WT/DS219/R
Page A-1
ANNEX A
First written submissions by the Parties and written submissions relating to
Parties' requests for preliminary rulings
Contents Page
Annex A-1 Executive Summary of the First Written Submission of Brazil A-2
Annex A-2 Executive Summary of the First Written Submission of the
European Communities and request for preliminary rulingsA-5
Annex A-3 Request of Brazil for a preliminary ruling A-13
Annex A-4 Reply of the European Communities to Brazil's request for a
preliminary rulingA-15
Annex A-5 Response of Brazil to the preliminary ruling requested by the
European CommunitiesA-17WT/DS219/R
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ANNEX A-1
EXECUTIVE SUMMARY OF THE FIRST
WRITTEN SUBMISSION OF BRAZIL
1. On 7 June 2001 the Government of Brazil requested that a panel be established in the matter
of, inter alia , the imposition by the EC of provisional and definitive anti-dumping duties on imports
of certain malleable cast iron tube or pipe fittings originating in Brazil.  A panel was established on
24 July 2001, composed on 5 September 2001 and the First Written Submission of Brazil was
presented to the Panel on 10 October 2001.  This document is a brief executive summary of the main
issues raised in the First Submission of Brazil.
2. Brazil submits that the EC has acted and is acting in a manner which is inconsistent with the
obligations incumbent on the EC under the WTO Agreements, including Article VI of the GATT
1994 and the Anti-Dumping Agreement (‘AD Agreement ’) in that benefits accruing to Brazil have
been nullified or impaired as a result of the anti-dumping measures which the EC has imposed on
imports of malleable cast iron tube or pipe fittings from Brazil.
3. The EC did not give any special regard to Brazil’s special situation as a developing country
and, in violation of Article 15 of the AD Agreement, the EC neither explored nor communicated
either to Brazil or to the Brazilian exporting producer that it might consider the possibility of
constructive remedies over and above the possibility of the imposition of anti-dumping measures.
4. The Applicants withheld information as to the factors and indices listed in Article 3.4, which
were reasonably available to them and which were manifestly relevant to the initiation of the
investigation.  As a consequence, the EC did not discharge its obligations under Article 5.8 by not
rejecting the Application.  Moreover, as the product definition in the Application was broader than the
one applied in the investigation, the information provided in the Application was inaccurate and
meaningless.  Consequently, the Brazilian exporting producer was not able to properly defend itsinterests, as provided for in Article 6.2.
5. Given that the Brazilian currency was devaluated by 41.99 per cent in January 1999, there
was no need whatsoever for the EC to impose measures on the Brazilian imports to offset dumping,
which did not exist, and the imposition of anti-dumping measures in these circumstances constitute aviolation by the EC of Article VI of the GATT 1994 and  of Article 1 of the AD Agreement.
Alternatively, the EC violated Article 11.1 of the AD Agreement as it has not, simultaneously with its
order imposing the measures, also ordered the revocation of these measures in order to comply with
the obligation of Article 11.1, namely, not to allow the duty to remain in force when it was no longer
necessary to offset dumping.  The EC also violated Article 11.2 as, further to its order to impose themeasures , it has failed to self-initiate a review concerning the need for the continued imposition of
the measures in view of the new situation  after the devaluation of the Brazilian currency.
6. The manner in which the EC constructed normal values for certain types of the investigated
product breached the requirements of the AD Agreement.  Firstly, in its quantification of the SG&Aand profit amounts to be added into the cost of production, the EC applied different tests for the
SG&A costs and for profits where only one test is expressly mandated by Article 2.2.2.  Alternatively,
given that the constructed normal values were based on data pertaining to sales of product types,
which did not permit a proper comparison, the EC did not make a fair comparison by refusing to grant
relevant allowances in the form of an adjustment , and by doing so the EC also inflated the dumping
margin.  Secondly, regarding certain product types, the EC included in its calculation types of fittings
that were not like products, in violation of Article 2.2.  The EC also acted inconsistently withWT/DS219/R
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Article 2.2.2 by adding the actual amounts for SG&A costs and for profits pertaining to production
and sales in the ordinary course of trade types of the product concerned, which are not identical to the
compared products.  By refusing to make due merited allowances for differences in physical
characteristics affecting price comparability, the EC violated Article 2.4.  As a consequence, the EC
also improperly inflated the dumping margin.
7. With regards to the comparison between the normal value and the export price, the following
five claims are submitted.  Firstly, by refusing to take into account the effect of internal taxation, the
EC increased the price difference between the export price and the normal value and hence
improperly increased the dumping margin, if any, found for the Brazilian exporting producer in
violation of Article VI:4 of the GATT 1994. Sec ondly, the EC violated Article VI:1 of the GATT
1994 and Article 2.4 of the AD Agreement by failing to fulfil the requirement of a fair comparison bydenying an allowance for differences in indirect taxation, advertising and sales promotional expenses
and packing costs affecting price comparison.  Thirdly, the EC’s method of currency conversion and
its method of assessment of indirect taxes by sampling violated Article 2.4.  Fourthly, by zeroing the
negative dumping margins found for some product types of the Brazilian exporting producer the EC
did not make a fair comparison between the export price and the normal value in violation ofArticle 2.4 and a distorted margin of dumping was calculated by the EC in violation of Article 2.4.2.
Finally, the above violations resulted in an exaggerated and inflated dumping margin and,
consequently, in the imposition of anti-dumping duties in excess of the actual margin of dumping, if
any, in violation of Article 9.3.
8. The manner in which injury was determined by the EC also breached the requirements of the
AD Agreement.  Firstly, the EC violated Articles 3.1 and 3.2 as it did not properly consider whether
there had been a significant increase in allegedly dumped imports from Brazil.  As the EC failed to
satisfy the requirements of Article 3.2 it was prevented from making any findings under the
subsequent sub-sections of Article 3.
9. Secondly, the EC violated Articles 3.1 and 3.2 as it failed to properly consider whether the
allegedly dumped Brazilian imports had significantly undercut the prices of the like product in the
EC.  In the context of price undercutting, the EC’s consideration did not relate to the “ dumped
imports ” as referred to in Article 3.2.  In addition, by failing to consider the effect on prices of the
“dumped imports ” under Article 3.2, the EC’s price undercutting calculation for the Brazilian
exporting producer was not based on positive evidence and the EC’s examination whether the exportprice of the product concerned from Brazil had significantly undercut the EC producers prices was not
objective.  Consequently, the EC’s undercutting calculation resulted in an exaggerated and inflated
undercutting margin.
10. Thirdly, by improperly and unjustifiably refusing to accept that the black heart Brazilian
product was different from the white heart EC product and by refusing to recognize an adjustment in
this respect or by refusing to make the price comparison on the basis of black heart fittings only, the
EC failed to make an ‘objective examination’ of the facts of the matter on the basis of ‘positive
evidence’ as required by Article 3.1 and also failed to make a proper price comparison in violation of
Article 3.2.  Consequently, the EC’s undercutting calculation thus resulted in an exaggerated andinflated undercutting margin.
11. Moreover, the EC violated Article 3.2 and 3.3 by attributing the injury said to have been
sustained by the EC cumulatively over imports from  the countries concerned.  The EC failed to take
due account of the preliminary need to conduct a country-by-country analysis and to properlyestablish the relevant conditions of competition.  The EC also violated Article 3.3 by cumulating
imports from the countries concerned although the relevant requirements relating to the conditions of
competition have not been satisfied by the EC’s findings.  Given the inconsistencies in its approach,
the EC has failed to comply with the requiremen t of an ‘objective examination’ provided for in
Article 3.1.WT/DS219/R
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12. Furthermore, the EC did not discharge its obligations under Articles 3.1 and 3.4 as its finding
of injury was not based on positive evidence.  The EC did not in its injury analysis evaluate all of the
non-exhaustive fifteen individual factors and indices going to the issue of injury within the meaning
of the AD Agreement.  The EC also violated Article 3.4 as the evaluated factors disclosed aninsufficient basis for a positive finding of injury by an objective and unbiased investigating authority.
In addition, the EC’s injury finding was not based on positive evidence as the EC did not consider the
trends of those factors and indices partially analysed but just compared the end points.  By not
disclosing the EC producers’ purchases and exports the EC precluded the Brazilian exporter from
verifying the consistency of the data used.  This non-disclosure, which is a serious violation of
Article 12.2.2, denied the Brazilian exporter the right of access to the essential facts being considered
by the EC prior to the imposition of definitive anti-dumping duties, in violation of Article 6.9, andprecluded it from properly defending its interests, in violation of Article 6.2.
13. Finally, the EC violated Articles 3.1 and 3.5 by attributing injury to the Brazilian imports
despite the fact that no injury had been sustained by the EC producers in respect of which causation
could then legitimately be established.  The EC also violated Articles 3.1 and 3.5 by failing to ensurethat the injury caused to the EC industry by factors other than the allegedly dumped imports –  for
example the EC producers’ comparative disadvanta ge, failing export performance, outsourcing and
rationalisation efforts, and/or imports from the other third countries, substitution of the product
concerned and/or the difference in the cost of production and the market perception – were not
attributed to the Brazilian imports.  Also, by not disclosing certain essential information, like the ECproducers’ own purchases and exports, the EC precluded the Brazilian exporter from verifying the
consistency of the EC’s data in violation of Articles 6.2, 6.9 and 12.2.2.
14. By not disclosing its methodology and calculations with regard to the currency conversions
made pursuant to the requirements of Article 2.4, the EC failed to provide to the Brazilian exportingproducer timely opportunities to see all information that was relevant to the presentation of its case, in
violation of Article 6.4.  The EC also violated  Articles 12.2 and 12.2.2 by not setting out in the
Provisional Regulation and the Definitive Regulation or otherwise make available in separate reports
all relevant information on the matters of fact and law.
15. Brazil respectfully requests that the Panel find that the EC acted inconsistently with
Article VI of GATT 1994 and the AD Agreement, recommend that the EC brings its measures intoconformity with Article VI of GATT 1994 and the AD Agreement, and suggest that the EC revoke its
anti-dumping duty order and reimburse all anti-dumping duties collected thereunder.WT/DS219/R
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ANNEX A-2
EXECUTIVE SUMMARY OF THE FIRST WRITTEN SUBMISSION
OF THE EUROPEAN COMMUNITIES AND REQUEST FOR
PRELIMINARY RULINGS
(21 November 2001)
The large number of claims in Brazil’s Submission means that this summary can give only a
cursory account of the arguments that the EC presents in its defence.  Consequently, the omission of
any argument from this summary should not be taken to indicate that the EC does not regard it as
important.
I. INTRODUCTION
1. The dispute arises out of the imposition by the EC of anti-dumping duties on malleable cast
iron fittings from Brazil and other countries.  The EC makes a number of introductory pointscovering, for example, the problems created by the form of Brazil’s Submission. (Paras. 1 to 12)
2. The EC stresses that the burden of proof lies on Brazil to establish at least a prima facie case
in support of its claims. (Para. 13)
3. The EC designates certain of its documents as confidential. (Para. 14)
2. PRELIMINARY ISSUES
4. The EC denies that there is any evidence to support the allegations made by Brazil concerning
the motives of the domestic industry in making their Application. (Paras. 15 to 18)
5. Many of Brazil’s claims are formulated so vaguely that they should be rejected by the Panel.
They fall below the good faith standard required by the DSU.  To entertain them would be to infringe
the EC’s rights to a ‘natural justice’ and ‘due process’.  The EC requests a preliminary rulingdismissing on these grounds seven individual clai ms and all the claims made under Issue 19.  For
brevity’s sake the individual requests are not repeat ed in the following account. (Paras. 19 to 22)
6. Brazil has made over twenty claims in its Submission which are new to this dispute, not
having been mentioned in its Panel Request. Claims of this kind are outside of the Panel’s terms of
reference, and the EC requests a preliminary ruling dismissing them.  For brevity’s sake the individual
requests are not repeated in the following account. (Paras. 23 to 24)
7. The standard of review to be applied by th e Panel in this dispute is that laid down in
Article 17.6(i) of the Anti-Dumping Agreement (the ‘Agreement’). (Paras. 25 to 28)WT/DS219/R
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3. ISSUES
3.1 Issue 1: ‘ No special regard to Brazil as a developing country, no constructive
remedies explored’.
8. Brazil claims that the EC has infringed various aspects of Article 15 of the Agreement.  No
coherent claim under the first sentence is made, and this provision in any case creates no separate
obligation. (Paras. 30 to 31, 44)
9. The EC denies that its anti-dumping measures affected the “essential interests” of Brazil.  The
importance of the malleable fittings business to either Tupy in particular or the Brazilian economy in
general was minimal. (Para. 32)
10. The EC also denies that it failed to explore possibilities of “constructive remedies” as
provided for in the Agreement.  Contrary to Brazil ’s assertion’s, several meetings were held between
EC and Brazilian officials at which the EC indicated the possibility of an undertaking being accepted.
(Paras. 33 to 43)
3.2 Issue 2 – ‘Inappropriate Application’
11. The obligation in Article 5.2 is directed not to WTO Members but to parties who present
applications.  Any corresponding obligation on Members is to be found only in Article 5.3, and ECdenies that it has infringed this provision.  The criteria in Article 5.2 were satisfied, and the EC does
not express a view on whether they are conditions precedent to initiation of an investigation.  The
propriety of the EC’s decision must be judged on the facts available to it at the time. (Paras. 45 to 50)
3.2.1 Volume and value of domestic production; complete description of product
12. Contrary to Brazil’s claim, there is no inconsistency between the scope of the application and
that of the investigation. Both concerned “malleable  cast iron fittings”.  CN codes were given in both
cases as guidance.  Although code CN 7307 19 90 does not cover such fittings it mentioned by the
Applicants in order to catch any fittings that were being wrongly classified on import.  The definition
in the Notice of Initiation would also have covered such misclassified products because, although it
gave the code CN 7307 19 10, it said that this was “given for information”.  No claim can lie underArticle 5 for possible defects in the Provisional or Definitive Regulations. (Paras. 51 to 57)
13. The EC refutes Brazil’s claim that the Application contained insufficient information on the
volume and value of production of the like product accounted for by the Applicants. (Paras. 58 to 62)
3.2.2 List of importers
14. The list of importers provided in the Application satisfied the criteria listed in Article 5.2(ii)
since the list required by that provision covers im porters of allegedly dumped products only.  In any
event, in the circumstances of the EC authorities’ assessment of the list presented in the Application
satisfied the requirements of the Agreement. (Paras. 65 to 72)
3.2.3 Information on consequent impact
15. The Application met the criteria of Article 5.2(iv).  The Agreement does not require that
every injury factor listed in Article 3.4 be addresse d in the Application.  In fact, this Application
contained information on all but a couple of these factors, as well as on several not listed there.  Brazil
has made no attempt to show that information on the other factors was relevant to substantiate the
allegations of injury. (Paras. 73 to 83)WT/DS219/R
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3.3 Issue 3 – ‘Inappropriate measures’
16. Brazil claims that the EC should not have im posed anti-dumping duties because, owing to the
devaluation that occurred towards the end of the investigation period, these exports were no longer
being dumped and duties were therefore not “necessary”. (Paras. 84 to 86)
17. Brazil’s claim fails to understand the basis on which anti-dumping duties are calculated under
the Agreement.  In the case of most Members, this  is by examining imports over a set ‘investigation
period’ prior to the initiation of the investigation.  This system has built-in mechanisms (review,
refunds, undertakings) to take into account changes which may occur after the investigation period.
(Paras. 87 to 91)
18. Brazil’s argument would give national authorities the power to set anti-dumping duties on the
basis of a qualitative assessment of events that cannot be objectively predicted. (Paras. 92 to 93).
19. Brazil provides no legal basis for its argument.  The only criteria provided in the Agreement
for judging whether measures are “necessary” are those for determining the dumping margin and theissues of causation and injury. (Paras. 94 to 99)
20. The fact that the EC has occasionally taken account of events following the investigation
period is not relevant.  Firstly, such decisions are discretionary, and secondly the devaluation took
place within the period.  Furthermore, devaluation does not by itself determine the pricing decisionsof companies. (Paras. 100 to 103).
21. Brazil has presented no evidence to justify its apparent claim that the EC should have initiated
a review of its measure. (Paras. 104 to 110).
3.4 Issue 4 – ‘Improper normal value – inappropriate product types’
3.4.1 Constructing normal value
22. Brazil has objected to the fact that when constructing the normal value, in arriving at the
profit margin, the EC included data relating to ‘unrepresentative’ domestic sales.  (These sales were
not used to establish the normal value based on prices because of the ‘low volume’ rule inArticle 2.2).  However, the EC did no more than apply the rule in the relevant provision, Article 2.2.2.
(Paras. 111 to 119)
23. Brazil is mistaken in alleging that the EC used different methods for calculating SG&A and
profit.  Both figures were (totally in accordance with Article 2.2.2) based on sales in the ordinarycourse of trade of the like product by Tupy. (Paras. 112 to 127)
3.4.2 Allowances
24. Brazil claims that the EC, when comparing the normal value and export price, should have
made an allowance to take account of the inclusion of data from ‘unrepresentative sales’ in the
constructed normal value (see paragraph 22 above).  However, no basis for making this allowance has
been proposed either by Tupy or by Brazil. (Paras. 128 to 132)
3.5 Issue 5 – ‘Improper normal value – inappropriate product codes’
25. Brazil claims that the EC based its calculation of the dumping margin on a comparison of
non-like products (specifically product types ‘68’ and ‘69’).  However, Brazil has provided no
evidence in support of this claim, which even Tupy admitted was not sustainable. (Paras. 133 to 142)WT/DS219/R
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26. Brazil also claims an adjustment should be made in the comparison because of differences
between the products, however no basis has been proposed on which such an adjustment could be
made. (Paras. 143 to 145)
3.6 Issue 6 – ‘No proper consideration of tax neutralisation’
27. Brazil claims that an allowance should have been made in respect of the 20 per cent tax credit
– ‘IPI Premium Credit’ – scheme operated by the Brazilian government because it compensated for
prior-stage indirect taxes.
28. The main reason for denying Tupy’ request for this allowance was that it did not demonstrate
that the credit compensated for internal taxes “borne” by the like product when destined forconsumption on the Brazilian market.
29. The EC identified various taxes (IPI, ICMS, PIS, COFINS) for which specific adjustments
were given where justified.  The claimed allowance regarding IPI Premium Credit was based on the
mere assertion in the relevant Brazilian law, and no evidence was provided of particular taxes that hadimposed on inputs for which it was supposed to compensate. (Paras. 146 to 156)
30. The legal status of compensation for prior-stage cumulative taxes is explained in the SCM
Agreement, which forms part of a common framew ork with GATT Article VI and the Anti-Dumping
Agreement.  The SCM Agreement emphasises that the burden is on the party concerned to establishclearly the link between the credit and the tax (on inputs) for which it is compensation. (Paras. 157 to
173)
31. Several other reasons were given to Tupy for refusing the allowance, and the EC endorses
these. Consequently none of Brazil’s claims are justified. (Paras. 174 to 178)
3.7 Issue 7 – ‘No proper adjustment for advertising and sales promotional expenses’
32. Brazil claims that, in calculating the dumping margin, Tupy should have been given an
adjustment for differences in advertising, etc., expenses.  However, Tupy did not present the EC with
evidence justifying such an adjustment. (Paras. 179 to 192).
33. In any event, the EC made adjustments for differences in ‘level of trade’ between Tupy’s
home and EC sales, and these subsumed any differences in advertising, etc. expenses. (Paras. 193 to
194).
3.8 Issue 8 – ‘No proper adjustment for packing costs’
34. Brazil also claims that an adjustment should have been given for packaging costs.  Such an
adjustment was also refused by the EC because of lack of evidence to support it. (Paras. 195 to 212)
35. Contrary to Brazil’s claim, the EC properly indicated what information was necessary to
ensure a fair comparison, in particular by means of the Questionnaire, and gave Tupy practicable
assistance in presenting its requests for adjustments. (Paras. 212 to 218)
3.9 Issue 9 – ‘No proper currency conversions’
36. Brazil accuses the EC of not explaining the basis of the exchange rate used in currency
conversions when comparing Tupy’s home and EC pri ces.  It claims a breach of Article 2.4.1, but that
Article contains no relevant obligation. (Paras. 219 to 221)WT/DS219/R
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37. In fact, Tupy had never requested an explanation, and did not need one because it had itself
provided the EC with the table of rates used in the conversion.  The rate used to convert transport
costs had a special conversion rate, but in any case these accounted for only a tiny part of the total
costs. (Paras. 222 to 230)
3.10 Issue 10 – ‘No proper basis to assess PIS/COFINS indirect taxes’
38. Brazil accuses the EC of infringing Article 2.4 in the way in which it calculated the
adjustment for PIS/COFINS indirect taxes.  In f act, Tupy never put forward a coherent claim for this
adjustment, and it was made by the EC itself on the basis of information obtained from Tupy.  The
calculation was made on the basis that the adjustment was to be made to the normal value, on the
basis of actual amounts paid or received by Tupy .  Furthermore, Brazil’s claim is based on new
evidence, contrary to Article 17.5(ii). (Paras. 231 to 238)
39. Brazil claims that the EC chose a punitive methodology for calculating the adjustment.  In
fact the EC adopted a practical method in the absence of any coherent request from Tupy, despite the
clear indication that it had been given of what was required. (Paras. 239 to 248)
3.11 Issue 11 – ‘No proper dumping margin findings (“zeroing”)’
40. The EC is currently considering the implications of the Appellate Body report in the Bedlinen
case.  The effect of ‘zeroing’ in the calculation of the dumping margin in this case was to increase itby less than 3 per cent. (Paras. 249 to 250).
3.12 Issue 12 – ‘No proper consideration of import volume trends’
41. Brazil’s main claim under this heading is that the EC failed to comply with the obligation in
Article 3.2 regarding significant volume increase.  The claim fails to appreciate that Members are
required to consider whether there has been such an increase.  There is no need for a positive finding
on the point, or of a recording of the outcome of the consideration.
42. In fact, the EC Regulations show that it considered the issue of significant increase both
individually for Brazil, and cumulatively for all the ‘countries concerned’. (Paras. 251 to 265)
3.13 Issue 13 – ‘No proper consideration of alleged price undercutting’
43. Brazil accuses the EC of infringing Article 3.2 by improperly calculating the degree of
undercutting by ‘zeroing’ negative margins.  Brazil’s use of the Bedlinen case as a precedent is
unfounded because of the many differences between dumping margins and margins of undercutting.Mere comparison of average prices would conceal the real effect of undercutting.  In any event, there
is only 0.01 per cent difference, a de minimis  amount, between the margins as calculated by the two
methods. (Paras. 266 to 270)
44. Brazil accuses the EC of infringing the same provision by confining its calculation of
undercutting to those product types that are exported to the EC.  The claim is baseless since the
methodology applied was entirely legal.  Furthermore, Brazil’s claim is based on new evidence,
contrary to Article 17.5(ii). (Paras. 271 to 279)
3.14 Issue 14 – ‘No proper calculation of alleged price undercutting margins’
45. Brazil makes several unjustified claims that the EC’s estimation of the margin of undercutting
infringed Articles 3.1 and 3.2.  Firstly, Brazil’s mistakenly argues that differences in cost of
production should be taken into account (although it could not even demonstrate that such differences
existed). (Paras. 280 to 286)WT/DS219/R
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46. Nor could Brazil establish that market perceptions of the products were different. (Paras. 287
to 290)
3.15 Issue 15 – ‘No proper cumulation of imports’
47. As regards cumulation of dumped imports in the investigation of injury the EC law and
practice, applied in this case, follows the requirements of Article 3.3. (Paras. 291 to 299)
48. Both the text of Article 3.2 and its context indicate that the rule regarding consideration of the
increased volume of dumped imports applies to the cumulated volume, where cumulation is justified.
This provision does not set a ‘competition’ requirement in addition to the one contained in Article 3.3.(Paras. 300 to 306)
49. WTO law, as reflected in national practice, allows considerable discretion to Members in the
application of the notion of “conditions of competition” in Article 3.3(b).  The EC practice is to take
account of volume trends, but only in extreme cases will the analysis of volume trends result in adecision not to cumulate. (Paras. 307 to 315)
50. The various specific challenges raised by Brazil are groundless.  Firstly, the issue of ‘like
products’ has no relevance in this context.  Secondly, there is no obligation to refuse cumulation
because of differences in volume trends.  Thirdly, the EC’s consideration of prices was quiteconsistent with its conclusion to cumulate.  Fourthly, the issue of channels of distribution was
properly considered by the EC. (Paras. 316 to 341).
3.16 Issue 16 – ‘Inappropriate consideration of injury indicators’
51. Brazil’s main claim concerns Article 3.4.  Contrary to Brazil’s assertion, the EC did comply
with the requirement to examine each of the injury f actors that are listed in that Article.  For most of
the factors this consideration is reported in deta il in the Regulations.  For a small number, which the
examination showed did not have a separate significance or did not indicate injury, the conclusions
were elaborated in an internal record.  The factor ‘growth’ was addressed as part of the investigation
of other listed factors. (Paras. 342 to 349)
52. Brazil fails to recognise that Articles 3.4 and 3.5 deal, respectively, with the state of the
domestic industry, and with the causes of any injury that is being suffered.  The EC’s Regulations
reflect this division. Brazil’s claims regarding ‘potential’ effects are misplaced since this provision is
relevant only in claims of threat of injury or re view requests.  Brazil’s claim regarding ‘endpoint-to-
endpoint’ analysis are also misplaced since it is based on the summaries made in the Regulationsregarding the Article 3.4 analysis, and does not to reflect the actual examination made by the EC.
(Paras. 350 to 370)
53. Regarding the consideration of individual factors in Article 3.4, the phrase ‘factors affecting
domestic prices’ refers to the price factors in Article 3.2, principally undercutting, which were fullyexamined by the EC.  In particular, Brazil’s denial of the importance of price sensitivity is not
justified. (Paras. 371 to 385)
54. Contrary to Brazil’s claims, the EC properly ex amined the ‘utilisation of capacity’, ‘output’,
‘sales’  and ‘market share’. (Paras. 386 to 402)
55. Brazil’s criticisms of the EC’s examination of ‘profits’ are based on a misunderstanding of
the nature of the injury investigation which, unlike that in safeguards cases, is focused on the one-year
investigation period for which dumping has been determined.  The EC also refutes Brazils criticismsWT/DS219/R
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of its examination of ‘employment’, ‘investments’ and ‘stocks’. Brazil’s arguments concerning export
performance are misplaced. (Paras. 403 to 424)
3.17 Issue 17 – ‘Inappropriate establishment of causation’
56. This issue concerns the matters covered by Article 3.5, in particular the obligation not to
attribute to dumped imports any injuries that are caused by other factors.  An important feature of this
paragraph is that, in contrast to Article 3.4, the onus lies on interested parties to raise ‘other factors’
during the investigation. (Paras. 427 to 429)
57. Several of Brazil’s claims are inadmissible because they concern factors that were not raised
during the investigation.  Its claims also fail on substantive grounds.  The alleged comparativeadvantage of Tupy is irrelevant to the issue of causation.  Regarding EC export sales, the EC properly
determined that they had no significant contribution to injury.  Furthermore, the EC properly used the
various sources of data that were available. Im ports from third countries were thoroughly examined,
and, where found to exist, their effects on the EC industry were separately identified.  This was the
case in particular as regards imports from Bulgaria. (Paras. 430 to 464)
58. Brazil’s claim regarding outsourcing of product ion by EC producers is irrelevant since any
consequences would be seen in the imports from third countries and this factor is specifically
examined.  Contrary to Brazil’s accusation, the EC fully investigated (and reported in the
Regulations) the consequences of the rationalisation carried out by the domestic industry at thebeginning of the injury investigation period , and the issue of rising prices in the EC market.
Furthermore, the EC’s examination of sales volume and market share were quite proper. (Paras. 465
to 488)
59. The EC did investigate the issue of substitution by plastic fittings, and found that this has
problem had arisen in the 1980s.  Furthermore, the relevant issue is not ‘substitution’ but ‘demand’
(upon which substitution would have its effect, if any) , and the EC properly investigated that factor.
(Paras. 489 to 497)
60. Brazil’s claims regarding the alleged differences between black and white heart fittings are
not relevant to the issue of causation since there are no significant cost differences between them and
consequently no scope for injury to the EC from such a factor. (Paras. 498 to 502)
3.18 Issue 18 – ‘No timely opportunities given to see all relevant information’
61. Brazil adopts a distorted reading of the EC Regulations in order to claim that the details of
currency conversions made by the EC were not disclosed.  The claim is against the ProvisionalRegulation and does not satisfy the requirements for such claims.  In any case the meaning of the
Regulations is obvious, and merely requires a distinction to be made between the rate applied on a
particular day, and the period (month or day) from which that rate is derived. (Paras. 503 to 509)
62. Brazil gives a misleading account of the source of the table of conversion rates used in the
dumping margin calculation.  This source was Tupy rather than the EC, and Tupy also provided the
explanation. (Paras. 510 to 513)
3.19 Issue 19 – ‘No proper information on matters of fact and law’
63. Under Issue 19 Brazil makes about twenty-five individual claims that the EC infringed
Article 12. All of these claims are irredeemably vague and should be rejected by the Panel.WT/DS219/R
Page A-12
64. Several of these claims are also misplaced because they refer to matters which, for proper
reasons (such as confidentiality), would never be in cluded by the EC in its published instruments, and
which Article 12 does not require should be included.
65. Some of the claims refer to non-existent obligations in Article 12.1.  Others are in effect
criticisms of the EC for accurately reporting the decisions it has taken when Brazil is also challenging
those decisions.  In so far as the claims touch on matters properly within the scope of Article 12 the
EC has fully discharged its obligations in the texts of the Regulations. (Paras. 514 to 566)
4. CONCLUSIONS, REMEDIES AND REQUESTS
66. The EC refutes the claims made by Brazil. It also objects to the remedies sought by Brazil,
and denies that any suggestion by the Panel would be appropriate. (Paras. 567 to 571).WT/DS219/R
Page A-13
ANNEX A-3
REQUEST OF BRAZIL FOR A PRELIMINARY RULING
(20 November 2001)
1. On 14 November 2001 the EC presented its First Written Submission in the above referenced
case and made a Request for a Preliminary Ruling.
2. In the second line of Paragraph Nº 11 on Page 6 of the EC’s 1st Submission, the EC refers to
what it views as “considerable practical problems” allegedly relating to the presentation of Brazil’s
First Submission.  The EC went as far as to state that in order to “enable members of the Panel to
quickly identify the part of that document” (i.e. Brazil’s First Submission) “to which this Submission”
(i.e. the EC’s 1st Submission) is referring”, the EC has produced a version of Brazil’s Submission that
includes line numbers (Exhibit EC-1).  References to  this will be made in the style ‘BFS line 275’”.
3. The EC has thus taken a most unusual step of producing its own “version” of Brazil’s First
Submission and in fact sought to compel the Panel a nd the parties to this dispute to make use of that
“version” instead of the only official text of Brazil’s First Submission.
4. Whatever the motives behind this seemingly unprecedented EC step to modify Brazil’s
document and to attempt to replace it with the EC’s own “version”, Brazil submits that this must not
be allowed.  Such modifications of an opposing party’s material in the framework of legal
proceedings of the present nature, whether this is acknowledged by the EC or not, is fundamentallywrong and is patently unacceptable in most if not all the legal systems of WTO Members.  Further,
Brazil notes that nothing in the Working Procedures adopted by this Panel or in other relevant WTO
rules requires line numbering or other similar forms of presentation in documents such as Brazil’s
First Submission. Remarkably, the EC does not pr ovide for such line numbers in its own 1
st
Submission.
5. The EC authorities have no right and must not be allowed to physically alter Brazil’s
document, change its presentation, renumber its pages or otherwise modify it in the way in which the
EC authorities have taken the liberty to do on this occasion.  Further, the EC authorities have no right
and must not be allowed to compel the Panel and/or any party to this proceeding to rely or to make
any use of the EC’s “version” of Brazil’s First Submission in the way which the EC authorities seek
to do in this case.
6. Brazil has willingly agreed to the EC authorities’ request to be granted additional time, well
above and beyond the deadline prescribed by Paragraph 12 of the Working procedures of Appendix 3
of the DSU, to prepare and present the EC’s 1st Submission.  The EC had five weeks since it received
Brazil’s First Written Submission to ask the Brazilian authorities to number paragraphs in thatdocument, which Brazil could have, and would have, done in due time.  Instead of doing so, the EC
preferred to resort to an unusual and unacceptable meddling with the Brazilian text.
7. Moreover, Brazil’s First Submission is clearly presented with each numbered page plainly
divided into well-defined paragraphs which, although not specifically numbered, are nonethelessunmistakably distinguished and separated from each other.  The EC could simply have referred to
page numbers and to paragraphs in their descending order in each page, such as “Brazil observes on
Page 63, 4
th Paragraph  that…”WT/DS219/R
Page A-14
8. In any event, Brazil reaffirms its understanding that for all purposes the only official version
of the Brazilian First Written Submission is the one handed in by the Permanent Mission of Brazil in
Geneva on 10 October 2001, in accordance with the timeframe set out for this case.  In fact, Brazil
cannot confirm that the EC's version of Brazil's First Submission is accurate.  Further, contrary to theEC’s claims, this unusual EC approach, if it were to be accepted, would in all likelihood add
considerable confusion to the entire proceeding.  The Panel and parties would constantly have to refer
simultaneously to three documents rather than to two, namely to the EC’s 1
st Submission, to Brazil’s
First Submission and to the EC's “version” of Brazil's First Submission.
9. Brazil therefore respectfully requests that the EC be called, by way of a preliminary ruling
pursuant to paragraph 13 of this Panel’s Working Procedures, to amend the text of the EC’s 1st
Submission so that all references therein to Brazil’s First Submission be made to the actual text of
Brazil’s First Submission as originally submitted by Brazil.  Such new EC references may be made,
for example in the manner proposed in paragraph 7 (above).  Brazil respectfully further requests that
the preliminary ruling require the EC to make the relevant amendments and present its new
submission within a short period of time which would not lead to any delays to these proceedings.
10. In view of the exceptional nature of the EC’s approach and its timing, Brazil makes this
request by way of an exception to the general rule of paragraph 13 of this Panel’s Working Procedures
and respectfully requests that the Panel accept Brazil’s above mentioned reasoning as showing good
cause for the submission of this request at this stage.WT/DS219/R
Page A-15
ANNEX A-4
REPLY OF THE EUROPEAN COMMUNITIES TO BRAZIL'S
REQUEST FOR A PRELIMINARY RULING
(26 November 2001)
1. In its letter of 20 November 2001, Brazil has requested that the EC “be called by way of
preliminary ruling pursuant to paragraph 13 of this Panel’s Working Procedures, to amend the text of
the EC’s 1st Submission so that all references therein to Brazil’s First Submission be made to the
actual text of Brazil’s First Submission as originally submitted by Brazil”.
2. The EC rejects the Complainant’s unsupported allegations that the EC has somehow
“modified”, “changed”, “altered” or “meddled with ” Brazil’s First Submission.  There is no difference
between the text of the document contained in Ex hibit EC – 1 and what the Complainant calls the
“actual text” of its submission, except the addition of line numbers.  Thus, the amendments requested
by the Complainant would be totally unnecessary because all the references made in the EC’s First
Submission to Brazil’s First Submission are alread y to the “actual text” of  that submission.
3. Furthermore, the EC has never requested that the Panel “replace” Brazil’s First Submission
by the numbered version included in Exhibit EC – 1.  The EC has provided that version to the Panel
exclusively in order to facilitate the reading of its own First Submission.  The EC could have omitted
that exhibit and leave to the Panel the task of numbering by itself the lines of Brazil’s submission.
4. As noted by the Complainant, nothing in the Working Procedures adopted by this Panel
requires line numbering or other form of presentation.  However, by the same token, nothing in the
Working Procedures requires that the EC refer to Brazil’s First Submission in any particular form, let
alone in a form chosen by Brazil.  More specifically, nothing in the Working Procedures prevents theEC from identifying a passage in Brazil’s First Subm ission by citing the number of the line in which it
is found.  The request made by the Complainant, if granted, would impose a new obligation upon the
EC which it did not have at the time when it made its First Submission.
5. Admittedly, the method followed by the EC is “unprecedented”.  But so was the submission
by the Complainant of a document with more than 250 pages without numbered paragraphs or lines.
An examination of those Panel reports where parties submissions’ have been reproduced (including
submissions by Brazil) shows that the use of numbering is universal.
6. The omission of numbering cannot have been unintentional.  Previous submissions by the
Complainant (the Panel Request and Request for Consultations) and by Tupy (which were drafted by
the same law firm) have included numbered paragraphs.  The same is true of the Complainant’s
Executive Summary and its request for a preliminary ruling of 20 November 2001.
7. It was completely foreseeable that the omission of numbering would cause great
inconvenience to both the Panel and other parties to the dispute in identifying elements in the
Complainant’s Submission.  The method of citation suggested by the Complainant (e.g. “seventhparagraph of the page 236”) is quite impracticable, and it is not used even by the Complainant itselfWT/DS219/R
Page A-16
(e.g. BFS line 5826: “Although the EC’s price undercutting methodology has been provided otherwise
of this document (see Issue 13 above),”.  ‘Issue 13’ covers 13 pages of the submission.).
8. Finding itself in a detrimental situation the EC reacted in a pragmatic way by adopting a non-
intrusive method of identifying passages in the Complainant’s Submission.  This approach wasactually more appropriate than paragraph numbering given the style of the Complainant’s Submission,
and could be done without affecting its structure.  (Such a system is not appropriate to the EC’s
submission where the average length of paragraphs is only seven lines.)
9. Having behaved at the very least negligently in placing the EC in this situation the
Complainant should not now be allowed to mandate retroactively the way in which the EC could
react.  Still less should the Panel and the other parties be compelled to live with the difficultiesgratuitously placed on them by the Complainant.
10. For the above reasons, the EC asks the Panel to reject Brazil’s request.  The EC further
requests that, in order to avoid the repetition of similar incidents, the Panel amend its Working
Procedures in order to provide that the parties sh all number the paragraphs or the lines of all their
subsequent submissions.WT/DS219/R
Page A-17
ANNEX A-5
RESPONSE OF BRAZIL TO THE PRELIMINARY RULINGS
REQUESTED BY THE EUROPEAN COMMUNITIES
(26 November 2001)
On 14 November 2001 the EC presented the First Written Submission of the EC and made a
Request for a Preliminary Ruling (the EC’s Request for a Preliminary Ruling).
The following is the Response of Brazil to the EC’s Request for a Preliminary Ruling.
A. THE EC’S REQUEST FOR A PRELIMINARY RULING1. The EC makes its request for preliminary rulings on the basis of a claim that the request for
the establishment of a panel submitted by Brazil (WT/DS219/2, BRL-22) does not meet the
requirements of Article 6.2 of the DSU.  The EC alleges that a number of claims made in the First
Submission of Brazil "are not raised or are inadequately defined" in the panel request and cannot
therefore be considered as falling within the panel's terms of reference.
1 Moreover, the EC authorities
further allege that certain claims in the First Submission of Brazil are “so vaguely defined that theEC’s fundamental rights would be seriously prejudiced if they were to be entertained by the Panel”.
B. WITH REGARD TO THE TERMS OF REFERENCE2. Brazil agrees with the EC that the panel's terms of reference are important for two major
reasons.  First, the terms of reference establish the jurisdiction of the panel.  Second, they fulfil an
important due process objective.
2 That is why the DSB has insisted that terms of reference should
meet a certain standard of clarity.
3. However, considering the list of claims alleged to fall outside the panel's terms of reference3,
the EC appears to believe that Article 6.2 DSU impos es an obligation on the Applicant to set out, in
the panel request, every element of each obligation it intends to invoke to make its case.
4. Brazil submits that the EC’s interpretation is not only at odds with the letter of Article 6.2 of
the DSU but is also incompatible with the spirit and purpose of Article 6.2 DSU.4
5. Brazil recalls that in Korea - Dairy Safeguards  the Appellate Body held that the mere listing
of the articles  of the agreement on which the complaint is based may, "in the light of the attendant
circumstances, suffice to meet the standard of cl arity in the statement of the legal basis of the
                                                     
1 The EC's First Written Submission, hereafter ECFS , para. 23.
2 EC - Regime for the Importation, Sale and Distribution, of Bananas , Appellate Body Report (‘EC –
Bananas AB Report’), WT/DS 27/AB/R, adopted 25 September 1997, para 142.
3 ECFS, para. 24.
4 In United States – Tax treatment for “Foreign Sales Corporations" , Appellate Body Report,
WT/DS108/AB/R, adopted 20 March 2000, para 166, the AB found that “the procedural rules of WTO dispute
settlement are designed to promote, not the development of litigation techniques, but simply the fair, prompt and
effective resolution of trade disputes”; see also Thailand – Anti-Dumping Duties on Angles, Shapes and Sections
of Iron or Non-Alloy Steel and H-Beams from Poland (‘Thailand – H-Beams AB Report’), WT/DS122/AB/R,
adopted 12 March 2001, para 97.WT/DS219/R
Page A-18
complaint”.5 In other words, the Appellate Body did not say that a “mere listing” would necessarily
be insufficient under Article 6.2 DSU.
6. Brazil's panel request indisputably meets at least the minimum standard of clarity under
Article 6.2 DSU.  In fact, Brazil began its request by listing the provisions of the AD Agreement itbelieves the EC had violated (Articles 1 to 7, 9, 11, 12 and 15).  By identifying the EC measure in
cause and the WTO provisions, which it considers that the EC had violated, Brazil had made a clear
statement of the “problem” in question and duly fulfilled thereby the “minimum standards”
requirement of specificity as established in DSU.
6
7. Brazil then went on to describe more precisely some of its arguments relating to the EC’s
initiation and conduct of the investigation, the determination of dumping and injury, the causal linkbetween dumping and injury, the developing country status, the imposition and collection of anti-
dumping duties, as well as the public notice and explanations.
8. In that part of its panel request, Brazil also refers to numerous sub-paragraphs of the Articles
it believes the EC has violated.  In addition, Braz il provides examples of the arguments it would put
forward in its First Submission.  This appears clearly, for example, in paragraph 5 of the panel request
where the expressions "for example" and "for instance" are used.  Brazil therefore submits that its
panel request goes far beyond the mere listing of the articles of the AD Agreement which in Brazil’s
view have been violated by the EC.
9. Regarding certain claims allegedly not referred to in the panel request, Brazil refers  Argentina
- Footwear , where the Panel decided that a “legal act not explicitly listed in panel request but which
has a direct relationship to a measure that is specifically described therein can properly be considered
by the panel”.
7
10. In other words, the requirements of Article 6.2 DSU are met if a "measure" is subsidiary or
so closely related to  a measure specifically identified, and the responding party can reasonably be
found to have received adequate notice of the scope of the claims asserted by the Applicant.
11. Brazil submits that the EC seems to confuse Brazil’s elaboration of certain arguments in the
panel request with the concrete claims which Brazil makes there.  A good example is that of
Article 9.3 of the AD Agreement which, according to the EC, would fall outside the terms ofreference.  However, the EC itself acknowledges in its First Written Submission that the Article 9.3
claim is "entirely dependent on other claims".
8  The EC does not contest that these "other claims" are
within the terms of reference.  It is therefore indi sputable that the Article 9.3 claim must also fall and
indeed falls within the terms of reference .
12. Moreover, Brazil contends that the EC confused the distinction between claims and
arguments.  As made clear by the Appellate Body,
"... there is a significant difference between the claims identified in the request for the
establishment of a panel, which establish the panel's terms of reference under
Article 7 of the DSU, and the arguments supporting those claims, which are set out
                                                     
5 Korea - Definitive Safeguard Measure on Imports of Certain Dairy Products , Appellate Body Report
(‘Korea – Dairy AB Report’), WT/DS98/AB/R, adopted 12 January 2000, para. 124.
6 European Communities - Regime for the Importation, Sale and Distribution of Bananas , the Report of
the Panel, WT/DS27/R/USA, adopted 22 May 1997, para 7.29.
7 Argentina – Safeguard Measures on Imports of Footwear , (‘Argentina – Footwear’), WT/DS/121/R,
adopted 25 June 1999; para 8.35; see also Japan - Measures Affecting Consumer Photographic Film and Paper,
WT/DS/44/R, adopted on 22 April 1998, para. 10.8.
8 ECFS, para. 132.WT/DS219/R
Page A-19
and progressively clarified in the first written submissions, the rebuttal submissions
and the first and second panel meetings with the parties." 9 (emphasis in the original)
Hence, while claims had to be "specified sufficiently in the request for the establishment of a panel in
order to allow the defending party ... to know the legal basis of the complaint"10, the arguments in
support of those claims should be set out and be refined in the course of the proceeding.
13. It is only as a matter of example that Brazil had set out some of the arguments in the panel
request.  There is no obligation on Brazil to lay down exhaustively all the arguments underpinning its
claims as the EC seems to imply.
14. Finally, Brazil asserts that the issue of the sufficiency of a panel request depends on whether
the respondent, in view of "attendant circumstances", has been misled as to what claims were in factbeing asserted against it in a manner actually prejudicing its ability to defend itself.
11 Brazil has never
intended to mislead the EC and can indeed see no valid basis for any suggestion that it has misled the
EC in the way, which appears to be implied by the EC.
15. In any event, the existence of prejudice must be determined in light of the overall
circumstances and considerations, “given the actual course of the panel proceedings”, i.e. a
respondent must have experienced actual prejudice in its ability to defend its interests before a mere
listing or provisions would be found to be insufficient under Article 6.2 DSU.
16. Brazil submits that the EC has not demonstrated, based on supporting evidence that it has
suffered any prejudice as a result of the alleged imprecision of Brazil’s panel request.
17. Moreover, Brazil notes that the EC has not requested any clarification of the claims raised in
the panel request prior to its claims in the EC’s First Written Submission.  In Thailand - H Beams AB
Report , the Appellate Body made clear that such a request can be made by the defending party and
that a line of argument according to which the respondent's rights of defence have been prejudiced
must not be abused.  Moreover, the Appellate Body further instructed to keep in mind that WTO
Members should engage in dispute settlement proced ures "in good faith in an effort to resolve the
dispute".12
18. It is also submitted and reminded that Brazil’s claims had already been raised in its request
for consultations13 and all of them were aired during the actual consultations.  The EC was therefore
fully aware of Brazil’s contentions and did not try to seek further explanations.  Therefore, Brazil
submits that the EC did not establish in any way that the alleged deficiency in the panel request
prejudiced its rights of defence.14
C. WITH REGARD TO THE EC’S CLAIMS OF ALLEGED ”VAGUENESS”
19. Regarding the proposal that certain claims made by Brazil are “vague”, Brazil observes first
that the summaries it has provided in its First Submission clearly indicate the sense of the claims (and
the arguments) which it made in that Submission and these summaries in fact eliminated any risk of
any “vagueness” with regard to Brazil’s claims.  Nonetheless, the EC seems to suggest that its right toa fair hearing “would be seriously prejudiced” if the claims were to be entertained by the Panel.
15
                                                     
9 EC - Bananas , para 141.
10 Ibid. 142.
11 Korea – Dairy Products AB Report , para 127.
12 Thailand – H-Beams AB Report, para. 97.
13 Document WT/DS219/1 of 9 January 2001.
14 Korea – Dairy Products AB Report , para 131.
15 ECFS, para. 19 et seq .WT/DS219/R
Page A-20
20. Brazil cannot accept this interpretation and submits that it is plainly unfounded.  Brazil
submits that, in any event, allegations such as that the claims in parties’ written submissions are
inaccurate, imprecise and/or vague, would have to be analysed by the Panel when the Panel deals with
the substance of the dispute and, in general, such claims cannot be fully assessed, let alone dismissed
in the framework of a preliminary ruling.
21. As already stated, Brazil agrees with the EC that the request for the establishment of a panel
does have to meet a certain standard of clarity as set out in Article 6.2 of the DSU.  However, claims
which have been recognised as falling within  a panel’s terms of reference and are therefore properly
before a panel, Brazil submits that it is for the Panel to decide, in its substantive analysis of the matter,
whether the claims are or are not too vague to be accepted.16
22. As stated above, Brazil notes that it is common practice in WTO proceedings to requestclarification of unclear matters from the other party.  In Thailand – H Beams AB Report  the Appellate
Body held that “nothing in the DSU prevents a defending party from requesting further clarification”
on the claims raised by the complaining party.
 17  According to the Appellate Body, one must keep in
mind that Members of the WTO should engage in dispute settlement procedures “in good faith and inan effort to resolve the dispute”.  Brazil notes that  the EC has not attempted in any way to have any
clarification of the allegedly defective claims.
23. Even if the Panel were to accept the EC’s basic assumption that a preliminary ruling can be
requested on the basis of such “vagueness”, Brazil recalls that it is for the EC to prove that itsfundamental rights would be “seriously prejudiced” were the allegedly “vague” claims to be
entertained by the Panel.
24. Finally, Brazil concurs with the EC’s assertion that “the defending Member should not itself
have to identify  the provisions which it is accused of infringing”.
18 However, Brazil believes that the
obligations, which in its view the EC has infringed, are clearly “identified” in the First Submission of
Brazil.  Thus, considering the EC’s definition of vagueness, which basically relates to non-
identification of the legal basis of the complaint, Brazil’s claims cannot be considered vague as it has
clearly identified that legal basis in its First Written Submission.
25. In any event, Brazil submits that allegations relating to the alleged vagueness of the claims
raised in the First Submission are to be dealt with in the substantive analysis conducted in the PanelReport rather than at the preliminary stage.  If the panel were to decide otherwise, Brazil believes that
its claims cannot be considered vague and that it is fo r the EC to prove that its rights of defence would
be prejudiced were these allegedly vague claims to be entertained by the panel.
D. SPECIFIC COMMENTS WITH REGARD TO THE EC’S SPECIFIC POINTS RAISED IN
ITS REQUEST FOR A PRELIMINARY RULING
(a) With regard to the alleged vagueness26. With regard to the alleged vagueness of some of Brazil’s claims, Brazil would like to respond,
while also bearing in mind paragraph 13 of the Working Procedures of the Panel, as follows:
                                                     
16 See, e.g., United States – Measures Treating Exports Restraints as Subsidies , Report of the Panel,
WT/DS194/R, adopted 29 June 2001, para. 8.120 et seq. ; Canada – Measures Affecting the Export of Civilian
Aircraft , Report of the Panel, WT/DS70/R, adopted 14 April 1999, para. 9.247 et seq. ; United States –
Restrictions on Imports of Cotton and Man-made Fibre Underwear , Report of the Panel, WT/DS24/R, adopted
8 November 1996, para. 7.38 et seq.
17 Thailand –H-Beams AB Report , para. 97.
18 ECFS, para. 20.WT/DS219/R
Page A-21
27. The EC seems to suggest that,
(i) “[c]laim at BFS line 1226, discussed at paragraph 63 below”;(ii) “[c]laim at BFS line 1737, discussed at paragraph 106 below”;(iii) “[c]laim at BFS line 3840, discussed at paragraph 221 below”;(iv) “[c]laim at BFS line 4750, discussed at paragraph 253 below”;(v) “[c]laim at BFS line 7160, discussed at paragraph 339 below”;
(vi) “[c]laim at BFS line 9762, discussed at paragraph 489 below”;
(vii) “[c]laim at BFS line 9922, discussed at paragraph 499 below”; and(viii) “[a]ll the claims made under Issue 19, discussed at paragraph 515 below” are
defectively vague and should be dismissed.
28. Brazil strongly disagrees in all of these instances with the EC’s allegations that the claims are
vague.  Regarding the “Application” (the EC’s 1
st claim),19 Brazil submits, in essence, that, as the
product definition in the Application was broader than the one applied in the investigation, theinformation provided in the Application in accordance with Article 5.2 was inaccurate and
meaningless, and, hence, the Brazilian exporting producer was not able to properly defend its
interests, as provided for in Article 6.2.  It is to be noted that the Application and the Notice of
Initiation were the only sources of information available to the Brazilian exporter until the Disclosure
Preceding the Provisional Regulation.  Brazil recalls that these claims were clearly presented inBrazil’s First Submission at pages 22-35.
29. Regarding the “ ex-officio  review” (the EC’s 2
nd claim), Brazil is, in sum, claiming that the EC
violated Article 11.2 as it has failed to self-initi ate a review concerning the need for the continued
imposition of the measures although, in view of the new situation after the devaluation of the
Brazilian currency, such a review was warranted.  Brazil recalls that this claim was clearly presented
in Brazil’s First Submission at pages 35-46.
30. Regarding the “conversion of currencies” (the EC’s 3rd claim), Brazil submitted in the First
Submission that the EC infringed Article 2.4.1 by not converting currencies using the rate of exchange
on the date of sale.  Brazil recalls that this claim was clearly presented in Brazil’s First Submission at
pages 93-97.
31. Regarding the “other CN codes” (the EC’s 4th claim), Brazil is, in essence, claiming that the
EC has failed to comply with th e requirement of an ‘objective examination’ under Article 3.1 as it
refused to investigate Tupy’s claim that the product concerned is imported under other CN codes than
CN code 7307 19 10.  The legal base of Brazils’ claim is clearly stated at page 115 of the FirstSubmission.
32. Regarding the “channels of distribution” (the EC’s 5
th claim), Brazil is, in essence, claiming
that the EC has failed to comply with the requir ement of an ‘objective examination’ provided for in
Article 3.1 by stating but not examining whether the conditions of competition were similar.  Thelegal base of Brazils’ claim is clearly stated at pages 170-171 of the First Submission.
                                                     
19 Brazil notes that the EC refers to BFS line 1185.WT/DS219/R
Page A-22
33. Regarding the substitution (the EC’s 6th claim), the legal base of this claim is clearly provided
at pages 170-171 of the First Submission.
34. Regarding the difference between two variants of the product concerned (the EC’s 7th claim),
the legal base of this claim is clearly stated at page 235 of the First Submission.
35. Regarding the “public notice claims” (the EC’s 8th claim), Brazil agrees with the EC that
“these provisions are many lines in length, and contain many clauses and subclauses”.20 However,
Brazil submits that the basic obligation, which is common to all these provisions and subclauses, is
linked to one simple requirement, which is that of transparency.  As held by the Panel in EC – Bed
Linen  in the same circumstances, that the requirements in Article 12.2 “all provide for transparency
with respect to the decisions of which notice is being given”.21
36. Brazil further recalls the general statement in page 240 of its First Submission that “[a]s acorollary of the substantive violation claims, Brazil also submits that the EC infringed the
transparency requirements under Article 12.2 by failing adequately to explain its decisions”.
Moreover, it was also stated there that the EC’s “public notices or separate reports do not set forth theEC’s reasoning as to why it applied the relevant provisions of the AD Agreement ( via the EC’s Basic
Regulation) in the way it did”.  Brazil also argued that “contrary to its obligations under Article 12 the
EC failed to explain its choices of methodology, analysis, and conclusions on questions of fact, and
failed to explain why it rejected arguments by the Brazilian exporting producer concerned.” As all of
Brazil’s separate claims regarding Article 12 are reflecting the fact that the EC infringed thetransparency obligation by not providing as the basis for the imposition of anti-dumping duties in this
case duly motivated public decisions, the EC’s allegation should fail.
(b) With regard to the EC’s claims of dismissal
Article 9.3
37. The EC seems to suggest that “ [c]laim (BFS line 1760) of breach of Article 9.3
(paragraph 132 below) ”, “[c]laim (BFS line 2350) of breach of Article 9.3 (paragraph 134 below) ”,
“[c]laim (BFS line 2685) of breach of Article 9.3 (paragraph 178 below) ”, “[c]laim (BFS line 3845)
of breach of Article 9.3 (paragraph 230 below) ” and “ [c]laim (BFS line 3970) of breach of Article 9.3
(paragraph 248 below) ” were not covered by the panel request.
38. Brazil rejects the EC’s suggestion that these claims were not covered by the panel request and
that they should be dismissed.  Brazil listed, inter alia , Article 9 (‘ Imposition and Collection of Anti-
Dumping Duties ’) on the basis of which Brazil contested the EC’s actions.  Brazil has, thus, by
identifying the WTO provision which it claims that the EC had violated (Article 9), constituted a clearstatement of the “problem” in question.  Moreover, as also held for example by the Panel ( Thailand –
H-Beams ), “the nature and underlying AD investigation that led to the imposition of the challenged
measures, make certain paragraphs” of the provis ion of the AD Agreement concerned (which has not
been specified in the panel request) “logically and necessarily”
22 relevant or applicable (or, as the case
may be, irrelevant or inapplicable in the dispute).  This is particularly so where, as further discussedbelow, the AD Agreement’s provision in question in fact follows automatically from the application
of other AD Agreement’s provisions which are specifically mentioned in the panel request.
39. In addition, Article 9.3 is a general provision obliging Members not to impose anti-dumping
measures above the margin of dumping “as established under Article 2”.  As pointed out in
                                                     
20 ECFS, para 515.
21 European Communities – Anti-dumping duties on imports of cotton-type bed linen from India,
WT/DS141/R, adopted on 30 October 2000, para 6.260.
22 All citations refer to para 7.21 in that Panel Report.WT/DS219/R
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paragraph 11 above, the EC itself acknowledges (paragraphs 132, 134, 178, 230 and 248) that Brazil’s
claims based on Article 9.3 are “entirely dependant on other claims” and the EC does not contest that
these other claims are within the terms of reference. As a finding of violation of Article 9.3
automatically  follows from the inconsistencies with the other Articles of the AD Agreement, Brazil
submits that there cannot be any additional obligation whatsoever to mention the said articlespecifically in the panel request.
40. Brazil, therefore, submits that the EC’s request should be rejected.Article 5.241. The EC suggests that “ [c]laim (BFS line 1185) of breach of Article 5.2 on the basis that
products covered in the investigation must be id entical with those described in the application
(paragraph 52 below) ” and “ [c]laim (BFS line 1228) of breach of Article 5.2 on the grounds that the
Application did not include a complete list of known importers (paragraph 69 below) ” should be
dismissed.
42. Regarding the latter claim, Brazil observes that the EC is cross-referring to “paragraph 67
below”.  Although the EC stated in paragraph 20 of  the ECFS that “the defending Member should not
itself have to identify the provisions which it is ac cused of infringing”, Brazil has, in a spirit of co-
operation, identified that the correct reference might be paragraph 66.
43. Brazil rejects the EC’s suggestion that Brazil has failed to clearly identify these “claims”
under Article 5 of the panel request.  The opening part of the panel request states, inter alia , that
“Brazil believes that the initiation of the Investig ation, … by the EC are actions which are inconsistent
with the following provisions of the AD Agreement and of the GATT 1994”.  Brazil also indicated
that its claims of violation of Article 5 concerned “especially (but not exclusively)” Article 5.2.Brazil also briefly summarised in paragraph 5 that the EC “did not discharge its obligations under
Article 5 in that (for example) the application did not contain a complete description of the volume
and value of domestic production of the like product accounted for by the applicants (Article 5.2(i))”.
The expression ‘for example’ shows that Brazil did not intend to be exhaustive but rather to exemplify
certain aspects of the Application and, on the basis of that Application, the subsequent initiation of the
investigation by the EC, was not in line with the requ irements of Article 5.  Moreover, the issue of the
initiation of the investigation was raised during the consultations between Brazil and the EC.
44. As in its First Submission, Brazil indicated that  its claims of violation of Article 5 of the AD
Agreement fell under Articles 5.2 and 5.3 and give n that not only both Arti cles were mentioned but
also “a brief summary of the legal basis was provided” in the panel request, Brazil, therefore, submits
that the panel request goes far beyond the mere listing of Article 5 alleged to have been violated bythe EC.
Article 6.245. The EC proposes that “ [c]laim (BFS line 1226) that the supposed difference between the
product scope of the Application and of the investigation precluded Tupy from being able to properly
defend its interests in violation of Article 6.2 (paragraph 67 below) ” are out of the terms of reference.
46. Brazil notes, in a spirit of co-operation, that the correct reference is probably paragraph 63.
47. Brazil does not agree to exclude this claim.  In the panel request, Brazil refers not only to
Article 6 but also to the specific sub-paragraph 6.2 under which its claims of violation fall.  Brazil
also pointed out in paragraph 8 of its panel request that the EC “failed to discharge its obligations
under Article 6 in that, inter alia , it failed to satisfy…and thereby also denied Tupy the full
opportunity for the defence of its interests in these among other respects (Article 6.2)” (emphasisWT/DS219/R
Page A-24
added).  Moreover, Brazil submits that Articles 5.2 and 6.2 are inherently inter-linked, i.e. if the
product definition in the Application was broader than the one applied in the investigation, the
information provided in the Application was inaccurate and meaningless and, consequently, the
Brazilian exporting producer was not able to properly defend its interests, as provided for in
Article 6.2.  Finally, the issue of the initiation of the investigation and the issue of evidence wereraised during the consultations between Brazil and the EC.
48. As in its First Submission, Brazil indicated that the EC’s course of action precluded Tupy
from being able to properly defend its interest in violation of Article 6.2 and given that Article 6.2 and
“a brief summary of the legal basis” were provided in the panel request, Brazil, submits that the panel
request goes far beyond the mere listing of Article 6 alleged to have been violated by the EC.
Article 2.2.2
49. The EC advocates that “ [c] laim (BFS line 2233) of infringement of Article 2.2.2 because of
use of different criteria for the calculation of SG&A costs and of profits (paragraph 121 below) ”
should be dismissed.
50. Brazil does not agree with the EC.  Article 2 and the specific sub-paragraph 2.2 under which
Brazil’s claims of violation fall, were listed in the panel request.  Brazil also briefly pointed out in
paragraph 17 of its panel request the manner in which the EC constructed normal values for certain
types of the investigated product breached the requirements of Article 2.2.  As the issue of‘construction of normal values’ was specified, also the issue raised by the EC, which automatically
follows from the inconsistencies with Article 2.2, was covered.  Moreover, the issue of the initiation
of the investigation was raised during the consultations between Brazil and the EC.
51. Consequently, Brazil has by identifying the above made a clear statement of the “problem” in
question.
Article 6.1352. The EC suggests that “ [c]laim (BFS line 3821) of breach of Article 6.13 (paragraph 220
below) ” was not covered by the panel request.
53. In the said paragraph 220 the EC is suggesting that “Brazil presents no evidence in support of
this claim”.  However, given that the EC’s claim is “untimely” at this stage of the dispute proceeding,
and not related to whether Brazil’s claim was covered by the panel request, Brazil requests the Panel
to dismiss the EC’s suggestion.
The Accuracy of information
54. The EC proposes that “ [c]laim (BFS line 4750) that the EC authorities failed to satisfy
themselves as to the accuracy of inform ation in the Application (paragraph 253 below) ” is outside the
panel request.
55. Under this claim the EC is referring to “par agraph 253 below”.  However, in that paragraph
the EC states that “Brazil also argues (BFS line 4750) that the volume of imports was not properly
established because the EC authorities failed to satisfy themselves as to the accuracy of the
information submitted by Tupy regarding imports under other CN codes.  This is a new claim notmentioned in the Panel Request and should be rejected by the Panel as outside its terms of reference
(paragraph 23 above).”
56. Although Brazil has, in a spirit of co-operation, tried to understand, how the EC’s claim of
dismissal and the reasons stated in paragraph 253 are interlinked, Brazil is unable to see any relationWT/DS219/R
Page A-25
between that claim and the reasoning.  Consequently, Brazil requests the Panel to dismiss the EC’s
proposal.
57. However, for the sake of transparency, Brazil would like to point out that both Articles 3 and
the specific sub-paragraphs 3.1 and 3.2 under which its claim of violation fell were listed in the panelrequest.  Moreover, in paragraph 26 of the panel request Brazil argued that “[t]he EC did not consider
whether there had been a significant increase in dumped imports from Brazil either in absolute terms
or relative to production or consumption in the EC”.  Given that Brazil’s claim, which the EC would
like to have dismissed, relates to ‘the volume of imports’, the claim is covered by paragraph 26 of the
panel request.
Article 3.258. The EC argues that “ [c]laim (BFS line 5294) of infringement of Article 3.2 because the
consideration of significant undercutting was confined to products that had matching EC products
(paragraph 272 below) ” is not covered by Brazil’s panel request.
59. Brazil disagrees.  The panel request refers not only to Article 3 but also to the specific sub-
paragraph 3.2 under which its claims of violation fall in the panel request.  Brazil also pointed out in
paragraph 27 of its panel request that “[t]he EC did not discharge its obligations under Article 3.1 and
3.2 in that it did not, inter alia , consider (with a basis of positive evidence) the effect of the allegedly
dumped imports on prices, …” (emphasis added).  Brazil is arguing that the EC’s consideration in the
context of price undercutting under Article 3.2 did not relate to the “ dumped imports ”.  Consequently,
Brazil submits that all aspects of the price undercutting and underselling determinations, whether
‘zeroing’ or ‘matching’ were covered by the panel request.  Brazil also submits that the stated “claim”
is in fact an argument supporting the claim relating to the notion of “the price effect”.  Finally, the
expression ‘ inter alia ’ shows that Brazil does not aim at being exhaustive but rather exemplifying that
certain aspects of the price comparison were not in line with Article 3.
Articles 6.2 and 6.960. The EC alleges that “ [c]laims (BFS line 7210) under Articles 6.2 and 6.9 in connection with
Issue 16 (paragraph 347 below) ” and “ [c]laim (BFS line 9160) regarding Articles 6.2 and 6.9
(paragraph 446 below) ” were not covered by the panel request.
61. Regarding the first claim, Brazil submits that in paragraph 347 the EC provides
argumentation, which is totally unconnected to Articles 6.2 and 6.9.  Also here, Brazil has, in a spirit
of co-operation, identified that the correct reference is probably paragraph 343.
62. Brazil strongly disagrees with the demand to exclude this claim.  In essence, Brazil submits
that by not disclosing the EC producers’ purchases and exports the EC precluded the Brazilian
exporter from being able to verify the consistency of the data used in violation of, inter alia ,
Articles 6.2 and 6.9.
63. As stated above, Brazil refers in the panel request not only to Article 6 but also to the specific
sub-paragraph 6.2 under which its claims of violation fall.  Brazil also pointed out that in paragraph 8
of the panel request that the EC “failed to discharge its obligations under Article 6 in that, inter alia, it
failed to satisfy…and thereby also denied Tupy th e full opportunity for the defence of its interests in
these among other respects (Article 6.2)” (emphasis added).  Moreover, Brazil submits that
Articles 6.2 and 6.9 are inter-linked, namely the first sentence of the former provides an important due
process obligation and the latter is an important application of this obligation in the context of final
determination.  In essence, how would interested parties have a full opportunity for the defence of
their interests if an investigative authority were not disclosing the essential facts under considerationWT/DS219/R
Page A-26
before the imposition of the definitive measures? Consequently, Brazil submits that both of the
Articles were covered by the panel request and the EC’s proposal of dismissal should be rejected.
Article 3.4
64. The EC suggests that “ [c]laims regarding the examination of specific injury factors listed in
Article 3.4 (paragraph 350 below), including in part icular the claim (BFS line 7909) of inadequate
consideration of ‘factors affecting domestic prices’ in breach of Article 3.4 (paragraph 371 below) ”
should be dismissed.  Regarding the latter claim, Brazil notes that the correct reference is probably
paragraph 372.
65. Brazil rejects the EC’s suggestion.  Brazil refers in the panel request to Articles 3 and 3.1 as
well as Article 3.4.  Moreover, the claims were clearly covered by paragraph 29 of the panel request.
Brazil also submits that the stated “claim” is one of several arguments interpreting the obligation of
the examination of injury factors listed in Article 3.4.  Brazil submits, thus, that the EC’s proposal
should be rejected.
Article 3.5
66. The EC suggests that “ [c]laim (BFS line 9008) of violation of Article 3.5 based on the
‘comparative advantage’ of Tupy (paragraph 432 below) ” and also that “ [c]laim (BFS line 9922) of
breach of Article 3.5 based on the differences between ‘black heart’ and ‘white heart’ fittings(paragraph 500 below) ” were not identified in the panel request and should be dismissed.
67. Brazil rejects the EC’s suggestion that these claims should be dismissed.  Firstly, Brazil
identified both Articles 3, 3.1 and 3.5 under which its claims of violations fall in the panel request.
Moreover, paragraph 30 of the panel request clearly mentions that “[t]he EC did not ensure that injurycaused to the domestic EC industry…was not attrib uted to imports of the product concerned from
Brazil”.  Consequently, by claiming that the EC violated Articles 3.1 and 3.5 by attributing the injury
caused by factors other than the allegedly dumped imports to the allegedly dumped imports, is just a
reformulation of paragraph 30 of the panel request.  Moreover, the issue of difference in the cost of
production was raised before the EC by the Brazilian exporter in the actual course of the anti-dumping
investigation.  Brazil also submits that the stated “claims” are in fact arguments supporting the claim
relating to the notion of causation.  Therefore, the EC’s request should fail.
Article 6.668. The EC suggests that “ [c]laim (BFS line 9338) regarding Article 6.6 (paragraph 448 below) ”
should be dismissed.
69. Brazil strongly disagrees and requests the Panel reject the EC’s suggestion.  As Articles 6 and
6.6 were listed in the panel request, Brazil has made a clear statement of the “problem” in question.
Moreover, Brazil stated in paragraph 8 of its panel request that “[t]he EC failed to discharge its
obligations under Article 6 in that, inter alia , it failed to satisfy itself as to the accuracy of certain
information submitted to it by Tupy in connection with … the importation of the product concerned
by domestic EC producers from countries not subject to the Investigation… (Article 6.6)”.
Consequently, the imports from Poland were covered by the panel request.  Finally, as the EC states,
the issue of imports from Poland was raised before the EC by the Brazilian exporter in the actual
course of the underlying anti-dumping investigation.
Article 1270. Finally, the EC alleges that “ [c]laim (BFS line 10158) of breach of Articles 12.2 and 12.2.2
(paragraph 520 below) ”, “[c]laims (BFS line 10165) of failure to provide information underWT/DS219/R
Page A-27
Article 12.1 (paragraph 522 below) ”, “[c]laim (BFS line 10235) regarding disclosure and Article 12
(paragraph 529 below) ”, “[c]laim (BFS line 10265) of breach of Articles 12.2 and 12.2.2
(paragraph 532 below) ”, “[c]laim (BFS line 10414) of breach of Articles 12.2 and 12.2.2 (paragraph
544 below) ” and “ [c]laim (BFS line 10470) of breach of Articles 12.2 and 12.2.2 (paragraph 550
below) ” were out of the panel request.
71. Brazil rejects the suggestion of the EC that Brazil has failed clearly to identify “claims” under
Article 12 in the panel request.  By identifying Article 12 (‘Public Notice and Explanation of
Determination’) and the specific sub-paragraph 12.2 under which certain claims of violations fall in
the panel request, Brazil has made a clear statement of the “problems” in question.  For the sake of
transparency, Brazil also emphasises that the problems were summarised in paragraphs 11 to 15 and
36 of the panel request.
72. In addition, Brazil submits that Article 12.1 is a general provision laying down notification
and public notice requirements of an initiation of an investigation.  More specifically, Article 12.1.1
requires that “[a] public notice of the initiation of an investigation shall contain, …adequate
information of the following: (i)…the product invo lved;…(iv) a summary of the factors on which the
allegation of injury is based;…”.  As Brazil is claiming that the initiation of the investigation by the
EC infringes Article 5, a finding of violation of Article 12.1 follows from those inconsistencies with
Article 5.2.  Consequently, Brazil submits that there cannot be any additional obligation whatsoever to
mention the said sub-paragraph specifically in the panel request.
73. Finally, Brazil observes that the EC has not shown in any way if, and if so how the EC
interests were prejudiced in this case by any of th e “omissions” the EC attributes to Brazil.  In the
absence of such prejudice Brazil considers that the EC claims are without merit and must therefore be
rejected.
E. BRAZIL’S REQUEST
74. In view of the foregoing, Brazil respectfully requests that the Panel,
(i) reject for being unfounded the EC’s request for a preliminary ruling alleging that
claims in Brazil’s First Written Submission have not been properly covered by its
request for the establishment of a panel (WT/DS219/2, BRL-22);
(ii) reject for being unfounded the EC’s request for a preliminary ruling alleging that
claims in Brazil’s First Written Submission are vague.
Alternatively, in case the Panel would consider that any of the above-mentioned requests
might have some merit, Brazil would request that any final decision on that would only be made once
the full scope, substance and all the merits of this dispute have been properly and conclusively
assessed.