WORLD TRADE
ORGANIZATIONWT/DS248/AB/R
WT/DS249/AB/R
WT/DS251/AB/RWT/DS252/AB/R
WT/DS253/AB/R
WT/DS254/AB/R
WT/DS258/AB/R
WT/DS259/AB/R
10 November 2003
(03-5966)
Original:  English
UNITED STATES – DEFINITIVE SAFEGUARD MEASURES
ON IMPORTS OF CERTAIN STEEL PRODUCTS
AB-2003-3
Report of the Appellate BodyWT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page i
I. Introduc tion................................................................................................................. ................1
II. Factual Background .......................................................................................................... ..........5
III. Arguments of the Participants  and the Third Particip ants ..........................................................6
A. Claims of Error by the United States – Appellant ......................................................... 6
1. Unforeseen Developments, Article 3.1 of the  Agreement on
Safeguards ,  and Article 12.7 of the DSU ........................................................6
2. Increased Imports..............................................................................................9
3. Paralle lism ......................................................................................................12
4. Causation ........................................................................................................13
B. Arguments of Brazil – Appellee ................................................................................... 17
1. Article 3.1 of the  Agreement on Safeguards   and Article 12.7
of the DSU ......................................................................................................17
2. Increased Imports............................................................................................183. Paralle lism ......................................................................................................19
4. Causation ........................................................................................................20
C. Arguments of China – Appellee ................................................................................... 22
1. Unforeseen Developments, Article 3.1 of the  Agreement on
Safeguards ,  and Article 12.7 of the DSU ......................................................22
2. Increased Imports............................................................................................23
3. Paralle lism ......................................................................................................26
4. Causation ........................................................................................................27
D. Arguments of European Communities – Appellee ....................................................... 29
1. Unforeseen Developments, Article 3.1 of the  Agreement on
Safeguards ,  and Article 12.7 of the DSU ......................................................29
2. Increased Imports............................................................................................31
3. Paralle lism ......................................................................................................33
4. Causation ........................................................................................................34
E. Arguments of Japan – Appellee ................................................................................... 37
1. Article 3.1 of the  Agreement on Safeguards   and Article 12.7
of the DSU ......................................................................................................37
2. Increased Imports............................................................................................38
3. Paralle lism ......................................................................................................40
4. Causation ........................................................................................................41
F. Arguments of Korea – Appellee .................................................................................. 43
1. Article 3.1 of the  Agreement on Safeguards   and Article 12.7
of the DSU ......................................................................................................43
2. Increased Imports............................................................................................44
3. Paralle lism ......................................................................................................46
4. Causation ........................................................................................................46WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage ii
G. Arguments of New Zealand – Appellee........................................................................ 49
1. Unforeseen Developments, Article 3.1 of the  Agreement on
Safeguards ,  and Article 12.7 of the DSU ......................................................49
2. Increased Imports............................................................................................50
3. Paralle lism ......................................................................................................50
4. Causation ........................................................................................................51
H. Arguments of Norway – Appellee ................................................................................ 54
1. Unforeseen Developments, Article 3.1 of the  Agreement on
Safeguards ,  and Article 12.7 of the DSU ......................................................54
2. Increased Imports............................................................................................56
3. Paralle lism ......................................................................................................59
4. Causation ........................................................................................................60
I. Arguments of Switzerland – Appellee .......................................................................... 61
1. Unforeseen Developments, Article 3.1 of the  Agreement on
Safeguards ,  and Article 12.7 of the DSU ......................................................61
2. Increased Imports............................................................................................62
3. Paralle lism ......................................................................................................64
4. Causation ........................................................................................................64
J. Conditional Appeals .................................................................................................... 67
1. Arguments of Brazil, Japan, and Korea  – Joint Appellants ............................67
2. Arguments of China – Appellant ....................................................................68
3. Arguments of the European Communities – Appellant ..................................70
4. Arguments of New Zealand – Appellant ........................................................71
5. Arguments of Norway  – Appellant .................................................................73
6. Arguments of Switzerland – Appellant ...........................................................74
7. Arguments of the United States  – Appellee ....................................................76
K. Arguments of the Third Participants............................................................................ 78
1. Canada ............................................................................................................78
IV. Issues Raised In This Appeal................................................................................................ ....79
V. Unforeseen Developments and Article 3.1 of the  Agreement on Safeguards ..........................82
A. Appropriate Standard of Review for Cl aims Under Article XIX:1(a) of the
GATT 1994................................................................................................................... 83
B. Article 3.1 of the Agreement on Safeguards ................................................................ 87
C. Is it Necessary to Demonstrate for Each Safeguard Measure at Issue that
Unforeseen Developments Resu lted in Increased Imports? ........................................ 94
D. Alleged Failure by the Panel to "Link" Certain Data to the USITC's
Demonstration of how "Unfores een Developments" Resulted in
Increased Imports ...................................................................................................... 100WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page iii
VI. Increased  Imports........................................................................................................... .........103
A. CCFRS, Hot-Rolled Bar, and Stainless Steel Rod ..................................................... 104
1. Legal Standard to be Used for Determining Whether there are
"Increased Imports" ......................................................................................105
2. Panel's Findings with Respect to CCFRS, Hot-Rolled Bar, and
Stainless St eel Rod .......................................................................................114
B. Tin Mill Products and Stainless St eel Wire ............................................................... 127
1. Tin Mill Products..........................................................................................127
2. Stainless St eel Wire ......................................................................................134
3. Completing th e Analysis...............................................................................137
VII. Para llelism ................................................................................................................ ..............138
A. The Need to Account for the Effects of Imports from Excluded Sources ................... 144
B. Conclusions with Respect to Stainless Steel Rod....................................................... 148
VIII. Caus ation ................................................................................................................. ...............156
A. CCFRS, Hot-Rolled Bar, Cold-Finished Bar, Rebar, Welded Pipe, FFTJ,
and Stainless Steel Bar .............................................................................................. 156
B. Tin Mill Products and Stainless St eel Wire ............................................................... 161
IX. Article 11 of the DSU ....................................................................................................... ......162
X. Article 12.7 of the DSU ...................................................................................................... ....164
XI. Conditional Appeals ......................................................................................................... ......166
XII. Findings and Conclusions................................................................................................... ....168
ANNEX 1: Notification of an Appeal by the United States under paragraph 4 of
Article 16 of the Understanding on Rules and Procedures Governing theSettlement of DisputesWT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage iv
TABLE OF CASES CITED IN THIS REPORT
Short Title Full Case Title and Citation of Case
US – Steel SafeguardsUnites States – Definitive Safeguard Measures on Imports of Certain
Steel Products , WT/DS248/R, WT/D S249/R, WT/DS251/R,
WT/DS252/R, WT/DS253/R, WT/DS254/R, WT/DS258/R,
WT/DS259/R, 11 July 2003
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of
Footwear , WT/DS121/AB/R, adopted 12 January 2000,
DSR 2000:I, 515
Argentina – Footwear (EC) Panel Report, Argentina – Safeguard Measur es on Imports of Footwear ,
WT/DS121/R, adopted 12 January 2000, as modified by the Appellate
Body Report, WT/DS121/AB/R, DSR 2000:II, 575
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of
Salmon , WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII,
3327
Canada – Aircraft(Article 21.5 – Brazil)Appellate Body Report, Canada – Measures Affecting the Export of
Civilian Aircraft – Recourse by Brazil to Article 21.5 of the DSU ,
WT/DS70/AB/RW, adopted 4 August 2000, DSR 2000:IX, 4299
Canada – Periodicals Appellate Body Report, Canada – Certain Measures Concerning
Periodicals , WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, 449
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat
Products (Hormones) , WT/DS26/AB/R, WT /DS48/AB/R, adopted
13 February 1998, DSR 1998:I, 135
EC – Poultry Appellate Body Report, European Communities – Measures Affecting
the Importation of Certain Poultry Products , WT/DS69/AB/R, adopted
23 July 1998, DSR 1998:V, 2031
EC – Tube or Pipe FittingsAppellate Body Report, European Communities – Anti-Dumping Duties
on Malleable Cast Iron Tube or Pipe Fittings from Brazil ,
WT/DS219/AB/R, adopted 18 August 2003
India – Patents (US)Appellate Body Report, India – Patent Protection for Pharmaceutical
and Agricultural Chemical Products , WT/DS50/AB/R, adopted
16 January 1998, DSR 1998:I, 9
India – QuantitativeRestrictionsAppellate Body Report, India – Quantitative Restrictions on Imports of
Agricultural, Textile and Industrial Products , WT/DS90/AB/R, adopted
22 September 1999, DSR 1999:IV, 1763
Japan – AgriculturalProducts II
 Appellate Body Report, Japan – Measures Affecting Agricultural
Products , WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, 277
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on
Imports of Certain Dairy Products , WT/DS98/AB/R, adopted
12 January 2000, DSR 2000:I, 3WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page v
Short Title Full Case Title and Citation of Case
US – Countervailing
Measures on Certain EC
ProductsAppellate Body Report, United States – Countervailing Measures
Concerning Certain Products from the European Communities ,
WT/DS212/AB/R, adopted 8 January 2003
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign
Sales Corporations" , WT/DS108/AB/R, adopted 20 March 2000,
DSR 2000:III, 1619
US – Fur Felt HatsWorking Party Report, Report on the Withdrawal by the United States
of a Tariff Concession under Article XIX of the General Agreement on
Tariffs and Trade , adopted 22 October 1951, GATT/CP/106.
US – GasolineAppellate Body Report, United States – Standards for Reformulated
and Conventional Gasoline , WT/DS2/AB/R, adopted 20 May 1996,
DSR 1996:I, 3
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on
Certain Hot-Rolled Steel Products from Japan , WT/DS184/AB/R,
adopted 23 August 2001
US – Lamb Appellate Body Report, United States – Safeguard Measures on
Imports of Fresh, Chilled or Froz en Lamb Meat from New Zealand and
Australia , WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001
US – Line Pipe Appellate Body Report, United States – Definitive Safeguard Measures
on Imports of Circular Welded Carbon Quality Line Pipe from Korea ,
WT/DS202/AB/R, adopted 8 March 2002
US – Line Pipe Panel Report, United States – Definitive Safeguard Measures on
Imports of Circular Welded Carbon Quality Line Pipe from Korea ,
WT/DS202/R, adopted 8 March 2002, as modified by the Appellate
Body Report, WT/DS202/AB/R
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain
Shrimp and Shrimp Products , WT/DS58/AB/R, adopted
6 November 1998, DSR 1998:VII, 2755
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures
on Imports of Wheat Gluten from the European Communities ,
WT/DS166/AB/R, adopted 19 January 2001WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage vi
TABLE OF ABBREVIATIONS IN THIS REPORT
"AUV" average unit value
"CCFRS" certain carbon flat-rolled steel
"COGS" cost of goods sold
"cold-finished bar" carbon and alloy cold-finished bar
"FFTJ" carbon and alloy fittings, flanges and tool joints
"FTA" free-trade area
"GSP" Generalised System of Preferences
"hot-rolled bar" carbon and alloy hot-rolled bar and light shapes
"NAFTA" North American Free Trade Agreement
"Proclamation" Proclamation 7529 of 5 March 2002 - To Facilitate Positive
Adjustment to Competition from Imports of Certain Steel Products,
United States Federal Register, 7 March 2002 (Volume 67, Number
45).  (Exhibit CC-13 submitted by the Complaining Parties to the
Panel)
"rebar" carbon and alloy rebar
"welded pipe" carbon and alloy welded pipe, other than oil country tubular goods
(OCTG)
the " Anti-Dumping Agreement "Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994
the "Complaining Parties" Brazil, China, th e European Communities, Japan, Korea, New
Zealand, Norway, and Switzerland
the "DSB" Dispute Settlement Body
the "DSU" Understanding on Rules and Procedures Governing the Settlement
of Disputes
the "GATT 1994" General Agreement on Tariffs and Trade 1994
the "Panel Reports" Panel Reports,  United States – Definitive Safeguard Measures on
Imports of Certain Steel Products
the "USITC" United States International Trade CommissionWT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page vii
the "USTR" United States Trade Representative
the " Working Procedures " Working Procedures for Appellate Review
the "WTO Agreement " Marrakesh Agreement Establishing the World Trade Organization  
the "WTO" World Trade Organization
"tin mill products" carbon and alloy tin mill products
"USITC Report, Vol. I" USITC, Certain Stee l Products, Inv. No. TA-201-73, USITC Pub.
3479 (Dec. 2001): Volume I – Determinations and Views of theCommissioners. (Exhibit CC-6 submitted by the Complaining
Parties to the Panel)
"USITC Second SupplementaryReport"USITC supplementary information on unforeseen developments and
injury determination for imports from all sources other than Canada
and/or Mexico, 4 February 2002. (Exhibit CC-11 submitted by the
Complaining Parties to the Panel)WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 1
WORLD TRADE ORGANIZATION
APPELLATE BODY
United States – Definitive Safeguard
Measures on Imports of Certain SteelProducts
United States,  Appellant/Appellee
Brazil,  Appellant/Appellee
China,  Appellant/Appellee
European Communities,  Appellant/Appellee
Japan,  Appellant/Appellee
Korea,  Appellant/Appellee
New Zealand,  Appellant/Appellee
Norway,  Appellant/Appellee
Switzerland,  Appellant/Appellee
Canada,  Third Participant
Cuba,  Third Participant
Mexico,  Third Participant
Separate Customs Territory of Taiwan, Penghu,
Kinmen and Matsu,  Third Participant
Thailand,  Third Participant
Turkey,  Third Participant
Venezuela,  Third ParticipantAB-2003-3
Present:
Bacchus, Presiding Member
Abi-Saab, Member
Lockhart, Member
I. Introduction
1. The United States appeals certain issues of law and legal interpretations developed in the
Panel Reports,  United States – Definitive Safeguard Measures on Imports of Certain Steel Products
(the "Panel Reports").  1
2. The Panel was established by the DSB on 3 June 2002,  pursuant to a request by the European
Communities, to examine the consistency of ten safe guard measures applied by the United States on
                                                     
1WT/DS248/R, WT/DS249/R, WT/DS251/R, WT/DS252/R, WT/DS253/R, WT/DS254/R,
WT/DS258/R, WT/DS259/R and Corr.1, 11 July 2003.  China, the European Communities, New Zealand,Norway, Switzerland, as well as Brazil, Japan and Korea acting jointly, submit conditional appeals on certainissues not addressed by the Panel.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 2
20 March 2002 on imports of certain steel products.
 2  On 14 June 2002, pursuant to Article 9.1 of the
DSU, the DSB referred to the Panel complaints on the same matter brought by Japan and Korea.  On
24 June 2002, the DSB, pursuant to Article 9.1 of the DSU, also referred to this single Panel
complaints on the same matter submitted by China, Norway, and Switzerland.  On 8 July 2002, theDSB, pursuant to Article 9.1 of the DSU, also refe rred to this single Panel a complaint on the same
matter submitted by New Zealand.  On 29 July 2002, the DSB, pursuant to Article 9.1 of the DSU,also referred to this single Panel a complaint on the same matter submitted by Brazil.
3. In their requests for the establishment of a panel, the Complaining Parties claimed that the ten
safeguard measures applied by the United States on imports of certain steel products were inconsistentwith the obligations of the United States contained in Articles 2, 3, 4, 5, 7, 8, 9, and 12 of theAgreement on Safeguards ,  Articles I, II, X, XIII, and XIX of the GATT 1994, as well as Article XVI
of the  
WTO Agreement . 3
4. The Panel issued eight Panel Reports—in the form of one document—that were circulated to
the Members of the WTO on 11 July 2003.  The Panel concluded, in all of the Panel Reports, that allten safeguard measures imposed by the United States were inconsistent with the  Agreement on
Safeguards   and the GATT 1994.
5. In particular, the Panel found that:
(a) the application of safeguard measures by the United States on imports of CCFRS,
hot-rolled bar, and stainless steel rod was inconsistent with Articles 2.1 and 3.1 of theAgreement on Safeguards ,  because "the United States failed to provide a reasoned
and adequate explanation of how the facts supported its determination with respect to'increased imports'"
 4;
(b) the application of safeguard measures by the United States on imports of CCFRS,
hot-rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, and stainless steel bar wasinconsistent with Articles 2.1, 3.1, and 4.2(b) of the  Agreement on Safeguards , 
because "the United States failed to provide a reasoned and adequate explanation that
                                                     
2Safeguard measures were applied on imports of CCFRS;  tin mill products;  hot-rolled bar;  cold-
finished bar;  rebar;  welded pipe;  FFTJ;  stainless st eel bar;  stainless steel rod;  and stainless steel wire.
3Panel Reports, paras. 3.1–3.8.
4Ibid., para. 11.2.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 3
a 'causal link' existed between any increased imports and serious injury to the relevant
domestic producers"  5;
(c) the application of safeguard measures by the United States on imports of tin mill
products and stainless steel wire was incons istent with Articles 2.1, 3.1, and 4.2(b) of
the  Agreement on Safeguards ,  because "the United States failed to provide a
reasoned and adequate explanation of how the facts supported its determinations withrespect to 'increased imports'" and the existence of a "causal link" between anyincreased imports and serious injury, "since the explanation given consisted ofalternative explanations partly departing from each other, which given the differentproduct bases, cannot be reconciled as a matter of substance"
 6;  and
(d) the application of safeguard measures by the United States on imports of CCFRS, tin
mill products, hot-rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, stainless
steel bar, stainless steel rod, and stainless steel wire was inconsistent with Articles 2.1and 4.2 of the  Agreement on Safeguards ,  because "the United States failed to
comply with the requirement of 'paralle lism' between the products for which the
conditions for safeguard measures had been established, and the products which weresubjected to the safeguard measure".
 7
6. In addition, the Panel concluded, in the Panel Reports concerning the complaints of China, the
European Communities, New Zealand, Norway, and Switzerland, that:
the application of safeguard measures by the United States on imports of CCFRS, tin
mill products, hot-rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, stainlesssteel bar, stainless steel rod, and stainless steel wire was inconsistent withArticle XIX:1(a) of the GATT 1994 and Article 3.1 of the  Agreement on
Safeguards ,  because "the United States failed to provide a reasoned and adequate
explanation demonstrating that 'unforeseen developments' had resulted in increasedimports causing serious injury to the relevant domestic producers".
 8
                                                     
5Panel Reports, para. 11.2.
6Ibid.
7Ibid.
8Ibid.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 4
7. The Panel concluded that, to the extent that the United States had acted inconsistently with
the provisions of the  Agreement on Safeguards   and the GATT 1994 set out above, it had nullified or
impaired the benefits accruing to the Complaining Parties under the  Agreement on Safeguards   and
the GATT 1994.
 9  The Panel recommended that the DSB request the United States to bring all the
safeguard measures into conformity with its obligations under the  Agreement on Safeguards   and the
GATT 1994.  10
8. On 11 August 2003, the United States notified the DSB of its intention to appeal certain
issues of law covered in the Panel Reports and certain legal interpretations developed by the Panel,pursuant to paragraph 4 of Article 16 of the DSU, and filed a Notice of Appeal pursuant to Rule 20 ofthe  Working Procedures .
 11  On 21 August 2003, the United States filed its appellant's submission.  12
On 26 August 2003, China, the European Communities, New Zealand, Norway, and Switzerland each
filed an other appellant's submission.  13  Further, on the same day, Brazil, Japan and Korea filed a joint
other appellants' submission.  14  On 5 September 2003, Brazil, China, the European Communities,
Japan, Korea, New Zealand, Norway, Switzerland, and the United States each filed an appellee'ssubmission.
 15  On the same day, Canada filed a third participant's submission.  16 Cuba, Mexico, the
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, Thailand, Turkey, and Venezuelanotified the Appellate Body of their intention to appear at the oral hearing as third participants.
 17
9. On 16 September 2003, the Appellate Body received an  amicus curiae   brief from the
American Institute for International Steel.  The European Communities, in a letter dated
23 September 2003, requested the Appellate Body to inform the parties whether the Appellate Body
intended to accept and take account of the  amicus curiae   brief.  In a letter dated 24 September 2003,
Brazil requested that the  amicus curiae   brief be disregarded.
                                                     
9Panel Reports, para. 11.3.
10Ibid., para. 11.4.
11WT/DS248/17, WT/DS249/11, WT/DS251/12, WT/DS252/10, WT/DS/253/10, WT/DS254/10,
WT/DS258/14, WT/DS259/13, 14 August 2003, attached as Annex 1 to this Report.
12Pursuant to Rule 21(1) of the  Working Procedures .
13Pursuant to Rule 23(1) of the  Working Procedures .
14Ibid.
15Pursuant to Rules 22(1) and 23(3) of the  Working Procedures .
16Pursuant to Rule 24(1) of the  Working Procedures .
17Pursuant to Rule 24(2) of the  Working Procedures .WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 5
10. The Appellate Body responded to the requests of the European Communities and Brazil on
24 September 2003, stating that a determination on whether it would accept the brief or take account
of it would be made after the Division had considered all submissions to be made by the participants
in this appeal, including submissions to be made at the oral hearing. 18
11. The oral hearing was held on 29 and 30 September 2003.  19  The participants and third
participants presented oral arguments and responded to questions put to them by the Members of theAppellate Body Division hearing the appeal.
II. Factual Background
12. On 28 June 2001, the USITC initiated a safeguard investigation at the request of the USTR, in
order to determine whether certain steel products were being imported into the United States in suchincreased quantities as to cause or threaten to cause serious injury to the domestic industry producinglike or directly competitive products.
 20  Pursuant to this investigation, the USITC made affirmative
determinations of serious injury to the domestic industry with respect to imports of:  CCFRS;hot-rolled bar;  cold-finished bar;  rebar;  FFTJ;  stainless steel bar;  stainless steel rod; and adetermination of threat of serious injury with respect to imports of welded pipe.
 21  The USITC made
divided determinations with respect to tin mill products;  stainless steel wire;  stainless steel fittingsand flanges;  and tool steel.
 22  The USITC recommended that tariffs and tariff-rate quotas be imposed
for the products for which it made affirmative determinations.  23  Subsequently, following a request
from the USTR, the USITC issued supplementary information on the economic analysis of remedyoptions
 24, on unforeseen developments, and an injury determination for imports from all sources other
than Canada and Mexico.  25
                                                     
18Letter dated 24 September 2003, from the Director of the Appellate Body Secretariat to the
Ambassadors of the Permanent Mission of Brazil and the Permanent Delegation of the European Communities.
19Pursuant to Rule 27 of the  Working Procedures .
20USITC, Investigation No. TA-201-73, Institution and Scheduling of an Investigation under Section
202 of the Trade Act of 1974, United States Federal Register, 3 July 2001 (Volume 66, Number 128),
pp. 35267-35268.  (Exhibit CC-2 submitted by the Complaining Parties to the Panel)
21USITC Report, Vol. I, p. 1 and footnote 1 thereto.
22Ibid.
23Ibid., pp. 2 and 3.
24USITC supplementary information on the economic analysis of remedy options, 9 January 2002.
(Exhibit CC-10 submitted by the Complaining Parties to the Panel)
25USITC Second Supplementary Report.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 6
13. Based on the USITC determination, the President of the United States imposed definitive
safeguard measures on imports of certain steel products pursuant to Proclamation 7529 of
5 March 2002.  The Proclamation imposed tariffs ranging from 30 percent to 8 percent on imports of
certain carbon flat-rolled steel, hot-rolled bar, cold-finished bar, rebar, welded pipe, fittings, flangesand tool joints, stainless steel bar, stainless steel rod, tin mill products, and stainless steel wire.
 26  The
products subject to these safeguard measures were products for which the USITC had madeaffirmative determinations; with respect to tin mill products and stainless steel wire, for which theUSITC had made divided determinations, the President decided to consider the determinations of thegroups of commissioners voting in the affirmative with regard to each of these products to be thedetermination of the USITC.
 27  Imports from Canada, Israel, Jordan, and Mexico were excluded from
the application of the measures.  28  The measures were imposed for a period of three years and one
day  29, and became effective on 20 March 2002.  30
III. Arguments of the Participants and the Third Participants
A. Claims of Error by the United States – Appellant
1. Unforeseen Developments, Article 3.1 of the  Agreement on Safeguards ,  and
Article 12.7 of the DSU
14. The United States requests that the Appellate Body reverse the Panel's findings that the
USITC failed to provide a reasoned and adequate explanation demonstrating that "unforeseen
developments" had resulted in increased imports causing serious injury to the relevant domestic
industry.
15. According to the United States, in articulating the applicable standard of review, the Panel
mistakenly reflected concerns relevant to Article 4.2 of the  Agreement on Safeguards , and
disregarded concerns relevant to the requirement of unforeseen developments, under Article XIX:1(a)
                                                     
26Proclamation, paras. 7 and 9.  For a more detailed listing of the specific measures imposed, see Panel
Reports, para. 1.34.
27Ibid.,  para. 4.
28Ibid.,  para. 11.  Imports from developing Members of the WTO, whose shares of total imports were
found not to exceed three percent individually, and nine  percent collectively, were also exempted from the
application of the measures.  Ibid., para. 12.  In addition, the USTR was authorized to exclude particular
products pursuant to the procedure set out in the Proclamation.  Ibid.,  clauses (5) and (6).  For information on
the product specific exclusions granted until 22 August 2002, see Panel Reports, paras. 1.40–1.47.
29Ibid.,  para. 9(b).
30Ibid.,  clause (8).WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 7
of the GATT 1994.  The United States submits that the appropriate standard of review is "not one
derived from Article 4.2, but from Article XIX:1(a)".  31  According to the United States, "Article 4.2
indicates factors the competent authorities must evaluate and outlines the causation analysis.  In
contrast … 'Article XIX provides no express guidance' on when, where or how that demonstration [ofunforeseen developments] should occur."
 32  In response to questioning at the oral hearing, the
United States clarified that it was not requesting a specific ruling from the Appellate Body underArticle 11 of the DSU in respect of the Panel's findings on unforeseen developments.
16. The United States takes issue with the statement of the Panel that "[t]he timing of the
explanation [relating to unforeseen developments], its extent and its quality are all factors that canaffect whether [that] explanat ion is reasoned and adequate."
 33  According to the United States, there is
no basis in the  Agreement on Safeguards   for finding that "timing" and/or "extent" are relevant to
determining whether the competent authorities' explanations are reasoned and adequate.  34  W i t h
regard to the term "explanation" and the term "adequate", the United States submits that because theAgreement on Safeguards   does not explicitly require an "explanation" and does not employ the term
"adequate", those terms can only be understood as a shorthand for the obligations that are in theAgreement.  Those obligations are that the published report contain "reasoned conclusions" on "allpertinent issues" and "a detailed analysis of the case", including "a demonstration of the relevance ofthe factors examined".
 35  The United States stresses that "the key consideration [under Article 3.1] is
whether the authorities present a logical basis for their conclusion."  36
17. The United States refers to the finding of the Appellate Body in  US - Line Pipe   which states
that "to fulfill the requirement of Article 4.2(b), last sentence, the competent authorities must establishexplicitly, through a reasoned and adequate explanation, that injury caused by factors other thanincreased imports is not attributed to increased imports."
 37  As it did for the terms "explanation" and
"adequate", the United States emphasizes that the term "explicit" does not appear in the  Agreement
on Safeguards .  As the  Agreement on Safeguards   "does not expressly require that the competent
                                                     
31United States' appellant's submission, para. 79.
32Ibid.
33The United States refers in paragraph 10 of its a ppellant's submission to paragraph 10.115 of the
Panel Reports.
34United States' appellant's submission, para. 58.
35Ibid., para. 59 and footnote 29 to para. 62, referring to the obligations set out in Articles 3.1 and
4.2(c) of the  Agreement on Safeguards .
36United States' appellant's submission, para. 60.
37Ibid., para. 63, referring to Appellate Body Report, US – Line Pipe , para. 217.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 8
authorities' determination, findings, or conclusions be 'explicit,' that term can only be understood as a
shorthand for the obligations that  are  in the Agreement – that the published report contain 'reasoned
conclusions' on 'all pertinent issues' and 'a detailed analysis of the case,' including 'a demonstration of
the relevance of the factors examined.'"
 38
18. The United States submits that, because "the Panel based many of its findings against the
United States on its conclusions that the USITC report failed to provide a 'reasoned and adequateexplanation' of certain findings"
 39, it follows that there can only be a violation of Article 3.1 and not
of Articles 2 and 4 of the  Agreement on Safeguards .  The United States argues that a failure to
explain a finding does not automatically prove that the USITC had not performed the analysisnecessary to make the finding.
 40
19. The United States contends that the Panel concluded that the USITC failed to distinguish the
impact the alleged unforeseen developments had on the different product categories subject to the
various safeguard measures.  According to the United States, this conclusion of the Panel reflects twomisconceptions.  First, Article XIX of the GATT 1994 does not specify a particular type of analysis todemonstrate unforeseen developments, nor does it require the competent authorities to differentiatetheir respective impact on particular imports.  Second, the Panel did not point to any facts suggestingthat the USITC's general conclusions as to unforeseen developments were in any wayunrepresentative of the specific steel industries and imports covered by the various measures.  Inaddition, the United States contends that the Panel erred by requiring that the impact of various
unforeseen developments be differentiated with respect to the individual industries, and even
economies, of other countries.
20. The United States also argues that the Panel erred in finding that data and analysis contained
in the USITC report, but outside the section of the report addressing unforeseen developments, werenot relevant to an evaluation of the USITC's fi ndings on unforeseen developments.  Although the
Panel, according to the United States, asserted that the USITC provided no data to support a
conclusion that imports increased in the wake of the unforeseen developments, it neverthelessrecognized that the USITC report cited to data tables showing imports into the United States for eachcountry and for each product over the entire period of investigation.  In the United States' view, the
                                                     
38United States' appellant's submission, para. 64.
39Ibid., para. 73.
40Ibid., para. 74.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 9
Panel was "required"  41 to consider this information.  According to the United States, in  EC – Tube or
Pipe Fittings ,  the fact that the investigating authorit y had failed to mention one of the factors
specifically listed in the  Anti-Dumping Agreement   did not prevent the Appellate Body from finding,
after a close reading of the investigating authority's report, that the investigating authority had in fact
considered the enumerated factor.  42
21. The United States also contends that in some  instances the Panel acted inconsistently with
Article 12.7 of the DSU by failing to undertake the requisite analysis and failing to articulate why itconsidered that the USITC did not provide the requisite reasoned conclusions.
 43  The United States
submits that the Panel cited no evidence that contradicted the USITC's conclusions, did not find anexplanation alternative to the one provided by the USITC, and failed to set forth explanations and
reasons sufficient to justify its findings and recommendations.
2. Increased Imports
(a) General
22. The United States requests the Appellate Body to reverse the Panel's findings regarding
increased imports with respect to the product categories CCFRS, tin mill products, hot-rolled bar,
stainless steel wire and stainless steel rod.
23. The United States contends that the Panel's finding that a determination of increased imports
can be made only when there is a "certain degree of recentness, suddenness, sharpness andsignificance" cannot be justified by the  Agreement on Safeguards   or Article XIX of the
GATT 1994.
 44  According to the United States, the phrase "in such increased quantities" "simply
states the requirement that, in general, the level of imports at (or reasonably near to) the end of theperiod of investigation must be higher than at some unspecified earlier point in time."
 45  The United
States submits that the text of Article 2.1 of the  Agreement on Safeguards   can support only an
interpretation that an increase in imports must be  "recent" in the sense of the ability of imports to
cause or threaten to cause serious injury.
                                                     
41United States' appellant's submission, para. 92.
42Ibid., para. 93, referring to Appellate Body Report, EC – Tube or Pipe Fittings , paras. 161–163.
43In response to questioning at the oral hearing, the United States clarified that it was seeking a specific
ruling on Article 12.7 of the DSU only with respect to the Panel's findings on "unforeseen developments".
44United States' appellant's submission, para. 100, referring to Panel Reports, para. 10.167.
45United States' appellant's submission, para. 102.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 10
24. With regard to the requirement that the increase in imports must be "sudden", the United
States notes that the Panel based this requirement on the reference to "unforeseen developments" in
Article XIX of the GATT 1994.  The United States contends that the Panel read into Article XIX a
requirement that it does not contain, thus violating customary rules of treaty interpretation.  TheUnited States further argues that the "suddenness" requirement is in opposition with the manner inwhich serious injury often occurs.  The United States finds support for this argument in the AppellateBody's observation in  US – Line Pipe   that "[s]erious injury does not generally occur suddenly".
 46
25. The United States submits that the Appellate Body's finding in  Argentina – Footwear (EC)  
referred to by the Panel stands for the proposition that the "attributes of recentness, suddenness,sharpness and significance are inexorably linked to the ability of imports to cause or threaten to causeserious injury".
 47  In the United States' view, because Article 2.1 of the  Agreement on Safeguards  
encompasses the entire investigative authority of the competent authority, the issue of whether the
increase was recent, sudden, sharp and significant enough should be considered as competentauthorities proceed with the remainder of their investigation, that is, with their consideration ofserious injury or threat of serious injury.
(b) Specific Arguments with respect to CCFRS
26. The United States maintains that the Panel erred in finding that the USITC did not provide a
reasoned and adequate explanation of increased impor ts because it did not account for the decrease in
imports from interim 2000 to interim 2001.  The United States argues that there is no provision in theWTO Agreements requiring the USITC to address interim 2001 imports as part of its increasedimports analysis, or to give the change in the levels of imports between interim periods dispositiveweight.  The Panel also erred in finding that the increase in imports until 1998 was no longer recentenough at the time of the determination to support a finding of increased imports.  In the UnitedStates' view, the Panel failed to consider that the effects of the 1998 import surge were still occurringat the time of the determination and that the imports remained at significantly higher levels in 1999and 2000 than in 1996.
                                                     
46United States' appellant's submission, para. 105, referring to Appellate Body Report, US – Line Pipe ,
para. 168.
47United States' appellant's submission, para. 24.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 11
(c) Specific Arguments with respect to Hot-Rolled Bar
27. The United States contends that the Panel erred in finding that this requirement was not met.
According to the United States, the Panel focused almost exclusively on the decrease in imports ininterim 2001, while improperly disregarding the increases in imports over the five preceding years ofthe investigation.
(d) Specific Arguments with respect to Stainless Steel Rod
28. The United States argues that the Panel erred in finding that the increased imports
requirement was not met for stainless steel rod.  According to the United States, the Panel placed toomuch weight on the decline in import volumes in interim 2001, and improperly rejected the USITC'sanalysis of this decline.  The United States argues that the USITC acknowledged the decrease inimports in interim 2001, but explained that, despite this decrease, the market share of importsremained essentially stable in interim 2001.  Thus, the United States argues that the USITC wascorrect in concluding that the decline in imports in interim 2001 was not so significant as to outweigh
the increases of the previous years.
(e) Specific Arguments with respect to Tin Mill Products and Stainless
Steel Wire
 48
29. The United States argues that the Panel erred in asserting that there is an inconsistency in the
increased imports findings of those Commissioners who defined the like product in different ways.
The United States argues that it is not necessary to reconcile the increased imports findings of each
Commissioner or group of Commissioners.  The Unit ed States also argues that there is "nothing
intrinsically irreconcilable" about findings based on different product groupings and that the findingsof the three Commissioners under each determination are not "mutually exclusive".
 49  The United
States contends that the issue of whether the USITC satisfied the increased imports requirementshould be addressed by examining separately the findings of the individual Commissioners.  In theUnited States' view, had the Panel done so, it would have found that each Commissioner separatelysatisfied the conditions of Article 2.1.
                                                     
48The United States notes that the Panel cross-referen ced its conclusions with respect to the increased
imports requirement for tin mill products in its analysis of causation for both tin mill products and stainless steel
wire.  United States' appellant's submission, para. 46.
49United States' appellant's submission, paras. 372 and 374.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 12
30. In the United States' view, neither the text of Articles 2.1 and 3.1, nor the object and purpose
of the  Agreement on Safeguards ,  supports the Panel's interpretation of a requirement of uniform like
product definition among Commissioners making affirmative determinations.  In addition, according
to the United States, the Appellate Body Report in  US – Line Pipe   supports the USITC's practice of
aggregating mixed votes of individual Commissioners.  Finally, the United States argues that, byconstruing the  Agreement on Safeguards   to require uniformity in the like product definition by a
multi-member competent authority, the Panel is infringing unnecessarily upon the manner in which aMember may structure the decision-making process of its competent authority.
3. Parallelism
31. The United States requests that the Appellate Body reverse the Panel's findings that the
United States' safeguard measures are inconsistent with Articles 2.1 and 4.2 of the  Agreement on
Safeguards ,  because the United States did not, with respect to any of the product categories at issue,
establish explicitly that imports from the sources included in the relevant safeguard measuressatisfied, alone, the conditions for the application of a safeguard measure.
32. The United States argues that the Panel based its product-specific analysis on two general
conclusions.  First, the United States argues, the Panel rejected nine of the ten safeguard measures onthe grounds that the USITC had failed to account for the effects of imports from excluded sources.
The United States acknowledges that the Appellate Body has stated that parallelism requires
authorities to focus separately on imports from sources that are not excluded from the safeguardmeasure.  However, the United States argues that the Appellate Body has not set conditions on  how 
an authority must conduct its parallelism analysis.  According to the United States, the Panel requireda separate analysis of imports from those sources not subject to the safeguards measure, a requirementwithout a textual basis in the  Agreement on Safeguards .
33. Second, the United States contends that the Panel incorrectly interpreted the requirement that
the competent authorities must establish "explicitly" that imports covered by the measure satisfy theconditions for the application of the measure.  The United States points to what it considers to be low
import levels from Israel and Jordan, as well as to the USITC's finding that "exclusion of imports
from Israel and Jordan would not change the conclusion of the Commission or of individual
Commissioners."
 50  The United States believes that, in the context in which this statement appears, its
meaning was that imports from Israel and Jordan were either non-existent or so small that the
                                                     
50United States' appellant's submission, para. 338.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 13
Commission's conclusions for imports from sources other than Canada and Mexico were also
applicable to imports from sources other than Canada, Mexico, Israel, and Jordan.  In the view of the
United States, the Panel required that the USITC repeat its findings on non-NAFTA imports "word for
word in a section specifically addressing non-FTA imports"  51.  In the United States' view, there is no
basis in the  Agreement on Safeguards   for requiring an authority to make redundant or unnecessary
findings.
34. The United States further contends that if the Appellate Body reverses the Panel's findings,
the Appellate Body will not be able to complete the analysis, because there is insufficient factual basisin the Panel Reports.  The United States argues that should the Appellate Body nevertheless decide tocomplete this analysis, it should find that the USITC's parallelism analysis was in compliance with
Article 2.1 of the  Agreement on Safeguards .
4. Causation
(a) General
35. The United States requests the Appellate Body to reverse the Panel's finding on causation for
CCFRS, tin mill products, hot-rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, stainless steel
bar, and stainless steel wire.  As a general matter, the United States emphasizes that, as recognized bythe Panel, there is nothing in the "substantial cause" test applied by the USITC that would necessarilymean that the WTO obligation to separate and distinguish the effects of other causes of injury on thestate of the industry cannot be fulfilled.
36. The United States next submits that the Panel incorrectly concluded that Article 4.2(b)
requires the competent authorities to perform a collective assessment of the injurious effects of otherfactors.  The United States argues that this interpretation is inconsistent with the text of Article 4.2(b)and with the Appellate Body's findings under the  Agreement on Safeguards   as well as in  EC – Tube
or Pipe Fittings ;  moreover, the United States argues that a collective analysis of the effects of "other"
factors is not any more accurate than an individual analysis.  A competent authority is furthermore, inthe United States' view, not bound to assess whether the effects of all "other" factors "outweigh" theeffects of imports.
 52
                                                     
51United States' appellant's submission, para. 343.
52Ibid., para. 173.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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(b) Specific Arguments with respect to CCFRS
37. The United States disagrees with the Panel's finding that the USITC did not establish a
"coincidence in trends" between increases in imports  and declines in the industry's condition.  The
Panel conducted an impermissible  de novo   review by not addressing the USITC's reasoned
conclusions and instead "prepar[ing] its own data set"
 53 so as to assess whether a coincidence of
trends existed.  This analysis of the Panel, moreover, did not address certain other factors which,according to the United States, "clearly had a bearing on the situation of the CCFRS industry [
 ]."  54
38. The United States further contends that the Panel misunderstood the USITC's underselling
analysis.  The fact that the USITC did not specifically discuss the price comparisons for the other
constituent items of CCFRS does not mean that the USITC was "conveniently selective"  55 and failed
to evaluate the data for these items.  The Panel also incorrectly characterized the USITC's AUVanalysis.
39. The United States disputes the Panel's finding that the USITC's definition of the CCFRS
product category was so broad that it prevented the USITC from properly performing its pricinganalysis.  The United States relies on the panel report in  Argentina – Footwear (EC) ,  as well as on
the Appellate Body Report in  US – Lamb ,  to argue that, when reviewing an authority's causation
findings, a panel must assume that the authorities' findings on the definition of "like product" and
"domestic industry" were proper.
40. The United States also submits that the USITC adequately distinguished the injurious effects
of demand declines from those of imports.  In the United States' view, the Panel appears toerroneously require a valid non-attribution analysis for "each and every moment" during the period ofinvestigation.
 56  The USITC, according to the United States, adequately distinguished the effects of
capacity increases, as well as of the effects of minimill competition;  the USITC reasonablyconcluded that there was no change in the minimills' relative cost advantage that would have causedthem to drive prices down and, therefore, correctly rejected the cost advantage as a significant factorin domestic price decline.  Finally, the United States argues that the USITC evaluated whether legacy
costs had increased the industry's costs and correctly noted that the industry's legacy costs predated
                                                     
53United States' appellant's submission, para. 187.
54Ibid., para. 192.
55United States' appellant's submission, para. 202, referring to the Panel Reports, para. 10.379.
56United States' appellant's submission, para. 227.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 15
the period of investigation.  The USITC, therefore, did not find that legacy costs were a source of
injury during the period of investigation.
(c) Specific Arguments with respect to Hot-Rolled Bar
41. The United States argues that the Panel erred in rejecting the USITC's finding—that increases
in the industry's COGS had not been a source of serious injury to the industry during the period of
investigation—as not being reasoned and adequate.  The USITC evaluated all the record evidence andcorrectly concluded that the evidence showed that COGS increases in 2000 were not a cause of injuryto the industry.  In the United States' view, the Panel's conclusion is based on the mistaken assumption
that the USITC did not examine whether the industry's profitability and pricing declines coincided
with increases in its costs.
(d) Specific Arguments with respect to Cold-Finished Bar
42. The United States contends that the Panel erred in rejecting the USITC's finding that
aggressive underselling by imports caused the industry to lose market share in 2000 and 2001 and tosuffer corresponding declines in its production, shipment, and sales revenue levels.  In the United
States' view, the Panel failed to recognize that the declines in 2000 and 2001 were caused by separate
events, namely demand declines in 1999, and a surge in import volume in 2000.
43. Furthermore, the United States argues that the Panel mistakenly rejected the USITC's finding
of aggressive underselling by imports in 1999 and 2000 because of the USITC's reliance on quarterlyprice comparison data, rather than annual AUV data.  The Panel's findings are an improper attempt toquestion the USITC's choice of methodology.  Furthe r, the USITC, contrary to the Panel's finding,
separated and distinguished the effects of demand declines from those of imports by examiningwhether the industry's profitability and revenue declines correlated with demand declines during 1999and 2000.
(e) Specific Arguments with respect to Rebar
44. The United States argues that the USITC adequately distinguished the injurious effects of
changes in the industry's COGS.  Contrary to the Panel's findings, the USITC provided a detailed andreasoned assessment of the manner in which changes in the industry's costs had an impact on theindustry's price and profitability levels in 1999 and 2000.  Moreover, the United States submits, theUSITC's analysis showed clearly that rising input costs were not a cause of injury to the industry.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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(f) Specific Arguments with respect to Welded Pipe
45. In the United States' view, the USITC was not obliged to distinguish and separate the effects
of the industry's capacity increases because the USITC found that the effects of these increases wereminimal.  According to the United States, the Appellate Body findings in  EC – Tube or Pipe Fittings  
support the view that a competent authority is not re quired to distinguish the effects of an "other"
factor if that factor is found to contribute to inju ry in a "minimal", "minor" or "not significant" way.
The USITC, furthermore, adequately explained why it found the allegedly "aberrant" performance ofone member of the welded pipe industry not to be a source of injury for the industry during the period.
According to the United States, Article 4.2(b) does not preclude a competent authority from making
"subjective" judgements about the meaning of that evidence or from describing its assessment of that
evidence in a "subjective" way.
(g) Specific Arguments with respect to FFTJ
46. The United States submits that the USITC bore no obligation to assess the nature and extent
of capacity increases on the industry because the USITC found that capacity increases by the FFTJ
industry would not place substantial pressure on dom estic prices.  The United States relies on the
Appellate Body Report in  EC – Tube or Pipe Fittings   in arguing that an authority need not "separate
and distinguish" the effects of an "other" known factor, if the factor contributes only "minimally" tothe injury being suffered by an industry.
 57  With respect to the factor "purchaser consolidation", the
United States submits that the USITC properly assessed the nature and extent of any injury caused bythis factor by correctly noting that the serious injury was associated with factors not directly affectedby declines in price.
(h) Specific Arguments with respect to Stainless Steel Bar
47. The United States argues that the USITC adequately distinguished the injurious effects of late
period demand declines by evaluating whether declines in the industry's condition correlated moreclosely with imports than demand declines during the period.  The USITC thereby performed the veryanalysis by which, according to the Panel itself, the USITC could have satisfied the non-attributionrequirement.  The United States also argues that the USITC also separated and distinguished, in areasoned and adequate manner, the effects of increased energy costs from those of increased imports
                                                     
57United States' appellant's submission, para. 297.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 17
by evaluating whether declines in the industry's c ondition correlated more closely with imports than
energy cost increases.
B. Arguments of Brazil – Appellee
1. Article 3.1 of the  Agreement on Safeguards   and Article 12.7 of the DSU
48. Brazil submits that the articulation by the Panel of the applicable standard of review is
consistent with the  Agreement on Safeguards   and previous findings of the Appellate Body.
49. Referring to the phrase "reasoned and adequate explanation", Brazil notes that although, as
the United States pointed out, "adequate" and "explanation", are not explicitly found in the text of theAgreement on Safeguards ,  both terms "are easily discerned"
 58 from what is in the Agreement, and
particularly the language found in Article 3.1 and Article 4.2(c) of the  Agreement on Safeguards  
(that is, "reasoned conclusions" and "detailed analysis" and "demonstration of the relevance offactors").
50. With respect to the United States' argument that explanations do not need to be "explicit,"
Brazil stresses that the need for an explicit determination "is clearly embedded in the requirement
under Article 3.1 that an authority 'set forth' its findings and reasoned conclusions reached on all
pertinent issues of fact and law."
 59
51. Brazil also does not agree with the United States that the Panel "improperly merged" the
substantive requirements for establishing the right to take a safeguard measure with the proceduralrequirements set out in Articles 3.1 and 4.2(c) of the  Agreement on Safeguards   by presuming that a
failure to explain a finding automatically proved that the USITC Commissioners had not performedthe analysis necessary to make a finding.
 60  Brazil argues that the position of the United States that the
substantive obligations of Articles 2.1, 4.1 and 4.2 " do not require that the reasoning supporting [the
determinations of competent authorities] expressly appear in [their] written report"  61, is "tantamount
to relieving authorities of their substantive obligations".  62  According to Brazil, the United States is
                                                     
58Brazil's appellee's submission, paras. 11 and 13.
59Ibid., para. 17.
60Ibid., para. 22, referring to the United States' appellant's submission, paras. 73–76.
61Brazil's appellee's submission, para. 22, referring to the United States' appellant's submission,
para. 76.
62Brazil's appellee's submission, para. 22.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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"essentially arguing that we should trust that the USITC performed the appropriate analyses even if
there is no clear basis for discerning what it did."
 63  Under this rationale, Brazil asserts, "one could
never move beyond arguments centered on a failure to provide a reasoned and adequate explanation,
since arguments attacking the underlying analyses almost always rely on whatever explanation the
authority actually did provide."  64
52. Finally, according to Brazil, the Panel complied with Article 12.7 of the DSU, as it performed
the requisite factual and legal analyses of the parties' competing claims, set out numerous factualfindings, and provided extensive explanation of how and why it reached its factual and legalconclusions.  Brazil argues that the fact that the United States may not agree with the Panel's rationaledoes not imply that the Panel did not comply with Article 12.7.
2. Increased Imports
(a) General
53. Brazil requests that the Appellate Body dismiss the United States' appeal from the Panel's
conclusions concerning increased imports.  Brazil submits that the Panel correctly interpreted and
applied the increased imports requirement.  Brazil notes that the Panel correctly found that the
increased imports requirement represents both a quantitative and qualitative standard, independent ofthe causation analysis.  According to Brazil, the requirement is that increased imports must be recentenough, sudden enough, sharp enough and significant enough to cause injury, based on anexamination of trends over the entire period of investigation, with an emphasis on the most recentperiod.
54. Brazil agrees with the Panel's conclusion that a finding that imports have increased pursuant
to Article 2.1 can be made when the increase evidences a certain degree of recentness, suddenness,sharpness and significance, and believes that this conclusion is fully supported by the Appellate Body
jurisprudence.  Specifically, Brazil alleges that the requirement of "recentness" has been construed by
the Appellate Body based on a sound understanding of the relationship between Article 2.1 andArticle 4.2(a) of the  Agreement on Safeguards   and Article XIX:1(a) of the GATT 1994, and that the
Panel was correct in adopting this interpretation.  Moreover, Brazil submits that the element ofsuddenness was recognized as inherent in Article XIX of the GATT 1994 by the Panel and,
                                                     
63Brazil's appellee's submission, para. 23.
64Ibid.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 19
previously, the Appellate Body.  In addition, Brazil argues that the increase in imports cannot be
confirmed by an analysis of end points since, in  Argentina – Footwear (EC) ,  the Appellate Body
specifically repudiated such an approach.
(b) Specific Arguments with respect to CCFRS
55. Brazil further contends that the Panel correctly found that the USITC did not meet the
increased imports requirement with respect to CCFRS.  In Brazil's view, the USITC performed thesame type of analysis that the Appellate Body rejected in  Argentina – Footwear (EC) —an end-point-
to-end-point analysis—without considering trends, and mentioned the decline at the end of the
investigation period "only in passing", adopting a "any increase will do" approach.
 65
3. Parallelism
56. Brazil submits that the Panel's findings on parallelism are fully consistent with the Appellate
Body jurisprudence, as set out in  US – Wheat Gluten   and  US – Line Pipe ,  and requests that the
Appellate Body dismiss the United States' appeal on parallelism.
57. Brazil agrees with the Panel's conclusion that the USITC failed to account for the different
effects of non-FTA imports of CCFRS as compared to the effects of all imports of CCFRS.  In
Brazil's view, the USITC's parallelism analysis in its Second Supplementary Report was based on itsfinding that the statements made on all imports as regards AUVs could also be made with respect tonon-NAFTA imports.  The Panel did not read into the  Agreement on Safeguards   a new requirement
that the effects of NAFTA imports be considered on their own or as an alternative cause, or that anauthority must specifically analyze the effects of excluded products;  rather, the Panel, in Brazil's
view, stated what was necessary to ensure a proper  assessment of the effects of included products.
58. As regards the exclusion of imports from Israel and Jordan, Brazil is of the view that the
United States essentially argues that because imports from these countries were so small, they need
not be part of a parallelism analysis.  However, in Brazil's view, in order to establish that imports
from sources covered by the measure satisfy all the conditions for imposing a safeguard measure, aMember must determine whether its conclusions on causation would change if imports from excludedsources, taken together, were removed from the equation.  In Brazil's view, there is no secondstandard for excluded sources of small volumes of imports.
                                                     
65Brazil's appellee's submission, para. 49.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 20
4. Causation
59. Brazil requests the Appellate Body to uphold the Panel's finding on causation.  Brazil claims
that there was no coincidence between import trends and domestic industry performance.  The Panelneither ignored the USITC's report, nor engaged in a  de novo   review;  rather, the Panel "did little
more than compile and republish information that was before the USITC."
 66  Brazil also disagrees
with the United States that the Panel did not analyze relevant factors and failed to include an analysisof import pricing in its coincidence analysis.
60. Brazil next submits that the USITC's treatment of import underselling failed to meet the
requirement to provide a "compelling analysis".  Brazil agrees with the Panel that the existence of
underselling does not, by itself, demonstrate that imports were driving prices down and cannotdemonstrate even the presence of competition between imports and domestic products.  In Brazil'sview, underselling by imports, combined with a declining import market share and the absence ofcoincidence between import trends and industry performance, does not provide a compellingexplanation of a causal link between increased imports and serious injury.
61. Further, according to Brazil, the Panel did not misunderstand the USITC's analysis, but rather
identified a "serious problem" often inherent in the use of AUVs.  Brazil submits that, contrary to theUnited States' assertion, the USITC did not fully consider the reliability of aggregate AUVs for
CCFRS.  Brazil also points out that United States courts have on occasions reversed the USITC's
findings for "excessive reliance" on AUVs.
 67  The USITC, in Brazil's view, did not establish why it
considered the aggregate AUV data to be reliable.
62. According to Brazil, the Panel was also correct to address the CCFRS like product definition
in the context of its causation analysis.  Brazil submits that like products must be defined in such away as to permit the analysis required by the  Agreement on Safeguards .  A like product that is too
broadly defined will yield data that is too aggregated  to offer an accurate depiction of the market.  The
reliance of the United States on the panel report in  Argentina – Footwear (EC)   in this respect is, in
Brazil's opinion, incorrect.  The panel in that dispute stated that "statistics for the industry and imports
as a whole will only show averages, and therefore will not  … provide sufficiently specific
                                                     
66Brazil's appellee's submission, para. 62.
67Ibid., para. 72.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 21
information on the locus of competition in the market."  68  That panel did not subsequently explore
this issue further, because no party had challenged the like product definition.
63. Brazil contends that the Panel in the present case was not required to make specific findings
on the like product definition for CCFRS before discussing the "analytical problems" with respect tocausation inherent in the USITC's CCFRS definition.
 69  However, in the event that the Appellate
Body should find fault with this aspect of the Panel's causation analysis, Brazil refers to itsconditional appeal, contained in its other appellant's submission.
64. Furthermore, Brazil submits that the Panel correctly concluded that the United States failed to
ensure that it did not attribute to imports of CCFRS the injurious effects of other factors.  Brazilemphasizes that panels need not accept the conclusions of authorities if those conclusions aredemonstrably wrong or insufficient in the light of the facts.  With respect to capacity increases, Brazil
submits that the Panel correctly found that the USITC failed to perform an adequate non-attribution
analysis.  Brazil contends that the USITC itself found that capacity increases had an effect on pricing,but subsequently failed to distinguish the effect of capacity increases from the effect of imports.
65. Brazil argues further that the USITC acknowledged that declining demand played a role in the
injury suffered by the industry, but then dismissed the role of declining demand on the grounds thatthis decline manifested itself late in the period of investigation.  Brazil submits that such analysis doesnot actually separate and distinguish the effect of declining demand during the period for which theUSITC "found the condition of the domestic industry [to be] most dire".
 70  Brazil submits further that
the operating performance of the CCFRS industry deteriorated most sharply in 2000 and 2001,
thereby showing correlation only with declining demand, and not also with increased imports.
66. Brazil submits that the Panel also correctly found that the USITC failed to distinguish the
effects of intra-industry competition from the effects of imports.  The USITC, according to Brazil,acknowledged that a greater volume of lower-cost minimill capacity and output did have an effect onprices, but subsequently dismissed this factor "without any serious analysis".
 71  With respect to the
USITC's pricing analysis, Brazil submits that the relevant question is not the existence or the extent ofunderselling, but rather whether there is a correlation between underselling and injury to the domestic                                                     
68Brazil's appellee's submission, para. 80, referring to Panel Report, Argentina – Footwear (EC) ,
para. 8.261 and footnote 557 thereto.
69Brazil's appellee's submission, para. 81.
70Ibid., para. 93.
71Ibid., para. 96.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 22
industry;  the USITC never examined this question.  Moreover, Brazil points out that, even as the
prices for minimills' products fell, these minimills nevertheless enjoyed stronger financial
performance than the integrated producers.  In the light of this fact, according to Brazil, the USITC
could not satisfy the non-attribution requirement by means of "a few cursory comments on relativecosts of production and import pricing".
 72
67. With respect to legacy costs, Brazil argues that the USITC did acknowledge that this factor
was a source of injury, but subsequently dismissed legacy costs on the basis that they predated theinjury and did not increase during the period of investigation; Brazil considers this explanationinsufficient and contends that in circumstances where an increasing portion of production isundertaken by companies without legacy costs, companies with legacy costs will be at a competitivedisadvantage, which will ultimately affect their performance.
68. Finally, Brazil agrees with the Panel that Article 4.2(b) requires an overall assessment of
"other factors".  Brazil submits that, for instance, declining demand cannot be evaluated in isolationfrom the fact that capacity was increasing at the same time.  The USITC never analyzed therelationship of various non-import factors and did not enquire how one of these factors might"compound the effect of the other".
 73  In Brazil's view, the Appellate Body in  US – Line Pipe  
recognized that a proper non-attribution analysis must include an "overall assessment", and inEC – Tube or Pipe Fittings   "recognized that circumstances may require an assessment of how factors
interact".
 74  In Brazil's view, the facts of this case require such an assessment.  In any event, in
Brazil's view, since the USITC failed to separate and distinguish other facts even on an individual
basis, the USITC's report does not meet the requirements of the  Agreement on Safeguards .
C. Arguments of China – Appellee
1. Unforeseen Developments, Article 3.1 of the  Agreement on Safeguards ,  and
Article 12.7 of the DSU
69. China requests that the Appellate Body reject the United States' appeal of the Panel's
conclusions concerning unforeseen developments.  China argues that the Panel applied the correctstandard in requiring that a report must contain a coherent and logical explanation with respect tounforeseen developments.  The Panel did not apply the standard set out in relation to Article 4.2;
                                                     
72Brazil's appellee's submission, para. 102.
73Ibid., para. 111.
74Ibid., para. 113.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 23
rather, China argues, the Panel referred to the standard derived by the Appellate Body from an
interpretation of Article 3.1 of the  Agreement on Safeguards   in the context of claims arising under
Articles 2 and 4 of that Agreement.  In China's view, this standard uses a "general formula" that
"stems" from Article 3.1  75 and that can be applied to all relevant conditions for applying safeguard
measures.
70. China argues that, pursuant to Article XIX of the GATT 1994 and the Appellate Body
decision in  US – Lamb ,  safeguard measures are imposed on imports of "particular" products.
Contrary to the United States' arguments, the Panel did not suggest that the USITC was required todetermine to what extent each unforeseen development affected each product and each country.Rather, the Panel correctly applied the requirement that the USITC demonstrate a logical connectionbetween unforeseen developments and increased imports for each safeguard measure.  In China's
view, this requirement ensures that such measures are not applied to products having no connection to
the unforeseen developments.
71. China submits that the Panel did not act inconsistently with Article 12.7 of the DSU.  That
provision requires the Panel to provide a basic rationale behind its findings; China notes in thisrespect that the Panel identified the legal standard, specified its approach for the application of thisstandard, examined all relevant facts and assessed them in the light of the standard as well as theapplicable provisions, and, finally, provided reasons for its conclusions.  In China's view, this issufficient, in the light of the Appellate Body's standard, to satisfy the requirements under Article 12.7
of the DSU.
2. Increased Imports
(a) General
72. China argues that the Panel was correct in finding that the United States acted inconsistently
with Articles 2.1 and 3.1 of the  Agreement on Safeguards  by failing to provide a reasoned and
adequate explanation of how the facts supported it s determination with respect to "increased imports".
China considers that, in order to satisfy the "increased imports" requirement, the rate and amount ofthe increase in imports must be evaluated; a comparison of the end points of the period ofinvestigation is not sufficient.  The competent authorities must furthermore examine recent imports,and recent data should not be considered in isolation from the data pertaining to the entire period of
                                                     
75China's appellee's submission, para. 37.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 24
investigation.  China further submits that the increase in imports must, furthermore, be sudden and
recent.  The increase in imports must also have  been recent enough, sudden enough, sharp enough and
significant enough, both quantitatively and qualitatively, to cause or threaten to cause "serious injury".
Moreover, since safeguard measures are of an extraordinary nature, the increase cannot have beensteady and gradual.  China adds that, if there is a decrease in imports during the period ofinvestigation, the competent authority must explain in a reasoned and adequate manner why such adecrease does—or does not—invalidate a finding on increased imports.
73. Finally, China disagrees with what it sees as the United States' claim that the analysis of
increased imports is not distinct from the analysis of serious injury and causation.  In China's view,the United States' arguments in this respect are cont rary to previous findings of the Appellate Body.
(b) Specific Arguments with respect to CCFRS
74. China believes that the USITC "failed to provide any explanation as to why the decrease in
imports occurring since 1998 could not offset the previous increase occurring three years ago."
 76  In
China's view, such a "gap" cannot be "completed" by a "re-explanation" of the facts by the UnitedStates before the Appellate Body.
 77  China considers that to follow the United States' arguments with
respect to CCFRS would mean that a simple end-point  to end-point comparison would be sufficient to
fulfil the "increased imports" requirement of the  Agreement on Safeguards ,  an interpretation clearly
rejected by the Appellate Body in  Argentina – Footwear (EC) .  China submits that the Panel did not
give undue weight to interim 2001 imports, but rather applied the findings of the Appellate Bodywhich require the competent authority to focus specifically on the most recent imports.  Finally, Chinaargues that the finding that the 1998 surge in imports "was no longer recent enough at the time of thedetermination" is "fully in line" with the requirements of the  Agreement on Safeguards   and their
interpretation by the Appellate Body.
 78
(c) Specific Arguments with respect to Hot-Rolled Bar
75. China agrees with the Panel that the USITC failed to provide a reasoned and adequate
explanation as to why the most recent decrease in imports in interim 2001 had no impact on theUSITC's conclusion that hot-rolled bar was being imported in "increased quantities".  China assertsthat it was for the USITC to explain why that decrease had no impact on its final conclusion.                                                     
76China's appellee's submission, para. 117.
77Ibid.
78Ibid., para. 125.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 25
Furthermore, China disagrees with the United States that the Panel failed to place the data for the end
of the investigation period in the context of the data from the earlier part of the period of
investigation.
(d) Specific Arguments with respect to Stainless Steel Rod
76. China agrees with the Panel's findings on stainless steel rod.  The USITC, in China's view,
failed to provide a reasoned and adequate explanation of why the most recent decrease in imports ininterim 2001 had no impact on the USITC's conclusion that stainless steel rod was being imported in"increased quantities".  China believes that, contrary to the United States' arguments, the Panel
appropriately placed the data for the end of the investigation period in the context of the data from the
earlier part of the period of investigation.  In any event, the USITC failed to explain why it found anincrease in imports in absolute numbers, while the decrease between interim 2000 and interim 2001was 31.3 percent.
(e) Specific Arguments with respect to Tin Mill Products and Stainless
Steel Wire
77. China argues that decisions of the Appellate Body demonstrate that the USITC was free to
rely on the findings made by three Commissioners and that the findings of those Commissioners may
constitute the determination required under Article 2.1 of the  Agreement on Safeguards .  However,
these findings must be reconcilable in order to provide a reasoned and adequate explanation as to howthe facts support the determination on increased imports.  There is no such explanation in the presentcase, because the Commissioners' findings departed from each other and were based on different
product groupings.  Although findings based on these different groupings might sometimes be
reconcilable, this would merely be by coincidence and is certainly not always the case.  China alsobelieves that the Appellate Body's decision in  US – Line Pipe   addressed the correct interpretation of
Article 2.1;  the present case, however, concerns the number of Commissioners makingdeterminations or the differences between such de terminations.  Moreover, China argues that in  US –
Line Pipe ,  unlike in the present case, the Commissioners at issue had made affirmative injury
determinations.  China submits that the United States was free to decide that a singular act resultsfrom decisions by six Commissioners;  however, according to China, the United States is not free torely on these decisions when the decisions by these Commissioners cannot be reconciled one with
another as a matter of substance.
 79
                                                     
79China's appellee's submission, para. 409.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 26
3. Parallelism
78. China argues that the Panel was correct in finding that the United States acted inconsistently
with Articles 2.1 and 4.2 of the  Agreement on Safeguards   by failing to establish that imports from
sources not excluded from the scope of the measures alone satisfy the conditions required for theapplication of the measures.
79. China contends that Articles 2.1 and 4.2 of the  Agreement on Safeguards ,  as interpreted by
panels and the Appellate Body, require authorities to justify explicitly any gap between importscovered by the investigation and imports falling within the scope of the measure.  The competent
authority must provide a reasoned and adequate explanation as to why imports falling within the
scope of the safeguard measure alone satisfy the conditions of Article 2.1, as elaborated in Article 4.2.In doing so, according to China, the USITC was required to "establish explicitly that non-FTAimports are able to cause serious injury distinctively from injury possibly caused, at the same time, byother sources of imports."
 80
80. China also claims that the United States made only implicit findings with respect to imports
from sources other than Canada and Mexico.  Moreover, according to China, the United States isincorrect in arguing that, "when the volume of FTA imports is extremely small, the authority'sconclusions with respect to all imports are applicable to imports from all sources other than FTA
sources, with no need for additional explanation."
 81  China argues that, even if imports from Israel
and Jordan were small—or sometimes even "quasi-inexistent"—this fact does not "release" the UnitedStates from conducting a proper parallelism analysis.
 82  China believes that there "cannot be a double
standard", depending on the level of imports.  83  According to China, although a small volume of
imports from FTA sources may make it easier to explain why non-FTA imports satisfy the conditionsof Article 2.1, the authorities must still provide such an explanation.
                                                     
80China's appellee's submission, para. 357.
81Ibid.., para. 335.
82Ibid., para. 359.
83Ibid., para. 373.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 27
4. Causation
81. China argues that the Panel was correct in finding that the United States acted inconsistently
with Articles 2.1, 3.1 and 4.2(b) of the  Agreement on Safeguards  by failing to demonstrate a causal
link between increased imports and serious injury.
82. China maintains that the Panel found, with respec t to two specific products, that the USITC
should have assessed the cumulative effect of factors other than increased imports.  Contrary to theUnited States' arguments, the Panel did not suggest that authorities must conduct such an assessment
in all cases and its interpretation of the non-attribution requirement is supported by previous decisions
of the Appellate Body.  In par ticular, the Appellate Body in  EC – Tube or Pipe Fittings   recognized
that an authority may need to conduct a collective an alysis in certain factual circumstances.  Although
the USITC's approach to non-attribution was not inhe rently flawed, the USITC failed to complete its
non-attribution analysis because it disregarded other factors once it had established that they did notindividually cause injury equal to or greater than that caused by increased imports.  The United Statesis incorrect in suggesting that the USITC need not conduct a non-attribution analysis regarding factorsmaking only a "minor" contribution to injury.  Furthermore, even if this were correct, the Panelcorrectly found that the USITC had not provided a reasoned and adequate explanation that thesefactors made only a minor contribution.  In any case, China maintains that most of the United States'
arguments regarding the Panel's findings on causation relate to the Panel's consideration of facts.
(a) Specific Arguments with respect to CCFRS
83. China notes that the United States challenges the Panel's finding that the USITC failed to
explain why it relied on annual AUV data.  However, this finding is consistent with the USITC's ownacknowledgement that some combined data may involve double counting.  The Panel did notspecifically conclude that the CCFRS product grouping was improper.  However, the Panel did make
an independent determination that the USITC's pricing analysis was not reasoned and adequate due to
flaws in the data and the USITC's selective relian ce on the data.  On the question of non-attribution,
the Panel did not require the USITC to distinguish th e effects of imports from those of other factors at
every moment during the investigation.  Rather, it required an explanation of why injury caused byother factors was not attributed to increased imports.  The need for such an explanation wasparticularly important given that the USITC itself acknowledged the potential injurious impact ofdeclining demand, increased capacity, intra-industry competition, and legacy costs.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 28
(b) Specific Arguments with respect to Cold-Finished Bar
84. According to China, the United States is improperly challenging on appeal the Panel's
findings of fact.  China states that the Panel determined that the USITC could not simply dismissdeclining demand as a possible injury factor, because the Panel found that another plausibleinterpretation of the data was that this factor could contribute significantly to injury.
(c) Specific Arguments with respect to Rebar
85. China claims that the United States is improperly challenging, on appeal, the Panel's findings
of fact.  In particular, the United States challenges the Panel's finding that the USITC had notprovided a reasoned and adequate explanation that capacity increases and the aberrant performance ofone domestic producer were insignificant causes of serious injury.  China also maintains that theUnited States is improperly disputing the Panel's c hoice of the relevant facts on which to base its
analysis.
(d) Specific Arguments with respect to Welded Pipe
86. China argues that, despite the USITC's view that capacity increases or the aberrant
performance of one domestic producers were minor factors, the USITC was nevertheless required toexplain this view and provide evidence to support it.  However, the USITC made only a subjectiveassertion that did not satisfy the non-attribution test.  The Panel did not find that subjectivejudgements are prohibited under Article 4.2(b) of the  Agreement on Safeguards .  However, China
maintains that the Panel considered that a subjec tive judgement without further explanation, of the
kind made by the USITC, did not constitute a reasoned conclusion.
(e) Specific Arguments with respect to FFTJ
87. China asserts that the Panel did not confirm the factual findings underlying the USITC's
determination that capacity increases did not have a substantial injurious impact.  The United States'arguments distort the Panel Reports in suggesting otherwise.  In addition, the USITC itselfrecognized that purchaser consolidation played a role in causing injury, but then dismissed this factorwithout further explanation.  In any case, China maintains that the United States' argumentsimproperly challenge factual findings of the Panel.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 29
(f) Specific Arguments with respect to Stainless Steel Bar
88. China argues that the United States is improperly challenging the Panel's findings of fact
regarding the factors of declining demand and increases in energy costs.  In particular, the Panelfound that the USITC dismissed declining demand as an injury factor despite acknowledging that thisfactor did play a role in causing injury.  Contrary to the United States' arguments, the Panel did notenunciate any standard regarding the second sentence of Article 4.2(b).  According to China, thePanel simply provided an example of what could have been a reasoned and adequate explanation thatthis factor was not causing injury to the domestic industry.
D. Arguments of European Communities – Appellee
1. Unforeseen Developments, Article 3.1 of the  Agreement on Safeguards ,  and
Article 12.7 of the DSU
89. The European Communities requests that the Appellate Body reject the United States' appeal
of the Panel's conclusions concerning unforeseen developments.  The European Communities recallsthat, as the Appellate Body found in  US – Lamb ,  the existence of unforeseen developments is a
"pertinent issue of fact and law" within the meaning of Article 3.1 of the  Agreement on Safeguards  
and, therefore, the "report of the competent authorities, … must contain a 'finding' or 'reasonedconclusion' on 'unforeseen developments'."
 84
 
90. The European Communities further recalls that Article XIX:1(a) of the GATT 1994 requires
that increased imports must result from unforeseen developments.  The relevant "unforeseen
developments" must, therefore, be linked to increased imports of each specific product that may besubject to a safeguard measure.  According to th e European Communities, the USITC failed to make
that link for each product.
91. The European Communities also submits that data not used by the USITC in its unforeseen
developments analysis, but used elsewhere in the USITC's report, is not relevant for the Panel'sanalysis.  A reasoned conclusion is one that links the pertinent facts to the conclusion reached, not onewhere "key elements of the analysis are left to guess work and supposition".
 85  It was not for the
                                                     
84European Communities' appellee's submission, para. 87, referring to Appellate Body Report,
US – Lamb , para. 76.
85European Communities' appellee's submission, para. 100.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 30
Panel, as the United States suggests, to undertake a  de novo   review of the USITC record and provide
the analysis and reasoning that the USITC failed to disclose.
92. The European Communities argues that the United  States' challenge to the Panel's finding that
"[t]he timing of the explanation, its extent and its quality are all factors that can affect whether anexplanation is reasoned and adequate" is unsupported.  According to the European Communities, theUnited States misconstrues the word "extent" as signifying "length".  The European Communitiesconsiders that the Panel did not demand that the US ITC report be longer, but that it contain a more
reasoned and adequate explanation of the findings.
93. The European Communities argues that the United States wrongly focuses only on the word
"reasoned" in Article 3.1 of the  Agreement on Safeguards   to question the obligation to provide an
"explanation" for the conclusions reached in the in vestigation.  In the European Communities' view,
the meaning of Article 3.1 must be established taking  into consideration all the terms used;  the two
terms "setting forth" and "reasoned" suggest the same meaning, that is, that a reasoned and adequateexplanation must be contained in the report.  The European Communities contends that the UnitedStates' interpretation of the term "reasoned conclusion"—that the report need only provide a "logicalbasis" for a conclusion—would fail to give meaning and effect to all the terms of the treaty.
94. As for the United States' argument that the word "explicit" is not contained in Article 3.1 of
the  Agreement on Safeguards ,  the European Communities refers to the term "set forth" in that
Article and argues that it would be "difficult to conceive of how an account can be given  distinctly  
or  in detail   in an implicit manner or how an  exposition ,  a  narrative ,  or a  description   can be
other than explicit."
 86
95. The European Communities agrees with the United States' argument that competent
authorities may choose any structure, any order of analysis, and any format for explanation that theysee fit, as long as the report complies with Articles 3.1 and 4.2(c).  However, the EuropeanCommunities argues, Members imposing safeguard measures are still required to set forth a reasonedand adequate explanation and not leave it to the Panel or other Members to deduce it from the rawdata.
96. With respect to the United States' contention that the Panel's findings on the lack of a
reasoned and adequate explanation should be restricted to Article 3.1 of the  Agreement on
                                                     
86European Communities' appellee's submission, para. 57.  (original emphasis)WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 31
Safeguards ,  the European Communities submits that the Appellate Body has explained in previous
safeguards cases that the failure to provide a reasoned and adequate explanation is not only a violation
of Article 3.1, but also of the substantive obligations of the  Agreement on Safeguards .
97. With respect to Article 12.7 of the DSU, the European Communities considers that the United
States is in fact reproaching the Panel for making more findings than were needed.  The EuropeanCommunities submits that, in stating that a certain explanation provided by the USITC was"plausible", the Panel had engaged in a speculation that went "beyond its mandate"
87 and that, had the
Panel developed alternative explanations, it would have conducted a  de novo  examination.
2. Increased Imports
(a) General
98. The European Communities requests that the Appellate Body dismiss the United States'
appeal of the Panel's conclusions concerning increased imports.  According to the EuropeanCommunities, the United States' challenge to the standard applied by the Panel is based on an attemptto collapse the increased import requirement with the causation analysis.  This argument is contrary to
the ordinary meaning of Article 2.1 of the  Agreement on Safeguards   and the Appellate Body
jurisprudence.  In the European Communities' view, the condition relating to increased imports isseparate from the question of causation and injury.  Moreover, the European Communities submitsthat the use of the present tense in the phrase "is be ing imported" explicitly limits the right to adopt a
safeguard measure to situations where increased imports continue and can still be found to cause orthreaten to cause injury.  The European Communities further contends that the United States' assertion
that the analysis of increased imports must take account of long-term effects of previous increases
cannot be justified by the  Agreement on Safeguards ,  because the safeguard measures are not
intended to provide compensation for effects of previous increases.
99. In addition, the European Communities argues that  the requirement to analyze trends over the
entire period of investigation and to focus particularly on the most recent data is derived directly fromthe phrase "is being imported".  This requirement has been clarified in  Argentina – Footwear  (EC) , 
where, according to the European Communities, the Appellate Body found that the relevantinvestigation period must be the "recent past", and also that it must "end in the very recent past".
 88
                                                     
87European Communities' appellee's submission, para. 106.
88Ibid., para. 123, referring to Appellate Body Report, Argentina – Footwear (EC) , footnote 130 to
para. 130.WT/DS248/AB/R, WT/DS249/AB/R,
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The European Communities argues that in the event of  a more than very slight and brief decrease at
the end of the period of investigation, the competent authorities must establish why, despite that
decrease, the facts of the case support the determination that the product continues to be imported at
increased levels.
100. The European Communities agrees with the Panel's finding that increased imports must
exhibit a "certain degree of recentness, suddenness, sharpness and significance".
 89  This interpretation
is fully supported by the Appellate Body's finding in  Argentina – Footwear  (EC) ,  which, in turn, is
based on a contextual reading of Article XIX of the GATT 1994 and Article 2.1 of the  Agreement on
Safeguards .
(b) Specific Arguments with respect to CCFRS
101. According to the European Communities, the United States criticizes the Panel for not
carrying out a concrete evaluation of the USITC's explanations of the long-term effects of the 1998
import increases.  The European Communities contends that this argument is an attempt by the United
States to collapse the analysis of the effects of the imports with the requirement of increased imports.
(c) Specific Arguments with respect to Hot-Rolled Bar
102. The European Communities considers that the Panel, contrary to the United States'
arguments, did not fail to analyze interim 2001 data in context and did not fail to consider the alleged"limited" duration of the decrease in interim 2001, but rather found that the USITC had failed toaddress and explain the interim 2001 data.
(d) Specific Arguments with respect to Stainless Steel Rod
103. The European Communities submits that the Panel did not, as alleged by the United States,
fail to consider duration and magnitude of the respective increases and decreases in imports.  Rather,the Panel found that the USITC did not explain why it found, despite the decline betweeninterim 2000 and interim 2001, that there was an increase of imports in absolute numbers.  In theEuropean Communities' view, the Panel also correctly found that the market share of imports was notpertinent for the determination that absolute impor ts increased.  Finally, the European Communities
submits that even if the Appellate Body were to reverse the Panel's finding on this product category,
                                                     
89European Communities' appellee's submission, paras. 133 and 137, referring to Panel Reports,
para. 10.167.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 33
the Appellate Body should still uphold the Panel's ultimate conclusion that the USITC had not
demonstrated the existence of increased imports.  The European Communities refers, for this purpose,
to its arguments before the Panel and the relevant arguments in China's appellee's submission.
(e) Specific Arguments with respect to Tin Mill Products and Stainless
Steel Wire
104. The European Communities submits that the Pane l did not create a new requirement that the
internal opinions of individual Commissioners must  be based on the same product groupings.  Rather,
the Panel's reasoning was based on the requirement that a safeguard measure must be based on thedetermination and the underlying investigation, as published in the report. The EuropeanCommunities agrees with the Panel that different product definitions lead to findings which areimpossible to reconcile, because, for instance, import numbers of differently defined products are notthe same, and will lead to different evaluations of trends, different explanations, and differentconclusions.
105. In the European Communities' view, in  US – Line Pipe ,  the Appellate Body addressed a
situation where three affirmative votes, considered as the determination of the USITC, found different
forms of injury which are written as alternatives into the  Agreement on Safeguards ;  however, there
is no alternative requirement concerning a "product" or "group of products that include the product"written into the  Agreement on Safeguards .  The Panel also did not improperly infringe upon a
Member's right to structure the decision-making process of its competent authority, but rather tried toreview all three individual determinations together , because the United States "insisted" that these
three findings together formed the USITC's determination.
 90  Should the Appellate Body nevertheless
consider that the Panel erred in law and choose to complete the legal analysis, the EuropeanCommunities submits that none of the individual findings separately fulfils the requirements of the
Agreement on Safeguards ,  and refers to its arguments before the Panel on this matter.
3. Parallelism
106. The European Communities submits that there is no reason for the Appellate Body to disturb
the Panel's findings on parallelism.  The European Communities disagrees with the United States'assertion that the Panel created a new requirement of a separate analysis of imports from sources notsubject to the safeguard measures.  Article 2.1 of the  Agreement on Safeguards   has been interpreted
as limiting the product basis of the determination to imports covered by the measures.  According to
                                                     
90European Communities' appellee's submission, para. 415.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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the European Communities, the phrase in Article 4 "factor other than imports" must be read as
"factors other than covered imports".  Therefor e, in the view of the European Communities, in
requiring that the effects of imports not covered by the measure be accounted for and not be attributed
to covered imports, the Panel was simply applying Article 4.2(b), second sentence, to the properproduct scope.  Moreover,  Article 4.2(b), by referring to "other factors", does not establish a closedlist and the competent authorities have a duty to investigate even beyond the listed injury factors.
107. The European Communities disagrees with the United States' contention that, because imports
from Israel and Jordan were non-existent or infinitesimal, the discussion of non-NAFTA imports alsoprovides the requisite explicit findings with respect to imports from all sources other than Canada,Mexico, Israel, and Jordan.  The United States is, in effect, invoking a  non-existent  de minimis  
exception.  Finally, the European Communities submits that, in the event the Appellate Body reverses
the Panel's findings, there is sufficient factual basi s for the Appellate Body to complete the analysis.
4. Causation
(a) General Statements
108. The European Communities requests that the Appellate Body uphold the Panel's findings on
causation with respect to all product categories subject to appeal.  The Panel did not suggest that acausation methodology needs to provide for a non-attribution analysis of the cumulative effects ofother factors in each and every case;  rather, the cases requiring a cumulative assessment are where anassessment on an individual relative basis is insufficient to ensure that the injurious effects of otherfactors are not attributed to increased imports.  The European Communities finds support for itsreasoning in the Appellate Body's findings in  US – Lamb   and  US – Line Pipe .
109. Further, in the European Communities' view, the Appellate Body found in  EC – Tube or Pipe
Fittings   that a factor which has  no injurious effect ,  rather than  minimal effects ,  does not have to be
subject to a non-attribution analysis.  Permitting a competent authority to ignore causal factors
considered to have only "minimal" effects would create a  de minimis   exception to the non-attribution
requirement not contemplated in Article 4.2(b).  Accordingly, the European Communities requests the
Appellate Body to uphold the Panel's finding for we lded pipe and FFTJ with respect to this matter.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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(b) Specific Arguments with respect to CCFRS 91
110. The European Communities submits that the Panel did not conduct a  de novo   review.  The
Panel's detailed analysis permitted the Panel to verify whether the USITC's conclusions were reasonedand adequate;  the Panel did not have to examine other factors.  Similarly, the Panel was correct inconcluding that the finding of underselling by imports did not represent a "compelling explanation"by the USITC.  There is no discussion in the USITC's report of the AUV for CCFRS as a whole.
111. The European Communities further submits that, in the context of declining demand, a factor
can be a cause of serious injury even if its effects appear late in the period of investigation.  The Panel
also correctly concluded that the USITC's analysis of capacity increases was "simplistic", and that the
statement that minimill cost advantages did not change during the period of investigation did notamount to a proper non-attribution analysis.  According to the European Communities, the USITCalso failed to examine legacy costs in the li ght of the operating margin of the industry.
(c) Specific Arguments with respect to Hot-Rolled Bar
112. The European Communities argues that the USITC dismissed cost increases as an other
causal factor on the basis of the "unsubstantiated claim"
 92 that the domestic industry should have been
able to increase its prices to cover increased co sts.  The European Communities submits that had the
domestic industry kept its costs constant, it would have actually had a higher operating margin, evenwith the decrease in sales prices.
(d) Specific Arguments with respect to Cold-Finished Bar
113. The European Communities agrees with the Panel that the USITC had not explained how
increased imports could be linked to declines in certain factors, if these declines had been apparent for
some time before there were any increased imports.  Furthermore, the Panel was correct in findingthat the USITC had not provided adequate justification for its use of quarterly, rather than yearly,
                                                     
91The European Communities incorporates, by reference, the submissions of the other Complaining
Parties, "some of whom have provided more detailed arguments in respect of certain product bundles".(European Communities' appellee's submission, para. 235)
For all of its product-specific arguments, the European Communities submits that, in the event the
Appellate Body should reverse the Panel's findings on any of the product categories, the Panel's ultimate
conclusion should nevertheless be upheld; the European Communities refers, for this purpose, to arguments it
made before the Panel.
92European Communities' appellee's submission, para. 256.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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data.  The European Communities argues that the USITC, furthermore, performed its analysis on a
sub-product, without providing information on whether this product was representative.
(e) Specific Arguments with respect to Rebar
114. The European Communities disagrees with the United States' argument that the Panel failed
to take account of the USITC's entire analysis of increased costs.  The United States' position ismoreover premised on the assertion that a domestic industry must be able to increase prices to coverits costs, which does not represent a reasoned and adequate explanation.
(f) Specific Arguments with respect to Welded Pipe
115. The European Communities agrees with the Pa nel that the USITC's analysis of domestic
capacity increases was deficient.  The European Co mmunities also agrees that the USITC's analysis of
the non-import related poor performance of a significant domestic producer was deficient.  The Paneldid not find that the USITC was "subjective", but rather found that the USITC had failed to properlyexamine the effects of certain factors.  The Panel also did not suggest that the USITC must perform acomplete causation analysis for one producer, but rather reviewed the USITC's causation analysis
relying on the USITC's own description of this producer as a "significant domestic producer".
(g) Specific Arguments with respect to FFTJ
116. In the European Communities' view, the Panel properly determined that the USITC had not
ensured that it had not attributed the effects of increased capacity to increased imports.  The Panelalso properly determined that the USITC had not ensured that it had not attributed the effects of
purchaser consolidation to increased imports;  the United States' argument is premised on the notion
that the USITC determined that the FFTJ industry wa s affected only via declines in market share and
other indicators, and that purchaser consolidation was unrelated to this and rather affected prices.  TheEuropean Communities states that the USITC's report itself suggests that price was an importantelement in the USITC's analysis in this respect.
(h) Specific Arguments with respect to Stainless Steel Bar
117. According to the European Communities, the USITC did not ensure non-attribution with
respect to decline in demand.  The United States' arguments alleging complexity of the USITC's
analysis with respect to energy cost increases are identical to those the United States submits withWT/DS248/AB/R, WT/DS249/AB/R,
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respect to demand declines.  Moreover, the European Communities believes that the Panel was correct
in finding that the USITC should have undertaken a collective analysis of other causal factors.
E. Arguments of Japan – Appellee
1. Article 3.1 of the  Agreement on Safeguards   and Article 12.7 of the DSU
118. Japan considers that the Panel was correct in finding that the United States acted
inconsistently with Article 3.1 of the  Agreement on Safeguards ,  because the USITC did not provide
a "reasoned and adequate explanation" for its findings.  According to Japan, whether an explanation is"reasoned and adequate" depends on a number of factors, including the complexity of the issue andthe timing, extent and quality of the explanation.  In any case, Japan contends that a reasoned andadequate explanation must be organized, logical, and explicit in the sense of being "set forth" in thereport;  the explanation must also be substantiated by evidence.  Although the  Agreement on
Safeguards   does not dictate the structure of an authority's report, the  Agreement on Safeguards   also
does not exempt an authority from the need to provide a reasoned and adequate explanation.According to Japan, the USITC's determin ation did not meet these requirements.
119. Japan also does not agree with the United States' claim that the Panel "incorrectly merged"
obligations under Articles 3.1 and 4.2 of the  Agreement on Safeguards   in addressing the USITC
report.  Japan submits that "[t]he obligation to explain is textually and inherently intertwined with theobligation to perform."
 93  Hence, the substantive and procedural obligations of the  Agreement on
Safeguards   "exist side-by-side"  94, and the violation of one may lead to a violation of another.  Japan
further asserts that the text of the  Agreement on Safeguards   "reflects the reality that the only basis on
which to evaluate what the authority did is to review what the authority said  [in its report].
Otherwise, any meaningful review of the ac tions of the competent authority would become
impossible."  95
120. With respect to Article 12.7 of the DSU, Japan considers that the Panel fully complied with
Article 12.7 as the Panel "applied the law to the facts while also ensuring that it did not replacereasonable conclusions reached by the USITC with its own conclusions".
 96
                                                     
93Japan's appellee's submission, para. 28.
94Ibid.
95Ibid. (original underlining)
96Japan's appellee's submission, para. 23.WT/DS248/AB/R, WT/DS249/AB/R,
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2. Increased Imports
(a) General
121. In Japan's view, the Panel correctly found that the United States failed to meet the increased
imports requirement.  The Panel correctly found that the increased imports requirement represents
both a quantitative and qualitative standard, independent of the causation analysis required by
Article 4.2 of the  Agreement on Safeguards .  The Panel's articulation of the standard for "increased
imports" and its analysis "echo the Appellate Body's  own careful review of the relevant provisions."  97
In Japan's view, the Panel's finding that the increase in imports must be "recent" is based on the
phrase "is being imported" in both Article 2.1 of the  Agreement on Safeguards ,  as well as
Article  XIX:1(a) of the GATT 1994, and on the Appellate Body's findings in  Argentina –
Footwear (EC) .  The requirement in Article 4.2(a) that the competent authority consider the rate and
amount of the increase in imports in absolute and re lative terms means that, as correctly recognized by
the Panel, the competent authorities must consider trends in imports over the period of investigation.Japan submits that the United States is "attempt[ing] to resurrect its simplistic end points analysis", an
approach that was expressly rejected by the Appellate Body in  Argentina – Footwear (EC) . 
98
122. Japan furthermore agrees with the Panel that the increase in imports must be "sudden".  The
Panel's approach rests upon the Appellate Body's ruling in  Argentina – Footwear (EC) and is,
moreover, derived from Article XIX:1(a) of the GATT 1994, which is entitled "Emergency Action"
and requires safeguard measures to be imposed only in response to unforeseen developments.  Japanfurther believes that, in its arguments, the United  States continues to "confuse" issues of serious
injury, as well as causation, with the distinct requirement of increased imports.  Japan argues thatunder a proper analysis of increased imports, an increase in imports can be sudden, independently ofthe "onset of serious injury".
 99
                                                     
97Japan's appellee's submission, para. 36.
98Ibid., para. 43.
99Ibid., para. 47.WT/DS248/AB/R, WT/DS249/AB/R,
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(b) Specific Arguments with respect to CCFRS  100
123. Japan contends that the Panel correctly applied the relevant standards articulated by the
Appellate Body in  Argentina –  Footwear (EC)   and the panel in  US –  Line Pipe ,  which require the
authority to determine, on a case-by-case basis, whether imports increased in absolute and relativeterms and whether the increase was sufficiently sudden and recent within a relevant period of time.  Inthe present case, there is no dispute that imports of CCFRS first increased and then declinedsignificantly, in absolute and relative terms, be fore falling more dramatically in mid-2001 to levels
below those in 1998 and 1996.  The USITC performed an end-point to end-point analysis and found
that imports of CCFRS had increased.  In Japan's view, the USITC should have instead considered the
trends over the entire period of investigation and especially the end of that period.  Japan furtherdisputes what it considers to be the United States' characterization of the Appellate Body's treatmentof increased imports in  Argentina –  Footwear (EC)   as relating primarily to causation.
(c) Specific Arguments with respect to Tin Mill Products and Stainless
Steel Wire
 101
124. Japan refers the Appellate Body to its submissions to the Panel.  Japan further submits that the
Panel did not challenge the right of the President of the United States to rely "on whatever number ofcommissioner votes he wanted".
 102  Rather, the Panel found, because the President relied on the
affirmative votes of three Commissioners who had performed their analysis on different productdefinitions, there was no reasoned and adequate explanation to justify the imposition of a measure onthe respective individual product.
125. In Japan's view, there must be a "one-to-one relationship" between the injury determination
and the like product definition.
 103  This requirement was not fulfilled in respect of tin mill products
and stainless steel wire because the USITC Commissioners, on whose determinations the President ofthe United States relied, did not make their findings of increased imports based on the same likeproduct definitions or data sets.  Thus, according to Japan, there was no coherent set of findings ofincreased imports to support the measures.  Finally, Japan believes that the Panel's decision does not
                                                     
100With respect to the Panel's findings on hot-rolled bar and stainless steel rod, Japan incorporates, by
reference, the relevant arguments put forward by the other Complaining Parties.  (Japan's appellee's submission,para. 58)
101Japan submits these arguments also with respect to the Panel's causation and parallelism analysis for
these two products.  (Japan's appellee's submission, paras. 126 and 152)
102Japan's appellee's submission, para. 139.
103Ibid., para. 164.WT/DS248/AB/R, WT/DS249/AB/R,
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depart from the findings of the Appellate Body in  US – Line Pipe ,  which involved the "aggregation
of affirmative decisions" based on different kinds of injury
 104;  the present case, however, in Japan's
view, involves aggregating votes based on different "like product" definitions.  Japan also submits
that the Panel's findings do not encroach upon a Member's right to lay down the decision-makingprocess of its competent authority.
3. Parallelism
126. Japan argues that the Panel was correct in find ing that the United States acted inconsistently
with Articles 2.1 and 4.2 of the  Agreement on Safeguards  by failing to establish that imports from
sources subject to the safeguard measures satisfied the conditions for the application of such
measures.
127. In Japan's view, the Panel correctly applied existing Appellate Body jurisprudence concerning
how authorities must conduct their analysis and expl ain their findings in imposing safeguard measures
on a non-MFN basis.  In imposing such measures, authorities must analyze the causal relationshipbetween imports that are subject to the measure and domestic industry performance.  Rather thantreating excluded imports as an other factor under the non-attribution requirement in Article 4.2(b) ofthe  Agreement on Safeguards ,  the competent authority must ensure that the effects of non-import
factors are not attributed to the imports subject to the measure, as opposed to all imports.  The USITC
did not make a specific causation finding for non-NAFTA imports of CCFRS or any other product.
Thus, the USITC failed to ensure that its NAFTA-i nclusive causation findings were consistent with
the NAFTA-exclusive scope of the safeguard measures.
128. In Japan's view, the United States' arguments concerning Israel and Jordan essentially state
that imports from these countries were so small that it was self-evident that, if they were removedfrom total imports, the effect on the United States' industry of the remaining imports would be thesame.  However, the point is not the quantity of the imports, but whether the USITC performed therequired analysis.  Japan submits that the USITC did not do so.
                                                     
104Japan's appellee's submission, para. 166.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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Page 41
4. Causation
(a) Specific Arguments with respect to CCFRS  105
129. Japan maintains that the Panel was correct in finding that the United States acted
inconsistently with Articles 2.1, 3.1 and 4.2(b) of the  Agreement on Safeguards  by failing to
establish that a causal link existed between any in creased imports and serious injury to the relevant
domestic producers.
130. According to Japan, the United States ignored the importance of the relationship between
domestic industry performance and increased imports.  The Panel correctly conducted an analysis ofhow import trends related to the various injury factors, and concluded that the analysis performed bythe USITC was not reasonable;  in so doing, the Panel did not conduct, as the United States contends,a  de novo   review.  Japan submits that the Panel correctly found that, because imports began a
sustained decline from 1998 through to the end of the period of investigation, there was no support forthe USITC's finding that imports were the primar y cause of the industry's price and profitability
declines at the end of the period.  Japan also submits that the Panel was not required to include an
analysis of import pricing in its coincidence analysis—import pricing is the focus of the "conditions
of competition" analysis performed by the Panel.
131. Japan further submits that the USITC's underselling analysis failed to meet the "compelling
explanation" requirement because the underselling by  imports was not shown to have an impact in the
market.  In other words, import pricing did not appear to have taken sales away from domesticcompanies.  Japan submits that the Panel was correct to criticize the USITC's use of AUVs;  theUSITC's determination does not reveal an evaluati on or discussion of AUVs for the overall CCFRS
category—where a competent authority merely includes a number in the determination, this does notestablish that the authority actually relied on that  fact.  The USITC also did not explain why AUVs
were appropriate surrogates, even though it specifically acknowledged that the reliability of this data
could be compromised as a result of the underlying product mix.
132. Japan next argues that the USITC's product gr ouping of CCFRS was arbitrary and too broad
to allow meaningful comparisons of aggregated volume, price, cost or production data.  The Panel'sfindings on coincidence and conditions of competition are not dependent on its criticisms of the
                                                     
105Japan does not submit arguments with respect to other product categories.  However, with respect to
hot-rolled bar, cold-finished bar, rebar, welded pipe , FFTJ, and stainless steel bar, Japan incorporates, by
reference, the arguments of the other Complaining Parties.  (Japan's appellee's submission, para. 126)WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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CCFRS product grouping.  However, if the Appellate Body finds that the Panel was required to make
a specific finding regarding the WTO-consistency of the USITC's like product definition in order to
assess the USITC's causation analysis, Japan refers the Appellate Body to the arguments on this topic
contained in the other appellant's submission by Brazil, Japan, and Korea.
133. Japan contends that the Panel was correct in finding that the United States failed to comply
with the non-attribution requirement and in examining all the relevant facts in reaching this finding.With respect to capacity increases, Japan argues that the USITC did find that capacity increases wereaffecting prices but did not attempt to separate and distinguish these effects.  Japan argues that theUSITC also failed to consider capacity utilization rates assuming capacity had remained stable overthe period rather than increased, as required by the Appellate Body decision in  US – Wheat Gluten .
134. With respect to declining demand, Japan submits that the USITC did not explain why this
factor was not responsible for the injury to the domestic industry, despite the fact that the most severe
injury occurred at the end of the period, when imports and demand were both falling.  With respect tointra-industry competition, Japan contends that the USITC did not fully analyze this factor and did not
respond to specific evidence that customers viewed minimills, rather than imports, as the priceleaders in the cold-rolled market.  Finally, with respect to legacy costs, Japan submits that the
USITC's discussion of this factor implicitly recognizes that these costs weighed heavily on theperformance of the industry and compromised the competitive position of certain domestic producers;in particular, Japan maintains that the USITC acknowledged that, even with import relief, the
viability and health of the industry could only be ensured by addressing legacy costs.
135. Japan also agrees with the Panel's finding that the USITC failed to consider the collective
effects of other factors as required by Article 4.2(b), although this finding was not necessary to thePanel's overall finding regarding non-attribution.  The Appellate Body Reports in  US – Line Pipe ,
US – Hot-Rolled Steel ,  and  EC – Tube or Pipe Fittings  allow for an overall consideration of the
effects of other factors, given the interaction between such factors.  Specifically, Japan argues that thePanel is not precluded from determining that such a consideration was required in particular factualcircumstances such as the present case, in which several factors intertwine.WT/DS248/AB/R, WT/DS249/AB/R,
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Page 43
F. Arguments of Korea – Appellee  106
1. Article 3.1 of the  Agreement on Safeguards   and Article 12.7 of the DSU
136. Korea considers that the Panel correctly applied Article 3.1 of the  Agreement on Safeguards .
According to Korea, the United States seeks to re-argue the appropriate standard that is requiredpursuant to Articles 3.1 and 4.2(b) of the  Agreement on Safeguards   "as if [that] standard had not
been fully set out in prior Appellate Body reports."
 107  The United States does this by arguing that
competent authorities are not required to provide explanations for their determinations  108 or that
explanations—even if required—need not be adequate  109 nor explicit.  110
137. Korea takes issue with the United States' argument that the word "explicit" is not contained in
Article 3.1 of the  Agreement on Safeguards .  Korea considers that it is "difficult to imagine"  111 how
the requirements to provide a "detailed analysis" pursuant to Article 4.2(c) of the  Agreement on
Safeguards   and to "set forth" findings and reasoned conclusions pursuant to Article 3.1 could be
satisfied by anything other than an "explicit" explanation.
138. As for the United States' contention that the Panel's findings should be restricted to Article 3.1
of the  Agreement on Safeguards ,  Korea argues that the failure to provide a reasoned and adequate
explanation is not only a violation of Article 3.1, but also of the substantive obligations of theAgreement on Safeguards .  Korea emphasizes that "[c]learly, in a case where the substantive
obligation is not met, the analysis cannot be 'reasoned and adequate'."
 112
139. Korea further considers that the Appellate Body should dismiss the claim of the United States
that the Panel acted inconsistently with Article 12.7 of the DSU.  The Panel Reports set forthexplanations and reasons sufficient to disclose the essential, or fundamental, justification for those
findings and recommendations in compliance with Article 12.7.
                                                     
106Korea endorses the views of the other Complaining Pa rties with respect to products and issues other
than those on which Korea focuses in its appellee's submission.  (Korea's appellee's submission, para. 41)
107Korea's appellee's submission, para. 46.
108Ibid., referring to the United States'  appellant's submission, para. 59.
109Korea's appellee's submission, para. 46, referring to the United States'  appellant's submission,
para. 62.
110Korea's appellee's submission, para. 46, referring to the United States'  appellant's submission,
paras. 63–64.
111Korea's appellee's submission, para. 48.
112Ibid., para. 57.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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2. Increased Imports
(a) General
140. Korea maintains that the Panel properly determin ed that the USITC's findings of increased
imports were not in compliance with the  Agreement on Safeguards .  Korea agrees with the Panel
that the increase in imports must have been "sudden" and "recent".  In Korea's view, the Panel, in this
respect, "synthesized" the prior decisions of the Appellate Body in  Argentina – Footwear (EC)  
and  US – Lamb . 113
141. Korea considers that the United States inco rrectly "dismisses" the significance of the
"emergency nature" of safeguard measures.  114  Korea believes that if there were no increase in
imports in the recent past, then the conditions for the application of a safeguard measure would not bemet because emergency action would no longer be necessary.  Only where an unforeseen and suddenincrease in imports is present will the need for emergency action exist.
142. Korea also recalls the Appellate Body's findings in  Argentina – Footwear (EC)   that the
increased imports requirement is both a quantitative as well as a qualitative requirement.  Therefore,
in Korea's view, the increase in imports must be recent, sudden, sharp and significant, and that end-of-
period trends must be analyzed in the context of trends occurring over the entire period ofinvestigation.
(b) Specific Arguments with respect to CCFRS
143. Korea disagrees with the United States that the Panel focused exclusively on the period
between interim 2001 and interim 2002.  The Panel did not give the interim period dispositive weight.
The Panel also correctly found that it was not possible to reconcile the USITC's statement that imports
relative to production were still significantly higher at the end of the period with the interim data that"clearly contradicted" that statement.
 115
144. Korea moreover argues that the Panel properly considered the effect of import declines
since 1998.  The Panel did not reach "an abstra ct conclusion concerning a mid-period alone"  116, but
                                                     
113Korea's appellee's submission, para. 73.
114Ibid., heading IV.B.3.
115Ibid., para. 90.
116Ibid., para. 91.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 45
rather examined that mid-period increase in the context of the subsequent decrease.  Korea considers
that the Panel rejected the USITC's findings for reasons similar to those articulated by the Appellate
Body in Argentina – Footwear (EC) .
(c) Specific Arguments with respect to Tin Mill Products  117
145. In Korea's view, the United States attempts to recast the issues of increased imports and
causation with respect to tin mill products as a question of national sovereignty and as a debate overthe rights of a country to structure its administering authority and decision-making process insafeguard investigations.  Korea argues that the United States continues to  make this argument, even
though the Panel carefully followed the reasoning of the Appellate Body in  US – Line Pipe   to the
effect that it was not reviewing the nature of administrative decision-making.
146. Korea submits that the United States relied on determinations of three Commissioners as the
basis for the measure on tin mill products.  The Panel correctly determined that the determinations ofthe three Commissioners did not meet the requ irements of Articles 2.1, 3.1, and 4.2(b) of the
Agreement on Safeguards ,  because these three findings are based on differently-defined like
products.
147. Korea contends that the United States incorrectly invokes the Appellate Body's findings in
US – Line Pipe .  In that case, according to Korea, the Appellate Body held that a determination of
both serious injury and threat of serious injury could establish the basis for safeguard action because
both represented a continuum of injury;  each was sufficient individually, or together, to meet therequirements of Article 2.1 of the  Agreement on Safeguards .  However, according to Korea, when
employing this same analysis to the present case, th e answer must be different.  A determination that
finds that the like product is CCFRS cannot support the right to take a safeguard action on tin millproducts.  Korea submits that it is true that all three Commissioners found serious injury—but not tothe same industry and not from the same imports.
148. Korea considers that the United States is wrong to state that affirmative determinations under
United States law are sufficient to satisfy the requirements of Articles 2 and 4 of the  Agreement on
Safeguards .  The Panel, according to Korea, properly determined that the  Agreement on Safeguards
does not permit a WTO Member to base a safeguard measure on a determination supported by a set of
                                                     
117Korea submits the same arguments with respect to the Panel's findings on causation concerning tin
mill products.WT/DS248/AB/R, WT/DS249/AB/R,
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explanations each of which is based on different facts and different conclusions which are inherently
inconsistent with each other.
3. Parallelism
149. Korea submits that the Panel properly found that the USITC's report failed to provide an
adequate parallelism analysis for CCFRS, welded pipe, and tin mill products and, therefore, does notconform to the requirements of Articles 2, 4 and 3.1 of the  Agreement on Safeguards .
150. Korea maintains that, contrary to the United States' assertion, the Panel did not state that the
USITC must also conduct a full analysis of the effects of the excluded imports.  Korea notes that the
Panel did not resolve the issue of whether non-covered imports themselves must be considered and
analyzed as an "other factor" of injury.  Korea submits that imports from excluded sources should beanalyzed as an "other factor" in order to ensure that the effects of injury from those imports are notimproperly attributed to covered imports.  In addition, Korea argues that the United States did notestablish explicitly that increased imports from non-NAFTA countries alone caused serious injury.According to Korea, the USITC's conclusion that it s findings would have been the same if imports
from Canada and Mexico were excluded from the analysis does not fulfill the conditions ofArticles 2.1 and 4.2(b).
151. Finally, as regards the exclusion of imports from Israel and Jordan, Korea argues that the
United States did not comply with the requirements of the  Agreement on Safeguards .  Korea submits
that in order to establish explicitly that imports from sources covered satisfy alone the conditions forthe application of a safeguard measure, a Member must determine whether its conclusions oncausation would change if imports from exempt sources, taken together, were excluded from theanalysis.  Moreover, in Korea's view, there is no second standard for sources of small volumes ofimports.
4. Causation
(a) Specific Arguments with respect to CCFRS and Welded Pipe
152. Korea agrees with the Panel that the USITC did not establish a causal link between increased
imports and serious injury for CCFRS.  The Panel recognized that the  Agreement on Safeguards  
does not establish the method for establishing a causal link and specifically recalled that the USITC'sanalysis had to be analyzed on its substance, not on the basis of labels.  The Panel, in Korea's view,WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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properly found that the United States did not establish a causal link between increased imports and
serious injury for CCFRS.
153. Korea argues that, after setting out its approach in a manner consistent with the prior holding
of the Appellate Body on this issue, the Panel an alyzed whether the USITC could have concluded that
there was a coincidence of trends between the various factors of injury and the increase in imports.  Insum, the Panel proceeded through each injury factor to determine whether there was a coincidence oftrends with respect to each.
154. According to Korea, the United States mistaken ly criticizes the Panel for preparing charts
summarizing the USITC data with a view to checkin g whether coincidence existed.  In Korea's view,
the Panel could not have reviewed the findings of the USITC if it had not first examined in somefashion the movements in imports and in injury factors.  Korea contends that the United States is
arguing that the Panel should have considered whether coincidence existed between increased imports
and other injury factors such as market share.  According to Korea, the Panel, however, concluded
that there was no coincidence between net commercial sales and imports, which is a different way ofanalyzing market share.
155. In addition, Korea argues that, in the absence of coincidence, the United States failed to
provide evidence that the USITC's analysis was a "compelling explanation" of why causation existed.Korea notes that the Panel examined whether the USITC's findings of build-up of import inventoriesand declining import prices provided a compelling explanation of causation after imports declined
in 1998.  The Panel rejected the USITC's "compelling analysis" as it related to importer inventories
and, Korea notes, the United States does not appeal that finding.  Korea contends that the UnitedStates incorrectly maintains that the Panel did not analyze the USITC's findings regarding pricingtrends.  Moreover, Korea submits that the USITC's pricing analysis was intended to show that importsled prices down.  Therefore, Korea contends that, presumably, the trends in prices and oversellingwould be the most relevant to that question.  However, according to Korea, the USITC made noreference to import pricing trends.  Finally, Korea argues that the United States responds to the Panel'sanalysis strictly by pointing to new evidence.  Acco rding to Korea, the data referred to was not relied
upon by the USITC because they were never cited by the USITC, nor would they have been, because
they contained prices only for non-NAFTA imports and the USITC analysis of pricing was with
respect to all imports.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 48
156. Korea argues that the United States misinterprets the Panel's finding with respect to CCFRS
as rejecting the USITC's analysis of causation on the basis of the like product definition.  In Korea's
view, the Panel simply recognized that the broad like product definition of CCFRS added
complexities to the analysis of conditions of competition.  This, according to Korea, is legally distinctfrom a finding regarding the proper definition of the like product, a finding that the Panel did notmake.
157. Korea contends that the Panel correctly found that the USITC's non-attribution analysis with
respect to CCFRS and welded pipe was "fatally flawed".
 118  Korea notes that the United States, in its
appellant's submission, puts emphasis on the requirement that the other factors "simultaneously" causeinjury.  However, Korea argues that, with the exception of welded pipe, the USITC does not identifyinjury from imports as occurring at any particular time in the period.  Moreover, Korea disagrees with
the United States' position that if the effect of a factor is minor, it does not have to be separated and
distinguished.  In Korea's view,  EC – Tube or Pipe Fittings   does not stand for the proposition that
the mere assertion that a factor is minor satisfies the non-attribution standard.
158. Korea submits that, on the one hand, the United States maintains that no analysis of
cumulative causes is required in order to adequately separate and distinguish the effects of otherfactors of injury, and, on the other, the United States acknowledges that the cumulative assessment offactors could lead to different results.  For example, the United States argued that it was not possiblefor legacy costs, standing alone, to cause price declines.  Furthermore, Korea contends that the United
States overstates the findings of the Appellate Body in  EC – Tube or Pipe Fittings ,  because in that
case, the Appellate Body specifically left open the possibility that a cumulative analysis might berequired in certain factual circumstances.
159. In addition, in Korea's view, the United States incorrectly interprets the Panel's findings as
requiring a "weighing" of factors versus imports.  The Panel, according to Korea, did not require aweighing, but rather commented on the importance of an overall assessment in the context of theUSITC methodology whereby causal factors are completely disregarded if they are not moreimportant than increased imports and regardless of whether such factors are found to be causing someof the injury.
                                                     
118Korea's appellee's submission, heading V.B.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 49
G. Arguments of New Zealand – Appellee
1. Unforeseen Developments, Article 3.1 of the  Agreement on Safeguards ,  and
Article 12.7 of the DSU
160. New Zealand requests the Appellate Body to uphold the finding of the Panel that the United
States acted inconsistently with Article XIX:1(a) of the GATT 1994 and Article 3.1 of the  Agreement
on Safeguards .  In New Zealand's view, the Panel applied the correct standard of review in the
application of Article XIX of the GATT 1994 and Article 3.1 of the  Agreement on Safeguards .  In
US – Lamb ,  the Appellate Body did not establish a standard of review for Article 4.2 different from
the standard applicable to other provisions of the  Agreement on Safeguards  or to Article XIX of the
GATT 1994.  Accordingly, the Panel applied the standa rd of review set out in Article 11 of the DSU
and did not allow its examination to reflect concerns relevant to Article 4.2 or disregard concernsrelevant to Article XIX of GATT 1994.
161. New Zealand considers that the Panel was correct in requiring the USITC to establish that
unforeseen developments resulted in increased imports in respect of each specific product subject to asafeguard measure.  If there were no such requirement, a Member could impose a safeguard measureon a range of products even if unforeseen developments had led to an increase in imports of only oneof them.
162. New Zealand further maintains that the Pane l was correct in finding that the USITC's
conclusions were not supported by data linking those developments to specific increased imports.The logic of the United States' position is that a co mpetent authority need only collect information in
a report and make a determination without providing any reasoning.  Article 3.1 of the  Agreement on
Safeguards   requires, however, that the report of the competent authorities set forth "reasoned
conclusions on all pertinent issues of fact and law".  A "reasoned conclusion" is one "that links thepertinent facts to the conclusion reached.  It is not one where key elements of the analysis are left toguesswork and supposition".
 119  New Zealand submits that the United States' argument that there is
no requirement for competent authorities to provide a "reasoned and adequate explanation" as long asthere is a "logical basis" for their conclusions undermines the disciplines of the  Agreement on
Safeguards .
                                                     
119New Zealand's appellee's submission, para. 4.13.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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2. Increased Imports
163. In New Zealand's view, the Panel applied the co rrect standard in determining whether there
are increased imports for purposes of Article 2.1 of the  Agreement on Safeguards .  New Zealand
rejects the United States' suggestion that the enquiry whether an increase in imports was "recent","sudden", "sharp", and "significant" should be "deferred" until the phase in which serious injury andcausation are determined.  New Zealand also contests the United States' interpretation of the phrase"in such increased quantities" to mean that the level of imports at, or reasonably near to, the end of aperiod of investigation be higher than at some unspe cified point in time;  such an interpretation would
"remove an essential discipline"
 120 from the  Agreement on Safeguards   and establish a standard that
would allow "the arbitrary imposition of safeguards measures just because imports have increased atsome stage in the past".
 121  New Zealand also submits that, in determining whether imports have
increased, the Panel applied a standard which is "well established in the law"  122, and properly found
that the USITC had failed to provide a reasoned and adequate explanation for its determination.
164. New Zealand emphasizes that the Panel's analysis of increased imports of CCFRS was
correct.  The Appellate Body found in  Argentina – Footwear (EC)   that a consideration of trends is
required for determining whether there are increased imports for purposes of Article 2.1 and that it isnot sufficient to merely compare import levels as they stood at the end points of the period of
investigation.
 123  According to New Zealand, the USITC "ignored these requirements"  124 by not
considering trends in imports over the entire period of the investigation.
3. Parallelism
165. New Zealand requests that the Appellate Body uphold the Panel's finding that the United
States acted inconsistently with Articles 2.1 and 4.2 of the  Agreement on Safeguards   by failing to
comply with the requirement of "parallelism".  Ne w Zealand first submits that, contrary to what the
United States' argues, the Panel did not suggest th at the USITC was required to conduct a separate
analysis of imports from sources not subject to the measure.  Rather, the Panel merely pointed out thatincreased imports of products excluded from the application of a measure cannot be used to support a
                                                     
120New Zealand's appellee's submission, para. 5.9.
121Ibid.
122Ibid., para. 5.12.
123New Zealand's appellee's submission, para. 5.17, referring to Appellate Body Report, Argentina –
Footwear (EC) , para. 129.
124New Zealand's appellee's submission, para. 5.17.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 51
determination that the product is being imported in such increased quantities as to cause serious
injury.  The Panel's statement that it is necessary "to account for the fact that excluded imports may
have some injurious impact on the domestic industry" is a "purely descriptive alternative way of
saying that excluded imports cannot be used to support a determination of increased imports".  125  In
New Zealand's view, the competent authority need not conduct a separate analysis, or make separatefindings for excluded products, but it does have to account for the effects of such products in makingfindings regarding the products subject to the safeguards measure.  This, in New Zealand's view, is"central to the logic of the parallelism requirement".
 126
166. With respect to the United States' argument concerning the exclusion of imports from Israel
and Jordan, New Zealand argues that the United States has "misconstrued the Panel's finding".  127
New Zealand submits that, with respect to imports from Israel and Jordan, the Panel was "making the
point that the USITC did not ask itself the right question."  128  The USITC enquired, first, whether
increased imports from all sources other than Canada and Mexico were a substantial cause of seriousinjury;  and it then enquired, second, into whether the exclusion of imports from Israel and Jordanwould change this conclusion.  However, the correct enquiry was whether imports covered by themeasure—that is, imports other than those from Canada, Mexico, Israel, and Jordan—were asubstantial cause of serious injury.  With respect to the United States' presentation of import statisticsfor Israel and Jordan, New Zealand argues that the issue before the Panel was not whether a reasonedand adequate explanation  could   be provided demonstrating that imports covered by the measure
were a cause of serious injury.  According to New Zealand, the issue was whether the USITC  had  in
fact provided such an explanation explicitly in its report.
4. Causation
(a) General
167. New Zealand argues that the Panel was correct in finding that the United States acted
inconsistently with Articles 2.1, 3.1 and 4.2(b) of the  Agreement on Safeguards   by failing to provide
a reasoned and adequate explanation establishing a causal link between "increased imports" of
                                                     
125New Zealand's appellee's submission, para. 7.4.
126Ibid., para. 7.5.
127Ibid., para. 7.9.
128Ibid., para. 7.10.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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CCFRS, hot-rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, and stainless steel bar and
"serious injury" to the relevant domestic producers.
168. New Zealand submits that the Panel was correct in concluding that the USITC should have
provided a collective analysis of the injurious effects of factors other than increased imports.  InEC – Tube or Pipe Fittings ,  the Appellate Body found that in the context of a causation analysis
under the  Anti-Dumping Agreement ,  a collective assessment of the injurious effects of all other
factors was not required in all cases, but may be required in specific circumstances where the lack of acollective assessment would lead to injury caused by other factors being attributed to imports.  InNew Zealand's view, the practice of the USITC of assessing the injurious effects of other factorsindividually "runs the risk of a finding of causation … even though the other factors cumulatively hada greater effect on serious injury than increased imports".
 129  Furthermore, the USITC found, in the
present case, that other factors causing serious injury (decline in demand, domestic capacity increases,
legacy costs and intra-industry competition) did contribute significantly to the alleged serious injury.An individual assessment of those factors, in New Zealand's view—particularly when these factorsare "linked and intertwined"—does not make clear what their full impact on serious injury hasbeen.
 130  New Zealand argues that the Appellate Body's reference in  US – Lamb   to the need to assess
the nature and the extent of the injury caused implies a collective assessment of that injury.
169. New Zealand furthermore disagrees with the United States' contention that the Panel
misunderstood the USITC's causation analysis and frequently failed to take into account all of the
findings of the USITC on particular issues.
(b) Specific Arguments with respect to CCFRS
170. In New Zealand's view, the Panel was correct in concluding that the USITC had failed to
provide a reasoned and adequate explanation demonstrating a causal link between increased CCFRSimports and serious injury.  Contrary to the United States' contention, the Panel did not conduct ade novo   review;  the "data set" prepared by the Panel consisted of graphs made on the basis of data
contained in the USITC's record.
171. According to New Zealand, the Panel also did not substitute its own conclusions on
coincidence for those of the USITC, but rather looked for the reasoned and adequate explanation of
                                                     
129New Zealand's appellee's submission, para. 6.10.
130Ibid., para. 6.11.WT/DS248/AB/R, WT/DS249/AB/R,
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WT/DS253/AB/R, WT/DS254/AB/R,
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Page 53
the USITC's determination.  The Panel correctly fo und a lack of coincidence between import trends
and trends in injury factors.  Furthermore, the Panel did not ignore the effects of import prices, as
alleged by the United States, but rather examined the USITC's pricing analysis after it found an
absence of coincidence.  New Zealand also argues that the Panel did not fail to consider the overallsituation of the domestic industry;  rather, the USITC itself essentially considered only two indicators.In New Zealand's view, the United States is, in reality, criticizing the Panel for not conducting ade novo  review.
172. New Zealand further submits that the Panel was correct in finding, in its consideration of
"conditions of competition", that the USITC's pricing analysis was not reasoned and adequate.Contrary to the United States' assertions, the Panel did not suggest that it was necessary for theUSITC to show underselling for each product at every point in time to justify a finding of
underselling.  Rather, New Zealand submits, the Panel—correctly—found fault with the USITC's
pricing analysis because the USITC did not provide a reasoned and adequate explanation of how thefacts supported the USITC's "general thesis" that "imports were priced below domestically producedsteel."
 131
173. New Zealand also argues that the Panel was correct in insisting that the USITC "justify its
reliance" on AUV pricing data when conducting its pricing analysis.  The Panel noted the reservationsexpressed by the USITC itself about using aggregat e, as opposed to individual, product data.  The
Panel made "the perfectly reasonable observation"
 132 that, having expressed qualifications and
reservations about the pricing data on which it was relying, the USITC had to justify its reliance on
that data.  New Zealand recalls that the Panel also found that even this data did not support theconclusions that the USITC had drawn.
174. New Zealand next submits that the Panel was correct in concluding that the broad product
definition of CCFRS made it difficult for the competent authority to identify the proper locus ofcompetition while undertaking a conditions of competition analysis.  In the case of a broad productdefinition, the statistics for the industry and imports will only show averages and will not providesufficiently specific information about the locus of competition in the market.  In New Zealand'sview, the Panel was not addressing the "like product" issue;  rather, the Panel made the point that,
regardless of whether the "like product" determination is or is not consistent with Article 2.1, a broad
product definition has implications for a causation determination.  Contrary to the United States'                                                     
131New Zealand's appellee's submission, para. 6.33.
132Ibid., para. 6.39.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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allegations, the Panel did not misconstrue the findings of the panel in  Argentina – Footwear (EC )  in
this respect.
175. New Zealand finally contends that the Panel was correct in concluding that the USITC had
failed to separate and distinguish the injurious effe cts of the following factors from those of increased
imports.  With respect to declining demand, New Zealand argues that the United States' objection tothe Panel's findings involves a disagreement with the Panel's factual conclusions;  at the end of theperiod of investigation, there was a strong coincidence between declining demand and injury, whileimports were declining.  With respect to domestic capacity increases, according to New Zealand, theUSITC acknowledged that such increases likely played a role in domestic price declines;  however,the USITC then dismissed this factor without assessing its nature and extent, although the factsindicate that the domestic industry used excess capacity in a manner that caused or contributed to
declining prices.
176. With respect to intra-industry competition, New Zealand argues that the USITC itself
acknowledged the role played by intra-industry comp etition in causing injury, but subsequently failed
to explain how it ensured the non-attr ibution of the injurious effects of this factor.  The United States
suggests that the cost advantages of minimills did not change during the period of investigation;however, as the Panel recognized, the existence of a factor throughout the period does not mean itcannot play a role in causing serious injury.  New Zealand also objects to the United States'introduction of previously undisclosed data in support of its arguments.
177. With respect to legacy costs, New Zealand contends that the findings of the USITC, as well as
the data considered by the Panel, show that legacy costs imposed a significant burden on integratedproducers.  New Zealand argues that the USITC itself recognized the problems caused to the industryby these costs, but then dismissed this factor—"in half a sentence"
 133—on the basis of the assertion
that these costs did not contribute to declining prices.
H. Arguments of Norway – Appellee
1. Unforeseen Developments, Article 3.1 of the  Agreement on Safeguards ,  and
Article 12.7 of the DSU
178. Norway requests the Appellate Body to reject the United States' appeal of the Panel's
conclusions concerning unforeseen developments.  Norway recalls that the Appellate Body found in
                                                     
133New Zealand's appellee's submission, para. 6.72.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 55
US – Lamb   that the existence of unforeseen developments is a "pertinent issue of fact and law" within
the meaning of Article 3.1 of the  Agreement on Safeguards ,  and that, therefore, the report of the
competent authorities must contain a finding or a reasoned conclusion on unforeseen developments.
Norway further refers to the Appellate Body's stat ement that a panel can assess whether the competent
authorities' explanation for its determination is reasoned and adequate "only if the panel criticallyexamines that explanation, in depth and in the light of the facts before the panel."
 134  Consequently,
according to Norway, a panel must examine whethe r the competent authorities considered all the
relevant facts and adequately explained how the fact s support their determinations.  In Norway's view,
it is obvious that a demonstration of unforeseen de velopments must be integrated with, and must be
logically connected to, the explanation of the other requirements, and must also be reasoned andadequate.
179. Norway contends that Article XIX of the GATT 1994 requires that unforeseen developments
be linked to the product which is being imported in increased quantities.  The United States, inNorway's view, seems to suggest that the USITC concluded that the effects of certain macroeconomicdevelopments were fairly consistent across the respective steel industries.  According to Norway,there is no such conclusion in the USITC report and, moreover, the conclusion is incorrect.
180. Norway further submits that data not used by the USITC in its analysis of unforeseen
developments, but used elsewhere in the USITC's report, are not relevant for the Panel's review.  InNorway's view, a reasoned conclusion is one that li nks the pertinent facts to the conclusion reached,
not one where "key elements of the analysis are left to guesswork and supposition".
 135  According to
Norway, the United States' position appears to be that a competent authority need only collectinformation in a report and make a determination—without providing any reasoning to support thedetermination.
181. As for the United States' contention that the Panel's findings on the lack of a reasoned and
adequate explanation imply only a violation of Article 3.1 and not of Articles 2 and 4 of theAgreement on Safeguards ,  Norway submits that the Appellate Body has explained in previous
safeguards cases that the failure to provide a reasoned and adequate explanation is not only a violationof Article 3.1, but also of the substantive obligations of the  Agreement on Safeguards .
 136  According
                                                     
134Norway's appellee's submission, para. 118, referring to Appellate Body Report, US – Lamb ,
para. 106.
135Norway's appellee's submission, para. 132.
136Ibid., para. 98.WT/DS248/AB/R, WT/DS249/AB/R,
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to Norway, "[i]t is inherent in the notion of 'determination', which underlies both Articles 2 and 4 of
the  Agreement on Safeguards ,  that there be full consideration of all the facts and arguments and a
reasoned and adequate explanation of how all the requirements for imposing the measure have been
met."
 137
182. With respect to Article 12.7 of the DSU, Norway submits that the United States is in fact
reproaching the Panel for making more findings than were needed.  The Panel was called upon toexamine whether the USITC had provided reasoned and adequate explanations to support itsdeterminations.  Once the Panel had decided that there were no such explanations, its analysis shouldhave ended.  It was, therefore, not for the Panel to develop alternative explanations or to examinewhether there was evidence to come to a different conclusion than the USITC.
2. Increased Imports
183. Norway submits that the United States' appeal of the Panel's findings on increased imports
rests on two grounds.  First, the United States challenges the standard applied by the Panel as notbeing supported by the text of the  Agreement on Safeguards .  Second, the United States asserts that
the Panel erred in its analysis of the import data for CCFRS, hot-rolled bar and stainless steel rod.  Inits submission, Norway addresses only the general legal standard for increased imports and, withrespect to the product-specific arguments for CCFRS, hot-rolled bar and stainless steel rod,
incorporates by reference the relevant arguments of the other Complaining Parties.
 138
184. Norway understands the United States to argue that the requirement, set out in  Argentina –
Footwear (EC) ,  that increases in imports be "recent enough, sudden enough, sharp enough and
significant enough", applies to the phase in which serious injury or causation are determined.  Thisargument, in Norway's view, "simply ignores"
 139 what was said in  Argentina – Footwear (EC)   and
the way in which the requirements set out there have been applied more generally in WTO disputesettlement.  The Appellate Body was not making a statement about the entire investigative process.The Appellate Body, in Norway's view, was not seeking to defer the requirement that increases berecent, sudden, sharp and significant to the phase in which serious injury or causation are determined.
                                                     
137Norway's appellee's submission, para. 100.
138Ibid., para. 141.
139Ibid., para. 145.WT/DS248/AB/R, WT/DS249/AB/R,
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185. Norway submits that, in assessing increased imports, the USITC was required to examine the
recent past.  Given the extraordinary or abnormal nature of safeguard measures, as recognized by the
Appellate Body, it is not enough for the competent au thorities to determine simply that the level of
imports at or near the end of the period was higher than at some unspecified earlier point.  Inparticular circumstances, a decrease in imports at the end of the period of investigation may precludea finding of increased imports pursuant to Article 2.1 of the  Agreement on Safeguards .  Norway
contends that the United States' argument that "any increase will do" would allow authorities to ignoretrends throughout the investigation period and would undermine the disciplines of the Agreement.
186. Norway argues that the effect of the United States' approach is to try to move from a standard
that is consistent with the objectives of the  Agreement on Safeguards ,  namely, to provide relief from
import surges, to a standard that allows the arbitrary imposition of safeguards measures just because
imports have increased at some stage in the past.  The United States, according to Norway, wants the
Appellate Body to reverse its previous case law to allow the United States to continue its practicewhereby a mere increase or "any increase" is sufficient;  this test would allow a determination thatimports have increased to be made on the basis of a peak in imports at some time during the period ofinvestigation and would ignore trends throughout that  period.  Norway concludes that this test has no
basis in law and must therefore be rejected.
(a) Specific Arguments with respect to Tin Mill Products and Stainless
Steel Wire
187. Norway argues that the Panel correctly found that the USITC's determination relating to tin
mill products and stainless steel wire did not comply with the requirements under Articles 2.1, 3.1and 4.2(c) of the  Agreement on Safeguards .  According to Norway, the specific legal problem arising
in this case is that not all the three Commissioners , who, according to the United States, voted in the
affirmative in respect of tin mill products and stainless steel wire, related their findings to tin mill
products and stainless steel wire.  The Panel examined whether the United States had established,through a proper determination supported by a report setting out reasoned and adequate explanations,that it had a right to apply a safeguard measure on tin mill products and stainless steel wire.  Norwaysubmits that the Panel correctly found that there was no such determination supported by a reasonedand adequate explanation because the Presidential Proclamation refers to three irreconcilabledeterminations based on different products.
188. The Panel's reasoning was based on the requirement that the measure ultimately imposed
must be based on a determination, and the underlying investigation, as published in the report.  ThisWT/DS248/AB/R, WT/DS249/AB/R,
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obligation, in Norway's view, has two aspects.  Firs t, there must be a determination, supported by a
report setting out reasoned and adequate explanations;  second, that determination must relate to the
products on which safeguard measures are imposed.
189. Both of these aspects are well set out in the text of the  Agreement on Safeguards   and have
long been clarified by the Appellate Body.  Thus, the determination required by WTO Members underthe  Agreement on Safeguards   must be a singular act for which a WTO Member is accountable.  The
Panel did not depart from the Appellate Body's findings in  US – Line Pipe ;  rather, the Panel
followed these Appellate Body fi ndings by asking whether a single legal act in the form of a
determination supported by a report with reasoned and adequate explanations existed.  Norway arguesthat the Panel correctly found that there was none.
190. Norway argues that, contrary to what the United States argues, divergent findings that are
based on differently-defined products are intrinsically irreconcilable.  Norway is furthermore of the
view that the question before the Panel was no t whether there was a match between the product
coverage of the determinations reached by Commissi oners Bragg, Devaney, and Miller.  As the Panel
clarified, it examined whether these opinions were reconcilable for purposes of the  Agreement on
Safeguards .  Norway argues that, in order to reconcile the different analyses and findings of the three
Commissioners that are based on different import volumes, the Panel would have had to examineex post   all the data on which the three different Commissioners based their analyses and determine
whether the increased imports requirement was fulfilled.  Norway submits that it is not for the Panel
to reconcile, to re-assess or to re-write the measur e by looking at data somewhere in the report.  The
Panel's task, according to Norway, is to evaluate whether the United States fulfilled its obligationsunder the  Agreement on Safeguards.
191. Norway also disagrees with the United States' argument that the Panel Reports improperly
impinge on the manner in which a Member structures the decision-making process of its competentauthority.  In Norway's view, the Panel "fully followed"
 140 the Appellate Body in recognizing the
sovereign discretion of the United States to structure its internal decision-making process as anexercise of its sovereignty.  Norway is of the view that the Panel did not impose any requirement onhow the United States structures its internal decision-making in safeguard investigations.
192. Finally, Norway contends that the Panel did not have to address the arguments of the
Complaining Parties that each of the individual opini ons analyzed separately also fails to fulfil the
                                                     
140Norway's appellee's submission, para. 286.WT/DS248/AB/R, WT/DS249/AB/R,
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requirements set by Articles 2.1 and 4 of the  Agreement on Safeguards .  However, Norway submits
that, should the Appellate Body consider it necessary  to do so, there are sufficient findings, arguments
and undisputed facts on the record to show that the assertion of the United States is incorrect.
3. Parallelism
193. Norway submits that there is no reason for the Appellate Body to disturb the Panel's findings
on parallelism.  Norway disagrees with the United States' assertion that the Panel created a newrequirement of a separate analysis of imports from sources not subject to the safeguard measures.Norway submits that Article 2.1 has been interpreted to refer only to imports from covered sources
and limits the product basis of the determination to imports covered by the measures.  The term
"imports" in Article 4 must have the same meaning, and thus the phrase "factor other than imports"must be read "factors other than covered imports".  Therefore, in the view of Norway, in requiring thatthe effects of imports not covered by the measure be accounted for and not be attributed to coveredimports, the Panel was simply applying Article 4.2(b), second sentence, to the proper product scope.Moreover, Article 4.2(b), by referring to "other factors", does not establish a closed list and thecompetent authorities have a duty to investigate even  beyond the listed injury factors.  Norway argues
that the United States never explains how a competent authority could demonstrate, other than byconducting a non-attribution analysis with respect to excluded imports, that there is a causal link
between imports actually covered by the relevant measures and serious injury.
194. In this regard, Norway also notes that a failure, by the competent authority, to proceed
properly may well have significant consequences for its conclusion.  For some product groups,imports from Mexico and Canada taken together were 40 percent of imports from all other sources.Indeed, for some products, the United States' authorities themselves concluded that imports from suchsources, even taken individually, were contributing importantly to serious injury.
195. According to Norway, the United States contends that because imports from Israel and Jordan
were non-existent or infinitesimal, the discussion of non-NAFTA imports also provides the requisiteexplicit findings with respect to imports from all sources other than Canada, Mexico, Israel, and
Jordan.  Norway submits that the United States is actually invoking a  de minimis   exception which
does not exist.  Norway further submits that the United States' contention that the Panel's requirementimposes the obligation to make redundant findings is also erroneous.  By requiring the United Statesto make specific findings for non-FTA imports, Norway believes, the Panel is making it possible forWT/DS248/AB/R, WT/DS249/AB/R,
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the competent authorities to make a proper determination, based only on the covered imports, that is
fully consistent with WTO requirements.
4. Causation
196. Norway requests the Appellate B ody to uphold the Panel's findings that the USITC failed to
meet the necessary causation standard for CCFRS, ho t-rolled bar, cold-finished bar, rebar, welded
pipe, FFTJ, stainless steel bar, tin mill products, and stainless steel wire.
197. Norway notes that there is no basis for the United States' claims that the Panel misinterpreted
the causation standard and "consistently read into the ITC's analysis findings the ITC did not make,
misstated or ignored critical findings of the ITC [   ] and even substituted its own views of the record
for that of the ITC."  141
198. Norway argues that, contrary to the United States' arguments, the Panel did not substitute the
USITC's  reasonable   conclusions on causation with its own conclusions.  Rather, it reviewed the
evidence that was before the USITC and recognized the obvious lack of coincidence betweenincreased imports and domestic industry performance.  Because of the lack of coincidence, the Panelsought out the USITC's analysis as to why a causal link between increased imports and serious injuryto the domestic industry still existed.  Norway contends that, based on the evidence before the Panel,there was no analysis offered by the USITC that could meet the standard.
199. Norway contends that, by stopping its investigation of individual factors after it had
established that they were not a cause of injury equal to or greater than increased imports, the USITCdid not comply with the requirement of Article 4.2(b).  This approach is, in Norway's view, clearlynot a correct one, as it does not comply with Article 4.2(b) of the  Agreement on Safeguards   that,
according to Appellate Body practice, requires a competent authority to separate and distinguish theinjurious effects of the increased imports from the injurious effects of other factors.
200. According to Norway, the United States is also mistaking a critical review by the Panel for a
de novo   review of the facts.  In Norway's view, the Panel correctly applied the standard of review and
examined whether the USITC assessed all relevant factors and provided a reasoned and adequate
explanation of how the facts supported its determinati on of a causal link as well as its non-attribution
analysis.
                                                     
141Norway's appellee's submission, para. 164, referring to the United States' appellant's submission,
para. 168.WT/DS248/AB/R, WT/DS249/AB/R,
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WT/DS253/AB/R, WT/DS254/AB/R,
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201. Norway furthermore associates itself with the product-specific arguments made by the other
appellees.  In particular, as regards the standard of review issue and the details of the CCFRS analysis,
Norway specifically refers to Brazil's appellee's submission.
I. Arguments of Switzerland – Appellee
1. Unforeseen Developments, Article 3.1 of the  Agreement on Safeguards ,  and
Article 12.7 of the DSU
202. Switzerland requests that the Appellate Body uphold the Panel's conclusions concerning
unforeseen developments.
203. As for the United States' argument that the word "explicit" is not contained in the
Agreement on Safeguards ,  Switzerland submits that the need for an explicit determination is simply a
clarification of the requirement contained in Ar ticle 3.1 that the published report must contain
"reasoned conclusions" and the requirement under Article 4.2(c) to provide a "detailed analysis",
including a "demonstration of the relevance of the factors examined."
204. Switzerland submits that the Panel applied the correct standard of review in examining the
issue of unforeseen developments under Article XIX:1( a) of the GATT 1994.  In stating that it had to
examine whether the competent authorities had "cons idered all the relevant facts and had adequately
explained how the facts supported the determinations that were made"  142, the Panel was simply
articulating what its responsibilities were in applying the standard of review set out in Article 11 ofthe DSU.  Switzerland asserts that the Panel was not allowing its approach, in this respect, to reflect
concerns relevant to Article 4.2 of the  Agreement on Safeguards .
205. Switzerland argues that Article XIX:1(a) of the GATT 1994 requires that there must be a link
between the relevant unforeseen developments and increased imports of each of the specific productsthat may be subject to a safeguard measure.  According to Switzerland, it is not sufficient, therefore,to link the unforeseen developments to only one of those products.
206. Switzerland further maintains that the Panel was correct in finding that the USITC's
conclusions were not supported by data linking those developments to specific increased imports.  A"reasoned conclusion" under Article 3.1 of the  Agreement on Safeguards   is one that links the
pertinent facts to the conclusion reached, not one where "key elements of the analysis are left to                                                     
142Switzerland's appellee's submission, para. 72, referring to Appellate Body Report, Argentina –
Footwear (EC) , para. 121.WT/DS248/AB/R, WT/DS249/AB/R,
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guesswork and supposition".
 143  Switzerland submits that the United States' position appears to be that
a competent authority only needs to collect information in a report and make a determination without
being under an obligation to provide sound reasoning to support its conclusion.  In Switzerland's
view, such a result makes a "mockery"  144 of the requirement in Article 3.1 that the competent
authority must publish a report of its "findings and reasoned conclusions on all pertinent issues of factand law."
207. With respect to Article 12.7 of the DSU, Switzerland argues that the Panel fully considered all
the facts and arguments of the United States and properly stated the basic rationale for its findings.
2. Increased Imports
(a) General
208. Switzerland submits that the Panel correctly concluded that the increase in imports must have
been recent.  According to Switzerland, this conclusion "tracks precisely" the Appellate Body'sfinding in  Argentina – Footwear  (EC)
 145, and follows from the use of the present tense in the phrase
"is being imported" in Article 2.1 of the  Agreement on Safeguards .
209. Switzerland also agrees with the Panel's finding that the increase in imports must be sudden.
According to Switzerland, this in terpretation is fully supported by the Appellate Body's finding in
Argentina – Footwear  (EC) ,  which, in turn, is based on a contextual reading of Article XIX of the
GATT 1994 and Article 2.1 of the  Agreement on Safeguards .
210. Finally, Switzerland disagrees with the Unites States' position that "the phrase 'in such
increased quantities' simply states the requiremen t that, in general, the level of imports at (or
reasonably near)  the end of the [period of investigation] be higher than at some unspecified earlierpoint in time."
 146  Switzerland sees this argument as endorsing the "simplistic"  147 end-points analysis
that was rejected by the Appellate Body in  Argentina – Footwear  (EC) . 148
                                                     
143Switzerland's appellee's submission, para. 81.
144Ibid., para. 81.
145Switzerland's appellee's submission, para. 90, referring to Appellate Body Report, Argentina –
Footwear (EC) , para. 130.
146Switzerland's appellee's submission, para. 94, referring to the United States' appellant's submission,
para. 102.
147Switzerland's appellee's submission, para. 94.
148Ibid., referring to Appellate Body Report, Argentina – Footwear (EC) , paras. 129 and 131.WT/DS248/AB/R, WT/DS249/AB/R,
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(b) Specific Arguments with respect to CCFRS  149
211. According to Switzerland, the United  States seeks to "rehabilitate"  150 the USITC report by
comparing the level of imports between 1996 and 2000 and without addressing the level of imports atthe end of the period of investigation.  Switzerland sees this approach as "patently wrong".
 151
(c) Specific Arguments with Respect to Tin Mill Products and Stainless
Steel Wire
212. Switzerland asserts that the Panel's findings are correct and completely in line with prior
panel and Appellate Body practice.  The Panel's concern was not with how the United Sates lawfunctions, but that by function of United States law—which required the President to rely on thedecision of at least three Commissioners—there needed to be consistent treatment of the like product.Otherwise, the analysis of these Commissioners could not support the measures on these individualproducts.
213. Switzerland argues that the United States is incorrect in claiming that the Panel's findings
"provide[
 ] no insight into the Panel's reasoning".  The Panel expressed its reasoning well.
Switzerland fails to understand how the United States can recognize the fact that the threeCommissioners based their findings on data for two different product groupings, but then claim thatthe disparate findings based on the data for those groupings both support a measure on only onegrouping.  The findings cannot possibly be reconciled because they address entirely different issues.The Panel found simply that, to comply with the provisions of the  Agreement on Safeguards ,  a
Member's authority may not reach an affirmative finding (however that is defined) and impose a
measure that is based on multiple, inconsistent like product definitions.  This is not a far-reaching
finding.
214. According to Switzerland, the United States e rroneously claims that the "something beyond"
language derived from the Appellate Body Report in  US – Line Pipe   applies in the present case.
Rather, the language is a statement by the Appellate Body that, in hierarchical terms, a showing ofthreat is easier to make than a showing of actual injury, which is "something beyond" threat.Therefore, the Appellate Body appears to have reasoned, if three threat of injury votes would suffice,
                                                     
149For hot-rolled bar and stainless steel rod, Switzerland refers to the arguments of the other
Complaining Parties and incorporates them by referen ce.  (Switzerland's appellee's submission, para. 100)
150Switzerland's appellee's submission, para. 104.
151Ibid.WT/DS248/AB/R, WT/DS249/AB/R,
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so would a combination of three threat and injury votes.  Lastly, in Switzerland's view, the Panel's
decision does not improperly infringe on a Member's right to structure the decision-making process of
its competent authority.
3. Parallelism
215. According to Switzerland, the Appellate B ody established unequivocally—based on the
identity of the language in Article 2.1 and Article 2.2—that imports included in the determinationsmade under Articles 2.1 and 4.2 should correspond to the imports included in the application of themeasure under Article 2.2 of the  Agreement on Safeguards .  This is crucial for the present case.  It
does not mean that a "gap" may not exist between imports covered under the investigation and
imports falling within the scope of the measure.  However, according to Switzerland, such a gap canonly be justified—as stated by the Appellate Body—if it is explicitly established that increasedimports from non-FTA sources  alone   caused serious injury or threat of serious injury.
216. The United States, in Switzerland's view, obviously failed to meet this standard.  Equally
invalid is the United States' criticism of the Pa nel for inserting an allegedly incorrect additional
analytical step.  The approach followed by the Panel, again, is based on consistent panel andAppellate Body practice.  Switzerland also disagrees with the United States' argument that, if thevolume of FTA imports is extremely small, the competent authority's conclusions with respect to all
imports are also applicable to imports from all sources other than the excluded FTA sources.
Switzerland contends that, even though imports from Israel and Jordan were small, or sometimes evenquasi-non-existent, this does not release the United States from establishing explicitly, with areasoned and adequate explanation, that imports from sources covered by the measure alone do satisfythe conditions for the application of a safeguard measure.
4. Causation
(a) General
217. Switzerland requests that the Appellate Body uphold the Panel's findings on causation.  For
the United States, the central element of the Panel's alleged errors with respect to causation relates toits establishment of the facts and its weighing and appreciation of the evidence.  Yet, nowhere in itsarguments on causation does the United States allege that the Panel has infringed Article 11 of theDSU.  All the United States has alleged, in its detailed product-by-product arguments, is that the
Appellate Body should reach a different factual findin g to that reached by the Panel.  Since the UnitedWT/DS248/AB/R, WT/DS249/AB/R,
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States has not pleaded before the Appellate Body that Article 11 has been infringed, it cannot have the
Panel's fact-finding and weighing of the evidence reversed.  The situation is similar to the situation
faced by the Appellate Body in  US – Countervailing Measures on Certain EC Products . 152
218. Switzerland further argues that the United States' submission erroneously suggests that the
Panel allegedly failed to meet an undefined "burden of proof" before it could conclude that theUSITC's findings were WTO-inconsistent.  The Panel was required to make an "objective assessment
of the matter before it" pursuant to Article 11 of the DSU.  This involves the Panel determining, in the
words of the Appellate Body, whether the USITC prov ided a reasoned and adequate explanation. The
United States has not alleged, however, that the Panel infringed its obligations under Article 11 of theDSU.  According to Switzerland, the United States  furthermore erroneously assumes that merely by
reversing the Panel's findings on specific issues, the Appellate Body could uphold the USITC's
causation analysis.
219. Switzerland contends that there are at least two general methodological faults committed by
the USITC.  First, in the instances where the US ITC has determined that there is more than one
alternative cause of injury, the USITC failed to assess, separate and distinguish the collective effectsof the other causes from the effects allegedly caused by increased imports.  Second, the USITCcontinues to consider that merely determining that increased imports are a cause "equal or greaterthan" any alternative cause of injury satisfies the non-attribution requirement of Article 4.2(b) of theAgreement on Safeguards ;  this is the same approach that was found inconsistent by the Appellate
Body in  US – Lamb .
220. Switzerland submits that the Panel's general analytical framework is "unobjectionable".
Switzerland notes that the Panel "compartmentalised"
153 the "coincidence" and "conditions of
competition" analysis and submits that, after the Panel found an absence of coincidence, did notconduct a sufficiently critical analysis of whether the USITC had nevertheless demonstrated theexistence of a causal link.  Switzerland submits that in the absence of coincidence, the factsestablished by the USITC do not establish a compelling explanation that a causal link exists.However, even on the basis of an "uncritical and unduly deferential examination"
 154, the Panel
concluded in nine out of ten cases that there was no reasoned and adequate explanation.
                                                     
152Appellate Body Report, US – Countervailing Measures on Certain EC Products , paras. 51–75.
153Switzerland's appellee's submission, para. 133.
154Ibid., para. 136.WT/DS248/AB/R, WT/DS249/AB/R,
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221. Switzerland agrees with the Panel's finding that where several factors are causing injury, a
competent authority must assess their effects collectiv ely in order to ensure that it does not attribute
any injury caused by other factors to increased imports.  Indeed, the Panel could have found every one
of the USITC's causation determinations inconsistent with the  Agreement on Safeguards   on these
grounds.  The Panel did not suggest that a causation methodology needs to provide for a non-attribution analysis of the cumulative effects of other factors in each and every case;  rather, the casesrequiring a cumulative assessment are where an assessment on an individual relative basis isinsufficient to ensure that the injurious effects of other factors are not attributed to increased imports.Switzerland finds support for its reasoning in the Appellate Body's findings in  US – Lamb   and
US – Line Pipe .
222. Further, in Switzerland's view, the Appellate Body in  EC – Tube or Pipe Fittings   found that
a factor which has  no injurious effect ,  rather than  minimal effects ,  does not have to be subject to a
non-attribution analysis.  Permitting a competent authority to ignore causal factors considered to haveonly "minimal" effects would create a  de minimis   exception to the non-attribution requirement not
contemplated in Article 4.2(b).  Accordingly, Switzerland requests the Appellate Body to uphold thePanel's finding for welded pipe and FFTJ with respect to this matter.
(b) Specific Arguments with respect to Welded Pipe
 155
223. Switzerland submits that the Panel correctly found the USITC's analysis of domestic capacity
increases to be insufficient in order to satisfy the non-attribution requirement.  The Panel alsocorrectly found the USITC's analysis of non-import related poor performance of a significantdomestic producer to be deficient;  Switzerland contends that the Panel was correct to find that evenfactors which have a minor effect should be subject to a non-attribution analysis.  Even if theAppellate Body reverses the Panel's findings, Swit zerland argues that the Appellate Body should still
uphold the Panel's ultimate conclusion;  for this purpose, Switzerland refers the Appellate Body to itsand other Complaining Parties' arguments before the Panel on which the Panel did not decide.
                                                     
155Switzerland incorporates, by reference, the argumen ts of the other Complaining Parties with respect
to the other product categories in dispute.  (Switzerland's appellee's submission, para. 162)WT/DS248/AB/R, WT/DS249/AB/R,
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J. Conditional Appeals
1. Arguments of Brazil, Japan, and Korea  – Joint Appellants
224. Brazil, Japan, and Korea request the Appellate Body conditionally to address their claims
with respect to the definition of the like product and the domestic industry under Articles 2.1and 4.1(c), as well as their claims with respect to Article 5.1 of the  Agreement on Safeguards .
(a) Definition of the like product and the domestic industry
225. In their joint conditional appeal, Brazil, Japan, and Korea request the Appellate Body to rule
on whether the grouping by the USITC of CCRFS products into a single like product was consistentwith Articles 2.1 and 4.1(c) of the  Agreement on Safeguards ,  in the event that the Appellate Body:
(i) disagrees with the Panel's finding that the safeguard measures are "deprived of a legal basis";(ii) reverses an aspect of any of the Panel's findings against the United States with respect to CCFRS;or (iii) concludes that the Panel should have issued a like product ruling to support its CCFRS
causation finding.
226. According to Brazil, Japan, and Korea, the parties agree that the products composing the
CCFRS product category are distinct, since "they have different physical properties, end uses,consumer tastes and habits, customs treatment, and production processes."
 156  In addition, Brazil,
Japan, and Korea argue that the USITC declined to group CCFRS products together in prior trade
remedy cases.
227. According to Brazil, Japan, and Korea, each of the domestic products within a grouping must
be "like" all of the subject imports within that grouping.  It is not enough to find that the grouping of
the domestic products is like that of the imported products.  Moreover, Brazil, Japan, and Korea argue
that the Appellate Body explained in  US – Lamb   "that a continuous line of production between
products—a characteristic heavily relied upon by the United States in the case of flat rolled steelproducts—is insufficient to overcome their lack of 'likeness'."
 157
                                                     
156Brazil's, Japan's, and Korea's other appellants' submission, para. 25.
157Ibid., para. 31.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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228. In Brazil, Japan, and Korea's view, the domestic industry should be defined on the basis of the
competitive relationship between the imported product and the like domestic product.  Finally, Brazil
Japan, and Korea submit that the product definition of CCFRS is inconsistent with Articles 2.1
and 4.1(c) of the  Agreement on Safeguards ,  because CCFRS products are not a single product and do
not compose one authentic market.
(b) Article 5.1 of the  Agreement on Safeguards
229. In the event the Appellate Body upholds or modifies the Panel's findings on causation, Brazil,
Japan, and Korea request the Appellate Body to complete the analysis "regarding the failure of the
United States to adequately analyze causation and to find that the United States failed to ensure that
its safeguard measures were limited to the extent necessary, as required by Article 5.1".
 158
Alternatively, in the event the Appellate Body revers es the Panel's findings with respect to increased
imports and causation, Brazil, Japan, and Korea requ est the Appellate Body to examine whether the
safeguard measures, as explained by the United States in its  ex post facto   economic model, comply
with Article 5 of the  Agreement on Safeguards .
230. Brazil, Japan, and Korea argue that, in accordance with the Appellate Body findings in
US – Line Pipe,   the Complaining Parties established a  prima facie   case that the United States
violated Article 5.1, because the Panel found that the United States failed to comply with the
causation requirements of Article 4.2(b) of the  Agreement on Safeguards .  According to Brazil,
Japan, and Korea, the United States failed to rebut the Complaining Parties'  prima facie   case.  Brazil,
Japan, and Korea argue that the United States'  ex post facto   analysis is not in accordance with the
requirements of Article 5.1 of the   Agreement on Safeguards ,  because the United States failed to
account for the effects of decreasing demand, domestic capacity increases, intra-industry competition,as well as legacy costs on the domestic industry's performance.
2. Arguments of China – Appellant
231. In the event the Appellate Body should reverse sufficient of the Panel's findings to undermine
the Panel's conclusion that the safeguard measures were deprived of legal basis, China requests theAppellate Body to address its cl aim with respect to the definition of the imported product, the like
product and the domestic industry under Articles 2.1 and 4.1(c), as well as its claims with respect toArticles 5.1, 9.1 and 3.1 of the  Agreement on Safeguards .
                                                     
158Brazil's, Japan's, and Korea's other appellants' submission, 2.WT/DS248/AB/R, WT/DS249/AB/R,
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(a) Articles 2.1 and 4.1(c) of the  Agreement on Safeguards
232. China argues that the United States acted inconsistently with Articles 2.1 and 4.1(c) of the
Agreement on Safeguards   because the United States failed to properly define the imported product,
the like product, and the domestic industry.  According to China, the United States' approach ofbundling together products in arbitrary groups failed to allow for an examination of the competitivedynamics amongst the various products.  China submits that in the absence of such a competitiveanalysis, an industry not suffering injury could benefit from the imposed relief on a broader group ofimported products, some of which might not have even increased.  In addition, China alleges that it
has demonstrated, along with the remaining other appellants, that even on the basis of the flawed
product groupings, the United States was not entitled to impose the safeguard measures.
(b) Article 5.1 of the  Agreement on Safeguards
233. China argues that the United States violated Article 5.1 of the  Agreement on Safeguards  
because the United States' safeguard measures were not limited to remedying or preventing theserious injury caused by imports.  China submits that the other appellants have demonstrated that the
USITC failed to properly segregate the injurious effects of other factors from the injurious effects of
increased imports.  In addition, according to China, the  ex post facto   analysis submitted by the
United States does not separate and distinguish the effects of factors other than imports on thedomestic industry.
(c) Article 9.1 of the  Agreement on Safeguards
234. China further claims that the United States acted inconsistently with Articles 9.1 and 3.1 of
the  Agreement on Safeguards .  China alleges, first, that the United States' approach of linking
developing country status under Article 9.1 with the United States' GSP is erroneous.  China notesthat the United States exercises discretion in deciding the list of beneficiaries within the context of itsGSP, and that a number of the eligibility criteria for this list are not related to a country's developmentstatus.  China contends that this approach is inconsistent with Article 9.1, which expressly requires alink between the special and differential treatment granted under this provision and the developingstatus of a Member.
235. China submits furthermore that the United States violated Articles 9.1 and 3.1 of the
Agreement on Safeguards   because it failed to provide a reasoned and adequate explanation for
China's exclusion from the treatment set forth under Article 9.1.  China maintains that its Protocol ofWT/DS248/AB/R, WT/DS249/AB/R,
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Accession lays down China's status as a developing country, and that this status applies for the
purposes of the  Agreement on Safeguards .  Despite these non-ambiguous circumstances, the United
States, in China's view, has failed to provide an ex planation for China's exclusion from the special and
differential treatment provisions of the  Agreement on Safeguards .  Moreover, China alleges that the
United States failed to provide an explanation as to why Chinese imports did not meet the de minimis  
test of Article 9.1.  In China's view, based on the preliminary calculations and the USITC statistics,China had, for a large number of products, a share of imports into the United States accounting forless than three percent, with the exporting developing countries collectively accounting for no morethan nine percent of total imports.
3. Arguments of the European Communities – Appellant
236. In the event the Appellate Body should reverse sufficient of the Panel's findings as to
undermine its conclusion that there was no legal basis for the safeguard measures imposed by theUnited States, the European Communities requests the Appellate Body to address its claim withrespect to the definition of the imported product, the like product, and the domestic industry underArticles 2.1 and 4.1(c), as well as its claim with respect to Article 5.1 of the  Agreement on
Safeguards .
(a) Articles 2.1 and 4.1(c) of the  Agreement on Safeguards
237. The European Communities first alleges that the United States acted inconsistently with its
obligations to properly define the product groupings and the domestic industry as required byArticles 2.1 and 4.1(c) of the  Agreement on Safeguards .  The European Communities submits that the
bundling of products into what it considers to be arbitrary groups is incompatible with the  Agreement
on Safeguards .  First, the USITC failed to identify the "imported product", contrary to the requirement
under Article 2.1, which, according to the Appellate Body's finding in  US – Lamb ,  must be a specific
product.  Second, in order to be considered a "specific product", a group of products must be coherent
and may not contain gaps.  Consequently, according to the European Communities, separateinvestigations should be conducted for each definable or specific product for which a Member isconsidering to impose safeguard measures.  Third, the European Communities argues that, since thedomestic product must be "like" the imported product, it is necessary for products contained in aspecific product definition to be "like" each other.   Therefore, in the European Communities' view, an
analysis of the competitive dynamics among the various products is required.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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238. In addition, the European Communities submits that the other appellants have otherwise
demonstrated that the United States was not entitled to impose the safeguard measures even on the
basis of the flawed product groupings.  According to the European Communities, the Panel "upheld
that view in deciding not to address these claims , although it recognized the problem … in several
instances."  159
(b) Article 5.1 of the  Agreement on Safeguards
239. The European Communities argues that the United States' safeguard measures exceed what is
necessary to remedy or prevent serious injury and facilitate adjustment.  The European Communities
contends that, contrary to the United States assertion, the two conditions set out in Article 5.1 of the
Agreement on Safeguards   are cumulative, rather than alterna tive.  Thus, according to the European
Communities, a Member may only impose a safeguard measure to the lesser of the extent necessary toprevent or remedy serious injury or to the extent necessary to facilitate adjustment.
240. Finally, the European Communities argues that the  ex post facto   analysis submitted by the
United States does not separate and distinguish the effects of factors other than imports on thedomestic industry.  In the European Communities' view, the United States'  ex post facto   analysis
repeated the errors manifest in the USITC report, because it failed to account for factors improperlyfound to be non-injurious, such as the legacy costs in respect of CCFRS.  Moreover, according to the
European Communities, the United States did not model the proper product in its  ex post facto  
analysis for the measure on slab.  Thus, the European Communities submits that the United Statesimproperly included data on slabs to calculate the measure for CCFRS and subsequently excludedslab from the safeguard measure imposed on CC FRS.  Consequently, according to the European
Communities, the United States  ex post facto   justification that includes slab cannot justify a measure
on CCFRS that excludes slab.  Therefore, the European Communities argues that the  ex post facto  
analysis cannot demonstrate that the measure is limited to the extent necessary.
4. Arguments of New Zealand – Appellant
241. If the Appellate Body were to reverse sufficient of the Panel's findings to undermine the
conclusion that there was no legal basis for the safeguard measures imposed by the United States,New Zealand requests the Appellate Body to address its claim that the United States failed to define"the domestic industry that produces like … products", under Articles 2.1 and 4.1(c), as well as its
                                                     
159European Communities' other appellant's submission, para. 17.WT/DS248/AB/R, WT/DS249/AB/R,
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claim with respect to Article 5.1 of the  Agreement on Safeguards .  In addition, in the event the
Appellate Body upholds the causation findings of the Panel, New Zealand associates itself with the
first conditional claim of Brazil, Japan, and Korea
 160 and the related arguments, and requests the
Appellate Body to address the claim under Article 5.1 of the  Agreement on Safeguards .
(a) Articles 2.1 and 4.1(c) of the  Agreement on Safeguards
242. New Zealand alleges that the United States has failed to define the domestic industry in
accordance with Articles 2.1 and 4.1(c) of the  Agreement on Safeguards .  With respect to the legal
standard for determining the like product, New Zealand argues that the like product in the
Agreement on Safeguards   has a narrow meaning, derived from its juxtaposition with the term
"directly competitive products".  In addition, the analysis of competitive relationships is central todetermining whether products are "like".  New Zealand's view is that a proper consideration of thelikeness of products is product, and not producer, oriented and that production processes are notrelevant in this respect.  The United States failed to meet the requirements of the  Agreement on
Safeguards   in its determination of the domestic industry producing CCFRS, because it improperly
bundled together unlike products.  The United States' approach of focusing on commonalities withinthe industry producing CCFRS was erroneous.
243. New Zealand further argues that the bundling of unlike products is impermissible, because it
would allow a competent authority to define the domestic product that is "like" the imported product
in a way that predetermines a finding that increased imports are causing serious injury.  Finally,New Zealand submits that if different products are bundled into one product category, theAgreement on Safeguards   requires that likeness be established between each of the imported products
in that category, as well as each of the products in the domestic products category.
(b) Article 5.1 of the  Agreement on Safeguards
244. New Zealand claims that the United States failed to comply with the requirements of
Article 5.1 of the  Agreement on Safeguards .  First, New Zealand argues that the President of the
United States, without any justification, imposed safeguard measures on CCFRS that are morerestrictive than the USITC's recommendations.  Second, a less restrictive remedy was placed on slabas compared to the remedy imposed on the other pr oducts in the CCFRS category, even though there
was no corresponding difference in the injury alleged to be caused by the increased imports of these                                                     
160This first conditional appeal of Brazil, Japan, and Korea is set forth in Brazil's, Japan's, and Korea's
other appellants' submission, para. 2.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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products.  Third, New Zealand argues that the safe guard measures were applied to a greater extent
than necessary to facilitate the adjustment of the United States' domestic industry.  Fourth, the  ex post
facto   analysis submitted by the United States is fundamentally flawed, because the United States'
methodology has the effect of overestimating the tariff required to restore the domestic industry toprofitability.  Specifically, New Zealand notes, in relation to CCFRS, that the United States includeddata on slabs to calculate the permissible extent of the measure, despite the fact that slabs wereexcluded from the remedy imposed by the President.  Finally, according to New Zealand, the UnitedStates' methodology attributes to imports serious injury caused by other factors.
5. Arguments of Norway  – Appellant
245. If the Appellate Body should reverse sufficient of the Panel's findings as to undermine its
conclusion that there was no legal basis for the safeguard measures imposed by the United States,Norway requests the Appellate Body to address its claim with respect to the definition of the importedproduct, the like product, and the domestic industry under Articles 2.1 and 4.1(c), as well as its claimwith respect to Articles 5.1 and 3.1 of the  Agreement on Safeguards .
(a) Articles 2.1 and 4.1(c) of the  Agreement on Safeguards
246. According to Norway, the United States incorrectly defined the "like product" and the
"imported product" and failed to apply the appropriate standard for determining the "domesticindustry that produces like or directly competitiv e products".  Norway argu es that the USITC bundled
together a broad range of distinct products, notwit hstanding the fact that the products within that
range were not like each other.  For example, the USITC grouped together several unlike importedproducts as "certain carbon flat-rolled steel products", and then bundled the same unlike domesticproducts.  In Norway's view, the failure of th e USITC to define the "like product" correctly
undermines all of its other findings on matters such as increased imports, causation, serious injury,
and remedy.
247. Norway further submits that the United States incorrectly argues that it is permissible for
competent authorities to first identify the domestic industry, and only thereafter to enquire whether
there were any imports that injured that industry.  Furthermore, the USITC defined the relevant"domestic industry" as the producers of a broad range of bundled, but distinct, products,notwithstanding the fact that the products within that range were not like each other.  Norway arguesthat products compete with each other only if they are properly grouped together, whether in thecontext of Article III of the GATT 1994 or in the context of trade remedies.  Norway is of the viewWT/DS248/AB/R, WT/DS249/AB/R,
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that, where there is no competitive nexus between the products involved, the analyses to establish
injury and to choose an appropriate remedy become meaningless.
(b) Articles 3.1 and 5.1 of the  Agreement on Safeguards
248. According to Norway, the United States did not apply its safeguard measures only to the
extent necessary to prevent or remedy serious injury and to facilitate adjustment within the meaningof Article 5.1, first sentence, of the  Agreement on Safeguards .  Norway incorporates by reference the
arguments developed before the Panel either by No rway alone or together with the remaining other
appellants.  Norway argues that Article 5.1 requires that a safeguard measure be proportional to the
injury caused by increased imports, and no additional relief can be imposed over and above what is
necessary to remedy the serious injury attributed to increased imports.  In Norway's view, ajustification for the extent of the measure is necessa ry so as to enable a Member to make a correct
decision regarding the measures to be imposed and serves the purpose of avoiding disputes.  Norwaysubmits that the  ex post facto   justification argued before the Panel is not in accordance with
Article 5.1, first sentence, and Article 3.1 of the  Agreement on Safeguards .  Norway further argues
that the measures imposed by the United States go beyond what is necessary to prevent or remedyserious injury, because the ex post   analysis fails both to isolate and separate the effects of other
factors and, therefore, attributes serious injury caused by other factors to imports.
6. Arguments of Switzerland – Appellant
249. If the Appellate Body should reverse sufficient of the Panel's findings as to undermine its
conclusion that there was no legal basis for the safeguard measures imposed by the United States,Switzerland requests the Appellate Body to address its claim with respect to the definition of theimported product, the like product, and the domestic industry under Articles 2.1 and 4.1(c), as well asits claim with respect to Article 5.1 of the  Agreement on Safeguards .
(a) Articles 2.1 and 4.1(c) of the  Agreement on Safeguards
250. Switzerland alleges that the USITC's bundling of products in arbitrary groups is incompatible
with the  Agreement on Safeguards.   Switzerland's claims are based on three main arguments.  First,
Switzerland argues that the USITC failed to identify the "imported product" pursuant to the
requirement under Article 2.1 to base a determination on "a product", which, according to theAppellate Body in  US – Lamb ,  must be a "specific product".  Second, in order to be considered a
"specific product", a group of products must be c oherent and may not contain gaps.  Consequently,WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 75
according to Switzerland, separate investigations should be conducted for each specific product for
which a Member is considering imposing safeguard measures.  Third, the domestic product must be
"like" the imported product, and it is also necessary for products contained in a specific product
definition to be "like" each other.  If an analysis of the competitive dynamics amongst the variousproducts were not required, WTO Members could prot ect an entire industry by grouping together all
products produced by that industry.
251. In Switzerland's view, in order to determine the scope of the imported product, a competent
authority should rely on the four criteria developed by GATT practice as well as the Appellate Bodyto establish likeness—physical characteristics, end uses, consumer preferences and tariffsclassifications.  Switzerland submits that it has demonstrated in its submissions before the Panel,along with the other Complaining Parties, that the United States did not properly apply these criteria
in determining the likeness of domestic and imported steel products.
(b) Article 5.1 of the  Agreement on Safeguards
252. Switzerland argues that the United States did not limit its safeguard measures to the extent
necessary to prevent or remedy serious injury and to facilitate adjustment, as required by Article 5.1of the  Agreement on Safeguards .  Switzerland argues that, in accordance with the Appellate Body
ruling in  US – Line Pipe ,  because the Panel found that the United States failed to comply with the
causation requirements of Article 4.2(b) of the  Agreement on Safeguards ,  the Complaining Parties
before the Panel established a  prima facie   case that the United States violated Article 5.1.
253. Moreover, according to Switzerland, the United States failed to rebut the other appellants'
prima facie   case because its  ex post facto   analysis does not isolate the effects of other factors of
injury from the injury caused by increased imports.  In Switzerland's view, the United States'ex post facto   analysis repeats the errors manifest in the USITC report, because it fails to account for
factors improperly found to be non-injurious, such as the legacy costs of the domestic industry.Moreover, according to Switzerland, the United States did not model the proper product in itsex post facto   analysis with respect to CCFRS.  Thus, Switzerland submits that the United States
improperly included data on slabs to calculate the measure for CCFRS and subsequently excluded
slab from the safeguard measure imposed on CCFRS .  Consequently, according to Switzerland, the
United States'  ex post facto   justification that includes slab cannot justify a measure on CCFRS that
excludes slab.  Finally, Switzerland argues that, although the USITC recognized that domesticcapacity increases likely played a role in causing injury, the  ex post facto   analysis contains noWT/DS248/AB/R, WT/DS249/AB/R,
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discussion on the effect of domestic capacity increases and does not attempt to isolate the injurious
effect of this other factor.
7. Arguments of the United States  – Appellee
(a) Product definition – Articles 2.1 and 4.1(c) of the  Agreement on
Safeguards
254. The United States maintains that the Appellate  Body cannot complete the analysis of this
issue due to the absence of factual findings by the Panel or undisputed facts in the Panel record onwhich it could base such an analysis.  According to the United States, this conclusion flows fromArticle 17.6 of the DSU, as interpreted by the Appellate Body.
255. In the United States' view, the other appellants' submissions confirm that the Appellate Body
is being asked to address factual matters, such as identifying whether the product definition wascoherent (which requires facts about the relevant merchandise) and determining the likeness of
particular products.  The United States' arguments before the Panel, as reflected in the Panel Reports,
also demonstrate the fact-based nature of the USITC's like product analysis.  In addressing theseissues, the Appellate Body would need to rely on fi ndings by the Panel (which are not available due to
the Panel's exercise of judicial economy) or undisputed facts in the Panel record, which do not exist.In this regard, the United States disputes the suggestion by Brazil, Japan, and Korea that the partiesagree that the products composing the USITC's product grouping for CCFRS are distinct.  The UnitedStates contends that the findings of the USITC and the arguments of the United States before thePanel demonstrate that this is not the case.
(b) Extent of Measures – Article 5.1 of the  Agreement on Safeguards
256. The United States maintains that the Appellate  Body cannot complete the analysis of this
issue due to the absence of factual findings by the Panel or undisputed facts in the Panel record onwhich it could base such an analysis.  According to the United States, this conclusion flows fromArticle 17.6 of the DSU, as interpreted by the Appellate Body.
257. The United States contends that the other appellants have not met their burden of proof
regarding Article 5.1.  However, even if this were not the case, the Appellate Body could not make a
finding regarding Article 5.1 without evaluating several factual matters.  For example, in assessing the
United States' numerical exercise and modelling exer cise, the Appellate Body would need to identify
data indicating the industry's condition in the absence of the injury attributable to increased imports,WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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data relevant to ensuring that the injurious effects of other factors are not attributed to increased
imports, and data estimating the effect of the safeguard measures.  According to the United States, the
parties disagreed about these issues so there are no undisputed facts in the Panel record, and the Panel
did not make any relevant factual findings on which the Appellate Body could rely.
258. The United States argues that several of the other appellants' arguments do not have a valid
foundation.  For example, arguments of the other appellants regarding Article 5.1 are frequently basedon their allegations of inconsistency with Article 4.2(b).  This basis would be removed if theAppellate Body reversed the Panel's findings on Arti cle 4.2(b).  The other appellants also frequently
maintain that the USITC or the President of the United States failed to provide an explanation whenimposing the measures of how the measures complied with Article 5.1.  However, the Panel foundthat the  Agreement on Safeguards   does not require any such explanation before the dispute
settlement process.  According to the United States, the Panel has therefore disposed of this issue and
this finding has not been appealed.
(c) China – Article 9.1 of the  Agreement on Safeguards
259. The United States maintains that the Appellate Body cannot address this claim because it does
not involve any issues of law or legal interpretations that could be reviewed under Article 17.6 of theDSU.  According to the United States, this is a novel and complex issue that is not resolved by the
Agreement on Safeguards   and on which WTO Members have not reached agreement, making it even
more inappropriate for the Appellate Body to determ ine it in the absence of relevant Panel findings.
260. If the Appellate Body nevertheless decides to address this claim, the United States argues
(with reference to its arguments before the Panel) that it should find that China failed to establish thatthe United States acted inconsistently with Article 9.1 of the  Agreement on Safeguards .  China did
not present any facts to the Panel to establish that it is a developing country Member.  It thereforefailed to met its burden of proof.  The statements of individual WTO Members that China referred todo not reflect a general understanding that China is a developing country.  Rather, they demonstratethat Members advocated a "pragmatic approach" to this question, which may differ between the
covered agreements.  The United States argues that this approach does not require Members to treat
China as a developing country Member under Article 9.1.
261. Finally, the United States maintains that the Panel did not exercise judicial economy in
respect of China's claim that Article 3.1 obliged the United States to provide an adequate andreasoned explanation at the time of imposing the safeguard measures, for not excluding ChinaWT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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pursuant to Article 9.1.  Contrary to China's arguments, the United States contends that the Panel
found that a Member is only required to respond to allegations regarding the level and extent of
safeguard measures pursuant to Article 9.1 during the dispute settlement process.
K. Arguments of the Third Participants
1. Canada
262. Canada maintains that it is fully supportive of the United States in its appeal of the Panel's
findings regarding the exclusion of imports from FTA partners from the application of the safeguardmeasures.  Canada submits that the Panel erred in finding that the competent authority is under anobligation to account for the fact that excluded FTA imports contributed to the serious injury, in
establishing whether imports from sources covered by the measure satisfy the requirements forimposing the safeguard measure.  The "excluded sources accounting requirement", established by thePanel, is a new requirement that lacks any textual basis in the  Agreement on Safeguards .  Moreover,
the Appellate Body in  US – Wheat Gluten   only stated the nature of the parallelism requirement and
did not purport to set conditions on how  an authority must conduct its parallelism analysis.  Canada
also agrees with the United States that in  US 
−  Line Pipe   the Appellate Body's explanation of the
parallelism requirement was the same as in  US −  Wheat Gluten .  The Panel erred in reading  US –
Line Pipe   to mean that parallelism necessarily requires the competent authority to account for the fact
that excluded imports may have some injurious effect on the domestic industry.  Thus, according to
Canada, this requirement has no basis in prior Appellate Body reports or in the language ofArticles 2.1 or 4.2 of the  Agreement on Safeguards .
263. Canada submits that the Panel's finding on parallelism is contrary to Article 3.2 of the DSU,
because the Panel created a new requirement that adds to a Member's obligations under theAgreement on Safeguards .  Moreover, Canada argues that if the Panel had applied the correct
standards, it would have concluded that the USITC's parallelism analysis was consistent with theAgreement on Safeguards .  In Canada's view, the United States fully satisfied the requirements
actually contained in the  Agreement on Safeguards .  The Appellate Body should therefore reverse the
Panel's findings on parallelism.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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IV. Issues Raised In This Appeal
264. Members of the WTO have agreed in the  Agreement on Safeguards   that Members may
suspend their trade concessions temporarily by applying import restrictions as safeguard measures ifcertain prerequisites are met.  These prerequisites are set forth in Article XIX of the GATT 1994,dealing with "Emergency Action on Imports  of Particular Products", and in the  Agreement on
Safeguards ,  which, by its terms, clarifies and reinforces the disciplines of Article XIX.  Together,
Article XIX and the  Agreement on Safeguards   confirm the right of WTO Members to apply
safeguard measures when, as a result of unforeseen developments and of the effect of obligations
incurred, including tariff concessions, a product is being imported in such increased quantities and
under such conditions as to cause or threaten to cause serious injury to the domestic industry thatproduces like or directly competitive products.  However, as Article 2.1 of the  Agreement on
Safeguards   makes clear, the right to apply such measures arises  " only"  if these prerequisites are
shown to exist.
265. In this case, we will address the issues raised on appeal with respect to the ten safeguard
measures applied by the United States to imports of certain steel products, in the following order:
(a) whether the Panel erred in finding that the United States acted inconsistently with
Article XIX:1(a) of the GATT 1994 and Article 3.1 of the  Agreement on Safeguards  
by failing to provide a reasoned and adequate explanation demonstrating that
unforeseen developments resulted in increased imports causing serious injury to thedomestic producers of CCFRS, tin mill products, hot-rolled bar, cold-finished bar,rebar, welded pipe, FFTJ, stainless steel bar, stainless steel rod, and stainless steelwire;
(b) whether the Panel erred in finding that the United States acted inconsistently with
Articles 2.1 and 3.1 of the  Agreement on Safeguards   by failing to provide a reasoned
and adequate explanation of how the facts supported its determinations that importsof CCFRS, tin mill products, hot-rolled bar, stainless steel rod and stainless steel wire
increased;
(c) whether the Panel erred in finding that the United States acted inconsistently with
Articles 2.1 and 4.2 of the  Agreement on Safeguards   by failing to provide a reasoned
and adequate explanation establishing explicitly that imports from sources notexcluded from the scope of the measure satisfy,  alone ,  the conditions required forWT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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the application of safeguard measures on imports of CCFRS, tin mill products, hot-
rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, stainless steel bar, stainless
steel rod, and stainless steel wire;
(d) whether the Panel erred in finding that the United States acted inconsistently with
Articles 2.1, 3.1, and 4.2(b) of the  Agreement on Safeguards   by failing to provide a
reasoned and adequate explanation demonstrating the existence of a causal linkbetween increased imports of CCFRS, tin mi ll products, hot-rolled bar, cold-finished
bar, rebar, welded pipe, FFTJ, stainless steel bar, and stainless steel wire, and seriousinjury or threat of serious injury to the relevant domestic industry;
(e) whether the Panel acted inconsistently with Article 11 of the DSU by failing to make
an objective assessment of the matter before it, including an objective assessment of
the facts of the case and the applicability of and conformity with the GATT 1994 and
the  Agreement on Safeguards ;  and
(f) whether the Panel acted inconsistently with Article 12.7 of the DSU by failing to
provide the "basic rationale" behind certain of its findings and conclusions.
266. There are also some conditional appeals the consideration of which depends upon our
findings on some of the issues otherwise raised in th is appeal.  We will address them in the following
order:
(a) if we reverse "sufficient of the Panel's findings"
 161 to undermine the conclusion that
the safeguard measures were "deprived of a legal basis"  162:
(i) whether the United States acted inconsistently with Articles 2.1 and 4.1(c) of
the  Agreement on Safeguards   by failing to define properly the imported
product, the like product, and the domestic industry with respect to theproduct groups covered by the safeguard measures;
                                                     
161China's other appellant's submission, para. 3;  European Communities' other appellant's submission,
para. 6;  New Zealand's other appellant's submission, para . 1.1;  Norway's other appellant's submission, para. 3;
Switzerland's other appellant's submission, para. 3.
162Panel Reports, para. 10.705.WT/DS248/AB/R, WT/DS249/AB/R,
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(ii) whether the United States acted inconsistently with Article 5.1 of the
Agreement on Safeguards   by imposing safeguard measures beyond the
extent necessary to remedy or prevent serious injury and to facilitate
adjustment;
(iii) whether the United States acted inconsistently with Articles 3.1 and 9.1 of the
Agreement on Safeguards   by using the rules of its Generalised System of
Preferences to identify developing country Members, and by failing toprovide a reasoned and adequate explanation as to why China did not qualifyfor the exemption under Article 9.1;
(b) if we reverse an aspect of any of the Pa nel's findings on CCFRS, or if we conclude
that the Panel should have made a finding on the correct definition of the like product
with respect to CCFRS, whether the United States acted inconsistently with
Articles 2.1 and 4.1(c) of the  Agreement on Safeguards   by failing to define properly
the like product with respect to CCFRS;
(c) if we uphold or modify the Panel's findings on causation, whether we should
complete the analysis with respect to causation, and determine whether the UnitedStates failed to ensure that its safeguard measures are limited to the extent necessaryto remedy or prevent serious injury and to facilitate adjustment as required byArticle 5.1 of the  Agreement on Safeguards ;
(d) if we reverse the Panel's findings on increased imports and causation, whether the
safeguard measures are limited to the extent necessary to remedy or prevent seriousinjury and to facilitate adjustment and, therefore, comply with Article 5 of theAgreement on Safeguards .
267. In response to our questioning at the oral hearing, all parties agreed that this dispute concerns
only the  specific   safeguard measures as applied by the United States.  Consequently, there is no
United States law, regulation, or methodology that is challenged,  as such ,  in this dispute.
268. Before turning to the substantive issues, we note that an  amicus curiae   brief was received
from an industry association, the American Institute  for International Steel, in the course of this
appeal.  As we mentioned earlier
 163, the European Communities inquired by letter of
                                                     
163Supra , paras. 9–10.WT/DS248/AB/R, WT/DS249/AB/R,
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23 September 2003 whether we would accept the brief and take it into account, and Brazil requested
by letter of 24 September 2003 that we disregard the brief.  At the oral hearing, Brazil requested that
we disregard the brief "for legal and systemic concerns".
 164  Likewise, Mexico stated at the oral
hearing that it opposed the acceptance of the  amicus curiae   brief.  165  Cuba and Thailand agreed with
Brazil and Mexico that the  amicus curiae   brief should be disregarded.  166  We note that the brief was
directed primarily to a question that was not part of any of the claims.  We did not find the brief to beof assistance in deciding this appeal.
V. Unforeseen Developments and Article 3.1 of the  Agreement on Safeguards
269. The United States appeals the Panel's finding th at the United States acted inconsistently with
Article XIX:1(a) of the GATT 1994 and Article 3.1 of the  Agreement on Safeguards   because the
USITC failed to demonstrate, through a reasoned and adequate explanation, that "unforeseendevelopments"
 167 had  resulted   in increased imports of  each of the products   on which the United
States imposed safeguard measures on 20 March 2002.  In examining this issue on appeal, we aremindful of the precise scope of the issue before us.  We observe that the United States' appeal doesnot raise the issue whether the "unforeseen developments" identified as such by the United States—that is, "the Russian crisis, the Asian crisis and the continued strength of the United States' markettogether with the persistent appreciation of the US dollar"
 168
  as well as the "confluence"  169 of those
events—actually amounted to "unforeseen developments" within the meaning of Article XIX:1(a).  In
response to our questions at the oral hearing, none of the participants disagreed with this formulationof the issue before us.
 170
                                                     
164Brazil's statement at the oral hearing.
165Mexico's statement at the oral hearing.
166Cuba's and Thailand's statements at the oral hearing.
167We use the term "unforeseen developments" as shorth and to describe the prerequisites set forth in the
first clause of Article XIX:1(a) of the GATT 1994, that is, "[i]f, as a result of unforeseen developments and ofthe effect of the obligations incurred by a Member under this Agreement, including tariff concessions".
168Panel Reports, para. 10.72.
169Ibid.
170At the oral hearing, the European Communities requested, however, that, should we reverse the
Panel's finding that the USITC failed to demonstrate,  through a reasoned and adequate explanation, that
"unforeseen developments" resulted in increased imports of each of the relevant products on which the United
States imposed safeguard measures, we address other arguments that were raised by the Complaining Partiesbefore the Panel concerning "unforeseen developments".  The European Communities refers, for instance, to itsargument that "unforeseen developments" that occurred several years ago and may have caused increasedimports then but the effects of which have now ceased , cannot be considered as "unforeseen developments"
justifying the imposition of safeguard measures. (European Communities' appellee's submission, para. 84)WT/DS248/AB/R, WT/DS249/AB/R,
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270. Our analysis examines, first, the arguments advan ced by the United States that relate to the
Panel's identification and application of the appropriate standard of review for claims arising under
Article XIX:1(a) of the GATT 1994.  Secondly, we examine the appropriate interpretation of
Article 3.1 of the  Agreement on Safeguards ,  both in general terms and, in particular, as it relates to
"unforeseen developments".  Thirdly, we examine whether Article XIX:1(a) of the GATT 1994requires a demonstration that "unforeseen developments"  resulted   in increased imports for  each
specific  safeguard measure at issue.  Finally, we look at whether the Panel was "required" to consider
data to which the USITC referred in certain parts of the USITC report, other than those dealing with"unforeseen developments", to support the USITC' s finding that "unforeseen developments" had
resulted   in increased imports.
271. We will examine separately, in another section of this Report, the United States' claim that the
Panel acted inconsistently with its obligation under Article 12.7 of the DSU by failing to provide the
"basic rationale behind [its] findings and recommendations" as they relate to "unforeseendevelopments".
272. This said, we turn first to examine the Un ited States' claim concerning the appropriate
standard of review for claims arising under Article XIX:1(a) of the GATT.
A. Appropriate Standard of Review for Claims  Under Article XIX:1(a) of the GATT 1994
273. At the outset of its analysis, the Panel considered the standard of review that was appropriate
for the examination of the claims made by the Complaining Parties relating to "unforeseendevelopments".  After citing our Reports in  Argentina – Footwear (EC)   and in  US – Lamb ,  the
Panel articulated the standard in the following terms:
… the role of this Panel in the present dispute is not to conduct a
de novo  review of the USITC's determination.  Rather, the Panel
must examine whether the United States respected the provisions of
Article XIX of GATT 1994 and of the Agreement on Safeguards,
including Article 3.1.  As further developed below, the Panel mustexamine whether the United States demonstrated in its published
report, through a reasoned and adequate explanation, that unforeseen
developments and the effects of tariff concessions resulted inincreased imports causing or threatening to cause serious injury to
the relevant domestic producers.
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In considering whether the United States demonstrated as a matter of
fact that unforeseen developments resulted in increased importscausing serious injury, the Panel will also examine, in application of
its standard of review, whether the competent authorities "considered
all the relevant facts and had adequately explained how the facts
supported the determinations that were made.
 171 (underlining added;
footnotes omitted)
The United States objects to the Panel's reliance on this standard, and argues that, in applying this
standard to examine the USITC's conclusions on "u nforeseen developments", the Panel "failed to take
into account the differences between the unfores een developments requirement and the Article 2
and 4 conditions for applying a safeguard measure".  172
274. The United States asserts that we made clear in  Korea – Dairy ,  Argentina – Footwear (EC) ,
and  US – Lamb   that the "unforeseen developments" language of Article XIX:1(a) constitutes a
"distinct obligation [that] is different from obligations"  173 under Articles 2 and 4 of the  Agreement
on Safeguards .  The United States maintains that the Panel "paid no heed"  174 to these differences
when it relied on statements in  Argentina – Footwear (EC)   and in  US – Lamb   on the standard of
review applicable to Article 4 of the  Agreement on Safeguards . 175  According to the United States,
"the standard adopted by the Panel … mistakenly reflects concerns relevant to Article 4.2, anddisregards concerns relevant to the 'unforesee n developments' requirement under Article XIX:1(a)."
 176
The United States thus argues that the "reasoned and adequate explanation test" is "inappropriate" for
claims arising under Article XIX of the GATT 1994.  177
                                                     
171Panel Reports, paras. 10.38–10.39.
172United States' appellant's submission, para 15.  We note that the United States' challenge is to the
Panel's  application   of the relevant standard of review.  The United States is not, therefore, alleging that the
standard of review, as articulated by the Panel, was, in itself, incorrect.  The United States confirmed thisunderstanding in response to questioning at the oral hearing.  In addition, the United States stated—for instance,in paragraph 54 of its appellant's submission—that the "Panel correctly noted in its standard of review sectionthat the Appellate Body has found 'that a panel must assess whether a reasoned and adequate explanation has
been provided as to how the facts support the determination.'"  In paragraph 55 of its appellant's submission, the
United States further stated that "the Panel also emphasized  correctly that with regard to Articles 2, 3, and 4 and
Article XIX, 'the role of the Panel is to 'review' determinations and demonstrations made and reported by aninvestigating authority,' and not to be the initial fact finder." (footnote omitted)
173United States' appellant's submission, para. 77.
174Ibid., para. 78.
175Ibid., paras. 78–79.
176Ibid., para. 78.
177United States' response to questioning at the oral hearing.WT/DS248/AB/R, WT/DS249/AB/R,
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275. We explained in  Argentina – Footwear (EC)   that Article XIX of the GATT 1994 and the
Agreement on Safeguards   "relate to the same thing, namely the application by Members of safeguard
measures".  178  We also indicated there our agreement with the statement by the panel in that case that
"Article XIX of GATT and the Safeguards Agreement must  a fortiori   be read as representing an
inseparable package   of rights and disciplines which have to be considered in conjunction."  179  In our
view, this inseparable relationship between Article XIX of the GATT 1994 and the  Agreement on
Safeguards   suggests that the United States' call for a different and separate standard of review for
Article XIX is unfounded.
276. We explained in  US – Lamb ,  in the context of a claim under Article 4.2(a) of the
Agreement on Safeguards ,  that the competent authorities must provide a " reasoned and adequate
explanation   of how the facts support their determination".  180  More recently, in  US – Line Pipe ,  in
the context of a claim under Article 4.2(b) of the  Agreement on Safeguards ,  we said that the
competent authorities must, similarly, provide a  " reasoned and adequate explanation ,  that injury
caused by factors other than increased imports is not attributed to increased imports".  181  Our findings
in those cases did not purport to address  solely   the standard of review that is appropriate for claims
arising under Article 4.2 of the  Agreement on Safeguards .  We see no reason not to apply the same
standard generally to the obligations under the  Agreement on Safeguards   as well as to the obligations
in Article XIX of the GATT 1994.
277. Moreover, as we said in  US – Lamb ,  the existence of "unforeseen developments" is a
"pertinent issue of fact and law" under Article 3.1, and "it follows that the published report of the
competent authorities, under that Article, must contain a 'finding' or 'reasoned conclusion' onunforeseen developments."
 182  Thus, the Panel in the current dispute correctly noted that "the
circumstances of unforeseen developments within the meaning of Article XIX:1(a) of GATT 1994must be demonstrated as a matter of  fact,  together with the conditions mentioned in Article 2.1 of the
Agreement on Safeguards, in the report of the competent authority and before a safeguard measurecan be applied."
 183
                                                     
178Appellate Body Report, Argentina – Footwear (EC) ,  para. 81.
179Ibid. (original emphasis)
180Appellate Body Report, US – Lamb , para. 103. (original emphasis)
181Appellate Body Report, US – Line Pipe , para. 217. (emphasis added)
182Appellate Body Report, US – Lamb ,  para. 76.
183Panel Reports, para. 10.37. (original emphasis; footnote omitted)WT/DS248/AB/R, WT/DS249/AB/R,
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278. In any event, the objection of the United States to the Panel's requirement that competent
authorities provide a "reasoned and adequate explanation" for their findings on "unforeseen
developments" cannot be reconciled with the obligations of a panel under Article 11 of the DSU,
which requires a panel to "make an objective assessment of the matter before it, including anobjective assessment of the facts of the case and the applicability of and conformity with the relevantcovered agreements".  As we said in  Argentina – Footwear (EC) :
… for all but one of the covered agreements, Article 11 of the DSU
sets forth the appropriate standard of review for panels.  The only
exception is the  Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994 ,  in which a specific
provision, Article 17.6, sets out a special standard of review fordisputes arising under that Agreement.
184
279. We do not see how a panel could examine objectively the consistency of a determination with
Article XIX of the GATT 1994 if the competent authority had not set out an explanation supporting
its conclusions on "unforeseen developments".  Indeed, to enable a panel to determine whether therewas compliance with the prerequisites that must be demonstrated before the application of a safeguardmeasure, the competent authority must provide a "reasoned and adequate explanation" of how thefacts support its determination for those prerequisites, including "unforeseen developments" underArticle XIX:1(a) of the GATT 1994.
280. For these reasons, we find that the Panel applied the proper standard of review in determining
how it should assess the matter before it under Article XIX of the GATT 1994.
281. We turn next to examine the United States' arguments under Article 3.1 of the  Agreement on
Safeguards .
 185
                                                     
184Appellate Body Report,  Argentina – Footwear (EC) , para. 118.
185The United States refers in its arguments also to the requirement contained in Article 4.2(c) of the
Agreement on Safeguards for competent authorities to provide a "detailed analysis of the case" and "a
demonstration of the relevance of the factors examined."  The United States notes, however, that the Panelfound that "Article 4.2(c) was not extensively addressed by the parties as a discrete basis for violation", and,accordingly, the Panel "d[id] not consider that an additional reference to Article 4.2(c) in relation to the Panel'sfindings on increased imports and causation would enhance the complainants' rights." (United States' appellant'ssubmission, footnote 15 to para. 54, referring to Panel Reports, paras. 9.31 –9.32).WT/DS248/AB/R, WT/DS249/AB/R,
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B. Article 3.1 of the Agreement on Safeguards
282. Article 3.1 of the  Agreement on Safeguards   provides, in relevant part, that:
The competent authorities shall publish a report setting forth their
findings and  reasoned   conclusions reached on all pertinent issues of
fact and law. (emphasis added)
283. To begin, we note that the United States sets out its arguments concerning Article 3.1 in
Section III of its appellant's submission, which is entitled "General Errors in the Panel's Findings
Under Article 3.1 of the Agreement on Safeguards".  186  Thus, the United States' argument concerning
the correct interpretation of Article 3.1 of the  Agreement on Safeguards   is not confined to the Panel's
findings on "unforeseen developments".  Indeed, we note that the Panel, in addition to finding that the
United States acted inconsistently with Article 3.1 w ith respect to the determination by the competent
authority of "unforeseen developments"  187, also found that certain of the USITC's findings on
increased imports and causation were inconsistent with Article 3.1.  188
284. We begin our analysis with an examination of the interpretation by the United States of
Article 3.1, last sentence, which underlies its submissions regarding the Panel's alleged errors underArticle 3.1.  The United States argues that "the  key consideration [under Article 3.1 of the  Agreement
on Safeguards ] is whether the authorities present a logical basis for their conclusion."
 189  According to
the United States, "the Safeguards Agreement does not explicitly require an 'explanation'."  190  Th e
United States rather argues that Article 3.1 of the  Agreement on Safeguards   "implies an explanation
only in requiring 'reasoned conclusions on all pertinent issues of fact and law'."  191  To support its
interpretation, the United States submits that the "ordinary meaning of the verb 'reason' is to '[t]hink in
                                                     
186In addition to addressing findings that the Panel made in the context of its analysis of "unforeseen
developments" (United States' appellant's submission, paras. 58–63), the United States also suggests that thePanel's conclusions on "increased imports" are inconsistent with Article 3.1 in that the Panel required thecompetent authority to do more than to "present a logical basis for [its] conclusions". (United States' appellant'ssubmission, paras. 59–60)
187Panel Reports, paras. 10.150 and 11.2.
188Ibid., paras. 10.200, 10.262, 10.419, 10.422, 10.445, 10.469, 10.487, 10.503, 10.536, 10.569, 10.573,
and 11.2.
189United States' appellant's submission, para. 60.
190Ibid., para. 59.
191Ibid., para. 60.WT/DS248/AB/R, WT/DS249/AB/R,
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a connected or logical manner; use one's reason in forming conclusions ... [a]rrange the thought of in a
logical manner, embody reason in; express in a logical form.'"
 192
285. As we understand it, this is the basis for the United States argument that Article 3.1 requires a
competent authority to present a "logical basis" for its determination in its published report.  TheUnited States did not explain what it meant by a "logical basis" in its written submissions.  However,in response to our questioning at the oral hearing, the United States clarified that a "logical basisdescribes the underpinning to the conclusion."
 193  The United States affirmed, further, in the oral
hearing, that the United States sees it as possible to have "a 'reasoned conclusion' without a 'reasonedand adequate explanation'."
 194
286. We have misgivings about the approach of the United States to ascertaining the meaning of
the last sentence of Article 3.1.  The requirement of Article 3.1 is that "competent authorities shall
publish a report setting forth their findings and  reasoned  conclusions reached on all pertinent issues
of fact and law."  The meaning of Article 3.1 must be established through an examination of theordinary meaning of the terms of Article 3.1, read in their context and in the light of the object andpurpose of the  Agreement on Safeguards .
 195  Thus, instead of basing an interpretation of
Article 3.1—as the United States does—entirely on the meaning of  one  word—"reasoned"—in that
provision, it is, in our view, appropriate to interp ret Article 3.1 by examining the ordinary meaning of
all  of the words that together prescribe the relevant obligation in that Article.
287. In doing so, we note that the definition of "conclusion" is "the result of a discussion or an
examination of an issue" or a "judgement or statement arrived at by reasoning:  an inference;  a
deduction".  196  Thus, the "conclusion" required by Article 3.1 is a "judgement or statement arrived at
by reasoning".  We further note that the word "reasoned", which the United States defines in terms ofthe verb "to reason", is, in fact, used in Article 3.1, last sentence, as an adjective to qualify the term"conclusion".  The relevant definition of the intransitive verb "to reason" is "to think in a connected or
                                                     
192United States' appellant's submission, para. 60.  The United States refers to the definition of "reason"
in the  New Shorter Oxford English Dictionary , L. Brown (ed.) (Clarendon Press, 1993), Vol.II, pp. 2495-2496.
193United States' response to questioning at the oral hearing.
194Ibid.
195Article 3.2 of the DSU;  Article 31 of the  Vienna Convention on the Law of Treaties , done at
Vienna, 23 May 1969, 1155 U.N.T.S. 331;  8 International Legal Materials 679.
196Shorter Oxford English Dictionary , 5th ed. W.R. Trumble, A. Stevenson (eds.) (Oxford University
Press, 2002), Vol. I, p. 477.WT/DS248/AB/R, WT/DS249/AB/R,
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logical manner;  use one's reason in forming conclusions".  197  The definition of the transitive verb "to
reason" is "to arrange the thought of in a logical manner, embody reason in;  express in a logical
form".  198  Thus, to be a "reasoned" conclusion, the "judgement or statement" must be one which is
reached in a connected or logical manner or expressed in a logical form.  Article 3.1 further requiresthat competent authorities must "set forth" the "reasoned conclusion" in their report.  The definition ofthe phrase "set forth" is "give an account of, esp. in order, distinctly, or in detail;  expound, relate,narrate, state, describe".
 199  Thus, the competent authorities are required by Article 3.1, last sentence,
to "give an account of" a "judgement or statement which is reached in a connected or logical manneror expressed in a logical form", "distinctly, or in detail."
288. Panels have a responsibility in WTO dispute settlement to assess whether a competent
authority has complied with its obligation under Article 3.1 of the  Agreement on Safeguards   to "set
forth" "findings and reasoned conclusions" for their determinations.  The European Communities and
Norway argue that panels could not fulfill this responsibility if they were left to "deduce for
themselves" from the report of that competent author ity the "rationale for the determinations from the
facts and data contained in the report of the competent authority."
 200  We agree.
289. We note further, as context, that Article 4.2(c) of the  Agreement on Safeguards   requires the
competent authorities to:
... publish promptly,  in accordance with the provisions of Article 3 , 
a detailed analysis of the case under investigation as well as ademonstration of the relevance of the factors examined. (emphasis
added)
We observe that this requirement is expressed as being "in accordance with" Article 3, and not "in
addition" thereto.  Thus, we see Article 4.2(c) as an elaboration of the requirement set out inArticle 3.1, last sentence, to provide a "reasoned conclusion" in a published report.
                                                     
197Shorter Oxford English Dictionary , 5th ed. W.R. Trumble, A. Stevenson (eds.) (Oxford University
Press, 2002), Vol. II, p. 2482.
198Ibid.
199Ibid., p. 2773.
200European Communities' appellee's submission, para. 48;  Norway's appellee's submission, para 75.WT/DS248/AB/R, WT/DS249/AB/R,
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290. The United States argued at the oral hearing that "Article 4.2(c) does not apply to the
competent authorities' demonstration of unforeseen developments"
 201 under Article XIX:1(a) of the
GATT 1994.  We disagree.  Article 4.2(c) is an elaboration of Article 3;  moreover "unforeseen
developments" under Article XIX:1(a) of the GATT 199 4 is one of the "pertinent issues of fact and
law" to which the last sentence of Article 3.1 refers.  It follows that Article 4.2(c) also applies to thecompetent authorities' demonstration of "unf oreseen developments" under Article XIX:1(a).
291. For these reasons, we conclude that the "present[ation of] a logical basis"
 202 as understood by
the United States, for the conclusions of the competent authorities, does not fulfill the requirements ofArticle 3.1, last sentence.  They must "set forth" a "reasoned conclusion".
292. We turn now to address the arguments the United States advances, under Article 3.1, that
relate to the Panel's findings on "unforeseen developments".
293. The Panel stated that "[t]he nature of the fa cts, including their complexity, will dictate the
extent to which the relationship between the unforeseen developments and increased imports causinginjury needs to be explained.  The timing of the explanation [relating to unforeseen developments], its
extent and its quality are all factors that can affect whether [that] explanation is reasoned andadequate."
 203  According to the United States, there is no basis in the  Agreement on Safeguards   "for
finding that 'timing' or 'extent' are relevant to whether the competent authorities' explanations arereasoned and adequate."
 204
294. As we see it, the United States appears to equate the word "extent" to the word "length" with
a view to implying that the Panel would have required that the competent authority's explanation be of
a certain length.  205  Based on our understanding of the relevant section of the Panel Reports, the Panel
required no such thing.  Rather than requiring that the USITC provide a "longer" explanation, thePanel was, in our view, simply stating that the USITC had not provided a reasoned and adequateexplanation of how the "unforeseen developments" resulted in increased imports of the products onwhich the United States imposed the safeguard measures.  In other words, the Panel was merelyrequiring that the competent authorities—to use our clarification of the requirement in Article 3.1—
                                                     
201United States' response to questioning at the oral hearing.
202United States' appellant's submission, para. 60.
203Panel Reports, para. 10.115.
204United States' appellant's submission, para. 58.
205Ibid., paras. 60–61.WT/DS248/AB/R, WT/DS249/AB/R,
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"give an account of" a "judgement or statement which is reached in a connected or logical manner or
expressed in a logical form" on  unforeseen developments   "distinctly, or in detail".
295. The United States further argues that the  Agreement on Safeguards   "do[es] not obligate the
competent authorities to present th eir report in any particular form."  206  As we see it, the United States
understands the Panel to have imposed such a requirement by finding that "the USITC failed toprovide a reasoned and adequate explanation because the USITC Report did not cite specifically todata or reasoning in another section of the report that supported a particular conclusion."
 207  Although
we agree with the United States that competent au thorities "may choose any structure, any order of
analysis, and any format for [the] explanation that they see fit, as long as the report complies"  208 with
Article 3.1, we do not agree that the Panel was requiring that a report be in a certain form.  Again, thePanel was assessing whether the USITC had provided a reasoned and adequate explanation of how the
facts supported the USITC's determination, and was not requiring that the explanation of facts be
provided in any particular form in the report.
296. We see no error in the Panel's approach.  In our view, it is consistent with our understanding
of Article 3.1, last sentence.  Further, the Panel's approach is in line with the standard of review forpanels that we discussed earlier.  As we said in  US – Line Pipe   and in  US – Lamb ,  competent
authorities must provide a "reasoned and adequate explanation" of how the facts support theirdetermination.
 209  I n   US – Line Pipe ,  we found, further, in clarifying the obligations of WTO
Members under the  Agreement on Safeguards ,  that:
… the competent authorities must establish explicitly, through a
reasoned and adequate explanation, that injury caused by factors
other than increased imports is not attributed to increased imports.
This explanation must be clear and unambiguous.  It must not merelyimply or suggest an explanation.  It must be a straightforward
explanation in express terms.
 210
                                                     
206United States' appellant's submission, para. 65.
207Ibid., para. 66.
208Ibid., para. 67.
209Appellate Body Report, US – Line Pipe , para. 217, in the context of a claim under Article 4.2(b) of
the  Agreement on Safeguards ;  Appellate Body Report, US – Lamb ,  para. 103, in the context of a claim under
Article 4.2(a) of the  Agreement on Safeguards .
210Appellate Body Report, US – Line Pipe , para. 217.WT/DS248/AB/R, WT/DS249/AB/R,
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297. This was a clarification of the obligation under Article 4.2(b), last sentence, of the
Agreement on Safeguards .  However, as we mentioned earlier, our articulation of this standard of
review should not be read as limited to claims under Article 4 of the  Agreement on Safeguards .
Thus, to the extent that the Panel looked for a "reasoned and adequate explanation" that was "explicit"in the sense that it was "clear and unambiguous" and "did not merely imply or suggest anexplanation", the Panel was, in our view, correctly articulating the appropriate standard of review tobe applied in assessing compliance with Article XIX of the GATT 1994 and the  Agreement on
Safeguards .
298. It bears repeating that a panel will not be in a position to assess objectively, as it is required to
do under Article 11 of the DSU, whether there has been compliance with the prerequisites that mustbe present before a safeguard measure can be applied, if a competent authority is not required to
provide a "reasoned and adequate explanation" of how the facts support its determination of those
prerequisites, including "unforeseen developments" under Article XIX:1(a) of the GATT 1994.  Apanel must not be left to  wonder   why a safeguard measure has been applied.
299. It is precisely by "setting forth findings and reasoned conclusions on all pertinent issues of
fact and law", under Article 3.1, and by providing "a detailed analysis of the case under investigationas well as a demonstration of the relevance of the factors examined", under Article 4.2(c), thatcompetent authorities provide panels with the basi s to "make an objective assessment of the matter
before it" in accordance with Article 11.  As we have said before, a panel may not conduct a  de novo  
review of the evidence or substitute its judgement for that of the competent authorities.
 211  Therefore,
the "reasoned conclusions" and "detailed analysis" as well as "a demonstration of the relevance of thefactors examined" that are contained in the report of a competent authority, are the only bases onwhich a panel may assess whether a competent authority has complied with its obligations under theAgreement on Safeguards   and Article XIX:1(a) of the GATT 1994.  This is all the more reason why
they must be made explicit by a competent authority.
300. In the final analysis, the United States seems to agree with this approach.  The United States
argues that the  Agreement on Safeguards   does not require an "explanation" and does not employ the
terms "adequate" and "explicit".  All the same, the United States acknowledges that those terms can
be understood as "a shorthand" for the obligations that  " are  in the Agreement", that is, that the
published report of the competent authorities must, pursuant to Article 3.1, contain "reasoned
                                                     
211Appellate Body Report, Argentina – Footwear (EC) , para. 121.WT/DS248/AB/R, WT/DS249/AB/R,
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Page 93
conclusions" on "all pertinent issues of fact and law" and, under Article 4.2(c), it must also contain "a
detailed analysis of the case", including "a demonstration of the relevance of the factors examined."  212
301. We turn now to the United States' argument that, since "the Panel based many of its findings
against the United States on its conclusions that the USITC Report failed to provide a 'reasoned andadequate explanation' of certain findings"
 213, it follows that there can only be a violation of
Article 3.1, and not also of Articles 2 and 4 of the  Agreement on Safeguards .  The United States adds
that a failure to explain a finding does not automatically prove that the USITC had not performed theanalysis necessary to make the finding.
 214
302. We recall again our earlier statements on the appropriate standard of review for panels in
disputes that arise under the  Agreement on Safeguards .  When the Panel found that the USITC report
failed to provide a "reasoned and adequate explanation" of certain findings, the Panel was assessing
compliance with the obligations contained in Articles 2 and 4 of the  Agreement on Safeguards   and
Article XIX:1(a) of the GATT 1994.  As we said in  US – Lamb ,  "[i]f a panel concludes that
competent authorities, in a particular case, have no t provided a reasoned or adequate explanation for
their determination … [that] panel has … reached a conclusion that the determination is inconsistentwith the specific requirements of [the relevant provision] of the  Agreement on Safeguards ."
 215  Thus,
we do not agree with the United States that the lack of a reasoned and adequate explanation does notimply a violation of Articles 2 and 4 of the  Agreement on Safeguards .
303. Moreover, we cannot accept the United States' interpretation that a failure to explain a finding
does not support the conclusion that the USITC "did not actually  perform   the analysis correctly,
thereby breaching Article 2.1, 4.2, or 4.2(b) [of the  Agreement on Safeguards ]".
 216  As we stated
above, because a panel may not conduct a  de novo   review of the evidence before the competent
authority, it is the  explanation   given by the competent authority for its determination that alone
enables panels to determine whether there has been  compliance with the requirements of Article XIX
of the GATT 1994 and of Articles 2 and 4 of the  Agreement on Safeguards .  It may well be that, as
the United States argues, the competent authorities have performed the appropriate analysis correctly.
                                                     
212United States' appellant's submission, paras. 59 and 64, and footnote 29 to para. 62, referring to the
obligations set out in Articles 3.1 and 4.2(c) of the  Agreement on Safeguards . (original emphasis)
213United States' appellant's submission, para. 73.
214Ibid., para. 74.
215Appellate Body Report, US – Lamb , para. 107.
216United States' appellant's submission, para. 73. (original emphasis)WT/DS248/AB/R, WT/DS249/AB/R,
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However, where a competent authority has not provided a reasoned and adequate explanation to
support its determination, the panel is not in a position to conclude that the relevant requirement for
applying a safeguard measure has been fulfilled by that competent authority.  Thus, in such a
situation, the panel has no option but to find that the competent authority has not performed theanalysis correctly.
304. In sum, Members may suspend trade concessions temporarily by applying safeguard
measures  " only"  in accordance with Article XIX of the GATT 1994 and with the  Agreement on
Safeguards ,  including Article 3.1 of that Agreement.  The last sentence of the latter provision, as
elaborated by Article 4.2(c) of that Agreement, requires that:
(a) the "competent authorities … publish a report";
(b) the report contain "a detailed analysis of the case";
(c) the report "demonstrat[e] … the relevance of the factors examined";
(d) the report "set[
 ] forth findings and reasoned conclusions";  and
(e) the "findings and reasoned conclusions" cover "all pertinent issues of fact and law"
prescribed in Article XIX of the GATT 1994 and the relevant provisions of theAgreement on Safeguards .
305. We examine next the United States' claim that the Panel erred in requiring a demonstration of
"unforeseen developments" for each of the safeguard measures at issue.
C. Is it Necessary to Demonstrate for Each Safeguard Measure at Issue that Unforeseen
Developments Resulted in Increased Imports?
306. The Panel found that, because Article XIX of the GATT 1994 requires a demonstration that
"unforeseen developments" have  resulted   in "increased imports", the report of the investigating
authorities must "contain  specific   factual demonstrations of unforeseen developments identified to
have resulted in increased imports causing or threatening to cause serious injury to the relevant
domestic producers for each safeguard measure at issue."  217
                                                     
217Panel Reports, para. 10.44 (original emphasis; underlining added).WT/DS248/AB/R, WT/DS249/AB/R,
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307. It is useful to set out the relevant reasoning and findings of the Panel on this issue before
analyzing the argument made by the United States.  The Panel found first that:
… at no point in the initial USITC Report is the issue of "unforeseen
developments" per se  mentioned, except, as the complainants have
pointed out, in a footnote in the separate view of one commissioner
explaining that although such a demonstration is required in WTO
law, it is not required by US law.  There is otherwise no discussion of
the effects of unforeseen developments for the specific safeguardmeasures at issue.
 218 (footnote omitted)
308. Turning to the Second Supplementary Report provided by the USITC, the Panel observed
that  "the USITC insists on the  overall effects   of the Asian and Russian financial crisis together with
the strong US dollar and economy to displace steel to other markets."  219  The Panel found that
"although it describes a plausible set of unforeseen developments that may have resulted in increasedimports to the United States from various sources, it falls short of demonstrating that suchdevelopments actually resulted in increased imports into the United States causing serious injury tothe relevant domestic producers."
 220
309. The Panel went on to find that, even if, as the USITC had found, "large volumes of foreign
steel production were displaced from foreign consumption,"  221 this did not, in itself, imply that
imports  to the United States   increased as a result of "unforeseen developments".  The Panel further
found that "the USITC did not provide any data to support its general assertion that the confluence of
unforeseen developments resulted in the  specific   increased imports at issue in this dispute,"  222 and
agreed with the Complaining Parties that "the USITC's explanation relates to steel production in
general and does not describe how the unforeseen developments resulted in increased imports inrespect of the  specific   steel products at issue."
 223
310. The Panel noted also that the United States referred, in its first written submission to the
Panel, "to parts of the USITC Report, which contain footnote references to tables that show imports
                                                     
218Panel Reports, para. 10.116.
219Ibid., para. 10.121. (original emphasis)
220Panel Reports, para. 10.122.
221Ibid., para. 10.123.
222Ibid., para. 10.125. (original emphasis;  underlining added)
223Panel Reports, para. 10.126. (original emphasis)WT/DS248/AB/R, WT/DS249/AB/R,
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by country and by product for the entire period of investigation."
 224  The Panel found that, although
"these tables contained data that  could   have been used to explain how unforeseen developments
resulted in increased imports that caused injury … the competent authority did no such thing."  225  The
Panel added that "[i]n fact, the text to which the footnotes correspond is either totally unrelated to anexplanation of unforeseen developments, or it de als generally with imports without specifying from
where those imports came."
 226  On that basis, the Panel concluded that:
… the explanation provided by the USITC [on] how unforeseen
developments resulted in increased imports causing serious injury is
not reasoned and adequate.  Moreover, it is not supported by relevant
data and it does not demonstrate, as a matter of fact, that such
unforeseen developments resulted in increased imports into theUnited States of the  specific   steel products that are the subject of the
safeguard measures at issue.
 227 (emphasis added)
311. The Panel found, therefore, that the United States acted inconsistently with Article XIX:1(a)
of the GATT 1994 and Article 3.1 of the  Agreement on Safeguards   by failing to provide a reasoned
and adequate explanation demonstrating that "unforeseen developments" had  resulted   in increased
imports of the  specific   steel products subject to the safeguard measure at issue.  228
312. The United States objects to this finding by arguing that Article XIX does not specify a
particular type of analysis, nor does it require any differentiation by the competent authority of the
impact of various "unforeseen developments" on  each  product that is subject to the relevant
safeguard measures.  The United States submits that "[t]o perform such an analysis, the competentauthorities would have to identify the effects of each unforeseen development on subsequent increasesin imports of a product"
 229 and thus "obligate the competent authorities to evaluate unforeseen
developments in the same way as imports themselves".  230  According to the United States, this is
"manifestly incorrect" because "[w]hile Article XIX:1(a) requires that increased imports be a 'resultof' unforeseen developments, in contrast, it requ ires that those imports 'cause' serious injury."
 231
                                                     
224Panel Reports, para. 10.133.
225Ibid. (emphasis added)
226Panel Reports, para. 10.133.
227Ibid., para. 10.135.
228Ibid., paras. 10.148, 10.150 and 11.2.
229United States' appellant's submission, para. 81.
230Ibid.
231Ibid.WT/DS248/AB/R, WT/DS249/AB/R,
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313. In considering this argument, we turn first to the text of Article XIX:1(a):
If, as a result of unforeseen developments and of the effect of the
obligations incurred by a Member under this Agreement, including
tariff concessions, any product is being imported into the territory of
that Member in such increased quantities and under such conditionsas to cause or threaten serious injury to domestic producers in that
territory of like or directly competitive products, the Member shall be
free, in respect of such product, and to the extent and for such time as
may be necessary to prevent or remedy such injury, to suspend theobligation in whole or in part or to withdraw or modify theconcession. (underlining added)
314. The term "such product" in Article XIX:1(a) refers to the product that may be subject to a
safeguard measure.  That product is, necessarily,  the product   that "is being imported in such
increased quantities".  Read in its entirety, Article XIX:1(a) clearly requires that safeguard measuresbe applied to the product that "is being imported in such increased quantities", and that those"increased quantities" are being imported "as a result" of "unforeseen developments".
315. Turning to the term "as a result of" that is also found in Article XIX:1(a), we note that the
ordinary meaning of "result" is, as defined in the dictionary, "an effect, issue, or outcome  from   some
action, process or design".
 232  The increased imports to which this provision refers must therefore be
an "effect, or outcome" of the "unforeseen de velopments".  Put differently, the "unforeseen
developments" must "result" in increased imports of the product ("such product") that is subject to a
safeguard measure.
316. It is evident, therefore, that not just any deve lopment that is "unforeseen" will do.  To trigger
the right to apply a safeguard measure, the development must be such as to  result   in increased
imports of  the product   ("such product") that is subject to the safeguard measure.  Moreover,  any 
product, as Article XIX:1(a) provides, may, potentially, be subject to that safeguard measure,provided that the alleged "unforeseen developments"  result   in increased imports of that   specific
product   ("such product").  We, therefore, agree with the Panel that, with respect to the specific
products subject to the respective determinations, the competent authorities are required by
Article XIX:1(a) of the GATT 1994 to demonstrate that the "unforeseen developments identified …
                                                     
232Shorter Oxford English Dictionary , 5th ed. W.R. Trumble, A. Stevenson (eds.) (Oxford University
Press, 2002), Vol. II, p. 2555.WT/DS248/AB/R, WT/DS249/AB/R,
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have resulted in increased imports [of the specific products subject to] … each
 safeguard measure at
issue."  233
317. We find further support for this conclusion in our rulings in  Argentina – Footwear (EC)   and
in  Korea – Dairy .  In those appeals,  we characterized the term "as a result of" as implying that there
should be a "logical connection" between "unforeseen developments" and the conditions set forth inthe second clause of Article XIX:1(a).  We found that there must be:
… a logical connection between the circumstances described in the
first clause – "as a result of unforeseen developments and of the
effect of the obligations incurred by a Member under this Agreement,
including tariff concessions … " – and the conditions [regarding
increased imports] set forth in the second clause of Article XIX:1(a)for the imposition of a safeguard measure.
 234
318. There must, therefore, be a "logical connection" linking the "unforeseen developments" and
an increase in imports of the product that is causing, or threatening to cause, serious injury.  Without
such a "logical connection" between the "unforeseen developments" and  the product   on which
safeguard measures may be applied, it could not be determined, as Article XIX:1(a) requires, that theincreased imports of "such product" were "a result of" the relevant "unforeseen development".Consequently, the right to apply a safeguard measure to  that product   would not arise.
319. For this reason, when an importing Member wishes to apply safeguard measures on imports
of several products, it is not sufficient merely to demonstrate that "unforeseen developments" resultedin increased imports of a broad category of products that included the specific products subject to the
respective determinations by the competent authority.  If that could be done, a Member could make a
determination and apply a safeguard measure to a broad category of products even if imports of one ormore of those products did not increase and did not result from the "unforeseen developments" atissue.  Accordingly, we agree with the Panel that such an approach does not meet the requirements of
                                                     
233Panel Reports, para. 10.44. (underlining added)  In the same vein, we further note that, as China
argues in paragraph 49 of its appellee's submission, the USTR had, in fact, asked the USITC in its letter dated3 January 2002, to identify "for each affirmative determin ation … any unforeseen developments that led to the
relevant steel products being imported into the United States in such increased quantities as to be a substantial
cause of serious injury." (Letter of the USTR to the USITC dated 3 January 2002, question 1). (underliningadded)
234Appellate Body Report, Argentina – Footwear (EC) , para. 92;  Appellate Body Report, Korea –
Dairy , para. 85.WT/DS248/AB/R, WT/DS249/AB/R,
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Article XIX:1(a), and that the demonstration of "unforeseen developments" must be performed for
each   product subject to a safeguard measure.  235
320. The United States suggests that:
[t]he Panel may have felt that the ITC ought to have issued multiple
demonstrations [of unforeseen developments], specific to each
product subject to a separate measure, but that did not mean that the
Panel could make an across-the-board dismissal of the "plausible"
explanation that the ITC provided.  236
321. However, the Panel did not make an "across-the-board dismissal" of the USITC's "plausible
explanations" regarding "unforeseen developments", as the United States claims.  Rather, the PanelReports reveal that the Panel considered whether the "unforeseen developments", on which theUSITC's determination relied, resulted in increased imports of the products on which the safeguardmeasures at issue were applied.  The Panel found that the USITC Second Supplementary Report
 237
"falls short"  238 in its explanation of how the Asian and Russian financial crises together with the
strong United States dollar and economy resulted in increased imports into the United States.  The
Panel also said that the USITC failed to draw necessary links between market displacements and
increased imports to the United States.  239  Furthermore, the Panel pointed out where supporting
discussion and data were lacking.  240  The Panel also stated that the USITC's explanation was faulty
because it referred to steel production in general and because the explanation did not address how the"unforeseen developments" resulted in increased imports in respect of the specific steel products at
                                                     
235We note that the United States also alleges that the Panel "mistakenly indicated that a competent
authority had to 'differentiate the impact' of various unforeseen developments on the individual industries andeven economies of other countries." (United States' appellant's submission, para. 85, referring to Panel Reports,
paras. 10.127–10.128).  Based on our review of the Pa nel Reports, we do not understand the Panel to have
imposed such a requirement.  Instead, as we see it, the Panel merely observed, in paragraph 10.127, that theAsian and Russian crises affected some countries more than others, to support its view that the USITC wasrequired to "explain how the increased imports of th e specific steel products subject to the investigation  were
linked to and resulted from   the confluence of unforeseen developments." (emphasis added)  Previously, in
paragraph 10.123 of the Panel Reports, the Panel had stated that "even if 'large volumes of foreign steel
production were displaced from foreign consumpti on', this [did] not, in itself, imply that  imports to the United
States  increased as a result of unforeseen developments." (emphasis added)
236United States' appellant's submission, para. 83.
237It will be recalled that the issue of whether the relevant "unforeseen developments" resulted in
increased imports of the products on which the safeguard measures were applied was not addressed in the initialUSITC report.
238Panel Reports, para. 10.122.
239Ibid., 10.123, 10.127 and 10.131.
240Ibid., paras. 10.124 –10.125, 10.130 –10.131 and 10.145.WT/DS248/AB/R, WT/DS249/AB/R,
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issue.
 241  In sum, the Panel was of the view that "the complexity of the unforeseen developments
pointed to by USITC called for a more elaborate demonstration and supporting data than that provided
by the USITC."  242
322. We also agree with the European Communities that "[i]n the present case where the ITC
relied upon macroeconomic events having effects across a number of industries, it was for the ITC todemonstrate the 'logical connection' between the alleged unforeseen development[s] and the increasein imports in relation to each measure, not for the Pa nel to read into the report linkages that the ITC
failed to make."
 243  Consequently, we do not find error in the Panel's finding that the USITC was
required to provide a reasoned and adequate explanation demonstrating that the alleged "unforeseendevelopments" resulted in increased imports for  each  product subject to a safeguard measure.
323. Moreover, since the USITC did not provide a "reasoned conclusion" that the "unforeseen
developments" resulted in increased imports for each specific safeguard measure at issue, we find no
error in the Panel's conclusions, in paragraph 10.150 and the relevant sections of paragraph 11.2 of thePanel Reports, that the application of each of those safeguard measures was inconsistent withArticle XIX:1(a) of the GATT 1994 and Article 3.1 of the  Agreement on Safeguards .
D. Alleged Failure by the Panel to "Link" Certain Data to the USITC's Demonstration of
how "Unforeseen Developments" Resulted in Increased Imports
324. Before the Panel, the United States argued that there were data to support the USITC's finding
that "unforeseen developments" had resulted in increased imports of the relevant products which"extended beyond consumption data for the most severely affected countries in south east Asia andproduction and consumption data for the former USSR republics".
 244  The United States referred,
inter alia ,  to the section of the USITC report dealing with increased imports, which contains footnote
                                                     
241Panel Reports, paras. 10.126 and 10.128.
242Ibid., para. 10.145.
243European Communities' appellee's submission, para. 97.
244Panel Reports, para. 10.132. (footnote omitted)WT/DS248/AB/R, WT/DS249/AB/R,
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references to tables that show imports by country and by product for the entire period of
investigation.  245
325. As we mentioned earlier, the Panel found that those "tables contained data that  could   have
been used to explain how unforeseen developments  resulted in increased imports … However, the
competent authority did no such thing."  246  The Panel explained that "the text to which the footnotes
correspond is either totally unrelated to an explanation of unforeseen developments, or it dealsgenerally with imports without specifying from where those imports came."
 247  The United States
acknowledges that the USITC itself did not cite th ese data in connection with its demonstration of
"unforeseen developments", but, nevertheless, it argues that the Panel "was  required   to consider
[those data] in evaluating whether the unforeseen developments finding was consistent withArticle 3.1 [of the  Agreement on Safeguards ]".
 248
326. Article 3.1 of the  Agreement on Safeguards  requires that the competent authority set out
"reasoned conclusions" on all "pertinent issues of fact and law".  One of those "issues of law" is therequirement to demonstrate the existence of "unforeseen developments" that have resulted inincreased imports causing serious injury.  In our vi ew, therefore, it was for the USITC to provide a
"reasoned conclusion" on "unforeseen developments".  A "reasoned conclusion" is not one where theconclusion does not even refer to the facts that may support that conclusion.  As the United Statesitself acknowledges, "Article 3.1 thus assigns the competent authorities—not the panel—the
obligation to 'publish a report setting forth  their  findings and reasoned conclusions reached on all
pertinent issues of fact and law.'"
 249  A competent authority has an obligation under Article 3.1 to
provide reasoned conclusions;  it is not for panels to find support for such conclusions by cobblingtogether disjointed references scattered throughout a competent authority's report.
327. The United States argues that our findings in  EC – Tube or Pipe Fittings   support its view
that the Panel was "required" to consider the relevant data to which the USITC refers in other sections
                                                     
245According to footnote 5009 under paragraph 10.133 of the Panel Reports, the sections of the USITC
Report which the United States brought to the attention of the Panel were "pp. 65-66 (CCFRS), 99-100 (hot-rolled bar), 107-108 (cold-finished bar), 115-116 (rebar), 168-170  (certain welded pipe), 178-180 (FFTJ), 213-
214 (stainless steel bar), 222-223 (stainless steel rod), 259-260 (stainless steel wire, Commissioner Koplan),
303-305 (carbon flat products and stainless steel wire and wire rope, Commissioner Bragg), 309-310 (tin mill
products, Commissioner Miller), 347 (stainless steel wire and wire rope, Commissioner Devaney)."
246Panel Reports, para. 10.133. (emphasis added)
247Panel Reports, para. 10.133.
248United States' appellant's submission, para. 92. (original emphasis)
249Ibid., para. 55. (original emphasis)WT/DS248/AB/R, WT/DS249/AB/R,
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of the USITC report to support the USITC's finding  that "unforeseen developments" had resulted in
increased imports.  The United States explains that "[i]n that dispute, the report of the investigating
authority failed to mention one of the factors specifically listed in the Antidumping Agreement at all
in its discussion."
 250  In that dispute, according to the United States, despite that omission, "the
Appellate Body determined, by virtue of a close reading of the remainder of the report, that the
investigating authority had in fact 'considered' the enumerated factor."  251  The United States
concludes from this that "[i]f this is a permissible analysis of whether the necessary evaluation wasperformed by national authorities, then the ITC's reliance on data tables actually referenced in theReport (although not in the unforeseen development section) is surely also permissible."
 252
328. The issue in  EC – Tube or Pipe Fittings   was not the obligation contained in Article 3.1 of
the  Agreement on Safeguards .  The issue there was, as the United States explains, whether a
particular injury factor listed in Article 3.4 of the  Anti-Dumping Agreement   "ha[d] been evaluated,
even though a separate record of the evaluation of that factor ha[d] not been made."  253  We found in
that appeal that "under the particular facts of [that] case, it was reasonable for the Panel to haveconcluded that the [competent authorities had] addressed and evaluated"
 254 the relevant factor.
329. Unlike the United States, we do not see the two cases as the same.  The issue in this case is
not whether certain data referred to in the USITC report had, in fact, been "considered" by the USITC.The USITC may indeed have "considered" all the relevant data contained in its report or referred to inthe footnotes thereto.  However, it did not use those data to  explain   how "unforeseen developments"
resulted in increased imports.  Rather, as the Panel found, "the text to which the footnotes correspond
is either totally unrelated to an explanation of unforeseen developments, or it deals generally withimports without specifying from where those imports came."
 255  Hence, what is wanting here is not
the data, but the reasoning that uses those data to support the conclusion.  The USITC did not, inour view, provide a conclusion that is supported by facts and reasoning, in short, a "reasonedconclusion", as required by Article 3.1.  Moreover, as we have stated previously, it was for theUSITC, and not the Panel, to provide "reasoned conclusions".  It is not for the Panel to do thereasoning for, or instead of, the competent auth ority, but rather to assess the adequacy of that
                                                     
250United States' appellant's submission, para. 93.
251Ibid., referring to Appellate Body Report, EC – Tube or Pipe Fittings ,  paras. 161–163.
252United States' appellant's submission, para. 93.
253Appellate Body Report, EC – Tube or Pipe Fittings , para. 161.
254Ibid.
255Panel Reports, para. 10.133.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 103
reasoning to satisfy the relevant requirement.  In consequence, we cannot agree with the United States
that the Panel was "required" to consider the relevant data to which the USITC referred in other
sections of its report to support the USITC's findi ng that "unforeseen developments" had resulted in
increased imports;  and, for the reasons mentioned, we do not see how our findings in  EC – Tube or
Pipe Fittings   support the United States' view to that effect.
330. We, therefore, uphold the Panel's findings, in paragraph 10.150 and the relevant sections of
paragraph 11.2 of the Panel Reports, that the ten safeguard measures at issue are inconsistent withArticle XIX:1(a) of the GATT 1994 and Article 3.1 of the  Agreement on Safeguards   because the
USITC's report failed to demonstrate, through a reasoned and adequate explanation, that "unforeseendevelopments" had resulted in increased imports of CCFRS, tin mill products, hot-rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, stainless st eel bar, stainless steel rod, and stainless steel wire,
causing serious injury to the relevant domestic producers.
 256
VI. Increased Imports
331. As we stated at the outset, under Article 2.1 of the  Agreement on Safeguards ,  safeguard
measures can be justified  " only"  when, as a result of unforeseen developments and of the effect of
obligations incurred, including tariff concessions, a product is being imported in such increasedquantities and under such conditions as to cause or threaten to cause serious injury to the domestic
industry that produces like or directly competitive products.  It is  " only"  if these prerequisites set
forth in Article XIX:1(a) of the GATT 1994 and the  Agreement on Safeguards   are shown to exist
that the right to apply a safeguard measure arises.  The fulfilment of each of these prerequisites is a"pertinent issue[
 ] of fact and law" for which "finding[s] and reasoned conclusion[s]" must be included
in the published report of the competent authorities, as required by Article 3.1 of the  Agreement on
Safeguards .  With this in mind, we consider next the Panel's findings relating to one of these
prerequisites, namely, the existence of "increased imports".  257
                                                     
256Panel Reports, paras. 10.150 and 11.2.
257We use the term "increased imports" as shorthand to describe the prerequisite set forth in
Article XIX:1(a) of the GATT 1994 and in Article 2.1 of the  Agreement on Safeguards ,  i.e., a product is being
imported "in such  increased   quantities, absolute or relative to domestic production". (emphasis added)WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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332. The United States appeals the Panel's finding that the USITC failed to provide a reasoned and
adequate explanation of how the facts supported it s findings that imports of CCFRS, stainless steel
rod, hot-rolled bar, tin mill products, and stainless steel wire "increased" within the meaning of
Article XIX:1(a) of the GATT 1994 and Article 2.1 of the  Agreement on Safeguards .
 258
333. With respect to the first three product categories—CCFRS, hot-rolled bar and  stainless steel
rod—the United States challenges two aspects of the Panel's findings.  First, the United Stateschallenges the Panel's general interpretation of the requirement relating to increased imports inArticle 2.1 of the  Agreement on Safeguards .  Secondly, the United States argues that the Panel "erred
in its analysis of the import data" for those three product categories.
 259
334. With respect to the other two product categories—tin mill products and stainless steel wire—
the United States takes issue with the Panel's finding that the USITC failed to provide a reasoned
and adequate explanation because the USITC based its determinations on two sets of explanations
which, according to the Panel, could not be reconciled.  260
335. We will deal with these separate claims in turn, and will first address the Panel's findings with
respect to CCFRS, hot-rolled bar, and stainless steel rod.
A. CCFRS, Hot-Rolled Bar, and Stainless Steel Rod
336. As we explained previously, with respect to CCFRS, hot-rolled bar, and stainless steel rod,
the United States challenges two aspects of the Panel's findings.  We examine first the United States'
argument concerning the appropriate legal standard to be used to determine whether the  requirementin Article 2.1 of the  Agreement on Safeguards   relating to "increased imports" has been met.
                                                     
258United States' appellant's submission, para. 97.  The Panel found that the USITC report contained an
adequate and reasoned explanation of how the facts support the determination made with respect to "increasedimports" of cold-finished bar, rebar, welded pipe, FFTJ, and stainless steel bar.
259United States' appellant's submission, para. 98.
260See Panel Reports, paras. 10.200 and 10.262.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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1. Legal Standard to be Used for Determining Whether there are "Increased
Imports"
337. Article XIX:1(a) of the GATT 1994 and Article 2.1 of the  Agreement on Safeguards   read as
follows:
GATT 1994
Article XIX
Emergency Action on Imports of Particular Products
1. (a) If, as a result of unforeseen developments and of the
effect of the obligations incurred by a Member under this Agreement,
including tariff concessions, any product is being imported into the
territory of that Member in such increased quantities and under such
conditions as to cause or threaten serious injury to domestic
producers in that territory of like or directly competitive products, the
Member shall be free, in respect of such product, and to the extent
and for such time as may be necessary to prevent or remedy suchinjury, to suspend the obligation in whole or in part or to withdraw or
modify the concession. (underlining added)
Agreement on Safeguards
Article 2
Conditions
1. A Member may apply a safeguard measure to a product only
if that Member has determined, pursuant to the provisions set out
below, that such product is being imported into its territory in such
increased quantities, absolute or relative to domestic production, and
under such conditions as to cause  or threaten to cause serious injury
to the domestic industry that produces like or directly competitive
products. (footnote omitted; underlining added)
338. The Panel found that the use of the present tense in the phrase "is being imported" in both
Article XIX:1(a) of the GATT 1994 and Article 2.1 of the  Agreement on Safeguards   "indicates that
it is necessary for the competent authorities to exam ine recent imports and that the increase in imports
was 'recent'."  261 The Panel also found that "increased imports must be 'sudden'"  262 because of the
                                                     
261Panel Reports, para. 10.159.
262Ibid., para. 10.166.WT/DS248/AB/R, WT/DS249/AB/R,
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"unforeseen and unexpected character of the developments resulting in the increased imports as well
as the emergency nature of safeguard measures".
 263
339. The Panel agreed with the finding of a previous panel that since Article 2.1 of the  Agreement
on Safeguards   speaks of a product that "is being imported … in such increased quantities"  264, it
follows, therefore, that imports need not be increasing at the time of the determination.  Instead, the
requirement is only that "imports  have  increas ed,  if the products continue 'being imported' in (such)
increas ed  quantities."  265  The Panel then considered whether a  decrease  in imports at the end of the
period of investigation could, in an individual case, prevent a finding of increased imports in the senseof Article 2.1 of the  Agreement on Safeguards .  The Panel observed that this would "depend on
whether, despite the later decrease, a previous increase nevertheless results in the product (still) 'beingimported in (such) increased quantities'."
 266  In that evaluation, according to the Panel, "factors that
must be taken into account are the duration and the degree of the decrease at the end of the relevant
period of investigation, as well as the nature, for instance the sharpness and the extent, of the increasethat intervened beforehand."
 267
340. The Panel also referred to our findings in  Argentina – Footwear (EC)   that the "competent
authorities are required to consider the  trends   in imports over the period of investigation,"  268 and that
"the increase in imports must have been recent enough, sudden enough, sharp enough, and significantenough … to cause or threaten to cause 'serious injury'".
 269  The Panel then concluded that "a finding
that imports have increased pursuant to Article 2.1 can be made when an increase evidences a certain
degree of recentness, suddenness, sharpness and significance."  270  In saying this, the Panel
emphasized "that there are no absolute standards as regards  how  sudden, recent, and significant the
increase must be in order to qualify as an 'increase' in the sense of Article 2.1 of the Agreement on
                                                     
263Panel Reports, para. 10.166.
264Ibid., para. 10.162. (underlining added)
265Panel Reports, para. 10.162. (original emphasis)  Th is aspect of the Panel Reports was not appealed.
266Panel Reports, para. 10.163.
267Ibid.
268Ibid., para. 10.165, referring to Appellate Body Report, Argentina – Footwear (EC) , para. 129.
(original emphasis)
269Panel Reports, para. 10.167, referring to Appellate Body Report, Argentina – Footwear (EC) ,
para. 131.
270Panel Reports, para. 10.167.WT/DS248/AB/R, WT/DS249/AB/R,
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WT/DS253/AB/R, WT/DS254/AB/R,
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Safeguards"  271, but added that one cannot conclude "that any increase between any two identified
points in time meets the requirements of Article 2.1 of the Agreement on Safeguards."  272
341. The United States contends that the Panel erred in finding that "the determination that imports
have increased pursuant to Article 2.1 can be made only when an increase evidences a certain degreeof recentness, suddenness, sharpness and significance."
 273  According to the United States, this
standard has no basis in Article 2.1 or anywhere else in the text of the  Agreement on Safeguards .  The
United States posits that our statement in  Argentina – Footwear (EC)   that the "increase in imports
must have been recent enough, sudden enough, sharp enough and significant enough … to cause orthreaten to cause serious injury"
 274, was a statement about "the entire investigative responsibility of
the competent authorities under the Safeguards Agreement"  275, and that "whether an increase in
imports has been recent, sudden, sharp and significant enough to cause or threaten serious injury are
questions that are answered as the competent authorities … proceed with the remainder of their
analysis (i.e., with their consideration of serious injury/threat and causation)."  276  The analysis of
these questions need not, therefore, according to the United States, form part of the evaluation of theissue of whether imports have "increased".  Rather, the United States contends that "the phrase 'insuch increased quantities' simply states the requirem ent that, in general, the level of imports at (or
reasonably near to) the end of a period of investigation be higher than at some unspecified earlierpoint in time."
 277
342. In reply, and in contrast, China, the European Communities, Korea, New Zealand, and
Norway argue that the United States is, in effect, asking us to find that "any increase is sufficient" to
satisfy the requirement in Article 2.1 of the  Agreement on Safeguards . 278  The European
Communities quotes, in this respect, a passage from the USITC report where it is stated that, for                                                     
271Panel Reports, para. 10.168. (original emphasis)
272Panel Reports, para. 10.168.
273United States' appellant's submission, para. 100, re ferring to paragraph 10.167 of the Panel Reports.
The United States does not quote the Panel's finding accurately.  The Panel, in fact, concluded in
paragraph 10.167 of the Panel Reports "that a finding that imports have increased pursuant to Article 2.1 can bemade when an increase evidences a certain degree of recentness, suddenness, sharpness and significance."  Theword "only" does not appear in the Panel's conclusion.
274Appellate Body Report,  Argentina – Footwear (EC) , para. 131.
275United States' appellant's submission, para. 107.
276Ibid.
277Ibid., para. 102.
278China's appellee's submission, para. 102;  Europ ean Communities' appellee's submission, para. 135;
Korea's appellee's submission, paras. 6 and 69;  New Zealand's appellee's submission, paras. 1.14 and 5.11;
Norway's appellee's submission, paras. 19 and 162.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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United States domestic purposes, there "is no minimum quantity by which imports must have
increased" and "a simple increase is sufficient."
 279
343. The Complaining Parties argue also that, in orde r to constitute "increased imports" within the
meaning of Article XIX:1(a) of the GATT 1994 and Article 2.1 of the  Agreement on Safeguards , 
those increased imports must be "recent" and "sudden"  280;  the European Communities and Norway
also argue that the increased imports must be "extraordinary" and "abnormal".  281
344. As a consequence, we must examine whether there is any  threshold —qualitative or
quantitative—to allow a finding by a competent authority on the existence of "such increasedquantities" within the meaning of Article XIX:1(a) and Article 2.1, or whether, as the United Statesargues, the requirement is "that, in general, the level of imports at (or reasonably near to) the end of aperiod of investigation be higher than at some unspecified earlier point in time."
 282
345. We examined essentially the same issue  in  Argentina –Footwear (EC)   and found there that:
… the determination of whether the requirement of imports "in such
increased quantities" is met is not a merely mathematical or technical
determination.  In other words, it is not enough for an investigation to
show simply that imports of the product this year were more than last
year – or five years ago.  Again, and it bears repeating, not just  any 
increased quantities of imports will suffice.  There must be " such
increased quantities" as to cause or threaten to cause serious injury to
the domestic industry in order to fulfil this requirement for applying a
safeguard measure.  And this language in both Article 2.1 of the
Agreement on Safeguards   and Article XIX:1(a) of the GATT 1994,
we believe, requires that the increase in imports must have been
recent enough, sudden enough, sharp enough, and significant enough,
both quantitatively and qualitatively, to cause or threaten to cause"serious injury".
 283 (original emphasis; underlining added; footnotes
omitted)
                                                     
279European Communities' appellee's submission, para. 135, referring to USITC Report, Vol. I, p. 278.
280Brazil's appellee's submission, paras. 38 and 41;  China's appellee's submission, para. 96;  European
Communities' appellee's submission, paras. 128 and 130;   Japan's appellee's submission, paras. 42 and 46;
Korea's appellee's submission, para. 73;  New Zealand's appellee's submission, para. 5.5;  Norway's appellee's
submission, para. 145;  Switzerland's appellee's submission, paras. 93 and 97.
281European Communities' appellee's submission, para. 140;  Norway's appellee's submission,
para. 158.
282United States' appellant's submission, para. 102.
283Appellate Body Report,  Argentina – Footwear (EC) ,  para. 131.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 109
346. We reaffirm this finding.  In that appeal, we underlined the importance of reading the
requirement of "such increased quantities" in the context in which it appears in both Article XIX:1(a)
of the GATT 1994 and Article 2.1 of the  Agreement on Safeguards .  That context includes the words
"to cause or threaten to cause serious injury".  Read in context, it is apparent that "there must be 'such
increased quantities' as to cause or threaten to cause  serious injury to the domestic industry in order to
fulfill this requirement for applying a safeguard measure."  284  Indeed, in our view, the term "such",
which appears in the phrase "such increased quantities" in Articles XIX:1(a) and 2.1, clearly links therelevant increased imports to their ability to cause serious injury or the threat thereof.  Accordingly,
we agree with the United States that our statement in  Argentina – Footwear (EC)   that the "increase
in imports must have been recent enough, sudden enough, sharp enough and significant enough … tocause or threaten to cause serious injury"
 285, was a statement about "the entire investigative
responsibility of the competent authorities under the Safeguards Agreement"  286, and that "[w]hether
an increase in imports is recent, sudden, sharp and significant enough to cause or threaten seriousinjury are questions that are answered as the competent authorities proceed with the remainder of theiranalysis (i.e., their consideration of serious injury/threat and causation)."
 287
347. We have observed previously that "the title of Article XIX is: 'Emergency Action on Imports
of Particular Products"  288, and that the "words 'emergency action' also appear in Article 11.1(a) of the
Agreement on Safeguards ". 289  Because safeguard measures are "emergency actions", we have noted
as well that "when construing the prerequisites for taking such actions, their extraordinary nature must
be taken into account."  290  The requirement relating to "increased imports" in Articles XIX:1(a)
and 2.1 must, therefore, be read in the context of the "extraordinary nature" of the "emergency action"that is authorized by Article XIX:1(a) of the GATT 1994.  Even so, the fact that safeguard actions are"emergency actions", and that the prerequisites for taking such actions should therefore be construedwhile taking into account the "extraordinary nature" of safeguard measures, does not imply that theprerequisites for taking such actions,  in and of themselves ,  must necessarily be "abnormal" or
                                                     
284Appellate Body Report,  Argentina – Footwear (EC) ,  para. 131.
285Ibid.
286United States' appellant's submission, para. 107.
287Ibid.
288Appellate Body Report, Argentina – Footwear (EC) , para. 93.
289Ibid.
290Ibid., para. 94.WT/DS248/AB/R, WT/DS249/AB/R,
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"extraordinary".  The question is one of the "conditions" under which "such" increased quantities of
imports occur.
348. In this respect, we note that, contrary to what the European Communities and Norway
assert
 291, in the single GATT 1947 case that involved Article XIX—the  US – Fur Felt Hats   case—
the Working Party did  not  find that increased imports must be "abnormal",  in and of themselves ,  to
be "increased imports" for purposes of Article XI X.  Instead, the Working Party in that case found
that:
There should be an abnormal development in the imports of the
product in question  in the sense that :
(i) the product in question must be imported in increased
quantities;
(ii) the increased imports must be the result of unforeseen
developments and of the effect of tariff concessions;
(iii) the imports must enter in such increased quantities and under
such conditions as to cause or threaten to cause serious
injury. (emphasis added)
349. That 1951 Working Party, therefore, used the word "abnormal" to describe the overall
conditions under which the increased quantities of imports must occur.  The Working Party found thatthe relevant "development in imports" must be abnormal precisely because the increased quantities ofimports, by the very terms of Article XIX:1(a), are "as a result of unforeseen developments and of theeffect of tariff concessions" and enter "in such increased quantities and under such conditions as tocause or threaten to cause serious injury."
350. In a similar vein, we said in  Argentina – Footwear (EC)   that "the increased quantities of
imports should have been 'unforeseen' or 'unexpected'."
 292  In doing so, we were referring to the fact
that the increased imports must, under Article XIX:1(a), result from "unforeseen developments" inorder to justify the application of a safeguard measure.  Because the "increased imports" must be "as aresult" of an event that was "unforeseen" or "unexpected", it follows that the increased imports mustalso be "unforeseen" or "unexpected".  Thus, the "extraordinary nature" of the domestic response to
                                                     
291European Communities' appellee's submission, para. 140;  Norway's appellee's submission,
para. 158.
292Appellate Body Report, Argentina – Footwear (EC) , para. 131.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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Page 111
increased imports does not depend on the absolute or relative quantities of the product being
imported.  Rather, it depends on the fact that the increased imports were unforeseen or unexpected.
351. We further note that Article XIX:1(a) of the GATT 1994 and Article 2.1 of the  Agreement on
Safeguards   require that the relevant product "is being imported in such increased quantities  and
under such conditions   as to cause or threaten to cause serious injury".  The question whether "such
increased quantities" of imports will suffice as "increased imports" to justify the application of asafeguard measure is a question that can be answered only in the light of "such conditions" underwhich those imports occur.  The relevant importance of these elements varies from case to case.
352. We turn next to examine the United States' argu ment that, as "the words recent, sudden, sharp
or significant"
 293 do not appear in Article 2.1, "the phrase 'in such increased quantities' simply states
the requirement that, in general, the level of imports at (or reasonably near to) the end of a period of
investigation be higher than at some unspecified earlier point in time."  294
353. Article 4.2 of the  Agreement on Safeguards   elaborates on the prerequisites for the
application of a safeguard measure that are set out in Article 2.1.  295  Article 4.2(a) provides context
for interpreting the meaning of the requirement relating to increased imports in Article 2.1.
Article 4.2(a) provides, in relevant part, that:
In the investigation to determine whether increased imports have
caused or are threatening to cause serious injury to a domestic
industry under the terms of this Agreement, the competent authorities
shall evaluate…the rate and amount of the increase in imports of the
product concerned in absolute and relative terms … . (underlining
added)
354. We concluded in  Argentina – Footwear (EC)   that "the competent authorities are  required to
consider the  trends   in imports over the period of investigation (rather than just comparing the end
points) under Article 4.2(a)."  296  A determination of whether there is an increase in imports cannot,
therefore, be made merely by comparing the end points of the period of investigation.  Indeed, incases where an examination does not demonstrate, for instance, a clear and uninterrupted upwardtrend in import volumes, a simple end-point-to-end-poi nt analysis could easily be manipulated to lead
                                                     
293United States' appellant's submission, para. 101.
294Ibid., para. 102.
295Appellate Body Report,  US – Line Pipe ,  para. 181, quoting  US – Wheat Gluten ,  para. 98.
296Appellate Body Report, Argentina – Footwear (EC) , para. 129. (original emphasis; underlining
added)WT/DS248/AB/R, WT/DS249/AB/R,
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to different results, depending on the choice of end points.  A comparison could support either a
finding of an increase or a decrease in import volumes simply by choosing different starting and
ending points.
355. For instance, if the starting point for the period of investigation were set at a time when
import levels were particularly low, it would be more likely that an increase in import volumes couldbe demonstrated.  The use of the phrase "such increased quantities" in Articles XIX:1(a) and 2.1, andthe requirement in Article 4.2 to assess the "rate and amount" of the increase, make it abundantlyclear, however, that such a comparison of end points will  not  suffice to demonstrate that a product
"is being imported in such increased quantities" within the meaning of Article 2.1.  Thus, ademonstration of "any increase" in imports between any two points in time is not sufficient todemonstrate "increased imports" for purposes of Articles XIX and 2.1.  Rather, as we have said,
competent authorities are required to examine the trends in imports over the entire period of
investigation.
 297
356. We, therefore, reject the United States' assertion that "the phrase 'in such increased quantities'
simply states the requirement that, in general, the level of imports at (or reasonably near to) the end ofa period of investigation be higher than at some unspecified earlier point in time."
 298  We note,
however, that the United States clarified at the oral hearing that it agrees that an examination of trendsis required for the purpose of determining whether there are increased imports under Articles XIXand 2.1, and with this we agree.
 299
357. As we explained above  300, the United States argues that the Panel erred in requiring that "a
finding that imports have increased … can be made  only  when an increase evidences a certain degree
of recentness, suddenness, sharpness and significance."  301  We understand that the United States is
submitting in essence that, in so finding, the Panel established an absolute standard in the abstract,applicable irrespective of the facts of the case.
 302
                                                     
297Appellate Body Report, Argentina – Footwear (EC) , para. 129.
298United States' appellant's submission, para. 102.
299United States' response to questioning at the oral hearing.
300See  supra , para. 341.
301United States' appellant's submission, para. 98, re ferring to Panel Reports, para. 10.167. (emphasis
added)
302United States' response to questioning at the oral hearing.WT/DS248/AB/R, WT/DS249/AB/R,
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Page 113
358. In considering whether the Panel did establish such an absolute standard, we observe  303 that
the word "only", although used by the United States in challenging the Panel on this point, is not
contained in the Panel's relevant finding.  Moreover, based on our review of the Panel's reasoning, we
do not understand the Panel to have articulated any ab solute standard, in the abstract, for determining
whether imports have increased within the meaning of Article XIX:1(a) and Article 2.1.  Rather, thePanel explicitly, and pointedly, agreed "with the Un ited States that there are no absolute standards as
regards  how  sudden, recent, and significant the increase must be in order to qualify as an 'increase' in
the sense of Article 2.1"
 304 of the  Agreement on Safeguards .  The Panel noted, however, that "from
the absence of  absolute   standards one cannot conclude that there are no standards at all and that any
increase between two identified points in time meets the requirements of Article 2.1".  305  The Panel
then went on to "agree[  ] with the United States that the inquiry is not whether imports have increased
'recently and suddenly'  in the abstract ." 306  Instead, according to the Panel "[a]  concrete   evaluation
is what is called for"  307 and, thus, a "competent authority must conduct an analysis considering all the
features of the development of import quantities and that an increase in imports has a certain degree ofbeing recent and sudden."
 308  It seems to us, therefore, that the Panel did not find that the degree of
"recentness, suddenness, sharpness and significance" had to be assessed by means of an absolutestandard that, only if met, could warrant a finding of "increased imports".
359. What is more, the Panel further explained that:
… a competent authority's findings on increased imports, distinct
from its causality and injury findings,  may be informed by the results
of its entire investigation .  The competent authority's findings on the
first requirement – increased imports – may have effects on the injuryfindings or on the causation findings, as prescribed by Article 4.2(a).
As a competent authority considers the other conditions necessary for
imposition of a safeguard, it determines, as directed by the Appellate
Body in  Argentina – Footwear (EC) ,  whether the increase in
imports was recent enough, sudden enough, and significant enough tocause or threaten serious injury to the relevant domestic producers.
 309
(emphasis added)
                                                     
303See  supra , footnote 273 to paragraph 341.
304Panel Reports, para. 10.168. (original emphasis)
305Ibid.
306Ibid.
307Ibid.
308Panel Reports, para. 10.168.
309Ibid., para. 10.171.WT/DS248/AB/R, WT/DS249/AB/R,
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360. In our view, this statement is further evidence that the Panel was of the view that the
assessment of whether an increase is "recent enough, sudden enough, and significant enough to cause
or threaten serious injury" is to be made  on a case-by-case basis   by the competent domestic
authority—and is  not,  therefore, a determination that is made in the  abstract .  We agree.
361. For these reasons, we conclude that the Panel did not require, in the abstract, that "a finding
that imports have increased … can be made [only] when an increase evidences a certain degree ofrecentness, suddenness, sharpness and significance."
 310  Rather, in our view, the Panel correctly relied
on our findings in  Argentina – Footwear (EC) .
362. We turn next to examine the Panel's findings on increased imports of CCFRS, hot-rolled bar
and stainless steel rod.  311
2. Panel's Findings with Respect to CCFRS, Hot-Rolled Bar, and Stainless Steel
Rod
363. As we noted above, the United States argues that the Panel "erred in its analysis of the import
data for CCFRS, hot-rolled bar and stainless steel rod."  312  As the United States sees it, the Panel's
finding that imports of those products did not "increase" for purposes of Article 2.1 of the
Agreement on Safeguards   resulted from the Panel's application of a legal standard that has no basis in
Article 2.1 or anywhere else in the text of the  Agreement of Safeguards ,  namely, that an increase in
imports must evidence "a certain degree of recentness, suddenness, sharpness and significance."  313
364. We have examined the Panel's interpretation of the general requirement related to "increased
imports" in Article 2.1, and have concluded that we agree with the interpretation advanced by thePanel.  We turn now to an examination of the Un ited States' appeal as it relates specifically to
"increased imports" of CCFRS, hot-rolled bar, and stainless steel rod in the light of that interpretation.We look first to the United States' arguments concerning CCFRS.
                                                     
310Panel Reports, para. 10.167.
311United States' appellant's submission, para. 98.
312Ibid.
313Ibid., para. 109.WT/DS248/AB/R, WT/DS249/AB/R,
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(a) CCFRS
365. With respect to "increased imports" of CCFRS, the Panel found that:
… the USITC's determination on increased imports of CCFRS, as
published in its report, does not contain an adequate and reasoned
explanation of how the facts support the determination.  The USITCrecognized that the sharpest increase took place in the period
until 1998, and that, since then, imports have decreased, in 1999
and 2000, back to levels nearly as low as the 1996 level.  The USITC
also noted the significant decrease between interim 2000 and
interim 2001 (from 11.5 to 6.9 million short tons), but it did not seem
to focus on, or at least account for, this most recent trend in
concluding that imports are "still significantly higher … than at the
beginning of the period".  Given the sharpness and significance of
this most recent decrease the Panel does not find that the USITC
explanation as published in its report contains an adequate andreasoned explanation of how the facts support the determination
CCRFS "is being imported in … increased quantities".
 314
(underlining added; footnotes omitted)
366. The United States argues that the Panel's conclusion that the USITC failed to provide a
reasoned and adequate explanation of how the facts supported its finding that CCFRS was being
imported "in such increased quantities" within the meaning of Article XIX:1(a) and Article 2.1 "restsin large measure on the Panel's determination that the ITC 'did not seem to focus on, or at leastaccount' for the fact that there was a decrease in imports, on both an absolute and a relative basis,from interim 2000 to interim 2001."
 315  According to the United States, the Panel gave the change
between interim periods "dispositive weight",  316 although the actual requirement in Article XIX:1(a)
and Article 2.1—as acknowledged by the Panel—is that "[any product] is being imported … in suchincreased quantities", and that, therefore, the "imports need not be increas ing  at the time of the
determination; what is necessary is that imports  have  increas ed,  if the products continue 'being
imported' in (such) increas ed  quantities."
 317
367. We agree with the United States that Article 2.1 does  not  require that imports need to be
increasing at the time of the determination.  Rath er, the plain meaning of the phrase "is being
imported in such increased quantities" suggests merely that imports must  have   increased, and that
                                                     
314Panel Reports, para. 10.181.
315United States' appellant's submission para. 111, referring to Panel Reports, paras. 10.181 and 10.183.
316United States' appellant's submission, para. 111.
317Ibid., para. 112, referring to Panel Reports, para. 10.162. (original emphasis)WT/DS248/AB/R, WT/DS249/AB/R,
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the relevant products continue "being imported" in (such) increased quantities.  We also do  not 
believe that a decrease in imports at the end of the period of investigation would necessarily prevent
an investigating authority from finding that, nevertheless, products continue to be imported "in such
increased quantities."   318
368. We do not agree, however, with the United States' assertion that the Panel's conclusion that
there were no "increased imports" of CCFRS, for purposes of Article 2.1, is a result of the Panelgiving "dispositive weight" to the decrease in imports that took place from interim 2000 tointerim 2001.  As we understand it, the Panel's conclusion was based on the Panel's finding that theUSITC had not provided  a reasoned and adequate explanation   of how the facts supported its
determination that CCFRS "is being imported in … such increased quantities".  The reason why thePanel did not find the USITC's  explanation   to be "reasoned and adequate" was the magnitude of the
decrease that occurred between interim 2000 and interim 2001 (from 11.5 to 6.9 million short tons).
In the words of the Panel, the USITC "did not seem to focus on, or at least account for, [that decrease]
… in concluding that imports are 'still significantly higher … than at the beginning of the period'".
 319
In the absence of a reasoned and adequate explanation in the USITC report relating to the decrease inimports that occurred at the end of the period of investigation, the USITC could not be said to haveadequately explained the existence of "such increased quantities" within the meaning of Article 2.1.
369. We also recall, once more, that "competent authorities are required to examine trends"
 320 in
imports.  Because imports of CCFRS decreased from 1999, and did not recover, the Panel found that
the USITC should have focused on, or at least accounted for, this most recent trend.  The Panel found
that the USITC did not do so, and concluded, therefore, that the USITC had not provided anexplanation that CCFRS "is being imported in … such increased quantities".  We see no legal error inthis finding of the Panel.
370. The lack of a reasoned and adequate explanation relating to the decrease that occurred
immediately before the USITC's determination is all the more significant, in our view, because theevidence of that decrease is arguably the most  relevant of all the data gathered during the
investigation, for purposes of assessing whether a product  " is being imported   in such increased
                                                     
318We note that a decrease at the end of a period of investigation may, for instance, result from the
seasonality of the relevant product, the timing of shipments, or importer concerns about the investigation.  Aswe have said, the text of Article 2.1 does not necessarily prevent, in our view, a finding of "increased imports"in the face of such a decline.
319Panel Reports, para. 10.181. (footnotes omitted)
320Appellate Body Report, Argentina – Footwear (EC) , para. 129.WT/DS248/AB/R, WT/DS249/AB/R,
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quantities".  We emphasized in  US – Lamb   "the relative importance, within the period of
investigation, of the data from the end of the period, as compared with the data from the beginning of
the period".  321  Once more, we do so here.
371. With respect to the timing of the "increased imports" of CCFRS, the Panel found that:
It may well be that the increase occurring until 1998 could have
qualified at the time as an increase satisfying the criteria of
Article 2.1 of the Agreement on Safeguards, but the Panel need notexpress itself on that point because that increase, in itself, was no
longer recent enough at the time of the determination.  In other
words, the increase occurring until 1998, taken by itself and with the
decrease thereafter, is not a sufficient factual basis for supporting a
determination in October 2001 that CCFRS "is being imported in …increased quantities".
 322 (underlining added)
372. The United States argues that the Panel erred in  concluding that the increase in imports that
occurred in 1998 "'was no longer recent enough at the time of the determination' to support a finding
of increased imports"  323 although "the Panel itself recognized that there are no absolute standards as
regards  how  sudden, recent, and significant the increase must be in order to qualify as an 'increase' in
the sense of Article 2.1."  324
373. Based on our review of the Panel's reasoning—in particular, the Panel's conclusions in
paragraphs 10.167 – 10.171 of the Panel Reports, where the Panel states that "[a]  concrete   evaluation
is called for"  325 and that "the inquiry is not whether imports have increased 'recently and suddenly'  in
the abstract " 326—we do not understand the Panel to have meant, as the United States appears to
suggest, that an increase in 1998 would not,  under any conditions ,  have been recent enough to
support a finding of increased imports.  Instead, the Panel proceeds to explain that "[i]n other words,the increase occurring until 1998,  taken by itself and with the decrease thereafter ,  is not a sufficient
                                                     
321Appellate Body Report, US – Lamb , footnote 88 to para. 138.
322Panel Reports, para. 10.182.
323United States' appellant's submission, para. 113, referring to Panel Reports, paras. 10.182
and 10.185.
324United States' appellant's submission, para. 113, re ferring to Panel Reports, para. 10.168. (original
emphasis)
325Panel Reports, para. 10.168. (original emphasis)
326Ibid.WT/DS248/AB/R, WT/DS249/AB/R,
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factual basis for supporting a determination in October 2001 that CCFRS 'is being imported in …
increased quantities'."
 327
374. In our view, what is called for in every case is an  explanation   of how the  trend   in imports
supports the competent authority's finding that the requirement of "such increased quantities" withinthe meaning of Articles XIX:1(a) and 2.1 has been fulfilled.  It is this  explanation   concerning the
trend   in imports—over the entire period of investigation—that allows a competent authority to
demonstrate   that "a product is being imported in such increased quantities".
375. Finally, we note that the United States also argues that the USITC conducted a "concrete
evaluation" of how the requirement relating to "increased imports" was met, and that that "evaluation"explains, according to the United States, "how the 1998 import surge had long-term effects that were
still occurring at the time of the ITC's determination."
 328  Unquestionably, the evaluation of the
effects   of increased imports must be appropriately assessed, where a competent authority examines
causation and serious injury.  We do not, however, see the relevance of such an analysis for purposesof determining whether "a product  is being imported   in such increased quantities".
376. Therefore, we  uphold   the Panel's conclusion, in paragraph 10.186 and the relevant section of
paragraph 11.2 of the Panel Reports, that the application of the safeguard measure on CCFRS isinconsistent with Articles 2.1 and 3.1 of the  Agreement on Safeguards ,  because the United States
failed to provide a reasoned and adequate explanation of how the facts support its determination withrespect to "increased imports" of that product.
377. We examine next the USITC's findings on stainless steel rod.
                                                     
327Panel Reports, para. 10.182. (emphasis added)
328United States' appellant's submission, para. 114.  The "analysis" that the United States refers to was
undertaken by the USITC as part of its causation analysis and determination of serious injury, and not as part ofits determination of "increased imports".WT/DS248/AB/R, WT/DS249/AB/R,
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(b) Stainless Steel Rod
378. The Panel found that:
… the USITC's determination on increased imports of stainless steel
rod, as published in its Report, does not contain an adequate and
reasoned explanation of how the facts support the determination.The USITC relied on the increase occurring between 1996 and 2000,
with the largest increase from 1999 to 2000 (25%).  The decline
between interim 2000 and interim 2001 was acknowledged, but the
USITC did not give an explanation why it nevertheless found that
there was an increase of imports in absolute numbers.  This failure is
particularly serious since this decrease (by 31.3%) was sharper than
the preceding increase, and, as a matter of proportion, offset the
increase of the two preceding years.
The only additional aspect adduced by the USITC in response to the
decrease in interim 2001 was the nearly stable market share ofimports.  The market share, however, is the relative notion of imports
vis-à-vis  domestic sales, and is not related to absolute import
volumes.  In light of the decrease in the most recent period and the
overall developments between 1996 and interim 2001 which can be
best described as a double up-and-down movement (returning to the
low point at the end), the Panel does not believe that the facts support
a finding that, at the moment of the determination, stainless steel rod
"is being imported in (such) increased quantities".
It may well be that the increases occurring from 1996 to 1997, orfrom 1998 to 2000, taken by themselves, would qualify as an
increase satisfying the criteria of Article 2.1 of the Agreement on
Safeguards.  However, at the time of the determination, the trends ofimports showed a significant recent decline, so that these past
increases can no longer serve as the basis that stainless steel rod "is
being imported in (such) increased quantities".
 329 (underlining added;
footnotes omitted)
379. With respect to stainless steel rod, the United States makes essentially the same arguments
that it made with respect to the Panel's findings on increased imports of CCFRS.  In particular, theUnited States alleges that the Panel "arbitrarily decided that the decline in the first six months of 2001was more significant than the increase of the pr ior two years, without considering the different
durations and magnitudes of the increases and decrease."
 330  According to the United States, the Panel
                                                     
329Panel Reports, paras. 10.267–10.269.
330United States' appellant's submission, para. 136, referring to Panel Reports, para. 10.267.WT/DS248/AB/R, WT/DS249/AB/R,
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"thereby failed to place data for the end of the investigation period in the context of data from an
earlier period."
 331
380. Again, based on our review of the Panel's reasoning, we do not find the Panel to have
concluded that the USITC failed to provide a  reasoned and adequate explanation   because it had
"arbitrarily decided that the decline in the first six months of 2001 was more significant than theincrease of the prior two years".
 332  Rather, we understand the Panel to have found that "the USITC
did not give an explanation [of] why it nevertheless found that there was an increase of imports inabsolute numbers"
 333  despite   the decline that occurred between interim 2000 and interim 2001.
Instead of unduly relying on that decline, the Panel, in our view, correctly required that the decline be
explained by the United States, particularly since it occurred at the end of the period of investigationand was, in the Panel's words, "sharper than the preceding increase, and, as a matter of proportion,
offset the increase of the two preceding years."
 334
381. On stainless steel rod, the United States argues also that the Panel erred in rejecting "the ITC's
reasoning as to why the decline in absolute impor ts in interim 2001 did not outweigh the increases of
the previous two years."  335  According to the United States, "there was good reason to discount the
significance of [that] decline in absolute imports … because the effect on the U.S. industry in terms ofmarket share was essentially unchanged at the increased level of 1999-2000."
 336  On this issue, the
Panel found that "[t]he market share … is the relative notion of imports  vis-à-vis   domestic sales, and
is not related to absolute import volumes."  337  On appeal, the United States argues that the USITC was
"not equating market share with absolute import levels", but, rather, "it was evaluating the
significance of the decline in absolute imports in interim 2001 in comparison to the increase in these
imports in the previous two years."  338
382. We do not see how this argument by the United States is relevant for purposes of a
determination of whether a product "is being imported in such increased quantities" absolute orrelative to  domestic production .  Obviously, "domestic production" and the domestic "market share"
                                                     
331United States' appellant's submission, para. 136.
332Ibid.
333Panel Reports, para. 10.267.
334Ibid.
335United States' appellant's submission, para. 137.
336Ibid.
337Panel Reports, para. 10.268.
338United States' appellant's submission, para. 137.WT/DS248/AB/R, WT/DS249/AB/R,
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of the industry of the United States are not identical concepts.  339  In our view, the "share of the
domestic market taken by increased imports" is a factor that is relevant under Article 4.2(a) of the
Agreement on Safeguards ,  for purposes of examining whether increased imports have caused or are
threatening to cause serious injury.
383. Accordingly, we  uphold   the  Panel's conclusion, in paragraph 10.277 and the relevant
section of paragraph 11.2 of the Panel Reports, that the application of the safeguard measure onstainless steel rod is inconsistent with Articles 2.1 and 3.1 of the  Agreement on Safeguards ,  because
the United States failed to provide a reasoned and adequate explanation of how the facts support itsdetermination with respect to "increased imports" of that product.
(c) Hot-Rolled Bar
384. With respect to hot-rolled bar, the Panel stated:
… the USITC's determination on increased imports of hot-rolled bar,
as published in its report, does not contain an adequate and reasoned
explanation of how the facts support the determination.  The USITCrelied on the higher amount of imports in 2000 than in any previous
year of the period examined and on the "rapid and dramatic increase"
from 1999 to 2000.  The decline between interim 2000 and 2001 was
acknowledged, but the USITC did not give an explanation why it,
nevertheless, found that there was an increase of imports in absolute
numbers.  It did so only with regard to imports relative to domestic
production, a finding with which the Panel will deal separately.
This failure to account for the most recent data from interim 2001, as
far as absolute imports are concerned, is serious in the view of the
Panel.  The decrease from interim 2000 (1.34 million tons) to interim
2001 (952,392 tons) represented a decrease by 28.9%, whereas the
increase in the year-to-year period before (1999 to 2000) that wascharacterized as "rapid and dramatic" was merely 11.9%.  In light of
this decrease in the most recent period, the Panel does not believe
that the trend of imports from 1996 to 2000 (an increase by 52.5%) is
sufficient to provide a basis for a finding that, at the moment of the
determination, hot-rolled bar "is being imported in such increasedquantities".
                                                     
339This is, of course, because not all domestic produc tion is necessarily traded in the domestic market.WT/DS248/AB/R, WT/DS249/AB/R,
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In the Panel's view, the trend of absolute imports between 1997 and
interim 2001 is best described as an alternation of increases anddecreases from year to year.  Given this up-and-down movement
ending with a decrease of 28.9% (in interim 2001), the Panel does
not believe that the facts support a conclusion of increased imports,
nor has the USITC provided an explanation to that effect.  The Panel
acknowledges that, until 2000, there was a net increasing trend, in
other words, the two increases in 1998 and 2000 were stronger than
the decrease in 1999.  However, the picture changes againsignificantly, when one includes the decrease (by 28.9%) in interim
2001, a fact that the USITC acknowledged, but did not evaluate.
Taking into account all qualitative and quantitative features of the
trends of imports over the period of examination, the Panel,
therefore, finds that the USITC's determination on increased importsof hot-rolled bar, as published in its Report, does not contain a
reasoned and adequate explanation of how the facts support a
conclusion that hot-rolled bar "is being imported in such increased
quantities."
 340 (underlining added)
385. The United States appeals the Panel's findings with respect to increased imports of hot-rolled
bar both in absolute terms and relative to domestic production.
(i) Absolute imports
386. As to absolute imports, the United States argues , in essence, that, in examining absolute levels
of imports for hot-rolled bar, the Panel "placed too much reliance"  341 on the decrease from interim
2000 to interim 2001, and "improperly disregarded the nature and magnitude of preceding changes in
imports."  342  The argument advanced by the United States here is similar to the United States'
argument on increased imports of CCFRS and stainless steel rod.
387. We do not agree with the United States that the Panel "placed too much reliance" on the
figures for the most recent period of the investigation.  Rather, based on our review of the Panel'sreasoning, we understand the Panel to have concluded that the USITC did not provide  a reasoned
and adequate explanation   of how the facts supported the USITC's finding concerning "increased
imports", because the USITC did  not  address the relevance of the decrease that occurred at the end
of the period of investigation in any way in its report.  The Panel found, in particular, that "[t]he
                                                     
340Panel Reports, paras. 10.204 –10.206.
341United States' appellant's submission, heading III.C.3.c.
342Ibid., para. 127.WT/DS248/AB/R, WT/DS249/AB/R,
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decline between interim 2000 and 2001 was acknowledged, but the USITC did not give an
explanation why it, nevertheless, found that there was an increase of imports in absolute numbers."  343
388. As we noted in the context of examining the United States' claim related to imports of
CCFRS, we note here also that, in not explaining the "most recent decrease" in absolute imports, theUSITC did  not,  in our view, provide an explanation concerning the overall  trend   in imports that
occurred during the period of investigation.  Again we recall that, in  Argentina – Footwear (EC) ,  in
clarifying the  Agreement on Safeguards ,  we stated that "authorities are required to examine
trends".
 344  In our view, by failing to address the decrease in imports that occurred between
interim 2000 and interim 2001, the United States did not—and could not—provide a reasoned andadequate explanation of how the facts supported its finding that imports of hot-rolled bar "increased",as required by Article 2.1 of the  Agreement on Safeguards .  This failure to account for the decrease in
absolute imports is all the more serious in the ligh t of the fact that the intervening trend that was not
addressed by the USITC occurred at the very end of the period of investigation.  In  US – Lamb ,  we
found that the competent authority "must assess" the data from the most recent past "in the context ofthe data for the entire investigative period".
 345  As the Panel found, it is, precisely, those most recent
data that the USITC failed to account for with respect to absolute imports.
389. Having examined the Panel's findings as they relate to imports in  absolute numbers ,  we turn
next to examine the Panel's findings concerning imports of hot-rolled bar   relative to domestic
production .
(ii) Relative imports
390. As to imports relative to domestic production, we recall once again that Article 2.1 provides
that a Member may apply a safeguard measure after a determination that the relevant product is"being imported … in such increased quantities, absolute  or  relative to domestic production … as to
cause or threaten to cause serious injury" (emphasis added).  Therefore, a determination of either anabsolute or relative increase in imports causing se rious injury is sufficient to authorize a Member to
apply safeguard measures.  Accordingly, the increased imports requirement  can  be met not only if
there is an absolute increase in imports, but also if there is an increase relative to domestic production.
                                                     
343Panel Reports, para. 10.204.
344Appellate Body Report,  Argentina – Footwear (EC) , para. 129.
345Appellate Body Report, US – Lamb , para. 138.WT/DS248/AB/R, WT/DS249/AB/R,
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391. After reviewing the USITC's findings on absolute imports, the Panel examined the
explanation provided by USITC with regard to  imports relative to domestic production .
 346  I n
assessing whether that explanation was reasoned and adequate, the Panel found that:
The decline in imports in interim 2001 was acknowledged, but
according to the USITC "the ratio of imports to US production in
interim 2001 was higher than that for the first three years of the
period examined, and was only three-tenths of a percentage point
below the 1999 level."
The Panel is not convinced by this statement and does not consider it
to be a reasoned and adequate explanation supporting the
determination of increased imports, given that the ratio of imports to
domestic production in the most recent period, interim 2001 (24.6%),
not only declined compared with full-year or interim 2000 (27.5%
and 27.0% respectively) but was also lower than in 1999 (24.9%) andnearly as low as in 1998 (23.8%).  Therefore the facts do not support
a conclusion that hot-rolled bar "is being imported in such increased
quantities, … relative to domestic production".
 347
392. Here, too, the United States challenges the Panel's interpretation, and advances essentially the
same arguments that it does with respect to the Panel's findings on increased imports of hot-rolled bar
in absolute terms.  In particular, the United States argues that "[a]s with absolute imports, the Panelimproperly disregarded the nature and magnitude of changes in relative imports preceding the firsthalf of 2001,"
 348 and "focused almost exclusively on a decline in imports in the first six months
of 2001 as compared to the first six months of 2000."  349
393. The Panel acknowledged that the USITC  had provided   an explanation in its report on
imports relative to domestic production.  350  Thus, the issue here is  not  whether the USITC did, or did
not, provide an "explanation" concerning the decrease that occurred at the end of the period ofinvestigation.  The issue here is the sufficiency of that "explanation".  The Panel found that the
explanation provided by the USITC was not reasoned and adequate because the "facts [did] not
support a conclusion that hot-rolled bar 'is being imported in such increased quantities'".
 351
                                                     
346Panel Reports, para. 10.208.
347Ibid., paras. 10.208–10.209.
348United States' appellant's submission, para. 130.
349Ibid., para. 129.
350Panel Reports, para. 10.204.
351Ibid., para. 10.209.WT/DS248/AB/R, WT/DS249/AB/R,
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394. In reaching this conclusion, the Panel stated that it did not consider the statement of the
USITC that "the ratio of imports to US production in interim 2001 was higher than that for the first
three years of the period examined, and was only three-tenths of a percentage point below the 1999
level"  352 to be a reasoned and adequate explanation supporting the determination on increased
imports.  The Panel explained that this was because "the ratio of imports to domestic production in themost recent period, interim 2001 … not only declined compared with full-year or interim 2000 … butwas also lower than in 1999 … and nearly as low as in 1998".
 353  For these reasons, the Panel
concluded that "the facts do not support a conclusion that hot-rolled bar 'is being imported in suchincreased quantities, … relative to domestic production.'"
 354
395. Based on the facts found by the Panel and in the Panel record, we have some misgivings
about the Panel's assessment.  As the Panel pointed out, the ratio of imports to domestic production
was 18.4 per cent in 1997  355, and 27.5 per cent in 2000—the last full year included in the period of
investigation.  This represents an increase in 9.1 percentage points.  Between interim 2000 and interim2001, there was a decline in that ratio (2.4 percentage points, being the difference between 27 per centfor interim 2000 and 24.6 per cent for interim 2001).  However, the ratio for interim 2001 was still 6.2percentage points above that for 1997.
396. In addition, as we stated in  US – Lamb ,  "data from the most recent past … must [be]
assess[ed]  in the context of the data for the entire investigative period".
 356  In its appellant's
submission, the United States points out that the ratio of imports to domestic production of hot-rolled
bar increased by 43.23 per cent from 1996 to 2000, and "rose in three out of the four year-to-year
comparisons, including a sizable increase from 1999 to 2000".  357  It appears to us that the decline in
imports between interim 2000 and interim 2001—from 27 to 24.6 per cent of domestic production—isrelatively modest when assessed in the context of the aforementioned 43.23 per cent increase, anddoes not necessarily   detract from an overall determination by the USITC that the product is "being
imported in such increased quantities".
                                                     
352Panel Reports, para. 10.208.
353Ibid., para. 10.209.
354Ibid.
355We note that the ratio of imports to domestic production was 19.2 per cent at the start of the period
of investigation in 1996.
356Appellate Body Report, US – Lamb , para. 138.
357United States' appellant's submission, para. 128.  That increase was from 24.9 per cent in 1999 to
27.5 per cent in 2000. (Panel Reports, para. 10.208)WT/DS248/AB/R, WT/DS249/AB/R,
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397. We are not suggesting that a 43.23 per cent increase between 1996 and 2000 would be, in
itself, sufficient to demonstrate "increased imports".  The fact of this increase, in itself, does not prove
that a product is being imported in "such" increased quantities in the sense of Articles XIX:1(a)
and 2.1.  As the Panel itself observed, "there are no absolute standards as regards  how  sudden,
recent, and significant the increase must be in order to qualify as an 'increase' in the sense ofArticle 2.1."
 358
398. Our review of the facts suggests to us that they may well support the USITC's conclusion
relating to increased imports.  Thus, we do not necessarily share the Panel's conclusion about thosefacts.  However, this is not the issue before us.  The issue before us here is whether the USITCprovided an explanation in its report on whether imports increased relative to domestic production.On that point, we agree with the Panel that the USITC did not explain why, despite the decline that
occurred at the end of the period of investigation, the facts nevertheless supported a determination of
"increased imports" within the meaning of Article 2.1.
 359  Thus, we agree with the Panel, albeit for
different reasons, that the USITC failed to provide a reasoned and adequate explanation of how thefacts supported its determination.
399. Accordingly, we  uphold   the Panel's finding, in paragraph 10.210 and the relevant section of
paragraph 11.2 of the Panel Reports, that the application of the safeguard measure on hot-rolled bar isinconsistent with Articles 2.1 and 3.1 of the  Agreement on Safeguards ,  because the United States
failed to provide a reasoned and adequate explanation of how the facts support its determination with
respect to "increased imports" of that product.
400. We now turn to the United States' appeal against the Panel's findings on tin mill products.
                                                     
358Panel Reports, para. 10.168. (original emphasis)
359The USITC report, in relevant part, states:
As a ratio to U.S. production, imports declined from 19.2 percent in 1996 to
18.4 percent in 1997, but then rose to 23.8 percent in 1998, 24.9 percent in1999, and 27.5 percent in 2000.  The ratio was lower in interim 2001, at24.6 percent, than in interim 2000, when it was 27.0 percent.
Imports were higher, both in absolute terms and relative to U.S. production,
in 2000 than in any prior year of the period examined and showed a rapidand dramatic increase from the previous year.  While imports declined in theinterim period comparison, the ratio of imports to U.S. production in interim
2001 was higher than that for the first three years of the period examined,
and was only three-tenths of a percentage point below the 1999 level.
USITC Report, Vol. I, p. 92. (footnote omitted)WT/DS248/AB/R, WT/DS249/AB/R,
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B. Tin Mill Products and Stainless Steel Wire
1. Tin Mill Products
401. The Panel also found that the USITC failed to provide a reasoned and adequate explanation
for its determination that imports of tin mill products had increased.  The Panel noted that thePresident of the United States "based his determination [with respect to tin mill products] on the
findings of [
 ] Commissioners [Bragg, Devaney, and Miller], although those three commissioners did
not perform their analysis on the basis of the same like product definition".  360  The Panel went on to
find that these findings "cannot be reconciled as a matter of their substance", because they were notbased on an identically-defined like product; the Panel concluded that a WTO Member is notpermitted, under Articles 2.1 and 3.1 of the  Agreement on Safeguards ,  to "base a safeguard measure
on a determination supported by a set of explanations each of which is different and  impossible  toreconcile with the other.  Such findings cannot simultaneously form the basis of a determination."
 361
402. The Panel also said that:
[T]he Panel sees no inconsistency with WTO law in the fact itself
that only one commissioner reached affirmative findings with regard
to tin mill products as a separate product.
However, if a Member relies  on the findings made by three
Commissioners and the findings of those three Commissioners
constitute the  determination   of the competent authorities in the
sense of Article 2.1 of the Agreement on Safeguards, there is a
requirement for those findings to provide a reasoned and adequate
explanation.  A reasoned and adequate explanation is not containedin a set of findings which  cannot  be reconciled one with another. 
362
(original emphasis; underlining added)
                                                     
360Panel Reports, para. 10.192.
361Ibid., para. 10.195.  (emphasis added)
362Panel Reports, paras. 10.198–10.199.WT/DS248/AB/R, WT/DS249/AB/R,
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403. The Panel distinguished the facts before it fr om the situation that was before us in  US – Line
Pipe  by stating:
The question in US – Line Pipe  was whether a  determination  could
leave open the question whether there was serious injury or threat of
serious injury.  From the perspective of the Agreement on
Safeguards, the conditions of Article 2.1 are satisfied equally by
serious injury and by threat of serious injury.  The challenge was not
that the  underlying report was split and contained different
reasonings that could not be reconciled one with another and that,
therefore, there was a violation of Articles 2.1 and 3.1 of the
Agreement on Safeguards.
 363 (original emphasis)
404. The United States asks us to reverse the findings of the Panel concerning tin mill products.
According to the United States, the Panel erred in requiring that the findings of each Commissioner orgroup of Commissioners be "reconciled".
 364  The United States submits that findings based on
different product groupings are not intrinsically irreconcilable.  365  Moreover, the United States argues
that the "inconsistency" found by the Panel is of no legal relevance, and that the views of the threeCommissioners represent alternative findings, which, according to the United States, are consistentwith the  Agreement on Safeguards  "so long as the analysis of at least one of the decision makers
satisfies the requirements of the Agreement".
 366
405. In our analysis of this issue, we will first briefly consider the structure and functioning of the
USITC, as explained by the United States, and will then summarize the relevant findings anddeterminations of the individual Commissioners and of the USITC in this case;  thereafter, we will
analyze the merits of the United States' appeal of the Panel's findings.
406. As explained by the United States, the USITC is the United States' competent authority for
purposes of the  Agreement on Safeguards .  The USITC is a body that usually consists of six
Commissioners.  In safeguard investigations, each of the six Commissioners makes an affirmative ornegative finding  independently   of each other as to whether a product is being imported in such
increased quantities as to be a substantial cause of  serious injury or threat thereof to the domestic
industry.  Each Commissioner—independently—defines the like or directly competitive product;  the
                                                     
363Panel Reports, para. 10.196.
364United States' appellant's submission, para. 370.
365Ibid., para. 372.
366Ibid., para. 375.WT/DS248/AB/R, WT/DS249/AB/R,
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affirmative or negative vote of a majority of the Commissioners constitutes the overall institutional
determination of the USITC.  367  If there is an equal number of affirmative and negative votes, the
President of the United States decides which voting group constitutes the overall institutional
determination of the USITC. 368
407. In the present case, for tin mill products, the six Commissioners comprising the USITC
did not all define the like or directly competitive product in the same way.  Four Commissioners(Chairman Koplan, Vice Chairman Okun, as well as Commissioners Hillman and Miller) defined tinmill products as a distinct and separate product category, and set out their respective "views"
 369 on the
basis of this product category.  370  The remaining Commissioners (Commissioners Bragg and
Devaney) did not consider tin mill products as a separate product category; rather, they considered tinmill products as part of the larger category of carbon and alloy flat products
 
 371, and set out their
respective "views" on the basis of this larger product category.  372
408. Among the four Commissioners who had defined tin mill products as a distinct and separate
product category, three reached a negative finding (Chairman Koplan, Vice Chairman Okun, andCommissioner Hillman)
 373, and one reached an affirmative finding (Commissioner Miller). 374
Commissioners Bragg and Devaney reached an affirmative finding with respect to the larger productcategory of carbon and alloy flat products (including tin mill).
 375
409. At the oral hearing, the United States explained that "the USITC combined the results" of the
views of Commissioners Bragg, Devaney, and Miller into a "single institutional determination"—an
                                                     
367United States' appellant's submission, para. 359.
368Ibid., footnote 469 to para. 359.
369At the oral hearing, the United States clarified th at it viewed the term "determination" as the legal
conclusion that increased imports are a cause of serious in jury or threat thereof, and differentiated this term from
the findings and reasoned conclusions of the individual decision-makers, which the United States prefers to call
the "views" of those particular decision makers.
370USITC Report, Vol. I, pp. 71ff and 307ff.
371This product category encompasses CCFRS, tin mill, and GOES.
372See USITC Report, Vol. I, pp. 272–273 (Commissioner Bragg);  USITC Report, Vol. I, footnote 65
on p. 36 (Commissioner Devaney).
373See USITC Report, Vol. I, pp. 71–78.
374See ibid., pp. 307–309.
375See ibid., pp. 279, 282–283, and 294–295 (Commissioner Bragg);  and footnote 368 on p. 71
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affirmative finding—on tin mill products.
 376  In other words, the fact that two Commissioners
considered products other than tin mill products when making their own independent findings did not
affect the result with respect to tin mill products alon e.  The United States explained that this "single
institutional determination" of the USITC on tin mill products is supported by the multiple differentfindings, or "views", of Commissioners Miller, Bragg, and Devaney.
 377  The President of the United
States chose this affirmative finding as the overall determination of the USITC, over the other"combined results" that reached a negative finding.
 378  Accordingly, for purposes of WTO
obligations, there is an affirmative determinati on made by the competent authority of the United
States, the USITC, that tin mill products are being imported in such increased quantities and undersuch conditions as to cause or threaten to cause serious injury to the domestic industry.  Thisdetermination of the USITC is supported by the vi ews of Commissioners Miller, Bragg, and Devaney;
therefore, according to the United States, it is from the views of these three Commissioners that a
panel, and we, must find a reasoned and adequate explanation for the USITC's determination.
410. Additionally, and before commencing our analysis, it may be helpful to observe that the issue
before us concerns, not the domestic law of the United States, but rather the obligations of the UnitedStates  under  the WTO Agreement .  As we stated in  US – Line Pipe ,  what matters for purposes of
WTO dispute settlement is whether the determination, irrespective of how it is decided domestically,meets the requirements of the  Agreement on Safeguards .
 379
411. Furthermore, it is also important to note that the issue before us, here, is  not  whether the
product scope of the  safeguard measure   may or may not be narrower than a competent authority's
determination —that is, it is not whether certain products included in a determination can subsequently
be excluded from the scope of the actual safeguard measure.  380  Instead, the issue before us is, we
repeat, whether the USITC's report provided a reasoned and adequate explanation for the USITC's"single institutional determination" that imports of tin mill products had increased within the meaningof Article 2.1 of the  Agreement on Safeguards .  We turn to this issue now.
                                                     
376See also ibid., p. 25, and the United States' appellant's submission, para. 394.
377See also United States' appellant's submission, para. 394.
378As we explained earlier, because the USITC found that it was "equally divided" with respect to tin
mill products, the decision whether the affirmative or rather the negative determination represented theinstitutional determination of the USITC rested with the President of the United States.
379Appellate Body Report,  US – Line Pipe , para. 158.
380We note that this issue was raised before the Pane l; the Panel, however, decided to exercise judicial
economy with respect to this claim.  (Panel Reports, para. 10.700)WT/DS248/AB/R, WT/DS249/AB/R,
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412. We note that the Panel did not examine the substance of the findings of the three
Commissioners;  rather, the Panel noted only that these findings were not based on an identically-
defined like product, and concluded that this rendered the findings of the three Commissioners
"irreconcilable".  From this conclusion, the Panel deduced that these findings could not provide areasoned and adequate explanation for the USITC's single determination.
413. We have reservations about the Panel's approach.  First, as a preliminary matter, we are not
persuaded that the findings of the three Commissioners " cannot   be reconciled".
 381  We do not believe
that an affirmative finding with respect to a broad product grouping, on the one hand, and anaffirmative finding with respect to one of the products contained in that broad product grouping, onthe other hand, are, necessarily, mutually exclusive.  It may be that they are irreconcilable, but thatwill depend on the facts of the case.  Here, the Panel did not inquire into the details of the findings as
they related to increased imports and, hence, was not adequately informed as to whether the three
findings were reconcilable or not.
414. Secondly, in any event, we note that Article 3.1 of the  Agreement on Safeguards   requires the
competent authority,  inter alia ,  to "publish a report setting forth their findings and reasoned
conclusions reached on all pertinent issues of fact and law".  We do not read Article 3.1 as necessarilyprecluding the possibility of providing multiple findings instead of a single finding in order to supporta determination under Articles 2.1 and 4 of the  Agreement on Safeguards .  Nor does any other
provision of the  Agreement on Safeguards   expressly preclude such a possibility.  The  Agreement
on Safeguards ,  therefore, in our view,  does not interfere with the discretion of a WTO Member to
choose whether to support the determination of its competent authority by a single explanation or,
alternatively, by multiple explanations by members of the competent authority.  This discretionreflects the fact that, as we stated in  US – Line Pipe , "the  Agreement on Safeguards   does not
prescribe the internal decision-making process for making [
 ] a determination [in a domestic safeguard
investigation]".  382
415. In the appeal before us, the USITC set out, in its report, three distinct and separate sets of
findings.  The results were combined into a "singl e institutional determination".  These findings were
made on the basis of different product definitions developed by three Commissioners.  Although we
agree with the Panel that "it makes a difference whether the product at issue is tin mill or a much
broader category called CCFRS and containing tin mill products", because "the import numbers for                                                     
381Panel Reports, para. 10.199.  (emphasis added)
382Appellate Body Report,  US – Line Pipe , para. 158.WT/DS248/AB/R, WT/DS249/AB/R,
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different product definitions will not be the same"
 383, this very difference, as well as the fact that the
findings underlying the USITC's determination were set out as distinct and separate in the USITC's
report, implies that these findings should  not  be read together, nor should a panel seek to "reconcile"
them.  Rather, a panel must ascertain whether a reasoned and adequate explanation for the USITC'sdetermination is contained in the report, even if only in one of the Commissioner's individualfindings.
416. In our view, in the case before us, the Panel should, therefore, not have ended its enquiry after
noting that the conclusions of Commissioners Bra gg and Devaney were based on a product definition
that differed from that on which Commissioner Miller based her conclusion.  After making thiscorrect observation, the Panel should have continued its enquiry by examining the views of the threeCommissioners  separately ,  in order to ascertain whether one of these sets of findings contained a
reasoned and adequate explanation for the USITC's "single institutional determination" on tin mill
products.
417. In fact, we note that the approach which, in our view, the Panel should have taken in the
context of increased imports, is precisely the approach the Panel adopted in the context ofparallelism.
 384  In that context, the Panel first reviewed the findings of Commissioner Bragg and
subsequently proceeded to review the findings reached by Commissioner Miller.  385  We do not
understand why the Panel reviewed the multiple findings separately in the context of parallelism, butdeclined to do so in the context of increased imports.
 386
418. It bears emphasizing that, in reviewing each of such findings separately, a panel is of course
obliged to assess whether that particular finding provides a reasoned and adequate explanation of howthe facts support the competent authority's determination.  As we held in  US – Lamb ,  "panels must
[not] simply  accept   the conclusions of the competent authorities";  they must examine these
                                                     
383Panel Reports, para. 10.195.
384We note, however, that the Panel also relied on the divergence in product definitions in the context
of its causation analysis.  (Panel Reports, paras. 10.422 and 10.572)
385Panel Reports, para. 10.615.
386We are aware that, in the context of parallelism, the Panel did not review the findings of
Commissioner Devaney; the Panel explained that "the United States does not rely on findings made byCommissioner Devaney in defence against the claim of violation of parallelism, possibly because thisCommissioner appears not to have reach ed any conclusions about imports other than excluded imports".  (Panel
Reports, footnote 5677 to para. 10.613)WT/DS248/AB/R, WT/DS249/AB/R,
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conclusions "critically" and "in depth".  387  Hence, in examining whether one of the multiple sets of
explanations set forth by the competent authority, taken individually, provides a reasoned and
adequate explanation for the competent authority's determination, a panel may have to address,  inter
alia, the question whether,  as a matter of WTO obligations ,  findings by individual Commissioners
made on the basis of a  broad   product grouping can provide a reasoned and adequate explanation for
a "single institutional determination" of the USITC concerning a  narrow   product grouping.  388
Accordingly, we do  not  suggest that the product scope of an affirmative finding by an individual
Commissioner is  not  relevant for the enquiry whether this finding does or does not provide a
reasoned and adequate explanation for the competent authority's determination.  389  Rather, our finding
implies that a panel may not conclude that there is no reasoned and adequate explanation for acompetent authority's determination by relying mere ly on the fact that distinct multiple explanations
given by the competent authority are not based on an identically-defined like product.
 390
419. In the light of the above, we  reverse   the Panel's finding, in paragraph 10.200 of the Panel
Reports, that the USITC report does not contain a reasoned and adequate explanation of how thefacts support the determination of increased imports for tin mill products because "the explanationconsists of alternative explanations partly departing from each other which, given the differentproduct bases, cannot be reconciled as a matter of their substance."
 391
420. We will discuss later in this Report whether, in the light of this finding, we should complete
the analysis with respect to this issue.
421. We turn next to stainless steel wire.
                                                     
387Appellate Body Report,  US – Lamb , para. 106.  (original emphasis)
388In this regard, we note that the fact that, pursuant to the domestic law of a WTO Member, a finding
made on the basis of a  broad   product grouping is deemed to support a competent authority's determination
which relates to a  narrower   product, does not, in and of itself, imply that this conclusion holds true also for the
purposes of the  Agreement on Safeguards .
389Indeed, we note that in the context of parallelism, the Panel addressed separately the finding of
Commissioner Bragg and found that "findings on a product category other than tin mill products are [not] ableto support a measure relating to tin mill products as a separate product category, unless there is a reasoned andadequate explanation relating the two product categories".   (Panel Reports, para. 10.615)
390We also emphasize that our finding does not address the question whether the USITC and/or
individual Commissioners correctly defined the "like product", the "imported product", or the "domesticindustry".
391Panel Reports, para. 10.200.WT/DS248/AB/R, WT/DS249/AB/R,
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2. Stainless Steel Wire
422. As with tin mill products, the United States appeals the Panel's finding that the competent
authority did not provide a reasoned and adequate explanation in relation to increased imports ofstainless steel wire because the findings of the three Commissioners underlying the USITC'sdetermination were not based on identically-defined like products.
 392  We begin by summarizing the
relevant findings of the USITC.
423. The six Commissioners of the USITC made divergent findings on the product category
stainless steel wire.  Four Commissioners (Cha irman Koplan, Vice Chairman Okun, as well as
Commissioners Hillman and Miller) defined stainless steel wire as a distinct product category and
presented their respective views on the basis of this product category.  393  The remaining two
Commissioners (Bragg and Devaney) did not consider  stainless steel wire as a separate product
category; rather, these two Commissioners identified a product category "stainless steel wireproducts" (Bragg) or "stainless steel wire and wire rope" (Devaney), both composed of stainless steelwire and stainless steel rope, and presented their respective views on the basis of this broader productcategory. 
394
424. Among the four Commissioners who defined stainless steel wire as a distinct and separate
product category, three reached a negative finding  (Vice Chairman Okun and Commissioners Hillman
and Miller)  395, and one reached an affirmative finding (Chairman Koplan).  396  Commissioners Bragg
and Devaney reached an affirmative finding with respect to the larger product category stainless steelwire products/stainless steel wire and wire rope.
 397
425. At the oral hearing, the United States explained that "the USITC combined the results" of
the views of Chairman Koplan and of Commissioners Bragg and Devaney into a "single institutionaldetermination"—an affirmative finding—on stainless steel wire.
 398  In other words, the fact that two
                                                     
392United States' appellant's submission, paras. 359–395.
393USITC Report, Vol. I, pp. 190 and 234–238.
394Ibid., pp. 277, 280, 288–289, and 301–302 (Commissioner Bragg);  and pp. 335–336 and 342–347
(Commissioner Devaney).
395Ibid., pp. 234–238.
396USITC Report, Separate Views of Chairman Koplan on injury, pp. 256–259.
397USITC Report, Vol. I, pp. 280, 288–289, and 301–302 (Commissioner Bragg); and pp. 342–347
(Commissioner Devaney).
398See also  ibid.,  p. 27;  United States' appellant's submission, para. 394.WT/DS248/AB/R, WT/DS249/AB/R,
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of the Commissioners considered products other than stainless steel wire did not affect the result with
respect to stainless steel wire alone.  The United States explained that this "single institutional
determination" of the USITC on stainless steel wire is supported by the multiple different findings, or
"views", of Chairman Koplan and of Commissioners Bragg and Devaney.  399  The President of the
United States chose this affirmative finding as the overall determination of the USITC, overthe "combined results" that reached a negative finding.
 400  Accordingly, for purposes of WTO
obligations, there is an affirmative determinati on made by the competent authority of the United
States, the USITC, that stainless steel wire is being imported in such increased quantities and undersuch conditions as to cause or threaten to cause serious injury to the domestic industry.  Thisdetermination of the USITC is supported by the views of Chairman Koplan and Commissioners Braggand Devaney;  therefore, according to the United States, it is from the views of these three
Commissioners that a panel, and we, must find a re asoned and adequate explanation for the USITC's
determination.
426. The Panel found that the USITC failed to provide a reasoned and adequate explanation of
how the facts support its determination that imports of stainless steel wire have increased.  The Panelfirst noted that the situation before it "is equivale nt to that encountered in the context of tin mill
products".
 401  The Panel then stated:
[T]he Agreement on Safeguards does not permit the combination of
findings as supporting a determination, if these findings were reachedon the basis of differently defined products.  If such findings cannot
be reconciled one with another (as a matter of substance), they cannot
simultaneously form the basis of a determination.
 402
The Panel, moreover, cross-referenced its reasoning set out in the context of its findings on tin mill
products.  403
                                                     
399See also United States' appellant's submission, para. 394.
400As we said earlier, because the USITC found that it was "equally divided" with respect to stainless
steel wire, the decision whether the affirmative or rather  the negative determination represented the institutional
determination of the USITC rested with the President of the United States.
401Panel Reports, para. 10.261.
402Ibid., para. 10.262.
403Ibid.WT/DS248/AB/R, WT/DS249/AB/R,
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427. As with the Panel's findings on tin mill products, the United States argues that, with respect to
stainless steel wire, the Panel erred in requiring that the findings of each Commissioner or group of
Commissioners be "reconciled".
404  The United States submits that there is "nothing intrinsically
irreconcilable about findings based on different product groupings".405  The United States also argues
that alternative findings by a single decision-maker are permitted by the  Agreement on Safeguards , 
"so long as the analysis of at least one of the decision makers satisfies the requirements of theAgreement".
 406
428. We note that the structure and format of the USITC's determination with respect to stainless
steel wire mirrors the USITC's determination with respect to tin mill products.  One Commissioner(Chairman Koplan) made affirmative findings on the product stainless steel wire
 407, while two other
Commissioners (Bragg and Devaney) made affirmative findings on a broader product group
including, as one of the elements of this product group, stainless steel wire.  408  The results of these
findings were subsequently combined by the USIT C into a single institutional finding concerning
stainless steel wire.
429. The facts on stainless steel wire, as well as the findings of the Panel, are, for all relevant
purposes, identical to those before us in the contex t of tin mill products.  Therefore, our reasoning
with respect to tin mill products is applicable,  mutatis mutandis ,  also to stainless steel wire.  409  We
therefore reverse  the Panel's finding, in paragraph 10.263 and in the relevant section of
paragraph 11.2 of the Panel Reports, that the USITC report does not contain a reasoned and adequate
explanation of how the facts support the determination of increased imports for stainless steel wire
because the "explanation consists of alternative explanations departing from each other and which,given the different product bases, cannot be reconciled as a matter of substance."
 410
                                                     
404United States' appellant's submission, para. 370.
405Ibid., para. 372.
406Ibid., para. 375.
407USITC Report, Separate Views of Chairman Koplan on injury, pp. 256–259.
408USITC Report, Vol. I, pp. 280, 288–289, 301–302 (Commissioner Bragg); USITC Report, Vol. I,
pp. 342–347 (Commissioner Devaney).
409See  supra ,  paras. 413–418.
410Panel Reports, para. 10.262.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 137
3. Completing the Analysis
430. In the course of finding that the explanation of the USITC for its determination of increased
imports of tin mill products and stainless steel wire was not reasoned and adequate, the Panel did notexamine separately the findings of the three Commi ssioners with a view to determining whether one
of these findings, as a matter of substance, contains a reasoned and adequate explanation.  As we havereached a conclusion different from the Panel on the interpretation of the  Agreement on Safeguards ,
and as the Panel did not undertake a substantive analysis, the question arises whether we should"complete the analysis".
431. In previous appeals, we have, when appropriate, completed the legal analysis with a view to
facilitating the prompt settlement of disputes.
 411  However, in the dispute before us, we have already
upheld the Panel's finding that the United States acted inconsistently with Article XIX:1(a) of theGATT 1994, as well as with Article 3.1 of the  Agreement on Safeguards ,  with regard to all ten
measures at issue.  We also find in the following section of this Report dealing with the issue of"parallelism"
 412, that the United States has acted inconsistently with Articles 2.1 and 4.2 of the
Agreement on Safeguards   with respect to all product categories, because the United States failed to
establish that imports covered by the safeguard measures,  alone ,  satisfy the conditions for the
imposition of a safeguard measure.  Therefore, the Panel's finding that the safeguard measures applied
to tin mill products and stainless steel wire are both "deprived of a legal basis"  413 remains
undisturbed.  As a result, it is not necessary for us to complete the analysis and determine whether theUSITC report provided a reasoned and adequate explanation that imports of tin mill products andstainless steel wire had increased within the meaning of Article 2.1 of the  Agreement on Safeguards .
432. We take up next the issue of "parallelism".
                                                     
411See, for instance, Appellate Body Report, US – Gasoline , at 18 ff;  Appellate Body Report,
Canada – Periodicals , at 469 ff;   Appellate Body Report,  EC – Hormones , paras. 222 ff;  Appellate Body
Report,  EC – Poultry ,  paras. 156 ff;  Appellate Body Report,  Australia – Salmon ,  paras. 117 ff, 193 ff and
227 ff;  Appellate Body Report, US – Shrimp , paras. 123 ff;  Appellate Body Report, Japan – Agricultural
Products II , paras. 112 ff;  Appellate Body Report, US – FSC , paras. 133 ff;  Appellate Body Report, Canada –
Aircraft  (Article 21.5 – Brazil) , paras. 43 ff;  and Appellate Body Report, US – Wheat Gluten , paras. 80 ff
and 127 ff.
412See  infra , paras. 433–474.
413Panel Reports, para. 10.705.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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VII. Parallelism
433. We start by recalling that the United States excluded imports from Canada and Mexico
 414, as
well as from Israel and Jordan  415, from the scope of application of these safeguard measures.  The
Panel found that these safeguard measures were inconsistent with Articles 2.1 and 4.2 of theAgreement on Safeguards   because the United States did not, with respect to any of the product
categories at issue, establish explicitly that imports from the sources included in the application ofthese measures,  alone ,  satisfied the conditions for the application of a safeguard measure.  The
United States challenges these findings of the Panel.
 416
434. In its findings, the Panel began by making some general comments about the requirement of
"parallelism"  417, and then reviewed the USITC's findings on a product-specific basis.  In these general
comments, the Panel noted that:
[i]ncreased imports from sources ultimately excluded from the
application of the measure must  … be excluded from the analysis.
The increase of these imports and their effect on the domesticindustry cannot be used to support a conclusion that the product in
question "is being imported in such increased quantities so as to
cause serious injury".  This makes it necessary … to account for the
fact that excluded imports may have some injurious impact on the
domestic industry .
 418 (emphasis added)
435. In its product-specific analysis, the Panel, using similar language, relied on this reasoning in
examining the USITC's determination with respect to non-NAFTA imports for nine productcategories, namely, CCFRS, tin mill products, hot-rolled bar, cold-finished bar, rebar, welded pipe,
FFTJ, stainless steel bar, and stainless steel wire.  For each of these nine product categories, the Panel
found that the USITC had not complied with the requirement to demonstrate a causal link betweenincreased imports and serious injury, because it did not account for the effects—existing or possible—
                                                     
414Proclamation, para. 8.
415Ibid., para. 11.
416United States' appellant's submission, paras. 315–358.
417Appellate Body Report,  US – Line Pipe , paras. 178–181.
418Panel Reports, para. 10.598.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 139
of excluded imports on the domestic industry.  419  The Panel did not make this finding with respect to
the tenth product category, stainless steel rod.  420
436. For all ten product categories, the Panel found a second flaw in the USITC's analysis after
examining its determination concerning non-NAFTA imports.  Using virtually identical language formost product categories
 421, the Panel stated:
[T]he Panel notes that the sources excluded from the measure are not
only Canada and Mexico, but also those from Israel and Jordan.
Accordingly, imports from sources covered by the measure are not"non-NAFTA imports", but imports other than those from Canada,
Mexico, Israel and Jordan.  With regard to such imports, the USITC
did not establish explicitly that they satisfied the requirements of
Article 2.1 (as elaborated in Article 4) of the Agreement on
Safeguards, neither in the USITC Report, nor in the SecondSupplementary Report.
                                                     
419The Panel used the language "to account for the fact  that excluded … imports contributed to the
serious injury" or "the injury caused by excluded imports must be accounted for" with respect to the product
categories CCFRS (Panel Reports, paras. 10.604–10.606), hot-rolled bar (Panel Reports, paras. 10.628–10.630),cold-finished bar (Panel Reports, paras. 10.638–10.640), rebar (Panel Reports, para. 10.650), FFTJ (PanelReports, paras. 10.664–10.667), and stainless steel bar (P anel Reports, paras. 10.674–10.677).  With respect to
Commissioner Miller's analysis of the causal link between non-Canadian imports of tin mill products andserious injury, the Panel stated that "[the] findings do not account for the fact that imports other than those from
an excluded source are less than those from all sources and that the effects on the domestic producers are,
therefore, not the same." (Panel Reports, paras. 10.620–10.621)  With respect to welded pipe, the Panel statedthat the USITC's finding "does not account for the fact that the threat of serious injury caused by non-NAFTAimports is but a part of the threat of serious injury caused by all imports and does not establish that there is agenuine and substantial relationship of cause and effect." (Panel Reports, para. 10.657)  With respect to stainless
steel wire, the Panel stated that "the findings [ ] do not take account of the portion of the threat of serious injury
caused by NAFTA imports."  (Panel Reports, para. 10.688)
420With respect to stainless steel rod, the Panel, in reviewing the USITC's finding on non-NAFTA
imports, did not refer to the causation or non-attribution requirements.  We address the Panel's findings withrespect to stainless steel rod in paras. 457–473, below.
421The Panel did not include the first paragraph with respect to its findings on tin mill products and
stainless steel rod.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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It may well be that imports from Israel and Jordan
422 were so small
that they could not possibly affect the findings reached, whetherabout all imports or about non-NAFTA imports.  However, in the
view of the Panel, it would then still be necessary for the competent
authorities to actually express the findings required under parallelism
with regard to increased imports other than those from Canada,
Mexico, Israel and Jordan.  The standard is that the Member must
establish explicitly that imports from sources covered by the measure
satisfy all conditions for the right to apply a safeguard measure.  Forthis finding to be made, it is not sufficient to merely find that the
exclusion of imports from Israel and Jordan would not change the
conclusions regarding the prerequisites for a safeguard measure.  The
Panel recognizes that if, as established elsewhere in the report of the
competent authorities, imports from an excluded source were [verysmall or (virtually) non-existent], it is very possible that the facts
allow   a finding that imports from sources covered by the measure do
satisfy the conditions for the application of a safeguard measure.
This, however, still needs to be established explicitly and supported
with a reasoned and adequate explanation.
 423 (original emphasis,
footnotes omitted)
437. The Panel made separate and distinct findings on parallelism for each of the ten product
categories.  The United States asks us to reverse the findings of the Panel on parallelism for all theseten product categories. The United States argues that, although the Panel "purported to conduct aproduct-by-product examination of the parallelism claims, its basis for rejecting the ITC's parallelismanalysis varied little from product to product."
 424  The United States contends that the Panel "asserted
two general conclusions in its introductory analytical section that served as the basis for its product-specific analyses".
 425  According to the United States, the first of these two "general conclusions" of
the Panel is a requirement to "account for the fact that excluded imports may have some injuriousimpact on the domestic industry"—to which the United States refers as the "excluded sources
accounting requirement".
 426  As the United States describes it, the second of these two "general
conclusions" of the Panel is a requirement to establish "explicitly" that imports from included sourcessatisfy the conditions for the imposition of a safeguard measure, a standard which the United Statesargues the Panel misconstrued to require the competent authority to make "redundant findings".
 427
                                                     
422For tin mill products, the Panel referred to imports from Mexico, Israel and Jordan.
423Panel Reports, paras. 10.607–10.608;  see also Panel Reports, paras. 10.622, 10.631–10.632, 10.641–
10.642, 10.651–10.652, 10.658–10.659, 10.668–10.669, 10.678–10.679, 10.689–10.690, and 10.698.
424United States' appellant's submission, para. 316.
425Ibid.
426Ibid., paras. 318 and 321–333.
427Ibid., paras. 334–344.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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Page 141
438. On appeal, the United States explicitly acknowledges that it "does not dispute that the ITC's
parallelism analysis  did not satisfy the standards articulated by the Panel ". 428  However, the United
States considers this to be "irrelevant"  429, because it contends that these requirements are not
contained in the  Agreement on Safeguards .
439. We begin our analysis by reviewing the relevant treaty provisions.  The word "parallelism" is
not in the text of the  Agreement on Safeguards ;  rather, the requirement that is described as
"parallelism" is found in the "parallel" language used in the first and second paragraphs of Article 2 ofthe  Agreement on Safeguards .  Article 2 of the  Agreement on Safeguards   stipulates:
Conditions
1. A Member
1 may apply a safeguard measure to a product only
if that Member has determined, pursuant to the provisions set out
below, that such product is being imported into its territory in such
increased quantities, absolute or relative to domestic production, andunder such conditions as to cause or threaten to cause serious injury
to the domestic industry that produces like or directly competitiveproducts.
2. Safeguard measures shall be applied to a product being
imported irrespective of its source. (underlining added)
________
1    A customs union may apply a safeguard measure as a single unit or on behalf of a
member State.  When a customs union applies a safeguard measure as a single unit,all the requirements for the determination of  serious injury or threat thereof under
this Agreement shall be based on the conditions existing in the customs union as a
whole.  When a safeguard measure is applied on behalf of a member State, all therequirements for the determination of serious injury or threat thereof shall be basedon the conditions existing in that member State and the measure shall be limited to
that member State.  Nothing in this Ag reement prejudges the interpretation of the
relationship between Article XIX and paragraph 8 of Article XXIV of GATT 1994.
                                                     
428United States' appellant's submission, para. 358.  (emphasis added)
429United States' appellant's submission, para. 358.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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440. In  US – Wheat Gluten ,  we said that:
The same phrase – "product … being imported" – appears in  both 
… paragraphs of Article 2.  In view of the identity of the language in
the two provisions, and in the absence of any contrary indication in
the context, we believe that it is appropriate to ascribe the  same  
meaning to this phrase in both Articles 2.1 and 2.2.  To include
imports from all sources in the determination that increased imports
are causing serious injury, and then to exclude imports from one
source from the application of the measure, would be to give the
phrase "product being imported" a  different   meaning in Articles 2.1
and 2.2 of the  Agreement on Safeguards .  In Article 2.1, the phrase
would embrace imports from  all  sources whereas, in Article 2.2, it
would exclude imports from certain sources.  This would be
incongruous and unwarranted.  In the usual course, therefore, the
imports included in the determinations made under Articles 2.1 and
4.2 should correspond to the imports included in the application of
the measure, under Article 2.2.  430 (original emphasis; underlining
added)
441. Thus, where, for purposes of applying a safeguard measure, a Member has conducted an
investigation considering imports from  all  sources (that is,  including   any members of a free-trade
area), that Member may not, subsequently, without any further analysis, exclude imports from free-trade area partners from the application of the resulting safeguard measure.  As we stated inUS – Line Pipe ,  if a Member were to do so, there would be a "gap" between, on the one hand,
imports covered by the investigation and, on the other hand, imports falling within the scope of thesafeguard measure.
 431  In clarifying the obligations of WTO Members under the "parallel"
requirements of the first and second paragraphs of Article 2 of the  Agreement on Safeguards ,  we
explained in  US – Line Pipe   that such a "gap" can be justified under the  Agreement on Safeguards
only if the Member establishes:
… "explicitly" that imports from sources covered by the measure
"satisf[y] the conditions for the application of a safeguard measure,
as set out in Article 2.1 and elaborated in Article 4.2 of the
Agreement on Safeguards ." 432
442. We further explained, in that same appeal, that, in order to fulfill this obligation in Article 2,
"establish[ing] explicitly" signifies that a competent authority must provide a "reasoned and adequate
                                                     
430Appellate Body Report, US – Wheat Gluten , para. 96.
431Appellate Body Report, US – Line Pipe, para. 181.
432Ibid., quoting US – Wheat Gluten ,  para. 98.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 143
explanation of how the facts support their determination"  433, adding that "[t]o be explicit, a statement
must express distinctly all that is meant;  it must leave nothing merely implied or suggested;  it must
be clear and unambiguous."  434
443. In considering the investigation by the competen t authority in the case before us, we note that
the USITC relied on data for imports from  all  sources.  The USITC report states that "[i]n
determining whether imports have increased, the Commission considers imports from all sources".  435
We observe also that, in the examination of whether increased imports were a cause of serious injury,the USITC also relied on data for all imports for each product category.  It is undisputed by the UnitedStates that, in its investigation, the USITC considered imports from  all sources —including   imports
from Canada, Israel, Jordan, and Mexico.  Nevertheless, imports from Canada, Israel, Jordan, andMexico were  excluded   from the application of the safeguard measures at issue.  Therefore, there is,
in these measures, a gap between the imports that were taken into account in the investigation
performed by the USITC and the imports falling within the scope of the measures as applied.
444. It was thus incumbent on the USITC, in fulfilling the obligations of the United States under
Article 2 of the  Agreement on Safeguards ,  to justify this gap by establishing explicitly, in its report,
that imports from sources covered by the measures—that is, imports from sources  other than   the
excluded countries of Canada, Israel, Jordan, and Mexico—satisfy,  alone ,  and in and of themselves,
the conditions for the application of a safeguard measure, as set out in Article 2.1 and elaborated inArticle 4.2 of the  Agreement on Safeguards .  Further, and as we have already explained, to provide
such a justification, the USITC was obliged by the  Agreement on Safeguards   to provide a reasoned
and adequate explanation of how the facts supported its determination that imports from sourcesother than   Canada, Israel, Jordan, and Mexico satisfy,  alone ,  and in and of themselves, the
conditions for the application of a safeguard measure.
445. As we have explained, the United States argues that the Panel articulated two aspects of the
requirement of "parallelism" on which it subsequently relied in its product-specific findings.  We willdiscuss each of these aspects in turn.  We turn first to the Panel's findings to which the United Statesrefers as establishing an "excluded sources accounting requirement".
 436
                                                     
433Appellate Body Report, US – Line Pipe , para. 181, quoting US – Lamb, para. 103.
434Appellate Body Report, US – Line Pipe , para. 194.
435USITC Report, Vol. I, p. 32.
436United States' appellant's submission, paras. 318 and 321–333.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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A. The Need to Account for the Effects of Imports from Excluded Sources
446. The United States claims that the Panel erred in concluding that the competent authorities are
required to account for the fact that excluded imports may have some injurious impact on thedomestic industry.  The United States submits that, in so far as the Panel indicated that parallelismrequires authorities to focus separately on imports from sources that are not excluded from themeasure, the Panel's statements "accurately reflect[
 ] what the Appellate Body said in  [ US – ] Line
Pipe". 437  However, the United States asserts that the Panel went "further" and established a
requirement for a separate analysis of imports from sources not subject to the safeguards measure,
according to which the competent authority must  "affirmatively account for the effect of such
imports."  438  The United States contends that the requirement articulated by the Panel has no basis in
the text of the  Agreement on Safeguards . 439
447. The United States relies on statements made by the USITC in both its original report and the
Second Supplementary Report, as establishing that the imports from sources covered by the safeguardmeasures applied by the United States,  alone ,  satisfy the conditions for the application of those
measures.  The United States acknowledges that, in doing so, the USITC did not "account for the factthat excluded imports may have some injurious impact on the domestic industry", as the Panelrequired.
 440  The United States argues, however, that the Panel, by requiring the competent authority
to "account for the fact that excluded imports may have some injurious impact on the domestic
industry", "insert[ed] … an extra analytical step with respect to parallelism".  441  The United States
maintains that nothing in the  Agreement on Safeguards   requires a distinct or explicit analysis of
imports from sources  not  subject to the measure.  442
448. We note, first, that the United States agrees that the "Appellate Body has read th[e]
language ['such product … being imported' in Article 2.1] to refer to only   imports from sources
which are subject to a safeguards measure ". 443  The United States also agrees that Article 2.1, as read
                                                     
437United States' appellant's submission, para. 324.
438Ibid., para. 327.
439We note that Canada, in its third participant's subm ission, also argues that the Panel erred in reading
US – Line Pipe   to mean that parallelism necessarily requires the competent authority to account for the fact that
excluded imports may have some injurious impact on the domestic industry.  (Canada's third participant'ssubmission, para. 35)
440United States' appellant's submission, para. 358.
441Ibid., para. 326.
442Ibid., paras. 326 and 329.
443Ibid., para. 327.  (emphasis added)WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 145
by the Appellate Body, requires the competent authority to "establish explicitly that increased imports
from [sources included in the safeguard measure] alone" satisfy the conditions for a safeguard
measure.  The United States does not contest these requirements in this appeal.  444
449. Secondly, as we have indicated previously, in  US – Line Pipe ,  the conditions set forth in
Article 2.1 are further elaborated in Article 4.2.  445  Article 4.2(b) requires that a determination that
increased imports have caused or are threatening to cause serious injury to the domestic industry, asrequired by Article 4.2(a), can be made only where an investigation by a competent authoritydemonstrates the existence of a "causal link" between "increased imports" and either serious injury orthe threat of serious injury.  Article 4.2(b), last sentence, stipulates also, for the purposes ofdetermining the existence of such a "causal link", that "[w]hen factors other than increased imports
are causing injury to the domestic industry at the same time, such injury shall not be attributed to
increased imports."  This obligation is sometimes described as the "non-attribution requirement".
 446
450. As a result, the phrase "increased imports" in Articles 4.2(a) and 4.2(b) must, in our view, be
read as referring to the same set of imports envisaged in Article 2.1, that is,  to imports included in the
safeguard measure .  Consequently, imports  excluded   from the application of the safeguard measure
must be considered a factor "other than increased imports" within the meaning of Article 4.2(b).  The
possible injurious effects that these excluded imports may have on the domestic industry must not beattributed to imports included in the safeguard measure pursuant to Article 4.2(b).  The requirementarticulated by the Panel "to account for the fact that excluded imports may have some injurious impact
on the domestic industry"
 447 is, therefore, not, as the United States argues, an "extra analytical step"  448
that the Panel added to the analysis of imports from  all sources.  To the contrary, this requirement
necessarily follows from the obligation in Article 4.2( b) for the competent authority to ensure that the
effects of factors other than increased imports—a set of factors that subsumes  imports excluded from
                                                     
444United States' appellant's submission, para. 324.  The United States also states, in its appellant's
submission, that to the extent the Panel's findings on this issue "indicate[] that parallelism requires authorities tofocus separately on imports from sources that are not excluded from the measure, [they] accurately reflect[
 ]
what the Appellate Body said in [ US – ] Line Pipe ."  (United States' appellant's submission, para. 324)
445Appellate Body Report, US – Line Pipe , para. 181;  Appellate Body Report, US – Wheat Gluten ,
para. 98.
446Appellate Body Report,  US – Lamb , para. 179.
447Panel Reports, para. 10.598.
448United States' appellant's submission, para. 326.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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the safeguard measure —are not attributed to imports included in the measure, in establishing a causal
link between imports included in the measure and serious injury or threat thereof.
 449
451. The non-attribution requirement is part of the overall requirement, incumbent upon the
competent authority, to demonstrate the existen ce of a "causal link" between increased imports
(covered by the measure) and serious injury, as provided in Article 4.2(b).  Thus, as we found inUS – Line Pipe ,  "to fulfill the requirement of Article 4.2(b), last sentence, the competent authorities
must establish explicitly, through a reasoned and adequate explanation, that injury caused by factorsother than increased imports is not attributed to increased imports".
 450
452. In order to provide such a reasoned and adequate explanation, the competent authority must
explain how it ensured that it did not attribute the injurious effects of  factors other than included
imports —which subsume "excluded imports"—to the imports included in the measure.  As we
explained in  US – Line Pipe  451  in the context of Article 3.1 and "unforeseen developments" in this
Report  452, if the competent authority does not provide such an explanation, a panel is not in a position
to find that the competent authority ensured compliance with the clear and express requirement ofnon-attribution under Article 4.2(b) of the  Agreement on Safeguards .
                                                     
449We recall that in  US – Lamb , we stated, in this respect:
As part of th[e] determination [of the existence of a causal link],
Article 4.2(b) states expressly that injury caused to the domestic industry byfactors other than increased imports "shall not be attributed to increased
imports."  In a situation where  several factors  are causing injury "at the
same time", a final determination about the injurious effects caused by
 increased imports   can only be made if the injurious effects caused by all
the different causal factors are distinguished and separated.  Otherwise, any
conclusion based exclusively on an assessment of only one of the causal
factors – increased imports – rests on an uncertain foundation, because it
assumes  that the other causal factors are  not  causing the injury which has
been ascribed to incr eased imports.  The non-attribution language in
Article 4.2(b) precludes such an assu mption and, instead, requires that the
competent authorities assess appropriately the injurious effects of the other
factors, so that those effects may be disentangled from the injurious effects
of the increased imports.  In this way, the final determination rests, properly,
on the genuine and substantial relationship of cause and effect between
increased imports and serious injury.
(Appellate Body Report,  US – Lamb,  para. 179) (original emphasis; underlining added)
450Appellate Body Report, US – Line Pipe, para. 217.
451Ibid., para. 107.
452See  supra ,  paras. 278 and 302.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 147
453. As a result, we are of the view that, in this dispute, the Panel did not err by requiring the
competent authority to "account for the fact that excluded imports may have some injurious impact on
the domestic industry", to ensure that the effects of  these excluded imports are not attributed to the
imports included in the safeguard measure.453  Rather, as we see it, the Panel correctly interpreted the
causation and non-attribution requirements under Articles 2 and 4 of the  Agreement on Safeguards .
454. We note that the United States' appeal of the Panel's findings in this regard is explicitly
limited to the Panel's articulation of the requirement itself.  The United States acknowledges that, inmaking its determinations concerning imports of nine of the ten product categories from sources otherthan Canada and Mexico, the USITC did not comply with the requirement set forth by the Panel, thatis, to "account for the fact that excluded imports may have some injurious impact on the domesticindustry".
 454
455. Accordingly, we see no reason to disturb the Panel's findings for those nine product categories
for which the Panel found that the United States did not account for the effect of imports excludedfrom the safeguard measures.
 455  For those nine product categories, as the Panel found, the United
States has failed to comply with the parallelism requirement, because it did not establish that importscovered by the safeguard measures at issue,  alone ,  satisfy the requirements for the imposition of a
safeguard measure, and the United States has, in effect, acknowledged that it has failed to do so.  Asthis flaw in the USITC's analysis on parallelism affects the United States' right to exclude importsfrom the scope of the measures at issue, there is, in our view, no need for us to address, with respect to
these nine product categories, the Panel's statement that the USITC's parallelism analysis was also
flawed because the USITC did not "actually express the findings required under parallelism withregard to increased imports other than those from Canada, Mexico, Israel and Jordan".
 456
                                                     
453We note that, in its causation analysis, the USITC found for every product a causal link between  all
imports and serious injury; this implies that the subsequently-excluded imports were contributing to the total
injurious effects attributed to all imports.  Moreover, the USITC or individual Commissioners stated, for certain
products (CCFRS, hot-rolled bar, cold-finished bar, welded pipe, FFTJ, stainless steel bar, and tin millproducts), that imports from some sources excluded from the measures contributed "importantly" to seriousinjury.  (USITC Report, Vol. I, pp. 66, 100, 108, 166–167, 178-180, 213, 309–310)
454United States' appellant's submission, para. 358.  The only product category not covered by this
admission is stainless steel rod, a product category which we consider separately, below.
455They are: CCFRS, tin mill products, hot-rolled bar, cold-finished bar, rebar, FFTJ, welded pipe,
stainless steel bar, and stainless steel wire.
456Panel Reports, paras. 10.608, 10.622, 10.632, 10.642, 10.652, 10.659, 10.669, 10.679, and 10.690.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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456. We, therefore,  uphold   the Panel's findings, in paragraphs 10.609, 10.623, 10.633, 10.643,
10.653, 10.660, 10.670, 10.680, 10.692, and the relevant sections of paragraph 11.2 of the Panel
Reports, with respect to CCFRS, tin mill products, hot-rolled bar, cold-finished bar, rebar, FFTJ,
welded pipe, stainless steel bar, and stainless steel wire, that the United States acted inconsistentlywith its obligations under Articles 2.1 and 4.2 of the  Agreement on Safeguards   because, in
establishing whether imports included in the safeguard measure satisfy,  alone ,  the requirements for
the imposition of a safeguard measure, it did not account for the possible injury caused by importsfrom excluded sources.
B. Conclusions with Respect to Stainless Steel Rod
457. We now turn to the Panel's findings concerning the one remaining product category for which
the Panel made somewhat different findings relating to parallelism, stainless steel rod.
458. On stainless steel rod, the Panel, in addr essing the USITC's finding on non-NAFTA imports,
did not refer to the causation or non-attribution analysis.  Instead, it stated:
The Panel agrees with the United States that in a case where excluded
imports account for less than 0.08% of total imports, it would
normally be possible to reach the conclusion that imports from other
sources satisfy the same requirements as all imports do. However, the
Panel is unable to identify … the required findings that establishesexplicitly, with a reasoned and adequate explanation, that imports
from other sources than Canada, Mexico, Israel and Jordan satisfy the
conditions of Article 2.1 as elaborated by Article 4.2 of the
Agreement on Safeguards.  In particular, the rather implicit statement
made that imports other than Canadian and Mexican imports have
increased and that they have caused serious injury to the domestic
industry, does not relate to imports covered by the measure which areimports from sources other than Canada, Mexico, Israel and
Jordan.
 457 (footnote omitted)
459. The Panel also found a second flaw with the USITC's analysis on stainless steel rod.  After
examining the USITC's determination on non-NAFTA imports, the Panel went on to state:
                                                     
457Panel Reports, para. 10.697.WT/DS248/AB/R, WT/DS249/AB/R,
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Also, it may well be that imports from Israel and Jordan were so
small that they could not possibly affect the findings reached,whether about all imports or about non-NAFTA imports.  However,
in the view of the Panel, it would then still be required for the
competent authorities to actually express the findings required under
parallelism with regard to increased imports other than those from
Canada, Mexico, Israel and Jordan.  The standard is that the Member
must establish  explicitly that imports from sources covered by the
measure satisfy all conditions for the right to apply a safeguardmeasure.  For this finding to be made it is not sufficient to merely
find that the exclusion of imports from Israel and Jordan would not
change the conclusions regarding the prerequisites for a safeguard
measure.  The Panel recognizes that if imports from an excluded
source were "small and sporadic" and "virtually non-existent" or"small and non-existent" and "non-existent", it is very likely that the
facts  allow   a finding that imports from sources covered by the
measure do satisfy the conditions for the application of a safeguard
measure.  This, however, still needs to be  established explicitly and
supported with a reasoned and adequate explanation.  458 (original
emphasis; underlining added; footnotes omitted)
460. The United States claims that the Panel "misconstrued" our clarification of the requirement
that findings must be "explicit" in a way that would require the USITC to make "redundantfindings".
 459  The United States contends that the USITC's reasoning with respect to imports from
Israel and Jordan was "complete, clear, and unam biguous", because "imports from Israel and Jordan
were too small to affect the data on which the ITC relied for its conclusions."  460
461. As we said earlier, a "gap" between imports covered under an investigation and imports
falling within the scope of a measure can be justified under Article 2, as elaborated in Article 4.2, onlyif the competent authorities "establish explicitly " that imports from sources covered by the measure
"satisf[y] the conditions for the application of a safeguard measure".
 461  Also, as we have recalled
previously, we stated, in  US – Line Pipe ,  that "'establish[ing] explicitly' implies that the competent
authorities must provide a  ' reasoned and adequate explanation   of how the facts support their
                                                     
458Panel Reports, para. 10.698.
459United States' appellant's submission, heading III.E.3.
460Ibid., para. 340.
461Appellate Body Report, US – Wheat Gluten , para. 98; Appellate Body Report, US – Line Pipe ,
para. 181.  We recall that Article 2.1 of the  Agreement on Safeguards requires a determination that:  (1) a
product is being imported "in such quantities and under such conditions";  (2) "as to cause";  (3) serious injuryor the threat of serious injury to domestic producers. (Appellate Body Report, Argentina – Footwear (EC) ,
para. 92)WT/DS248/AB/R, WT/DS249/AB/R,
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determination'".
 462  Moreover, we also stated in that same appeal that, in order to be "explicit", a
statement must "express distinctly all that is meant;  it must leave nothing merely implied or
suggested;  it must be clear and unambiguous."  463
462. For the measures before us, the USITC made a determination on the basis of an investigation
of imports from  all  sources, and concluded from this investigation that imports from all sources
satisfied the conditions for the application of these safeguard measures.  The USITC then madeadditional findings, which, according to the United States, established that imports from those sourcesincluded in these safeguard measures—that is, imports from sources  other than   Canada, Israel,
Jordan, and Mexico—satisfied, on their own, the conditions of the  Agreement on Safeguards   for the
application of a safeguard measure.
463. The USITC made several references to the excluded countries in several parts of its report.
With respect to stainless steel rod, the USITC stated, in footnote 1437 of its report:
We also have considered whether the exclusion of imports of
stainless rod from Mexico or Canada from our injury analysis would
have affected our finding that imports were a substantial cause of
serious injury to the stainless rod industry.  Because imports of
stainless rod from Mexico and Canada each accounted for an
extremely small percentage of total imports during the period ofinvestigation, INV-Y-180 at Table G-25, we find the exclusion of
these volumes does not change our volumes or pricing analysis in a
significant manner.  Accordingly, our injury analysis would not be
changed in any way by their exclusion.  464 (underlining added)
464. In its "Views on Remedy", the USITC observed that "[i]mports of stainless steel rod from
Jordan are not a substantial cause of serious injury or threat of serious injury because there have beenno imports of stainless steel rod from Jordan during the period of investigation".
 465  Moreover, in its
"Views on Remedy", the USITC indicated, with respec t to stainless steel rod, that imports from Israel,
as well as from certain other sources, "accounted for a small or non-existent percentage of totalimports and had a minimal share of the domestic rod market during the period of investigation."
 466  In
addition, the USITC stated, in its Second Supplementary Report, that "in accord with its findings in
                                                     
462Appellate Body Report, US – Line Pipe , para. 181, referring to Appellate Body Report,
US – Lamb , para. 103.  (original emphasis)
463Appellate Body Report, US – Line Pipe , para. 194.
464USITC Report, Vol. I, p. 223 and footnote 1437 thereto.
465Ibid., p. 405 and footnote 268 thereto.
466Ibid., p. 405.WT/DS248/AB/R, WT/DS249/AB/R,
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the Views on Remedy, … exclusion of imports fr om Israel and Jordan would not change the
conclusions of the Commission or of individual Commissioners."  467
465. These are all the comments by the USITC on which the United States relies as satisfying the
parallelism requirement.  468  At no point did the USITC make a determination on whether imports
from those sources that were ultimately included in the safeguard measure—that is, imports fromthose sources  other than   Canada, Israel, Jordan, and Mexico—satisfied,  alone ,  in and of
themselves, the conditions for the application of a safeguard measure.  Instead, the USITC made  two
separate determinations —one determination that the exclusion of imports from  Canada and Mexico  
would not change the "injury analysis"
 469 of the USITC, and another  separate   determination that the
exclusion of imports from  Israel and Jordan  would not change the conclusions of the USITC.  470
466. The requirement of the  Agreement on Safeguards   to establish explicitly that imports from
sources covered by a measure,  alone ,  satisfy the conditions for the application of a safeguard
measure cannot be fulfilled by conducting a  series of separate and partial   determinations.  For
example, where a WTO Member seeks to establish explicitly that imports from  sources other than A
and B   satisfy the conditions for the application of a safeguard measure, if that Member conducts a
separate investigation, and makes a separate determination, on whether imports from sources  other
than A  satisfy the relevant conditions, and then, subsequently, conducts  another   separate and
                                                     
467USITC Second Supplementary Report, p. 4. (footnote omitted)  In footnote 26 to this statement, the
USITC makes reference to its own and the individual Commissioners' "Views on Remedy" on all product
categories at issue.
468With respect to Israel and Jordan, the United Stat es relies, for all product categories, on product-
specific findings made by the USITC in the views expressed on remedy in its original report.  (United States'
appellant's submission, para. 335)  The United States also relies on the general statement of the USITC,contained in the Second Supplementary Report, that "exc lusion of imports from Israel and Jordan would not
change the conclusion of the Commission or of individual Commissioners." (United States' appellant'ssubmission, para. 338)  With respect to non-NAFTA imports, the United States references its arguments beforethe Panel on product-specific statements by the USITC  (United States' appellant's submission, para. 351 and
footnote 460 thereto;  para. 354 and footnote 463 thereto;  para. 355 and footnote 464 thereto);  in the case of
stainless steel rod, the United States relied, before the Panel, on footnote 1437 of the USITC's report.  (PanelReports, para. 7.1846)  We note that, on appeal, the United States does not argue that the Panel failed toexamine the relevant USITC's findings; rather, the United States disagrees with the conclusions that the Panelderived from its review of these findings.
469USITC Report, Vol. I, p. 223, footnote 1437.
470We note that the USITC provided these two separate findings with respect to almost all product
categories at issue.  For one product category—tin mill products— three   separate findings were provided—one
finding for imports from sources other than Canada, one finding for imports from sources other than Mexico,and one finding that the "exclusion of imports from Israel and Jordan would not change the conclusions of theUSITC or individual Commissioners". (USITC Report, Vol. I, p. 310, footnotes 28 and 29;  USITC SecondSupplementary Report, p. 4)WT/DS248/AB/R, WT/DS249/AB/R,
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distinct investigation, and makes a separate determination, on whether imports from sources  other
than B  satisfy the relevant conditions, then these  two separate   determinations, in our view, do not
demonstrate that imports from sources other than  A and B together  satisfy the requirements for the
imposition of a safeguard measure.  By making these two separate determinations, that Member will,logically, for each of them, be basing its determination, in part, either on imports from A or onimports from B.
 471  If this were permitted, a determination on the application of a safeguard measure
could be easily subjected to mathematical manipulation.  This could not have been the intent of theMembers of the WTO in drafting and agreeing on the  Agreement on Safeguards .
467. We are, therefore, of the view that the Panel raised a valid methodological concern when it
stated that "it would … be required for the comp etent authorities to actually express the findings
required under parallelism with regard to increased imports other than those from Canada, Mexico,
Israel and Jordan."
 472
468. It may not have made a practical difference in the application of the safeguard measures at
issue in this appeal, in as much as, on the facts, the quantity of imports from the excluded countrieswas negligible or virtually non-existent.
 473  However, we are of the view that, rather than making  two
separate determinations —excluding either Canada and Mexico, or, alternatively, Israel and Jordan—
from the underlying data on which it based its overall determination, the USITC should have, as thePanel found
 474, provided  one single joint   determination, supported explicitly by a reasoned and
adequate explanation, on whether imports from  sources  other  than   Canada ,  Israel ,  Jordan ,  and 
Mexico ,  by themselves, satisfied the conditions for the application of a safeguard measure.
469. The United States argues that "[i]n the context in which [the USITC's statement concerning
Israel and Jordan] appeared, [its] meaning [ ] was clear: imports from Israel and Jordan were either
                                                     
471Clearly, where a Member examines imports from sources  other than A ,  it will be  including ,  in its
analysis, imports from B;  conversely, when examining imports from sources  other than B , the Member will be
 including  in its analysis imports from A.  Thus, at each step of the investigation, the Member will be including
the effects of some of the excluded imports in its analysis.
472Panel Reports, para. 10.622.
473We note that we are  not  addressing the question of the appropriate interpretation, in this respect, of
the parallelism requirement in circumstances where imports from Israel and Jordan were  zero  in every year of
the period of investigation.  We note that, for the product  category at issue, stainless steel rod, contrary to the
United States' assertion in paragraphs 337 and 342 of its appellant's submission, according to the data tablescontained in the USITC report and referenced in paragraph 336 of the United States' appellant's submission,
imports from Israel during the period of investigation were  not zero   in every year.  (USITC Report,
Appendix E, Table E-3, p. E-5)
474Panel Reports, para. 10.698.WT/DS248/AB/R, WT/DS249/AB/R,
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non-existent or so small that the Commission's conclusions for imports from sources other than
Canada and Mexico were also applicable to imports from sources other than Canada, Mexico, Israel
and Jordan."  475  The United States also submits that "[t]he Panel appears to believe that it was not
enough for the ITC to state that the findings that it made with respect to non-NAFTA imports wereequally applicable to non-FTA imports.  Instead, the ITC apparently had to repeat the findings wordfor word in a section specifically addressing non-FTA imports."
 476  The United States argues that such
a finding would have been "redundant".  477  The United States also points out that, in the case of
stainless steel rod, the Panel accepted that "it is adequate for an authority to state that, because thevolume of imports is  extremely small ,  the authority's conclusions with respect to  all imports   are
also applicable to imports from  all sources other than excluded sources ".
 478  The United States
contends that the Panel should have adopted the same analytical approach when reviewing the
USITC's finding on imports from sour ces other than Israel and Jordan.
470. We are not persuaded by these arguments of the United States.  First, we do not find any
explicit statement in the USITC's report that the USITC's findings relating to imports from sourcesother than  Canada and Mexico   were also applicable to imports from sources other than  Canada ,
Israel , Jordan , and Mexico .
 479  Secondly, with respect to the Panel's findings on the exclusion of
                                                     
475United States' appellant's submission, para. 339.  The United States appears to be suggesting that the
statement of the USITC that the "exclusion of imports from Israel and Jordan would not change the conclusionsof the Commission or of individual Commissioners" refers to the conclusions concerning  non-NAFTA   imports
(rather than to the conclusions concerning  all  imports).  However, the USITC did not explicitly make this point
and this reading of the USITC's finding is not evident to us.  Moreover, the United States bases this suggested
reading of the USITC's statement on the fact that "t his statement immediately preceded the ITC's parallelism
analysis for imports from sources other than Canada and Mexico." (United States' appellant's submission,para. 339)  However, we note that, for stainless steel rod, the USITC's findings on non-NAFTA imports arecontained in the original report, whereas the statement wi th respect to the exclusion of imports from Israel and
Jordan is contained in the Second Supplementary Report.   Consequently, the statement concerning the exclusion
of imports from Israel and Jordan did not "immediately prece[de]" the USITC's analysis of non-NAFTA imports
of stainless steel rod.  Therefore, we read the statemen t that the "exclusion of imports from Israel and Jordan
would not change the conclusions of the Commission or of individual Commissioners", as far as stainless steelrod is concerned, as referring not to the USITC's conc lusions concerning non-NAFTA imports, but rather to the
USITC's conclusions concerning  all  imports.
476United States' appellant's submission, para. 343.
477Ibid., para. 343.  At the oral hearing, the United States stated that the combination of particular
findings of the USITC provides the finding that is re quired concerning imports from all excluded sources.
478United States' appellant's submission, para. 341. (emphasis added)
479We note, moreover, that in its statement, contained in the Second Supplementary Report, that "the
exclusion of imports from Israel and Jordan would not change the conclusions of the Commission or individualCommissioners", the USITC explicitly refers to its findings under the section of the original report entitled
"Views on Remedy of the Commission"; in that section, for stainless steel rod, under the heading "Country
Exclusion", the USITC mentions Canada and Mexico, as well as Israel and Jordan, separately, and, in our view,does not discuss any connection between imports from these four sources and does not refer to these foursources together.  (USITC Report, Vol. I, p. 405 and footnote 268 thereto)WT/DS248/AB/R, WT/DS249/AB/R,
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Canada and Mexico for stainless steel rod, the Panel did, indeed, state that "in a case where excluded
imports account for less than 0.08% of total imports, it would normally be possible to reach the
conclusion that imports from other sources satisfy the same requirements as all imports do".
 480  The
United States does not mention, however, that the Panel, after the quoted sentence, immediately wenton to state that it was "unable to identify … the required finding that establishes explicitly … thatimports from other sources than Canada, Mexico, Israel and Jordan satisfy the conditions ofArticle 2.1".
 481  In other words, in its findings on the USITC's determination on imports of stainless
steel rod from sources other than Canada and Mexico, the Panel raised the same valid methodologicalconcern that it did with respect to the USITC's fi nding on imports from sources other than Israel and
Jordan—namely, that, instead of a single determination concerning all included imports, the USITCmade two separate determinations, excluding, in each of these determinations, only some of the non-
covered sources.  For this reason, we do not see any inconsistency in the Panel's logic.
471. As for the argument that the USITC's findings on imports from sources other than Canada and
Mexico should have been read by the Panel as applying simultaneously to imports from sources otherthan Canada, Israel, Jordan, and Mexico  by virtue of the small import volumes at issue ,  we observe
that the  Agreement on Safeguards   does not provide for any different application of the parallelism
requirement based on the volume of imports.
482  With this argument, the United States is asking us to
read something into the  Agreement on Safeguards   that is not there, and this we cannot do.  483
472. As we explained in  US – Wheat Gluten   and  US – Line Pipe ,  a competent authority must
establish, unambiguously, with a reasoned and adequate explanation, and  in a way that leaves
nothing merely implied or suggested ,  that imports from sources covered by the measure,  alone , 
satisfy the requirements for the application of a safeguard measure.  We are  not  suggesting that very
low imports volumes, either from some, or from all, of the excluded sources at issue, are irrelevant fora competent authority's findings or the reasoned and adequate explanation underpinning suchfindings.  We recognize that, where import volumes from excluded sources are very small, it is quitepossible that the explanation underpinning the competent authority's conclusion need not be as
                                                     
480Panel Reports, para. 10.697. (footnote omitted)
481Ibid.
482Some of the Complaining Parties suggested that the United States was, in effect, seeking to invoke a
de minimis   exception. (European Communities' appellee's submission, para. 347;  Norway's appellee's
submission, para. 219)  At the oral hearing, the United States argued that it was not invoking a  de minimis  
principle, but rather a "principle of explanation".
483Appellate Body Report,  India – Quantitative Restrictions , para. 94;  Appellate Body Report,  India –
Patents (US) , para. 45.WT/DS248/AB/R, WT/DS249/AB/R,
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extensive as in circumstances where the excluded sources account for a large proportion of total
imports.  Nevertheless, even if an explanation need not necessarily be extensive, the requisite explicit
finding  must still be provided .  That finding must be contained in the authority's report, must be
supported by a reasoned and adequate explanation, and—as we stated above—must address importsfrom all covered sources, excluding  all  of the non-covered sources.  Nowhere in the  Agreement
on Safeguards  is there any indication that these important principles can be disregarded in
circumstances where imports from some or all sources are at low levels.
473. For these reasons, we do not agree with the United States that the Panel required the USITC
to make "redundant findings".
 484  Rather, the Panel correctly noted that the USITC had not provided
the requisite finding, supported by a reasoned and adequate explanation—namely, whether theexclusion of  all  non-covered sources would change the USITC's conclusion about the prerequisites
for the application of a safeguard measure.  The Panel was certainly aware—as we are—of the very
small import volumes at issue.  However, the USITC had not made the requisite finding, and, aspanels may not conduct  de novo   reviews, the Panel could not make the determination for the
competent authority, even if the data needed for ma king such determination could be gleaned from the
competent authority's report.  Therefore, we cannot fault the Panel for having applied faithfully the
requirements of the  Agreement on Safeguards ,  as clarified by us in our previous reports.  Similarly,
the mere fact that import volumes were low—however low such import volumes may be—cannotentitle the Panel to make a finding that should have been made by the USITC.  For these reasons, we
do not reverse the Panel's findings on stainless steel rod.
474. We, therefore,  uphold   the Panel's findings, in paragraph 10.699, and in the relevant section
of paragraph 11.2 of the Panel Reports, with respect to stainless steel rod that the United States actedinconsistently with its obligations under Articles 2.1 and 4.2 of the  Agreement on Safeguards  
because it failed to establish explicitly, with a reasoned and adequate explanation, that importsincluded in the safeguard measure satisfy,  alone ,  the requirements for the imposition of a safeguard
measure.
                                                     
484United States' appellant's submission, heading III.E.3.WT/DS248/AB/R, WT/DS249/AB/R,
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VIII.  Causation
475. We next address the issue of causation.  On this issue, the Panel found that, for nine product
categories
 485, the USITC failed to provide a reasoned and adequate explanation demonstrating that a
"causal link" existed between increased imports and serious injury, as required by Articles 2.1, 4.2(b)and 3.1 of the  Agreement on Safeguards .
476. For seven of those product categories—CCFRS, hot-rolled bar, cold-finished bar, rebar,
welded pipe, FFTJ, and stainless steel bar—the Panel found that the USITC's "causal link"determination was "inconsistent with Articles 4.2(b), 2.1 and 3.1 of the Agreement on Safeguards".
 486
477. For the other two product categories—tin mill products and stainless steel wire—the Panel
found that the USITC report did not contain "a reasoned and adequate explanation of how the factssupport" the "causal link" determination, "as required by Articles 2.1, 4.2(b) and 3.1 of the Agreementon Safeguards", because the determination was based on alternative explanations given by differentCommissioners that, in the Panel's view, could not be reconciled.
 487
478. The United States claims that the Panel erred in making these findings on causation, and
requests that we reverse all nine findings of the Panel.  However, given the different groundsarticulated by the Panel for, on the one hand, tin mill products and stainless steel wire, and, on theother hand, the other seven products, the United States makes two separate claims.  The United States
addresses tin mill products and stainless steel wire in one claim
 488, and the other seven products in
another claim.  489  We will consider the two claims separately.
A. CCFRS, Hot-Rolled Bar, Cold-Finished Bar, Rebar, Welded Pipe, FFTJ, and
Stainless Steel Bar
479. For the seven products other than tin mill products and stainless steel wire, we begin by
recalling that Members may apply safeguard measures " only" when, as a result of unforeseen
                                                     
485CCFRS (see Panel Reports, para. 10.419);  tin m ill products (see Panel Reports, para. 10.422);  hot-
rolled bar (see Panel Reports, para. 10.445);  cold-fini shed bar (see Panel Reports, para. 10.469);  rebar
(see Panel Reports, para. 10.487);  welded pipe (see Panel Reports, para. 10.503);  FFTJ (see Panel Reports,
para. 10.536);  stainless steel bar (see Panel Reports, para. 10.569);  stainless steel wire (see Panel Reports,
para. 10.573).
486Panel Reports, paras. quoted in footnote 485.
487Ibid.
488United States' appellant's submission, section F,  paras. 359–396;  see also literal C in para. 397.
489United States' appellant's submission, section D,  paras. 139–314; see also literal D in para. 397.WT/DS248/AB/R, WT/DS249/AB/R,
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developments and of the effect of obligations incurred, including tariff concessions, a product is being
imported in such increased quantities and under such conditions as to cause or threaten to cause
serious injury to the domestic industry that produces like or directly competitive products.  It is
"only"  if these prerequisites set forth in Article  XIX:1(a) of the GATT 1994 and in the  Agreement
on Safeguards   are shown to exist that the right to apply a safeguard measure arises.
480. Furthermore,  all  of these prerequisites must be established in the investigation for products
being imported from sources included in the application of the measure, as "the imports included inthe determinations made under Articles 2.1 and 4.2 should correspond to the imports included in theapplication of the measure, under Article 2.2" of the  Agreement on Safeguards .
 490
481. In this case, the Panel decided to exercise judicial economy with respect to all claims on
"serious injury".  491  Consequently, the Panel made no findings on whether the USITC had
demonstrated that the domestic industry in the United States was suffering "a significant overall
impairment".  492  The Panel also decided to exercise judicial economy with respect to all claims
relating to the appropriate definition of the "imported product", the "like product", and the "domesticindustry".
 493  For this reason, the Panel relied on a number of assumptions  494 in assessing whether the
USITC's "investigation demonstrate[d], on the basis of objective evidence, the existence of the causallink between increased imports of the product concerned and serious injury or threat thereof
 ". 495
                                                     
490Appellate Body Report, US – Wheat Gluten , para. 96.
491Panel Reports, para. 10.700.
492Article 4.1(a) of the Agreement on Safeguards .
493Panel Reports, para. 10.700.
494In paragraph 10.278 of the Panel Reports, the Panel stated that it "assumed for the purposes of its
consideration of the issue of causatio n", that the relevant domestic producers had been correctly defined and that
serious injury or threat thereof existed.  We note that the Panel found no "increased imports" for five productcategories – CCFRS, hot-rolled bar, stainless steel rod, tin mill, and stainless steel wire.  However, the Panel
must also have assumed, tacitly, that, for the purposes of its causation analysis, imports had increased for those
five products.  We do not see anything improper  per se   in panels making such assumptions, especially when
doing so enables panels to make findings they otherwise would not have made, thereby facilitating appellate
review.  We are mindful that the volume and complexity of this case may have prompted the Panel to exercise
judicial economy on several issues and to rely on the corresponding inter-dependent assumptions.  We note,however, that the cumulation of several inter-related assumptions could have affected our ability to complete thePanel's legal analysis had we pursued a ruling on causation.
495Article 4.2 (b) of the  Agreement on Safeguards .  We note that "serious injury" is the purported effect
that should be causally linked by the competent author ity to "increased imports".  When the determination of
"serious injury" is challenged, a panel may only conclude definitively that "the existence of the causal link" hasbeen adequately demonstrated  after   having established that "increased imports"  and  "serious injury" were
adequately determined in the investigation.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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482. We have found earlier
 496 that the ten measures at issue are inconsistent with Article XIX:1(a)
of the GATT 1994 and Article 3.1 of the  Agreement on Safeguards ,  and, in consequence, we have
upheld the Panel's finding that the USITC failed to provide a reasoned and adequate explanation
demonstrating that the alleged "unforeseen developments"  resulted   in imports of the ten products to
which the measures at issue apply.  Also, on the issue of "parallelism", we have found  497 that the ten
measures at issue are inconsistent with Articles 2.1 and 4.2 of the  Agreement on Safeguards ,  and, in
consequence, we have upheld the Panel's finding that the USITC failed to demonstrate that importsfrom sources covered by the safeguard measures at issue,  alone ,  were being imported into the
territory of the United States "in such increased quantities, absolute or relative to domestic production,and under such conditions as to cause or threaten to cause serious injury to the domestic industry thatproduces like or directly competitive products", as required in Article 2.1 and further developed in
Article 4.2 of the  Agreement on Safeguards.
483. As we have already found that the measures before us are inconsistent with Article XIX:1(a)
of the GATT 1994 and with Articles 2.1, 3.1, and 4.2 of the  Agreement on Safeguards ,  it is
unnecessary, for the purposes of resolving this dispute, to rule on whether the Panel was correct infinding that the United States also acted inconsistently with Articles 2.1 and 4.2 of the  Agreement
on Safeguards   because the USITC report failed to demonstrate the existence of a "causal link"
between increased imports from  all  sources  (that is, imports covered by the measures  and  imports
not covered by the measures) and serious injury to the domestic industry.  We, therefore, decline to
rule on the issue of causation.  Accordingly, and as we have not examined the Panel's findings on
causation for the seven products that are the focus of this claim by the United States—CCFRS, hot-rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, and stainless steel bar—we neither reverse noruphold those findings.
484. At the oral hearing in this appeal, none of the participants appeared to disagree that, if we
were to uphold the Panel's findings on "unforeseen developments", parallelism, and/or increasedimports, it would not be  necessary   for us to rule on the claims raised on causation.  Nevertheless,
several participants expressed an interest in having us rule on causation as it would provide guidanceto Members on applying safeguard measures in the future consistently with their WTO obligations.
The United States expressed a strong preference for us to rule on causation, stating that "[it would] be
                                                     
496See  supra , para. 330.
497See  supra , para. 456.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 159
important for us in terms of understanding what our obligations are under the Agreement [on
Safeguards]  and what we have to do to comply with them".  498
485. Guidance may be found in our previous rulings.  In  US – Line Pipe ,  for example, we
interpreted Article 4.2(b) of the  Agreement on Safeguards   as establishing:
… two distinct legal requirements for competent authorities in the
application of a safeguard measure.  First, there must be a
demonstration   of the " existence   of the causal link between increased
imports of the product concerned and serious injury or threat
thereof  ".  Second, the injury caused by factors other than the
increased imports must not be attributed to increased imports.  499
(emphasis added)
486. Moreover, in  US – Lamb ,  when examining the requirement of Article 4.2(b) that the
determination as to increased imports must be "on the basis of objective evidence", we explained that"objective evidence" means "objective data".
 500  Thus, Article 4.2(b) requires a "demonstration" of the
"existence" of a causal link, and it requires that this demonstration must be based on "objective data".Further, this "demonstration" must be included in the report of the investigation, which should "set[
 ]
forth the findings and reasoned conclusions, as required by Articles 3.1 and 4.2(c)" of the  Agreement
on Safeguards . 501
487. In  US – Line Pipe ,  we also found that, in the context of "non-attribution",  competent
authorities:  (i) "must 'establish explicitly' that imports from sources covered by the measure 'satisf[y]
the conditions for the application of a safeguard measure, as set out in Article 2.1 and elaborated inArticle 4.2 of the  Agreement on Safeguards '"
 502;  and (ii) must provide a "reasoned and adequate
explanation  of how the facts support their determination".  503
                                                     
498United States' response to questioning at the oral hearing.
499Appellate Body Report,  US – Line Pipe ,  para. 208.
500Appellate Body Report,  US – Lamb ,  para. 130.
501Appellate Body Report,  US – Line Pipe ,  para. 236.
502We first made this assertion in  US – Wheat Gluten ,  in the context of a discussion on parallelism.
(Appellate Body Report,  US – Wheat Gluten ,  para. 98)  In  US – Line Pipe ,  we explained that the same
reasoning would apply to Article 4.2(b), last sentence. (Appellate Body Report,  US – Line Pipe ,  para. 216)
503We made this assertion originally in  US – Lamb   in the context of a discussion of a claim under
Article 4.2(a) of the  Agreement on Safeguards.  (Appellate Body Report,  US – Lamb ,  para. 103)  In US – Line
Pipe, we explained that the same reasoning would apply to Article 4.2(b), last sentence. (Appellate Body
Report, US – Line Pipe, para. 216)WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
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488. In  US – Wheat Gluten ,  we found that "the term 'causal link' denotes … a relationship of
cause and effect"
 504 between "increased imports" and "serious injury".  The former—the purported
cause—contributes to "bringing about", "producing" or "inducing" the latter  505—the purported effect.
The "link" must connect, in a "genuine and substantial"  506 causal relationship, "increased imports",
and "serious injury".
489. In sum, the  Agreement on Safeguards —in Article 2.1, as elaborated by Article 4.2, and in
combination with Article 3.1—requires that competent authorities demonstrate the  existence   of a
"causal link" between "increased imports" and "serious injury" (or the threat thereof) on the basis of"objective evidence".  In addition, the competent authorities must provide a reasoned and adequateexplanation of how facts (that is, the aforementioned "objective evidence") support theirdetermination.  If these requirements are not met, the right to apply a safeguard measure does not
arise.
490. In  EC – Tube or Pipe Fittings ,  we found that the non-attribution language of Article 3.5 of
the  Anti-Dumping Agreement   does not require,  in each and every case ,  an examination of the
collective   effects of other causal factors, in addition to an examination of the  individual  effects of
those causal factors.
 507  We explained there that an assessment of the collective effects of other causal
factors "is  not always   necessary to conclude that injuries ascribed to dumped imports are actually
caused by those imports and not by other factors."  508  We acknowledged, however, that "there may be
cases where, because of the specific factual circumstances therein, the failure to undertake an
examination of the collective impact of other causal factors would result in the investigating authority
improperly attributing the effects of other causal factors to dumped imports".  509  We explained further
that "an investigating authority is not required to ex amine the collective impact of other causal factors,
provided that ,  under the specific factual circumstances of the case, it fulfils its obligation not to
attribute to dumped imports the injuries caused by other causal factors".  510
                                                     
504Appellate Body Report,  US – Wheat Gluten ,  para. 67.
505Ibid.
506Ibid.,  para. 69.
507Appellate Body Report, EC – Tube or Pipe Fittings , para. 190.
508Ibid., para. 191. (emphasis added)
509Appellate Body Report,  EC – Tube or Pipe Fittings , para. 192.
510Ibid.  (emphasis added)WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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Page 161
491. Lastly, it may be useful to refer to our finding in  EC – Tube or Pipe Fittings   in respect of the
relevance of factors that "had effectively been found not to exist".  511  In that case, the competent
authority had found, contrary to the submissions of the exporters, that the difference in costs of
production between the imported product and the domestic product was virtually non-existent andthus did not constitute a "factor other than dumped imports" causing injury to the domestic industryunder Article 3.5 of the  Anti-Dumping Agreement .  Consequently, we found that there was no reason
for the investigating authority to undertake the analys is of whether the alleged "other factor" had any
effect   on the domestic industry under Article 3.5
 512 because the alleged "other factor" "had effectively
been found  not  to exist".  513  In other words, we did not rule that minimal (or not significant) factors
need not be considered by the competent authorities in conducting non-attribution analyses.  Rather,we ruled that only factors that have been found to exist need be taken into account in the non-
attribution analysis.
B. Tin Mill Products and Stainless Steel Wire
492. We turn now to the two other products on which the Panel found that the USITC failed to
provide a reasoned and adequate explanation of how the facts supported its determination that a"causal link" existed between increased imports and serious injury to the domestic industry thatproduces like or directly competitive products.  The Panel based its findings on causation for tin mill
products and stainless steel wire on the Panel's previous conclusion that the United States was not
entitled to apply safeguard measures to imports of those two products because the relevantdeterminations made by the USITC were supported by findings of different Commissioners that couldnot be reconciled.
 514  We have already reversed those findings.  515
493. Accordingly, we also  reverse   the Panel's findings on causation made, respectively, in
paragraphs 10.422, 10.573, and the relevant sections of paragraph 11.2 of the Panel Reports, that theUSITC report does not contain a reasoned and adequate explanation of how the facts support thedetermination that increased imports of tin mill products and stainless steel wire  caused   serious
injury to the relevant domestic industry as required by Articles 2.1, 4.2(b), and 3.1 of the  Agreement
on Safeguards   because the determination was based on different findings by the USITC
                                                     
511Appellate Body Report,  EC – Tube or Pipe Fittings , para. 178.
512Ibid. , para. 177.
513Ibid. , paras. 178. (original emphasis)
514Panel Reports, paras. 10.422 and 10.572 –10.573.
515See  supra , paras. 419 and 429.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 162
Commissioners.  This is not to say that we find that a causal link  has been   established with respect
to tin mill products and stainless steel wire.  We are simply saying that the reasoning used by the
Panel to find that the USITC failed to establish a causal link for these products is flawed, and does not
support the Panel's conclusion that no such link was established.  We make no finding on whether ornot a causal link has been established for these products.  In the light of our other findings in thisReport that all ten safeguard measures are inconsistent with Article XIX:1(a) of the GATT 1994 andArticles 2.1, 3.1 and 4.2 of the  Agreement on Safeguards ,  it is not necessary, for purposes of
resolving this dispute, to make further rulings on causation related to tin mill products and stainlesssteel wire.
IX. Article 11 of the DSU
494. In its Notice of Appeal, the United States alleged that the Panel "acted inconsistently with
Article 11 of the DSU in that it failed to make an objective assessment of the matter before it,including an objective assessment of the facts of the case and the applicability of and conformity withGATT 1994 and the Safeguards Agreement."
 516  In its appellant's submission, the United States'
arguments under Article 11 are intermingled with its arguments on the Panel's findings on "unforeseendevelopments"
 517 and with its arguments on the Panel's causation analysis.  518
495. Article 11 of the DSU provides:
The function of panels is to assist the DSB in discharging its
responsibilities under this Understanding and the covered
agreements.  Accordingly, a panel should make an objective
assessment of the matter before it, including an objective assessment
of the facts of the case and the applicability of and conformity with
the relevant covered agreements, and make such other findings aswill assist the DSB in making the recommendations or in giving the
rulings provided for in the covered agreements.  Panels should
consult regularly with the parties to the dispute and give them
adequate opportunity to develop a mutually satisfactory solution.
                                                     
516Notice of Appeal, WT/DS248/17, WT/DS249/11, WT/DS251/12, WT/DS252/10, WT/DS253/10,
WT/DS254/10, WT/DS258/14, WT/DS259/13, 14 August 2003, p. 4, para. 6.
517United States' appellant's submission, paras. 77–79.
518Ibid. , paras. 160–161.  The United States clarified during the oral hearing that it was not pursuing its
claim, set out in paragraph 6 of its Notice of Appeal, that the Panel had failed to meet its obligations underArticle 11 because it had made self-contradictory findings.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 163
496. In response to our questioning during the oral hearing, the United States stated that it was not
making any "specific claims under Article 11", and th at it was for us to decide whether a ruling on
Article 11 of the DSU was necessary.  519  The United States asserted that the Panel's allegedly
incorrect conclusions with respect to Articles 2.1, 3.1, and 4 of the  Agreement on Safeguards   and
Article XIX of the GATT 1994 "resulted partly from its failure to observe its obligations underArticle 11."
 520  Therefore, the United States said that it did not make a claim under Article 11 that is
"separate and distinct"  521 from its claims with respect to the substance of the Panel's analysis.
497. As we have stated previously, "not every failure by the Panel in the appreciation of the
evidence before it can be characterized as failure to make an objective assessment of the facts."  522
Similarly, not every error of law or incorrect legal interpretation attributed to a panel constitutes afailure on the part of the panel to make an objective assessment of the matter before it.
498. A challenge under Article 11 of the DSU must not be vague or ambiguous.  On the contrary,
such a challenge must be clearly articulated and substantiated with specific arguments.  An Article 11claim is not to be made lightly, or merely as a subs idiary argument or claim in support of a claim of a
panel's failure to construe or apply correctly a particular provision of a covered agreement.
 523
A claim under Article 11 of the DS U must stand by itself and be substantiated, as such, and not as
subsidiary to another alleged violation.
499. The United States' arguments on Article 11 of the DSU are mentioned only in passing in its
appellant's submission.  Nowhere do we find a clearly articulated claim or specific arguments that
would support such a claim.  Moreover, the United States did not clarify its challenge under Article 11
of the DSU during the oral hearing.  In sum, the United Stated has not substantiated its claim that thePanel acted inconsistently with Article 11 of the DSU, and this claim must therefore fail.
                                                     
519United States' response to questioning at the oral hearing.
520Ibid.
521Ibid.
522Appellate Body Report,  Japan – Agricultural Products II ,  para. 141.
523The United States further clarified during the oral hearing that if we were to conclude that the Panel
erred in its findings on Article 4.2(b) of the  Agreement on Safeguards ,  it would not be necessary for us to reach
its claim under Article 11.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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X. Article 12.7 of the DSU
500. The United States also contends that the Panel acted inconsistently with its obligations under
Article 12.7 of the DSU by failing to provide "the basic rationale" for its findings and conclusions, inthe context of its analysis of "unforeseen developments" under Article XIX:1(a) of the GATT 1994.
 524
501. The United States argues that the Panel did not articulate, "except in conclusory fashion", the
reasons for finding that the USITC did not provid e "reasoned conclusions" as required by Article 3.1
of the  Agreement on Safeguards . 525  The United States maintains that the Panel merely concluded
that the USITC's demonstration of "unforeseen developments" was "plausible, but … not sufficiently
supported and explained", without pointing to any evidence that undermined any of the USITC's
conclusions, or providing any alternative explanation.  526  Accordingly, the United States submits that
"the Panel failed to set forth explanations and reasons sufficient to disclose its justifications for itsfindings and recommendations."
 527
502. Article 12.7 of the DSU reads, in relevant part:
… the report of a panel shall set out the findings of fact, the
applicability of relevant provisions and the basic rationale behind any
findings and recommendations that it makes.
503. We have already reviewed the Panel's findings on the USITC's analysis of "unforeseen
developments".  Based on our review of the Panel's reasoning, it appears to us that the Panel
considered in detail the evidence that was before the USITC, and provided detailed explanations of
how and why it concluded that the USITC had failed to demonstrate, through a reasoned and adequateexplanation, that the alleged "unforeseen developments"  resulted   in increased imports of  each 
product subject to a safeguard measure.
 528  The Panel explains, for instance, that, although the USITC
report "describes a plausible set of unforeseen developments that  may have resulted   in increased
imports to the United States from various sources, it falls short of demonstrating that such
                                                     
524In its Notice of Appeal, the United States made a general claim that the Panel acted inconsistently
with Article 12.7 of the DSU.  Although in its appellant's submission the United States made reference toArticle 12.7 in the context of its claims regarding "unforeseen developments", "causation", as well as
"parallelism", in response to questioning at the oral hearing, the United States clarified that its claim under
Article 12.7 related exclusively to the Panel's findings on "unforeseen developments".
525United States' appellant's submission, para. 95.
526Ibid.
527Ibid.
528The Panel's reasoning is explained, in particular, in Panel Reports, paras. 10.121-10.150.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 165
developments  actually resulted   in increased imports into the United States causing serious injury to
the relevant domestic producers."  529  The Panel then goes on to say that:
… even if "large volumes of foreign steel production were displaced
from foreign consumption" this does not, in itself, imply that imports
to the United States increased as a result of unforeseen developments.
Article XIX of GATT, however, requires a demonstration that the
unforeseen development resulted in  increased imports into  the
United States.  In our view, the USITC's explanation failed to linkthese steel market displacements to the increased imports  into the
United States  at issue.
 530 (original emphasis)
504. In our view, in making these statements, the Panel has sufficiently set out in its Reports the
"basic rationale" for its finding that the USITC failed to explain how, though "plausible", the"unforeseen developments" identified in the report in fact  resulted   in increased imports of the
specific products subject to the safeguard measures at issue.
505. The United States also argues that the Panel did not explain why the USITC failed to
demonstrate that the alleged "unforeseen developments" resulted in increased imports of each of the
products to which the safeguard measures apply, but rather "simply assumed that the ITC's
demonstration, which focused on macroeconomic events and relied on broad economic indicators,could not suffice as a demonstration for any specific measure."
 531
506. In our view, the Panel did not simply  assume ,  but rather clearly pointed to, a deficiency in
the USITC's reasoning.  The Panel reviewed the USITC's findings and found that the USITC failed todemonstrate that the "plausible" unforeseen developments did, in fact, result in increased imports ofthe specific products subject to the safeguard measures at issue.  Because the USITC, according to theUnited States, relied on macroeconomic events having effects across the respective industries, it wasfor the USITC to show how those events were rele vant to each product covered by each of the
safeguard measures at issue.  As the United States itself acknowledges, "Article 3.1 assigns the
competent authorities – not the panel – the obligation to 'publish a report setting forth  their  findings
and reasoned conclusions reached on all pertinent issues of fact and law'."
 532 Therefore, it was for the
USITC, and not for the Panel, to explain how the facts supported its determination with respect to"unforeseen developments".  The argument of the United States in this appeal seeks to shift the                                                     
529Panel Reports, para. 10.122 (emphasis added)
530Panel Reports, para. 10.123. (original emphasis; footnote omitted)
531United States' appellant's submission, para. 82.
532Ibid., para. 55 (original emphasis).WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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burden of this demonstration to the Panel, whose func tion, in this regard, is confined to assessing the
adequacy of the "reasoned conclusions" put forward by the competent authority.  We agree with the
Panel that the USITC's demonstration was insufficient, and we find no error in the Panel's explanation
of that finding.
507. Although the United States may not agree with the rationale provided by the Panel for its
findings, we find that the Panel set out, in its Reports, a "basic rationale" consistent with therequirements of Article 12.7 of the DSU.  Accordingly, we reject the United States' claim relating tothe Panel's alleged failure to provide a "basic rationale" for its finding concerning Article XIX:1(a) ofthe GATT 1994.
XI. Conditional Appeals
508. The Complaining Parties request us to find that  the United States acted inconsistently with
Articles 2.1, 4.1(c), and 5.1 of the  Agreement on Safeguards .  China also requests us to find that the
United States acted inconsistently with Article 9.1 of the  Agreement on Safeguards .  These requests,
however, are conditional.  To reach these claims we would, first, need to reverse the finding made bythe Panel, in paragraph 10.705 of the Panel Reports, that all ten safeguard measures imposed by theUnited States "were deprived of a legal basis".
 533  We have not done so.
509. In a previous section of this Report  534, we found that the ten measures at issue are inconsistent
with Article XIX:1(a) of the GATT 1994 and Article 3.1 of the  Agreement on Safeguards ,  and we
consequently upheld the Panel's finding that the USITC failed to provide a reasoned and adequateexplanation demonstrating that the alleged "unforeseen developments"  resulted   in increased imports
of the ten products to which the measures at issue apply.
510. Likewise, in examining the issue of "parallelism", we also found
 535 that the ten measures at
issue are inconsistent with Articles 2.1 and 4.2 of the  Agreement on Safeguards ,  and we
consequently upheld the Panel's relevant findings that the USITC failed to demonstrate that importsfrom sources covered by the safeguard measures at issue,  alone ,  were being imported into the
territory of the United States "in such increased quantities, absolute or relative to domestic production,
and under such conditions as to cause or threaten to cause serious injury to the domestic industry that
                                                     
533Brazil, Japan, and Korea formulated their conditional appeal in different terms, which will be
described and addressed in the paragraphs below.
534Supra , para. 330.
535See  supra , paras. 456 and 474.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 167
produces like or directly competitive products", as required by Article 2.1 and further elaborated in
Article 4.2 of the  Agreement on Safeguards.
511. Consequently, we do not disturb the finding made by the Panel, in paragraph 10.705 of the
Panel Reports, that all ten safeguard measures imposed by the United States "were deprived of a legalbasis".  Therefore, the condition on which some of the Complaining Parties request us to rule on thequestion of whether the United States, by imposing the safeguard measures at issue, actedinconsistently with its obligations under Articles 2.1, 4.1(c), 5.1, and 9.1 of the  Agreement on
Safeguards ,  does not arise.  In these circumstances, there is no need for us to examine these
conditional appeals.
 536
512. Finally, we note that, in addition, Brazil, Japan, and Korea, in their joint appellants'
submission, condition their cross-appeal with respect to Article 5.1 of the  Agreement on Safeguards
on the event that we uphold or modify the Panel's findings on causation.  In this event, these parties
request us to complete the analysis "regarding the failure of the United States to adequately analyzecausation and to find that the United States failed to ensure that its safeguard measures were limited tothe extent necessary, as required by Article 5.1."
 537  Similarly, in the event that we uphold the Panel's
findings on causation, New Zealand requests us to find that the United States failed to comply withArticle 5.1 of the  Agreement on Safeguards .  Alternatively, in the event that we reverse the Panel's
findings with respect to increased imports and causation, Brazil, Japan, and Korea request us toexamine whether the safeguard measures, as explained by the United States in its " ex post   economic
analysis and model"
 538, comply with Article 5 of the  Agreement on Safeguards .  In a previous section
of this Report, we decided not to rule on the findings made by the Panel on causation  539 with respect
to CCFRS, hot-rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, and stainless steel bar.Consequently, the aforementioned conditions do not ar ise for those seven products.  As for the two
remaining products, namely, tin mill products and stainless steel wire, we reversed the Panel's
                                                     
536We note that Brazil, Japan, and Korea, in their conditional appeal on whether the USITC acted
inconsistently with Articles 2.1 and 4.1(c) of the  Agreement on Safeguards  by "grouping [  ] CCFRS products
into a single like product" (see Brazil's, Japan's, and Korea's other appellants' submission, para. 4), request that
we address this claim in the event that we (i) disagree with the Panel's finding that the safeguards measures are"deprived of a legal basis";  (ii) reverse an aspect of any of the Panel's findings against the United States withrespect to CCFRS;  or (iii) conclude that the Pane l should have issued a like product ruling to support its
CCFRS causation finding.  We note that, in the light of our rulings, none of the conditions listed by Brazil,Japan, and Korea arises.
537Brazil's, Japan's, and Korea's other appellants' submission, para. 2.
538Ibid., para. 3.
539See  supra , para. 483.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
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findings on both "increased imports" and causation.
 540  However, as we have found that the measures
applied to those two products are inconsistent with Article XIX:1(a) of the GATT 1994 and with
Articles 2.1, 3.1, and 4.2 of the  Agreement on Safeguards ,  it is, in our view, not necessary, for the
purposes of resolving this dispute, to rule on whether, in applying these measures, the United Statesalso acted inconsistently with its obligation under Article 5.1 of the  Agreement on Safeguards.
XII. Findings and Conclusions
513. For the reasons set out in this Report, the Appellate Body:
(a) upholds the Panel's conclusions, in the relevant sections of paragraph 11.2 of the
Panel Reports concerning the complaints of China, the European Communities,
New Zealand, Norway, and Switzerland  541, that the application of all safeguard
measures at issue in this dispute is inconsistent with the requirements ofArticle XIX:1(a) of the GATT 1994 and Article 3.1 of the  Agreement on Safeguards  
because "the United States failed to provide a reasoned and adequate explanationdemonstrating that 'unforeseen developments' had resulted in increased importscausing serious injury to the relevant domestic producers";
(b) upholds the Panel's conclusions, in the relevant sections of paragraph 11.2 of the
Panel Reports, that the application of the safeguard measures on imports of CCFRS,
stainless steel rod and hot-rolled bar is inconsistent with the requirements of
Articles 2.1 and 3.1 of the  Agreement on Safeguards   because "the United States
failed to provide a reasoned and adequate explanation of how the facts supported itsdetermination with respect to 'increased imports'";
(c) reverses the Panel's conclusions, in the relevant sections of paragraph 11.2 of the
Panel Reports, that the application of the safeguard measures on imports of tin mill
products and stainless steel wire is inconsistent with Articles 2.1 and 3.1 of theAgreement on Safeguards   because "the United States failed to provide a reasoned
and adequate explanation of how the facts supported its determination with respect to
'increased imports', since the explanation given consisted of alternative explanations
                                                     
540See  supra , para. 493.
541In upholding claims on "unforeseen developments", the Panel refers to claims made by China, the
European Communities, New Zealand, Norway, and Switzerland.WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/R
Page 169
partly departing from each other, which given the different product bases, cannot be
reconciled as a matter of substance";  and finds it unnecessary to complete the
analysis to decide whether the determination with respect to "increased imports" fortin mill products and stainless steel wire is consistent with Articles 2.1 and 3.1 of theAgreement on Safeguards ;
(d) reverses the Panel's conclusions, in the relevant sections of paragraph 11.2 of the
Panel Reports, that the application of the safeguard measures on imports of tin mill
products and stainless steel wire is inconsistent with Articles 2.1, 4.2(b), and 3.1 ofthe  Agreement on Safeguards   because  "the United States failed to provide a
reasoned and adequate explanation of how the facts supported its determination of a'causal link' between any increased imports and serious injury, since the explanation
given consisted of alternative explanations partly departing from each other, which
given the different product bases, cannot be reconciled as a matter of substance";  andfinds it unnecessary to complete the analysis to decide whether the determination
with respect to a "causal link" for tin mill products and stainless steel wire isconsistent with Articles 2.1, 4.2(b), and 3.1 of the  Agreement on Safeguards ;
(e) upholds the Panel's conclusions, in the relevant sections of paragraph 11.2 of the
Panel Reports, that the application of all safeguard measures at issue in this dispute is
inconsistent with Articles 2.1 and 4.2 of the  Agreement on Safeguards   because "the
United States failed to comply with the requirement of 'parallelism' between the
products for which the conditions for safeguard measures had been established, andthe products which were subjected to the safeguard measure";
(f) finds it unnecessary, for purposes of resolving this dispute, to rule on whether the
Panel was correct in finding that, with respect to CCFRS, hot-rolled bar, cold-finished
bar, rebar, welded pipe, FFTJ, and stainless steel bar, the United States actedinconsistently with Articles 2.1, 3.1 and 4.2(b) of the  Agreement on Safeguards
because the USITC report failed to demonstrate the existence of a "causal link"between increased imports from all sources and serious injury to the domestic
industry, and neither reverses nor upholds the Panel's findings on causation;
(g) finds that the United States did not substantiate the claim raised under Article 11 of
the DSU;WT/DS248/AB/R, WT/DS249/AB/R,
WT/DS251/AB/R, WT/DS252/AB/R,
WT/DS253/AB/R, WT/DS254/AB/R,
WT/DS258/AB/R, WT/DS259/AB/RPage 170
(h) finds that the Panel satisfied its duty, under Article 12.7 of the DSU, to set out a
"basic rationale behind [its] findings" with respect to Article XIX:1(a) of the
GATT 1994;  and
(i) declines to rule on the conditional appeals of the Complaining Parties relating to
Articles 2.1, 4.1(c), 5.1, and 9.1 of the  Agreement on Safeguards .
514. The Appellate Body  recommends   that the DSB request the United States to bring its
safeguard measures, which have been found in this Report, and in the Panel Reports as modified bythis Report, to be inconsistent with the  Agreement on Safeguards   and the GATT 1994, into
conformity with its obligations under those Agreements.
Signed in the original at Geneva this 23rd day of October 2003 by:
_________________________
James Bacchus
Presiding Member
_________________________ _________________________
Georges Abi-Saab John Lockhart
Member MemberWT/DS48AB/R
Page 1
ANNEX 1
WORLD TRADE
ORGANIZATIONWT/DS248/17
WT/DS249/11WT/DS251/12
WT/DS252/10
WT/DS253/10
WT/DS254/10
WT/DS258/14
WT/DS259/13
11 August 2003
(03-0000)
Original:  English
UNITED STATES – DEFINITIVE SAFEGUARD MEASURES
ON IMPORTS OF CERTAIN STEEL PRODUCTS
Notification of an Appeal by the United States
under paragraph 4 of Article 16 of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU)
The following notification, dated 11 August 2003, sent by the United States to the Dispute
Settlement Body (DSB), is circulated to Members.  This notification also constitutes the Notice of
Appeal, filed on the same day with th e Appellate Body, pursuant to the  Working Procedures for
Appellate Review .
_______________
Pursuant to Article 16 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes  ("DSU") and Rule 20 of the Working Procedures for Appellate Review , the
United States hereby notifies its decision to appeal to the Appellate Body certain issues of lawcovered in the Panel Reports on United States – Definitive Safeguard Measures on Imports of Certain
Steel Products  (WT/DS248/R, WT/DS249/R, WT/D S251/R, WT/DS252 /R, WT/DS253/R,
WT/DS254/R, WT/DS258/R and WT/DS259/R) and certain legal interpretations developed by the
Panel.
1. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
application of safeguard measures on imports of certain carbon flat-rolled steel ("CCFRS"); tin mill;
hot-rolled bar; cold-finished bar; rebar; welded pipe; fittings, flanges, and tool joints ("FFTJ");
stainless steel bar; stainless steel rod; and stainless steel wire is inconsistent with Articles XIX:1 of
the General Agreement on Tariffs and Trade 1994  ("GATT 1994") and Article 3.1 of the Agreement
on Safeguards  ("Safeguards Agreement")
542 on the grounds that the United States failed to provide a
reasoned and adequate explanation demonstrating that "unforeseen developments" had resulted in
increased imports of each of these products causing serious injury to the relevant domestic industry.
                                                     
542Unless indicated otherwise, reference to article s with Arabic numerals are to articles of the
Safeguards Agreement and references to articles wi th Roman numerals are to articles of GATT 1994.WT/DS48AB/R
Page 2
(Paras. 10.148-10.150 and 11.2.)  These findings are in error, and are based on erroneous findings on
issues of law and related legal interpretations, including, for example,
(a) that the Panel could not consider data on the record of the U.S. International Trade
Commission ("USITC") and cited in other sections of the USITC report in evaluatingwhether the competent authorities provided their findings and reasoned conclusions
with regard to unforeseen developments in accordance with Article 3.1
(paras. 10.133-10.135 and 10.145);
(b) that the USITC was obliged to explain why the specific products under examination
were affected individually by the confluence of unforeseen developments
(paras. 10.127 and 10.147);  and
(c) that the USITC did not sufficiently support and explain its conclusion that the
displacement of steel on world markets led to increased imports to the United States
from all sources (paras. 10.122-10.123, 10.125, 10.143-10.144 and 10.146).
2. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
application of safeguard measures on imports of CCFRS, hot-rolled bar, and stainless steel rod is
inconsistent with Articles 2.1 and 3.1, on the grounds that the United States failed to provide a
reasoned and adequate explanation of how the facts supported its determinations with respect to
increased imports of these products.  (Paras. 10.181, 10.183, 10.186-10.187, 10.204, 10.208, 10.210,10.267, 10.271, 10.277, and 11.2.)  These findings are in error, and are based on erroneous findings
on issues of law and related legal interpretations, including, for example,
(a) that increased imports must be "sudden," and must "evidence[] a certain degree of
recentness, suddenness, sharpness and significance" (paras. 10.159 and 10.166-10.167);
(b) that in light of the decrease in imports of CCFRS, hot-rolled bar, and stainless steel
rod between interim 2000 and interim 2001, the USITC report did not contain an
adequate and reasoned explanation of how the facts support its determinations
regarding the absolute and relative increases in imports of these products
(paras. 10.181, 10.184, 10.204, 10.208, 10.267, and 10.271);  and
(c) that an increase in imports in 1998 (for CCFRS) and in 2000 (for hot-rolled bar and
stainless steel rod) was not recent enough at the time of the USITC determination to
support a finding under Article 2.1 that imports of CCFRS, hot-rolled bar, or stainless
steel rod are "being imported in . . . increased quantities" (paras. 10.181-10.182,10.185, 10.207, 10.269).
3. The United States seeks review by the Appellat e Body of the Panel' s legal conclusion that the
determinations regarding both increased imports of tin mill and stainless steel wire and also the causal
link between these increased imports and serious injury to the corresponding domestic industry areinconsistent with Articles 2.1, 3.1, and 4.2(b) on the grounds that the explanations given for these
determinations consisted of alternative explanations partly departing from each other, which given the
different product bases, cannot be reconciled as a matter of substance.  (Paras. 10.200, 10.262, 10.422,
10.573, and 11.2.)  These findings are in error, and are based on erroneous findings on issues of law
and related legal interpretations, including, for example,
(a) that findings by the competent authorities that are based on differently defined
products are impossible to reconcile (paras. 10.194, 10.262, 10.422, and 10.572);  andWT/DS48AB/R
Page 3
(b) that a reasoned and adequate explanation is not contained in a set of findings by the
competent authorities that rests on more than one like product definition
(paras. 10.194, 10.262, 10.422, and 10.572).
4. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
application of safeguard measures on imports of CCFRS, hot-rolled bar, cold-finished bar, rebar,
welded pipe, FFTJ, and stainless steel bar is inc onsistent with Articles 2.1, 3.1, and 4.2(b) of the
Safeguards Agreement, on the grounds that the United States failed to provide a reasoned and
adequate explanation that a "causal link" existed between any increased imports and serious injury or
threat of serious injury to the relevant domestic producers with respect to increased imports of these
products.  (paras. 10.418-10.419, 10.444-10.445, 10.468-10.469, 10.486-10.487, 10.502-10.503,
10.535-10.536, 10.568-10.569, and 11.2)  These findings are in error, and are based on erroneousfindings on issues of law and related legal interpretations, including, for example,
(a) that the USITC failed to provide a reasoned and adequate explanation of its finding
that there was a causal link between increased imports of CCFRS and the serious
injury suffered by the domestic industry; more specifically that:
(i) the USITC failed to provide a reasoned and adequate explanation of its
finding that there was a coincidence in import and industry trends during the
period (paras. 10.374-10.376);  and
(ii) that the USITC failed to provide a compelling explanation of why the
"conditions of competition in the CCFRS market established a causal link
between imports and industry trends (para. 10.381);
(b) that the USITC's definition of CCFRS as a like product prevented the application of a
causation analysis consistent with Article 4.2(b) for the industry producing that
product (paras. 10.378, 10.380, 10.416-10.417);
(c) that the USITC failed to provide a compelling explanation that a causal link existed
between increased imports of cold-finished bar and the serious injury suffered by the
domestic industry (para. 10.458);
(d) that the USITC's non-attribution analysis failed to separate and distinguish the
injurious effects of particular factors other than increased imports so that the injury
caused by these factors, together with other factors, was not attributed to increased
imports of CCFRS, hot-rolled bar, cold-finished bar, rebar, welded pipe, FFTJ, and
stainless steel bar (paras. 10.389, 10.396, 10.401, 10.407-10.410, 10.418-10.419,10.440, 10.443-10.444, 10.467-10.468, 10.484-10.486, 10.496, 10.499-10.501,
10.529, 10.533-10.535, 10.560, and 10.565-10.568);
(e) that, in addition to an individual assessment of the effects of other factors causing
injury to the domestic industry, Article 4.2(b) calls for "an overall assessment of such'other factors'" (para. 10.332) or for an evaluation of the "cumulative effects of
individual factors" causing injury (paras. 10.409 and 10.567);
(f) that a competent authority may be required, in certain circumstances, to use an
economic modeling analysis to quantify the amount of injury caused by imports andother factors causing injury as part of its causation analysis under Articles 2.1, 3.1,
and 4.2(b) (paras. 10.340-10.342);  andWT/DS48AB/R
Page 4
(g) that the explanation of the competent authorities must be "clear and unambiguous"
and "establish explicitly" that injury caused by factors other than increased imports is
not attributed to increased imports (para. 10.330).
5. The United States seeks review by the Appellate Body of the Panel's legal conclusion that the
application of safeguard measures on imports of CCFRS, tin mill, hot-rolled bar, cold-finished bar,
rebar, welded pipe, FFTJ, stainless steel bar, stainless steel rod, and stainless steel wire is inconsistent
with Articles 2.1 and 4.2, on the grounds that the Un ited States failed to comply with the requirement
of "parallelism" because it had not established that imports from sources subject to the safeguard
measure satisfied the conditions for application of a safeguard measure.  (Paras. 10.609, 10.615,
10.623, 10.633, 10.643, 10.653, 10.660, 10.670, 10.680, 10.685, 10.692, 10.699, and 11.2)  These
findings are in error, and are based on erroneous findings on issues of law and related legalinterpretations, including, for example,
(a) that Articles 2.1 and 4.2 make it necessary to account for the fact that excluded
imports may have some injurious impact on the domestic industry and that the USITC
analysis failed to account for this impact (paras. 10.598, 10.605-10.606, 10.621,10.629-10.630, 10.639-10.640, 10.650, 10.657, 10.666-10.667, 10.676-10.677, and
10.688);
(b) that the USITC's findings regarding imports from Israel and Jordan did not establish
explicitly or provide a reasoned and adequate explanation that imports from sourcesnot excluded from the measure satisfied the conditions for application of a safeguard
measure (paras. 10.607-10.608, 10.622, 10.631-10.632, 10.641-10.642, 10.651-
10.652, 10.658-10.659, 10.668-10.669, 10.678-10.679, 10.689-10.690, and 10.698);
(c) that the views of Commissioner Bragg did not meet the requirements of parallelism
with regard to tin mill and stainless steel wire because she "reached findings on the
broader category of CCFRS" and "on a broader category including stainless steel
wire" (paras. 10.615 and 10.685);  and
(d) that Commissioner Koplan's parallelism analysis regarding stainless steel wire does
not contain the required findings that establish explicitly, with a reasoned and
adequate explanation, that imports from sources other than Canada, Mexico, Israel,and Jordan satisfy the conditions of Article 2.1 as elaborated by Article 4.2
(para. 10.688).
6. The United States seeks review of the Panel's findings referenced above on the grounds that
the Panel acted inconsistently with Article 11 of the DSU in that it failed to make an objective
assessment of the matter before it, including an objective assessment of the facts of the case and the
applicability of and conformity with GATT 1994 and the Safeguards Agreement.  As particular
examples,
(a) the Panel found that the USITC's demonstr ation of unforeseen developments was not
sufficiently supported and explained, even though the Panel found the explanation
plausible, cited no alternative explanation, and found no error in the USITC's
reasoning or the data used to support that reasoning (paras. 10.145-10.150);  and
(b) made self-contradictory findings (including in paragraphs 10.173, 10.182, 10.192,
10.225, 10.433-10.437, 10.442, and 10.519).WT/DS48AB/R
Page 5
7. The United States also seeks review of the Panel's findings referenced above on the grounds
that the Panel acted inconsistently with Article 12.7 of the DSU, in that its report did not set out the
basic rationale behind its findings and recommendations.
__________