WT/DS211/R
Annex 1-1
Page 1
ANNEXES
Content Page
Annex 1-1 First Written Submission of Turkey – Executive Summary 2
Annex 1-2 First Written Submission of Egypt – Executive Summary 5
Annex 2-1 First Oral Statement of Turkey – Executive Summary 14
Annex 2-2 First Oral Statement of Egypt – Executive Summary 19
Annex 3 Restatement by Turkey of its Claims in Response to a Request 
from the Panel24
Annex 4-1 Responses of Turkey to Questions Posed in the Context of the First
Substantive Meeting of the Panel37
Annex 4-2 Responses of Egypt to Questions Posed in the Context of the First 
Substantive Meeting of the Panel57
Annex 5-1 Rebuttal Submission of Turkey – Executive Summary 69
Annex 5-2 Rebuttal Submission of Egypt – Executive Summary 76
Annex 6-1 Second Oral Statement of Egypt – Executive Summary 82
Annex 6-2 Second Oral Statement of Turkey – Executive Summary 87
Annex 7-1 Concluding Statement of Turkey at the Second Substantive
Meeting of the Panel92
Annex 7-2 Closing Statement of Egypt at the Second Substantive Meeting of
the Panel94
Annex 8-1 Responses of Turkey to Questions Posed in the Context of the
Second Substantive Meeting of the Panel97
Annex 8-2 Responses of Egypt to Questions Posed in the Context of the
Second Substantive Meeting of the Panel120
Annex 8-3 Response of Egypt to Follow-Up Questions Posed by the Panel,
and comments by Turkey on Egypt's Response139
Annex 9 Third Party Oral Statement of Chile 142
Annex 10-1 Third Party Written Submission of the European Communities 143
Annex 10-2 Third Party Oral Statement of the European Communities 149
Annex 10-3 Third Party Responses to Questions from the Panel of the European
Communities154
Annex 11-1 Third Party Written Submission of Japan 157
Annex 11-2 Third Party Oral Responses of Japan to Questions from the Panel 165
Annex 12-1 Third Party Written Submission of the United States 169
Annex 12-1 Third Party Oral Statement of the United States 176
Annex 12-3 Third Party Responses of the United States to Questions from the
Panel182
Annex 13 Supplemental Working Procedures of the Panel Concerning
Certain Business Confidential Information186WT/DS211/R
Annex 1-1
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ANNEX 1-1
FIRST WRITTEN SUBMISSION OF TURKEY
EXECUTIVE SUMMARY
1. Based on a petition filed by Al Ezz Rebars C o. and Alexandria National Iron and Steel Co.,
the Egyptian Ministry of Trade and Supply, Intern ational Trade Policy Department (“Investigating
Authority” or “IA”) commenced an anti-dumping duty investigation with respect to imports of
concrete steel reinforcing bar (“rebar”) from Turkey in February 1999.1  The investigation was
completed by the same office, then within the Ministry of Economy and Foreign Trade, inOctober 1999.  As a result of the investigation, anti-dumping duties were imposed, ranging from
22.63 per cent - 61.00 per cent ad valorem .
2
2. It is the view of the Government of Turkey that Egypt’s anti-dumping duty investigation and
final anti-dumping determination was inconsistent wi th Articles VI and X:3 of the General Agreement
on Tariffs and Trade 1994 (“GATT 1994”) and with several provisions of the Agreement on
Implementation of Article VI of the GATT 1994 (the “Anti-Dumping Agreement” or the
Agreement”), including Articles 2.2, 2.4, 3.1, 3.2, 3.4, 3.5, 6.1, 6.2, 6.6, 6.7 and 6.8 and Annex II,Paragraphs 1, 3, 5, 6 and 7 and Annex I, paragraph 7.
3. In summary, Turkey’s claims are as follows:
(a) Egypt made determinations of injury and dumping in the rebar investigation without a
proper establishment of the facts and based on an evaluation of the facts that was
neither unbiased nor objective.
(b) During the investigation of material in jury, Egypt failed to develop “positive
evidence” linking imports from Turkey to the adverse trends that it found within the
Egyptian rebar industry.  Egypt did not investigate whether there were any specific
sales lost by the domestic industry to imports from Turkey, or whether in specifictransactions involving head-to-head competition the domestic producers were forced
to lower their prices to meet Turkish im port competition.  Nor did Egypt investigate
whether domestic purchasers considered imports from Turkey, imports from some
other source, or domestic companies themselves as the price leaders in the market.
Egypt did not investigate whether or not th ere was a temporary supply disturbance in
the fast-growing Egyptian market, such that imports from Turkey were needed to
meet demand.  Indeed, there is no evidence on the public record of head-to-head
competition between imports and the domestic producers other than the bare,
conclusory allegations submitted by the domestic industry in their application for
                                                     
1 See Arab Republic of Egypt, Ministry of Trade and Supply, International Policy Department,
Initiation Report – Steel Reinforcing Bars from Turkey  (Feb.  1999) (“Initiation Report”)(reproduced in Ex.
TUR-1).
2 See Arab Republic of Egypt, Ministry of Economy and Foreign Trade, Foreign Trade Sector,
International Trade Policies Department, Anti-Dumping, Subsidy and Safeguards Department, Rebar from
Turkey – Final Report – Dumping Investigation (Oct.  1999) (“Final Report”)(reproduced in Ex. TUR-16) and
Notice No. (6) 1999, Imposition of Definitive Anti-dumping Duties on the Dumped Imports of Steel RebarsOriginating in or Exported From Turkey, Official Gazette No. (238)(Supplemental), Oct. 21, 1999(reproducedin Ex. TUR-17).WT/DS211/R
Annex 1-1
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anti-dumping measures.  Egypt’s imposition of definitive anti-dumping measures
despite its failure to develop “positive evidence” specifically linking the adverse
trends in the domestic industry to imports from Turkey is inconsistent with
Articles 3.1 and 3.5 of the Agreement.
(c) Moreover, Egypt failed to investigate or to take account of the effect of several
factors -- other than imports from Turkey -- that had a substantial adverse effect on
the Egyptian industry.  Egypt also failed to take account of other, neutral factors that
caused prices for rebar to fall.  These factors included the effects of a large capacity
expansion within the domestic industry during the period of investigation on the
industry’s cost structure and on price competition between the Egyptian producers;the effect of falling steel scrap input prices on the worldwide and domestic price of
rebar; the effect of a sudden contraction in domestic demand in January 1999 just
when domestic prices fell; and the effect of a larger volume of comparably priced,
non-dumped imports from third countries.  The effect of these factors was either
ignored, or improperly discounted, or improperly attributed to imports from Turkey inEgypt’s final anti-dumping determination in violation of Articles 3.1, 3.4 and 3.5 of
the Agreement.
(d) The public record of the injury investigat ion indicates that Egypt failed to compare
the prices of domestic products and the prices of imports on a comparable, deliveredbasis to the customers who had to choose between imports and domestic rebar to
meet their requirements.  Egypt therefore failed to establish properly whether there
was price undercutting by imports as required by Articles 3.1 and 3.2 of the
Agreement.
(e) Egypt changed the scope of its injury investigation without giving adequate notice to
the Turkish respondents, and without giving them an opportunity to submit evidence
on the present material injury issue, in contravention of Articles 6.1 and 6.2 of the
Agreement.
(f) Egypt relied on evidence of injury for its affirmative injury determination which was
taken from a period that was subsequent to, and therefore did not coincide with, its
finding that there were sales at less than normal value.  In so doing, Egypt failed to
establish, consistent with the requirements of Article 3.5 of the Agreement, that the
dumped imports were, “through the effects of the dumping”, causing injury to a
domestic industry within the meaning of the Agreement.
(g) During the sales-at-less-than-normal-value investigation, Egypt’s request for
substantial new cost information, and substantiation of the accuracy of respondent’s
prior responses, late in the anti-dumping duty proceeding, after the time for issuing
questionnaires and well after the verification, severely prejudiced respondents.
Furthermore, this action was inconsistent with Annex II, paragraph 1, Annex I,paragraph 7 and Articles 2.4, 6.1, 6.6 and 6.7 of the Agreement.
(h) The deadlines imposed for responses to Egypt’s supplemental requests for
information were unreasonably short, resul ting in an improper determination to resort
to “facts available”, in violation of Articles 6.1.1 and 6.2 and Annex II, paragraph 6of the Agreement.
(i) The factual basis cited by Egypt for seeking large amounts of supplemental cost
information late in the anti-dumping duty proceeding was speculative and unfounded,
as shown in subsequent submissions by the respondents.  Given the explanationsWT/DS211/R
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provided by respondents on this score, Egypt’s decision to rely on “facts available”
was based on an improper determination of the facts and on an evaluation of the facts
that was biased or lacked objectivity.  In addition, that determination was inconsistent
with Article X:3 of the GATT 1994 and Articles 2.4, 2.2.1.1, 2.2.2, and 6.8 andAnnex II, paragraphs 3, 5, 6 and 7 of the Agreement.
(j) Egypt’s refusal to schedule a meeting during which respondents could explain their
responses to the supplemental questionnaires was inconsistent with Article X:3 of the
GATT 1994, as well as Article 6.2 and Annex II, paragraph 6 of the Agreement.
(k) Egypt’s selection of particular data as “facts available” in the case of each respondent
was also improper and lacked objectivity.  The costs employed were, in most cases,
much higher than the actual contemporaneous costs experienced by the respondents,
as shown by other, reliable data developed during the investigation.  As a result, the
costs selected as “facts available” produced an unfair and unreasonable comparison
between normal value and the export price in violation of Articles 2.4, 2.2.1.1, 2.2.2and 6.8 and Annex II, paragraphs 5 and 7 of the Agreement.
(l) Egypt’s refusal to offset interest expenses with short-term interest income in
determining cost of production was inconsistent with Articles 2.2.1, 2.2.1.1 and 2.2.2
of the Agreement.
(m) And finally, Egypt’s failure to make an adjustment to the normal value for imputed
credit expenses between the date of shipment and the date of payment was
inconsistent with Article 2.4 of the Agreement.
4. Consultations were held between the Governme nts of Turkey and Egypt in Cairo, Egypt on 3-
5 December 2000 and again in Ankara, Turkey on 3-4 January 2001, but no resolution to this dispute
could be reached.  Subsequently, on 11 June 2001, following Turkey’s request for the establishment
of a panel, the Governments of Turkey and Egypt again held consultations with a view to settlement
of the dispute, again to no avail.
5. The panel is respectfully requested to find that Egypt’s anti-dumping duty investigation and
final determination were inconsistent with the GATT 1994 and with the Anti-Dumping Agreement.
Egypt should either revoke the definitive anti-dumping measure imposed on imports of rebar from
Turkey or suspend the application of that measure pending a reopening of its investigation for the
purpose of addressing the deficiencies identified above.WT/DS211/R
Annex 1-2
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ANNEX 1-2
FIRST WRITTEN SUBMISSION OF EGYPT
EXECUTIVE SUMMARY
I. BACKGROUND
1. On 6 November 2000, the Government of Turkey requested consultations at the WTO with
the Government of Egypt regarding definitive anti-dumping measures imposed by Egypt on steel
rebar from Turkey.1  Consultations were held in Cairo and Ankara on 3-5 December 2000 and 3-
4 January 2001 respectively.  The consultations did not lead to a mutually satisfactory resolution of
the matter and Turkey requested that the establishment of a Panel be placed on the agenda of the DSB
meeting of 16 May 2001.2  Egypt opposed the request for the establishment of a Panel at the DSB
meeting of 16 May 2001 in order to permit further consultations between the parties, which took place
on 11 June 2001.  However, consultations again failed to resolve the dispute.  Accordingly, a Panel
was established at the DSB meeting of 20 June 200 1 in which the United States, Japan, the European
Communities and Chile reserved their third party rights.
2. In its request for the Establishment of a Panel, Turkey considers that the measures imposed by
Egypt on steel rebar from Turkey are inconsistent with Article X:3 of the General Agreement on
Tariffs and Trade 1994 (GATT 1994); Articles 2.2, 2.4, 3.1, 3.23, 3.4, 3.5, 6.1, 6.2, 6.6, 6.7, 6.8 and
Annex II, paragraphs 1, 3, 5, 6 and 7 and Annex I, paragraph 7 of the Agreement on Implementation
of Article VI of the General Agreement on Tariffs and Trade (the “AD Agreement” or “Agreement”).As a result, Turkey considers that the measures nullify and impair the benefits accruing to it under the
GATT 1994 and the Anti-Dumping Agreement.
3. The claims submitted by Turkey are individually addressed below, together with an analysis
of Egypt’s rights and obligations under the relevant provisions of the AD Agreement and the GATT1994.  An examination of the relevant provisions will demonstrate that Egypt applied the measures in
question only pursuant to an investigation that was initiated and conducted in accordance with
Egypt’s rights and obligations as provided for in Article VI of GATT 1994 and the Anti-Dumping
Agreement.
II. INJURY AND CAUSAL LINK
A. OPENING STATEMENT
4. Steel is, by its very nature, a commodity product.  When imports of this kind arrive in the
marketplace in very substantial volumes and at very low prices, the domestic industry is bound to
suffer injury.  As demonstrated below, Egypt was ca reful to distinguish and to separate other factors
than the dumped imports that may have contributed to the injury.
                                                     
1 WTO Doc. WT/DS211/1.
2 Id., at p. 2.
3 This provision was inserted at a later date via a corrigendum (WTO Doc. WT/DS211/2/Corr.1).WT/DS211/R
Annex 1-2
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1. Turkey has not demonstrated that the Investigating Authority failed to establish by
“positive evidence” a causal link between imports from Turkey and injury to the
domestic industry
5. Turkey alleges that Egypt failed to establish by “positive evidence” that there was a causal
link between imports from Turkey and declining prices in the domestic market.  The “positive
evidence” to which Turkey refers is “that consumers purchased imported rebar supplied by the
domestic manufacturers for price reasons”.  Turkey therefore alleges that Egypt’s imposition of
definitive anti-dumping measures was inconsistent with Articles 3.1 and 3.5 of the Agreement.
6. Contrary to Turkey’s allegation, the Investig ating Authority determined on the basis of the
data and information available that the volume of dumped imports increased over the period
considered and that this had a significant effect on prices of locally produced rebar as required under
Article 3.1(a).  The Investigating Authority also examined the consequent impact of the dumped
imports on the domestic producers as required under Article 3.1(b) and found, inter alia , that because
the industry is sensitive to volume changes, it had to lower prices to meet the competition from the
dumped imports and in order to retain sales.
7. With regard to the establishment of a causal link, the Investigating Authority considered all
evidence that was provided by interested parties and found that there were “no other causes of injury”
sufficient to break the causal relationship between the dumped imports and the injury to the domesticindustry.  Moreover, at the time of the investigat ion, the Investigating Authority was not aware of any
“known factors”, other than those that it did consid er, which would be likely to cause injury to the
domestic industry.
8. Article 3.5 of the AD Agreement clearly states that factors listed therein “ may be relevant ” in
the establishment of a causal link.  Accordingly, unlike Article 3.4, which mandates that “[t]he
examination of the impact of the dumped imports shall  include an evaluation of all relevant economic
factors”, it is clear from the wording of Article 3.5 that consideration of the factors listed therein is not
mandatory.
9. It follows that Egypt is under no obligation to investigate whether domestic manufacturers
lowered their prices specifically  in response to competing offers by suppliers of Turkish rebar or
whether specific  sales were lost by the domestic industry to imports from Turkey.  In addition, the AD
Agreement does not require that the Investigating Authority investigate whether the dumped imports
are the price leaders in the market, as such is not relevant to the establishment of a causal link.  As to
contraction in demand or changes in the patterns of consumption, these factors were examined during
the course of the investigation and found to be irrelevant to the Investigating Authority’sdetermination of a causal relationship.
10. Turkey incorrectly alleges that the Investigating Authority failed to take account of the effect
of other factors that had a substantial adverse effect on the Egyptian industry
11. Turkey alleges that the Investigating Authority failed to take account of, and improperly
attributed to rebar imports from Turkey, the effect of other factors that had a substantial adverse effect
on the Egyptian industry as well as of other neutral factors that caused the price of rebar in Egypt to
fall.
12. It is clear that the above allegation relates to causation . The relevant provision of the AD
Agreement is Article 3.5. Turkey’s claim under Article 3.4 should therefore be rejected , as it is not
relevant to the issue under consideration.WT/DS211/R
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13. Turkey has not established that the Investigating Authority failed to take account of the effect
of other factors that had a substantial adverse effect on the Egyptian industry in violation of
Article 3.5 of the AD Agreement.  Throughout the course of the investigation, the Investigating
Authority examined all evidence that was provided  by interested parties.  To this end, the
Investigating Authority examined capacity expansion, competition between domestic producers,
falling prices for raw materials, domestic demand and the effect of non-dumped imports.  On the basis
of this examination, the Investigating Authority found that there were “no other causes of injury”
sufficient  to break the causal relationship between the dumped imports and the injury to the domestic
industry.
3. Turkey’s argument with regard to capacity expansion and the establishment of a causal
link is fundamentally flawed
14. Turkey’s argument with regard to the capacity  expansion of the Egyptian rebar industry in the
establishment of a causal link is fundamentally flawed in a number of respects.  First, the Panel should
reject all new evidence that was not before the Investigating Authority during the course of the
investigation.  Second, contrary to Turkey’s allegation, the Investigating Authority did consider the
capacity expansion of the domestic industry as required under the AD Agreement.  Third, the capacity
expansion of the Egyptian industry was invoked during the investigation by the Turkish exporters as
an economic factor indicating the absence of injury , rather than a factor that was known  to be
contributing to the injury incurred by the domestic industry.
4. Turkey has failed to demonstrate that E gypt’s application of Article 3.5 of the AD
Agreement was incorrect
15. Turkey is concerned that Egypt improperly attributed to imports from Turkey the decline in
prices that took place in 1999.  In particular, Turkey alleges that by attributing falling prices caused by
declining demand, increased domestic competition and falling raw material costs to imports, the
Investigating Authority violated Articles 3.4 and 3.5 of the AD Agreement.
16. It is evident that the issue raised here is yet again one of causation . Turkey is not alleging that
Egypt failed to examine the impact of the dumped imports on the domestic industry as required under
Article 3.4. To this end, Turkey has not provided any legal argumentation to support this claim. The
invocation of Article 3.4 in this manner is thus without legal foundation and should therefore be
dismissed by the Panel.
17. With regard to Article 3.5 of the AD Agreement, the Panel must ask whether the Investigating
Authority considered the effect upon price, factors such as declining demand, increased domestic
competition and falling raw material costs.
18. During the investigation, the Investigating Authority found no evidence to prove the existence
of a contraction of demand of the product concerned.  To the contrary, demand increased.  Moreover,
there was insufficient evidence before the Investigat ing Authority to conclude that capacity expansion
could have been a factor contributing to the injury.  However, the Investigating Authority did examine
whether there was any increased competition as a result thereof.  As to declining cost of raw
materials, the Investigating Authority found that the alleged decline in the price on steel was not a
sufficient factor to break the causal link between the dumped imports and the injury to the domestic
industry.WT/DS211/R
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5. Turkey’s analysis and establishment of the facts as regards the comparison of imports
from non-dumped sources is flawed
19. Turkey’s analysis and establishment of the facts concerning the comparison of imports from
non-dumped sources is flawed in two respects.  Fi rst, Turkey implies that the AD Agreement requires
that the Investigating Authority determine whether the dumped imports were the price leaders in the
market in the establishment of a causal relationship under Article 3.5.  Second, Turkey falsely accuses
the Investigating Authority of failing to investigate the effects of non-dumped imports from third
countries when reaching its determination that the dumped imports were, through the effects of
dumping, causing injury to the domestic rebar industry.
20. While the prices of non-dumped imports from third countries may be relevant in the
establishment of a causal link under Article 3.5, nowhere in the Agreement is there the requirement
that Egypt consider whether the Turkish imports were acting as the price leaders in the market.  Whatis relevant in this regard is that the Investigating Authority investigate known  factors which at the
same time are injuring the industry.  To this end, Turkey has not presented a prima facie  case that
non-dumped imports from third countries were a factor that was known to the Investigating Authority
to be simultaneously causing injury to the domestic industry.
21. Nonetheless, the Investigating Authority was care ful to consider any potential effects of third
country imports, both in terms of volume and of price, upon the domestic industry.  There is noparticular method prescribed by the AD Agreement that Egypt must employ  to separate and
distinguish the injurious effects of dumped imports from the injurious effects of other causal factors.
Thus, the Investigating Authority examined all sources of non-dumped imports and found that the fall
in domestic prices was caused by the dumped imports rather than imports from other sources.
22. With respect to Saudi Arabia and Libya, the examination of the import volumes from these
countries in Q1-1998 and Q1-1999 demonstrated that their individual import volumes were declining
sharply.  This is in contrast to the dumped imports from Turkey, which increased significantly during
the same period.  Moreover, the Investigating Authority reviewed the prices of imports from both
Saudi Arabia and Libya and found them to be much higher than the prices of Turkish imports.  As a
result, the Investigating Authority concluded that other sources of imports were not the cause of injury
suffered by the domestic industry.
6. Turkey incorrectly asserts that the In vestigating Authority’s finding of price
undercutting was based on a flawed price comparison
23. Turkey alleges that by comparing domestic prices and imported prices on a basis that was
neither truly comparable nor at the appropriate level of trade, the Investigating Authority’s finding of
price undercutting was based on a flawed price comparison in violation of Articles 3.1, 3.2 and 3.5 of
the Agreement.
24. It is clear that the Investigating Authority’s comparison of import price with domestic price
was indeed made at the same level of trade (i.e. the ex-factory price for the local industry and ex-
importer’s store levels for the dumped imports).  Turkey, on the other hand, would prefer that the
comparison take place on a delivered-price basis.  There is, however, no legal foundation to require
the Investigating Authority to conf ine its analysis in this manner.WT/DS211/R
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7. The task of the Panel is not to conduct a de novo  review of the Investigating Authority’s
determination with respect to domestic sales, but to determine whether the Investigating
Authority’s establishment of the facts was unbiased and objective
25. Turkey alleges that the Investigating Authority misinterpreted certain data.  In particular,
Turkey alleges that the Investigating Authority sought to blame the increase in domestic sales on
imports from Turkey and that the Investigating Aut hority concluded that this increase was the result
of reducing domestic prices significantly to compete with the dumped product and to retain market
share.
26. By alleging that the Investigating Authority misinterpreted certain data, Turkey is in fact
challenging the Investigating Authority’s determination with respect to that data. Article 17.6(i) of the
AD Agreement, however, makes it very clear that the ta sk of the Panel is solely to assess whether the
Investigating Authority’s establishment of the fact s was proper and the evaluation thereof unbiased and
objective.  If affirmative, the evaluation shall not be overturned even if it the Panel might have reached a
different conclusion.  In any event, Turkey has not alleged any particular violation of the AD
Agreement and thus there is no legal basis to support this claim .
8. The AD Agreement does not require an Investigating Authority to inform interested
parties that it has changed the legal basis fo r its injury determination during the course
of the investigation
27. Turkey claims that by failing to give notice of the change in the scope of the investigation
from threat of material to present material injury, the Investigating Authority violated Articles 6.1 and
6.2 of the AD Agreement. Egypt is not, however, under any obligation under the AD Agreement to
inform the respondents that it had changed the le gal basis for its injury determination during the
course of the investigation.
9. Turkey has not shown that the Investigatin g Authority failed to demonstrate that the
imports caused injury to the Egyptian Industry “through the effects of dumping found”
28. Turkey is of the opinion that because the only dumping occurred in 1998 and the injury found
by the Investigating Authority occurred in 1999, the Investigating Authority failed to show that the
imports were, through the effects of the dumping, causing injury to the domestic industry.  According
to Turkey, “the resulting determination is, therefore, inconsistent with Articles 3.1 and 3.5”.
29. Two points will be addressed. The first is that the AD Agreement does not require that any
specific period of time be established for the purpose of data collection with regard to theinvestigations of dumping and of injury.  Second, the Investigating Authority found that the injury
that occurred in Q1-1999 confirmed the injury that took place in 1998 as a result of the dumped
imports.  Thus, in setting the periods of data collection for both dumping and injury, the Investigating
Authority included the first quarter of 1999 for injury in order give adequate consideration to the
effects of the dumping that primarily took place, in terms of volume, in 1998.  Moreover, the period
of data collection for injury included the full period of data collection established by the Investigating
Authority for dumping.
B. DUMPING DETERMINATION
1. Opening Statement
30. The Investigating Authority made numerous attempts to obtain the requisite information from
the respondents, but was met with insufficient co-operation and unreliable data.  As a consequence,
the Investigating Authority had no other alternative but to base its determinations on the informationWT/DS211/R
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at its disposal.  In determining the appropriate facts available, the Investigating Authority primarily
used the data submitted by each respondent, thereby giving respondents the benefit of their own data
to the extent possible.
2. The requests for additional information were made in full compliance with the relevant
provisions of the AD agreement
31. Turkey claims that the request for cost information sent to the respondents on 19 August and
23 September 1999 violated Articles 6.1, 6.1.1, 6.2, 6.6 and 6.7 as well as paragraph 7 of Annex I and
paragraphs 1 and 6 of Annex II of the AD Agreement.  Lastly, Turkey alleges that these requests also
contravene Article 2.4 of the AD Agreement dealing with the comparison between normal value andexport price.  Those claims are without merit.
32. Contrary to Turkey’s allegations, the letters of 19 August 1999 did not constitute “a long,
supplemental cost questionnaire that was, in fact, an entirely new cost questionnaire”.  The
Investigating Authority’s requests for additional information on cost of production of rebar were sentas a result of two undisputed facts:
(a) All respondents with the exception of IDC had submitted incomplete and partial
replies to the section of the Manufacturers’ Questionnaire concerning cost of
production.  Contrary to the explicit requirements of the Manufacturers’Questionnaire, they reported monthly costs data only for those months during which
they had export sales of rebar to Egypt.  Since this limited information was largely
insufficient to verify whether domestic sales were made in the ordinary course of
trade, the respondents were requested to provide cost data for the entire investigation
period.
(b) During the investigation period, Turkey experienced hyperinflation at an average rate
of 5 per cent per month.  Since this factor was likely to have a major impact on cost
of production, the Investigating Authority asked the respondents to explain whether
their cost of production had been adjusted to reflect inflation and to provide
supporting evidence, pursuant to paragraph 1 of Annex II and Article 2.2.1.1 of the
AD Agreement.
33. In Egypt’s view, this course of action is in accordance with the provisions of Articles 2.4, 6.1,
6.1.1, 6.2, 6.6 and 6.7 as well as with paragraph 7 of Annex I and paragraphs 1 and 6 of Annex II of
the AD Agreement.
34. The Investigating Authority complied with paragraph 1 of Annex II when it sent to each
respondent in February 1999 a Manufacturers’ Questionnaire specifying the information required and
the manner in which the information should be structured.  The Questionnaire also drew the attention
of the respondents to the fact that the Investigating Authority could make determinations on the basis
of facts available if the required information was not supplied in a reasonable period of time.  Asdemonstrated in this submission, the same level of assistance was provided in all subsequent requests
for additional information.
35. The compliance with Article 6.1 is evident since the purpose of the requests for additional
information was precisely to give notice to the interested parties of the information which the
Investigating Authority required to make its determinations.
36. The Investigating Authority did not contravene Article 6.2.  This Article is irrelevant to the
requests for additional information since it only concerns the submission of oral information.
Furthermore, Egypt considers that the Investigating Authority was under no obligation to accede toWT/DS211/R
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the request for a meeting which was presented at a late stage of the investigation and at a time when it
had already been established that the costs data submitted by the respondents were not reliable.
37. As explained in this submission, the requests for additional information were sent in
accordance with Article 6.6 which entitles, and in fact obliges, the Investigating Authority to satisfy
itself as to the accuracy of the information used as a basis for its determinations.
38. The Investigating Authority furthermore informed the respondents of the reasons why the
information submitted on costs of production could not be accepted, and granted them ample
opportunity to present in writing the evidence required, in accordance with Article 6.1 and
paragraph 6 of Annex II. In Egypt’s view  however, the provisions of Article 6.1.1  are inapplicable to
requests for additional information and clarifications such as those sent by the Investigating Authority
in the rebar investigation. Indeed, Article 6.1.1 concerns only the deadline to be granted for the
response to questionnaires, which clearly the requests for additional information were not.
39. With respect to the claim under Article 6.7 and paragraph 7 of Annex I , Egypt considers that,
contrary to Turkey’s allegations, the AD Agreement does not suggest that the Investigating Authority
must verify information solely through on-the-spot verification visits nor that verification visits
should be preferred over other means of verification.  Furthermore, the AD Agreement does not
prevent the Investigating Authority from requesting the submission of additional information and
documentary evidence after having carried out verification visits.
40. Lastly, the claim of violation of Article 2.4 is ill-founded since this Article, and the burden of
proof requirement contained therein, only concern the issue of fair comparison between export price
and normal value.  In any case, it is submitted that the Investigating Authority never imposed an
unreasonable burden of proof on the respondents since the data requested consisted of readilyavailable accounting records and the clarifications required were essentially descriptive.
3. The decision to use partially facts available was fully justified by the respondents’
failure to submit reliable costs data
41. Contrary to Turkey’s allegations, the decision to use facts available is in full compliance with
Egypt’s obligations under the provisions of the AD Agreement and, in particular, of the provisions ofArticle 6.8 and Annex II
 of the AD Agreement.  As demonstrated in this submission, the costs data
submitted by the respondents were incomplete, unsubstantiated by sufficient supporting evidence anddid not demonstrate that they duly reflected the costs associated with the production and sale of rebar,
in accordance with Article 2.2.1.1 of the AD Agreement. In consequence, the Investigating Authority
was entitled to make its determinations on facts available in accordance with Article 6.8 and
paragraph 5 of Annex II.  Pursuant to paragraph 6 of Annex II, the Investigating Authority informed
the respondents of the reasons why their costs data could not be accepted and gave them ample
opportunity to provide further explanations.  The Investigating Authority furthermore stated in the
Final Report the reasons why the explanations and the information provided were not satisfactory,
therefore justifying the use of facts available.
42. As explained in this submission, the claims of violation of Articles 2.2.1.1, 2.2.2 and 2.4 are
redundant since they rely on the assumption that the Investigating Authority was not entitled to use
facts available.  They are furthermore based on the wrong premise that the Investigating Authority
calculated monthly cost production and constructed normal value, whereas they were calculated forthe entire investigation period.  They are lastly without merit as a matter of law and would lead to
absurd results in the circumstances of this case.WT/DS211/R
Annex 1-2
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4. The investigating authority used data submit ted by the respondents as appropriate facts
available
43. The circumstances briefly described in points 1 and 2 above would have entitled the
Investigating Authority to disregard the reported costs data altogether and to make full use of facts
available for the determination of the normal valu e.  Instead, the Investigating Authority decided to
use the data submitted by the respondents as appropriate facts available.  This methodology is
considered to be reasonable and fair since, in spite of the poor quality of the reported costs data, the
respondents were given the benefit of their own data.  This is furthermore fully in line with the
relevant provisions of the AD Agreement.
44. The cost of production and constructed normal value of the respondents were calculated in
accordance with the above methodology.  Turkey contends that the Investigating Authority violated
various provisions of the AD Agreement in the re construction of the cost of production and normal
value of Icdas, Habas, IDC and Diler.  No claim is presented concerning the calculations pertaining to
Colakoglu. It is explained in this submission th at those claims are without any merit and must,
therefore, be rejected.
5. The disallowance of interest revenue in the reconstruction of the cost production and
normal value is in line with the AD Agreement
45. The relevant provisions of the AD Agreement make it clear that the cost of production must
correspond to the costs associated to the production and sale of the product concerned, to the
exclusion of any other cost item which bears no relationship to production or sale.  In consequence,
Egypt considers that interest income, which is generated by the financial activities of the respondents,
should not be included in the computation of the co st of production.  This is in line with the
provisions of Article 2.2 of the AD Agreement as well as with the usual practice of other jurisdictions,
such as, for instance, the United States and the European Communities.
6. The absence of a credit cost adjustment to the reconstructed normal value does not
violate the AD Agreement
46. Turkey alleges that the Investigating Authority’s denial of an adjustment for credit costs to
the reconstructed normal value while such adjustment was made to the export price contravenes
Article 2.4 of the AD Agreement.  This claim has no merit as a matter of law. Egypt considers that,
unlike actual selling prices that are negotiated between seller and buyer on the basis of, among otherthings, the conditions and terms surrounding the sale, the construction of the normal value produces a
notional price, the level of which cannot be influenced by any conditions and terms of the relevantsales. In consequence, Egypt considers that the constructed normal value does not need to be adjusted
for differences in credit terms, since such normal valu e is not affected by any credit terms.  In any
case, since all domestic sales were made at a loss, the Investigating Authority could not use any credit
terms granted in the ordinary course of trade to calculate the adjustment.  For the foregoing reasons,
Egypt considers that the absence of an adjustment for credit costs to a reconstructed normal value isbased on a permissible interpretation of Article 2.4 of the AD Agreement and should therefore be
upheld by the Panel.
7. Egypt did not contravene Article X:3 of GATT 1994 in the conduct of the rebar anti-
dumping investigation
47. Lastly, Turkey alleges that some of the actions of the Investigating Authority violated
Article X:3 of GATT 1994.  This claim is redundant and without any merit.WT/DS211/R
Annex 1-2
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48. In Egypt’s view, actions taken by an Investigating Authority in one single anti-dumping case
should only be reviewed under the obligations of Article X:3 if such actions had a significant impact
on the overall administration of the law, and not simply on the outcome of the single case in question.
Furthermore, a conclusion that Article X:3 is violated could in any case not be reached where theactions in question are found to be consistent with more specific obligations of the applicable WTO
Agreement.WT/DS211/R
Annex 2-1
Page 14
ANNEX 2-1
FIRST ORAL STATEMENT OF TURKEY
EXECUTIVE SUMMARY
1. The Government of Turkey considers that the imposition of definitive anti-dumping measures
in this case is inconsistent with Articles VI and X:3 of the GATT 1994 and with Articles 2.2, 2.4, 3.1,
3.2, 3.4, 3.5, 6.1, 6.2, 6.6, 6.7 and 6.8 of the Agreement, as well as Annex I, Paragraph 7 and Annex II
paragraphs 1, 3, 5, 6 and 7.
I. INJURY CLAIMS
2. During the injury investigation in the Turkish rebar case, the Investigating Authority found
that both domestic production and sales within Egypt increased  during the period of investigation,
capacity utilization either remained constant or increased, and the domestic industry was able to
increase  its market share.  In particular, domestic sales volume increased by 46 per cent in 1997 and
by 19.5 per cent in 1998.  Domestic market share increased by 5.7 per cent in 1998 and by 22.9 per
cent in the first quarter of 1999, as compared to 1996 levels.  The principal indicia  of injury cited in
the Final Report were evidence of falling prices, significant declines in domestic industry profitability
in both 1998, and the first quarter of 1999, and rising inventories.
3. It is the view of the Government of Turkey that the Investigating Authority improperly
attributed the declining prices, declining profitability, and rising inventories to the effects of importsfrom Turkey.  In this regard, the Final Report found evidence of price underselling by imports from
Turkey and attributed a price decline of 1.6 per cent in 1998 and 10.8 per cent in the first quarter of
1999 to such price underselling.  However, there is no “positive evidence” linking imports from
Turkey to these effects.  Increases in the volume of imports cannot be injurious when the domestic
industry is itself increasing the volume of its sales, maintaining capacity utilization, and increasing itsdomestic market share.  The existence of some price underselling is also insufficient positive evidence
of injury causation.  Positive evidence of injury causation would include evidence that purchasers
considered Turkish imports to be the price leaders in the market, evidence of lost sales, or evidence
that the domestic industry dropped its prices or was unable to raise prices in specific response to the
prices of imports from Turkey.  None of this evidence is on the record.  Where there is no specific,“positive evidence” that imports caused prices to fall, the price declines could just as well have been
caused by other factors, as has been claimed elsewhere by Turkey.  Because Egypt failed to establish,
by “positive evidence,” that imports from Turkey caused the price and profitability declines
experienced by the Egyptian rebar industry, the imposition of definitive anti-dumping measures in this
case was contrary to Articles 3.1 and 3.5 of the Agreement.
4. Turkey considers that the Investigating Authority failed to examine all relevant economic
factors and indices having a bearing on the state of the industry in violation of Article 3.4 and that it
improperly attributed to imports from Turkey the effects of other factors and conditions of
competition in violation of Article 3.5.  Specifically, the Investigating Authority failed to consider the
adverse effects on domestic profitability and pricing produced by five factors:  (a) the dramatic
capacity expansion at the two major Egyptian rebar producers and its likely, temporary effects on theproducers’ cost structure, as well as its effects on competition between the Egyptian producers to fill
newly expanded order books; (b) sharpening compe tition between Al Ezz and Alexandria National as
Al Ezz sought to increase market share by capitalizing on its cost advantages over Alexandria
National; (c) falling prices for steel scrap, the primary raw material input into finished rebar producedWT/DS211/R
Annex 2-1
Page 15
by Al Ezz; (d) a sharp contraction in domestic demand in January 1999, when prices for rebar fell;
and (e) the effect of comparably priced, fairly traded imports.
5. Turkey also notes that the Investigating Authority did not evaluate all of the mandatory
factors identified in Article 3.4.  These factors include productivity, actual and potential negative
effects on cash flow, employment, wages, growt h, and ability to raise capital or investments.
Furthermore, the public version of the Essential Facts and Conclusions Report provides no evidence
that there was sufficient examination or evaluation of capacity, capacity utilization, or return on
investment.
6. Turkey considers that Egypt failed to de termine accurately whether there was price
undercutting by imports of rebar from Turkey because the Investigating Authority failed to make
price comparisons on a delivered-price-to-the-customer basis.  The Essential Facts and Conclusions
Report does not reveal the channels of distribution for domestic and imported product or where in the
chain of distribution any actual price competition between imported product and domestic product
takes place.  Without knowing these facts, it is impossible to ascertain whether the Investigating
Authority measured price competition between imported and domestic products at the correct level of
trade.  The Investigating Authority’s findings in this regard are contrary to Articles 3.1, 3.2 and 3.5.
7. Turkey considers that the Investigating Authority violated Article 6.1 and 6.2 of the
Agreement by changing the scope of its injury investigation – from an investigation solelyconcentrated on threat of injury to an investigation of present material injury – after the deadline for
submission of factual information and comment and without adequate notice to the Turkish
respondents.  Failure to give this notice deprived th e Turkish interested parties of their right to submit
relevant information and comment on the present material injury question.
8. By investigating the existence of dumping during calendar year 1998 and relying on evidence
of injury taken from the first quarter of 1999, the Investigating Authority violated Article 3.5, which
requires a showing that “imports are, through the e ffects of the dumping, .  .  .  . causing injury with
the meaning of [the] Agreement.”  No linkage was shown to exist between dumping in 1998 and
injury in 1999.
II. DETERMINATION OF DUMPING
9. Egypt turned the normal sequence of events in an anti-dumping duty investigation on its head,
and in so doing seriously prejudiced the rights and interests of the Turkish respondents.  Normally, it
is anticipated that the anti-dumping duty questionnaire will contain all basic questions setting forth the
format in which home market sales and costs of production will be reported as well as requesting allbasic documentary support for such costs that must be submitted outside of the on-the-spot
investigation.  Furthermore, such questionnaires must be sent out as soon as possible after initiation of
the investigation.
10. In the Egyptian rebar investigation, more than a month after the verification took place, more
than four months after the questionnaire responses were filed, and when, in the Investigating
Authority’s own words, the end of its investigation was “near”, the Investigating Authority suddenly
issued a long, supplemental cost questionnaire that was, in fact, an entirely new and much more
complex cost questionnaire.  Much of the data requested was basic preliminary data that should have
been requested either in the original questionnaire  or at verification.  Moreover, the Investigating
Authority required that the respondents provide substantial new cost information.  And then, instead
of extending its investigation in order to conduct a new cost verification, the Investigating authority
asked respondents to do the impossible – to respond to a substantially expanded and more complex
cost questionnaire than was contained in its original questionnaire and to submit tables and charts
tying each aspect of cost and sales responses to their books and records, together with adequate sourceWT/DS211/R
Annex 2-1
Page 16
documentation to verify each and every sales price and cost.  All of the source documentation was, of
course, supposed to be fully translated, organized, explained and tied together in English so that the
Egyptian authorities could follow the trace from the response to the books.  Literally thousands of
pages would have had to have been translated, organized and explained in order to respond fully tothe questionnaire.
11. As explained by three of the Turkish respondents at the time, this attempt at a “long-range” or
“mail order” verification was doomed to failure from the start.  In fact, given the tone, content and
deadline set by the 19 August letter, the fact that nearly identical letters were sent to each of the five
respondents notwithstanding the absence of evidence  that they had coordinated their responses, the
timing of this letter just 24 hours after a major earthquake hit Turkey and the absurd deadline imposedfor a response, it seems that Egypt hoped and expected that respondents would be unable to respond
providing a pretext for a final determination with margins based on “facts available”.
12. By failing to request the basic cost data identified in its 19 August letter in its original
questionnaire, the Egyptian Authorities violated Paragraph 1 of Annex II of the Agreement.  Bywaiting until after the verification to raise these issues and then insisting that respondents provide full
“mail order” verification of their previously submitted cost responses and the new information that the
Investigating Authority for the first time requested on August 19, Egypt seriously prejudiced the
rights of respondents and their ability to provide the data required in violation of Paragraph 6 of
Annex II.  Egypt also imposed “an unreasonable burden of proof” on respondents in violation ofArticle 2.4 of the Agreement.
13. This prejudice was compounded by the absurd deadlines imposed for responses to the
Investigating Authority’s 19 August 1999 and 23 September 1999 questionnaires.  The deadline of 13
days in which to respond to the 19 August questionnaire was plainly inadequate in the best ofcircumstances in light of the expansive new requests for information and for self-verification that that
questionnaire contained.  It was utterly devoid of consideration for the actual circumstances
respondents faced in light of the massive earthquake that hit Istanbul the day before.
14. Respondents reasonably requested extensions to 11 October 1999 and 22 October 1999 in
which to respond to this questionnaire.  But the In vestigating Authority granted an extension only to
15 September 1999, just 27 days after the questionnaire was issued.  Failure to provide a full 37 daysin which to respond to this questionnaire, and failure to grant respondents’ reasonable requests for
extension of the initial 37-day deadline violated Article 6.1.1.  In the alternative, these actions violated
Article 6.2 and Annex II, paragraph 6.
15. On 23 September 1999, the Investigating Authority, for the first time, required of these
companies a break-down of all costs to produce billet, supplied on a monthly basis.  The Investigating
Authority also demanded that these three companies translate each and every page of the hundreds of
pages of documentation that they were required to provide in their 15 September responses.  The
period given for a response to this questionnaire, just two to five days, was manifestly inadequate and
contrary to Articles 6.1.1 and 6.2 of the Agreement, as well as Annex II, paragraph 6.
16. After receiving the Investigating Authority’s letter of 23 September 1999, Colakoglu, Diler
and Habas requested a hearing during which they could explain how the information submitted in
their 15 September 1999 responses replied to the Investigating Authority’s information requests.  The
denial of this request violated Article 6.2, which provides, inter alia , that “[i]nterested parties shall .  .
. have the right .  .  . to present .  .  . information orally.”  Icdas requested a hearing as soon as it
reviewed the Essential Facts and Conclusions Report.  The denial of this request also violated
Article 6.2.WT/DS211/R
Annex 2-1
Page 17
17. The Investigating Authority’s rationale for requesting additional cost data after the
verification was that respondents’ costs and prices for rebar did not increase as the Investigating
Authority had anticipated given high inflation in Turkey.   However, this reasoning was purely
speculative.  The only support for the Investigating Authority’s supposition in this regard is the
undisputed fact that Turkey’s economy was experi encing high inflation during the period of
investigation.  However, hyperinflation in the economy as whole certainly does not mean that each
sector and product group is experiencing inflation at the same rate.  This is particularly true of
industries, like the Turkish rebar industry, that import most of their raw materials and where the raw
material input is a commodity product su bject to significant swings in price.
18. Respondents showed in their responses, filed on 15 September 1999, that the Investigating
Authority was incorrect in assuming that constant, sl ightly declining or slightly increasing costs meant
that there was something missing from respondents’ reported costs of production.  Specifically,
respondents showed that their scrap prices declined by 30 per cent-40 per cent in dollar terms during
1998.  The TL was also devaluing against the dollar during this period.  However, where the constant
currency cost declines by this much, the cost in TL could decline as well, or stay stable, or rise only abit, but by much less than inflation.
19. Moreover, respondents explained that labour contracts are renegotiated once per year, such
that one would not expect changes in the unit labour cost throughout the year all other things being
equal.   What causes unit labour costs to rise and fall in these circumstances are changes in the volumeof production.  Similarly, in the case of depreciation expenses, respondents showed that the expense is
adjusted at year-end for inflation.  Some companies used the year-end total depreciation to calculate
their monthly depreciation costs.  Other companies used their monthly values but explained that
annual inflation is predicted at the beginning of the year and included in the monthly depreciation
expenses in the companies’ books.  Therefore, while 1998 depreciation costs were certainly higherthan 1997’s, all other things being equal, the unit depreciation expense would not vary from month to
month during 1998.  Finally, the Government of Turk ey provided official import statistics showing
that inflation did not increase at 5 per cent month as had been assumed by the Investigating Authority.
During many months, including the May-August 1998 period, inflation did not exceed 2.5 per cent
per annum .  Thus, in the context of this industry, it is not at all surprising that neither costs nor home
market prices increased at 5 per cent per month.
20. The Investigating Authority’s findings that respondents’ costs did not include the effects of
inflation, which the Investigating Authority put at 5 per cent per month, were contrary to all of the
facts on the record.  For this reason, the Investigating Authority’s determination of the facts was not
“proper,” nor was its evaluation of the facts objective and unbiased.  (See Article 17.6 (i)).
Furthermore, resort to facts available was unju stified under Article 6.8 and 2.4 of the Agreement.
21. The Investigating Authority sought to characterize the Colakoglu’s, Habas’s and Diler’s
responses to the 19 August and 23 September letters as a “refusal” to provide necessary information.
However, given the enormous amounts of information and analysis requested and the limited amount
of time provided for a response, the voluminous responses provided, and the respondents’ expressedwillingness to come to Cairo to explain the information submitted, this panel should conclude that
each respondent, at a minimum, “acted to the best of its ability”.  Accordingly, resort to facts available
violated paragraph 5 of Annex II.   Furthermore, if the responses received by the Investigating
Authority from IDC and Icdas were considered inadequate, it was incumbent upon the Investigating
Authority to notify these companies that additional information or explanations were required.  No
such notice was ever provided.  See Annex II, paragraph 6.
22. As noted in our submission at page 69, because the Investigating Authority’s resort to Facts
Available was not justified, the final determination was not compliant with Articles 2.2.1.1, 2.2.2 or
2.4.WT/DS211/R
Annex 2-1
Page 18
23. The facts available used to calculate respondents’ costs were severely distorted and
inconsistent with other reliable information in the record in violation of Annex II, paragraph 3.
24. The failure to deduct short-term interest income from interest expense violates
Articles 2.2.1.1 and 2.2.2 of the agreement.  Turkish respondents’ financial statements were prepared
in accordance with generally accepted accounting practices in Turkey.  There is a separation in
respondents’ financial statements between opera ting income and non-operating income.  Operating
expense and income is expense and income that relates directly to the companies’ core operations
involving the production and sale of rebar.  Short-term  interest income is fungible and it is classified
as operating income in the companies’ financial statements.  Therefore, as a matter of generally
accepted accounting principles, such income is related to the production and sale of the product under
investigation.
25. The failure to make an adjustment to normal value for differences in credit terms violates
Article 2.4 of the Agreement.  The credit cost ad justment claimed by respondents is normally granted
by the United States, EU, Canada, Chile and Australia.  Such adjustments are made both to the normal
value and the constructed normal value.WT/DS211/R
Annex 2-2
Page 19
ANNEX 2-2
FIRST ORAL STATEMENT OF EGYPT
EXECUTIVE SUMMARY
I. INTRODUCTION & SCOPE OF REVIEW
1. A number of claims have been raised by Turkey under Articles 2, 3, 6, and Annexes I & II of
the AD Agreement, together with Article X:3 of GATT 1994.  In response, Egypt submits that it
applied the definitive measures on rebar from Turkey pursuant to an investigation that was initiated
and conducted in accordance with Egypt’s rights and obligations as required under the relevantprovisions of the Anti-dumping Agreement and the GATT 1994.
2. Most of Turkey’s claims rely on a different interpretation of the factual circumstances of the
rebar investigation; however, this is not sufficient to demonstrate the existence of a violation under
the AD Agreement.  Facts may be evaluated in different ways.  What matters under Article 17.6 of theAD Agreement is whether the establishment of the facts by the Investigating Authority was unbiased
and objective and whether its determinations are based on a permissible interpretation of the
applicable provisions of the AD Agreement.  Also  of key importance under Article 17.5(ii) is that
when reviewing the Investigating Authority’s determ inations, the Panel must only consider facts made
available to the Investigating Authority during the course of the investigation.
II. INJURY
A. CAUSATION
3. Turkey has failed to demonstrate that Egypt’s application of Article 3.5 of the AD Agreement
was incorrect.  Turkey’s case appears to be based upon a fundamental misconception under the ADAgreement that dumping must be the sole cause of injury.  Since the conclusion of the Tokyo Round,
however, it is not even required that dumping be the principle cause of injury.
4. During the course of the investigation, Egypt was careful to distinguish and to separate factorsother than the dumped imports that may have contributed to the injury experienced by the domesticindustry.  The Investigating Authority considered all evidence that was provided by interested parties,
including any “known factors” other than the dumpe d imports likely to cause injury to the domestic
industry. On the basis of this examination, the Investigating Authority found that there were “no other
causes of injury” sufficient to break the causal relationship between the dumped imports and the
injury to the domestic industry.  To the contrary, the Investigating Authority found that the volumeand price of dumped imports had a direct impact upon the domestic rebar industry in terms of price,
profitability and inventories.
5. There is no express requirement in Article 3.5 that investigating authorities seek out and
examine in each case on their own initiative the effects of all possible factors other than imports thatmay be causing injury ( Thailand – Steel , Panel at 7.273).  The Agreement does not require that Egypt
examine whether specific sales were lost by the domestic industry to imports from Turkey or whether
domestic manufacturers lowered their prices specifically in response to competing offers by suppliers
of Turkish rebar.  While consideration of the prices of non-dumped imports from third countries may
be relevant in the establishment of a causal link under Article 3.5, nowhere in the Agreement is there
the requirement to consider whether the Turkish imports were acting as the price leaders in theWT/DS211/R
Annex 2-2
Page 20
market. In any event, as detailed in Egypt’s Firs t Submission, the Investigating Authority was careful
to consider the effects of third country imports, including those of Saudi Arabia and Libya, both in
terms of volume and price, upon the domestic industry.
6. Consideration of contraction in demand or changes in the patterns of consumption is not
mandatory under Article 3.5 unless relevant to the Investigating Authority’s determination of a causal
relationship.  Article 3.5 of the AD Agreement therefore does not, as alleged by Turkey, impose any
obligation on the Investigating Authority to investigate “whether there was a supply-demand gap that
could not be filled by domestic production”.  The Panel should note, however, that (a) demand in the
Egyptian market was considered by the Investigating Authority and found to have increased; and
(b) the injury incurred to the domestic industry was not in the form of lost sales.  Indeed, in theSubmission of Turkish Respondents Concerning Threat of Injury  (attached as TUR – 18), the
respondents point to the fact that demand is, in fact, increasing.
7. As to the declining cost of raw materials, th e Investigating Authority considered the evidence
and found that it did not prevent the domestic industry from suffering losses.  Given that the injury tothe domestic industry included a decline of profit, the falling cost of raw materials is even more
poignant to the establishment of the causal relationship between the dumping and the injury that
occurred to the domestic industry.
8. Turkey alleges that the Investigating Authority failed to investigate the capacity expansion of
domestic rebar producers.  This is incorrect: the capacity expansion of the domestic industry was
considered by the Investigating Authority during the course of the investigation as required underArticle 3.4.  The Investigating Authority also examined whether there was any increased competition
in the domestic industry as a result of capacity expansion any found that it was not a factor that was
relevant to the establishment of a causal relationship under Article 3.5.  The capacity expansion wasnot, however, a factor that was known to be contribut ing to the injury. Indeed, the capacity expansion
of the Egyptian industry was presented by the respondents as an economic factor demonstrating the
absence of any injury to the domestic industry.
9. As demonstrated in Egypt’s First Submission, the invocation by Turkey of Article 3.4 to
matters pertaining to the examination of a causal link under Article 3.5, is legally incorrect.  Turkey is
alleging that Egypt improperly attributed the injury (i.e. falling prices and a decrease in profitability)to imports from Turkey.  According to Turkey, the in jury was “produced”, that is to say that it was
caused, by factors other than the dumped imports, such as increased domestic capacity and domestic
competition, a decline in the price of raw materials and domestic demand, and the effect of non-dumped imports.  The examination of injury differs from that of a causal link.  The injury analysis
under Article 3.4 does not involve an examination of other potential factors contributing to injury,which is the sole prerogative of Article 3.5.
10. In any event, Turkey has provided neither the legal argumentation nor the evidence to support
a claim under Article 3.4.  It is not sufficient for Turkey to simply allege, without more, any particular
violation under the AD Agreement.  Turkey must present a prima facie  case of inconsistency.  To this
end, Turkey has failed.
B. METHOD AND INTERPRETATION OF DATA
1. Price undercutting
11. Turkey alleges that, by comparing domestic prices and imported prices on a basis that would
be neither truly comparable nor at the appropriate level of trade, the Investigating Authority’s finding
of price undercutting was based on a flawed price comparison in violation of Articles 3.1, 3.2 and 3.5
of the Agreement.  This is wrong: the level of trade that the Investigating Authority consideredWT/DS211/R
Annex 2-2
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appropriate in this context is the ex-factory price for the local industry and ex-importer’s store levels
for the dumped imports, which are two perfectly comparable prices for the determination of price
undercutting. Turkey, on the other hand, would prefer that the comparison take place on a delivered-
price basis.  There is, however, no legal foundation on which to base this claim.  In addition, such acomparison would ignore the fact that importers and exporters do not sell on a delivered basis.
2. Sales and prices
12. By alleging that the Investigating Authority misinterpreted certain data with respect to sales
and prices, Turkey is in fact challenging the Investigating Authority’s evaluation of that data.  We will
recall that Article 17.6(i) makes it very clear that the task of the Panel is solely to assess whether the
Investigating Authority’s establishment of the fact s was proper and the evaluation thereof unbiased and
objective.  If affirmative, the evaluation cannot be overturned, even if the Panel might have reached a
different conclusion.  In any event, Turkey has not alleged any particular violation of the AD
Agreement and thus there is no legal basis whatsoever to support this claim.
3. Period of time established
13. Turkey is of the opinion that, because dumping occurred in 1998, and the injury to the
domestic industry in 1999, Egypt failed to show that the imports were, through the effects of
dumping, causing injury to the domestic industry in violation of Articles 3.1 and 3.5.  Contrary toTurkey’s allegation, however, the injury to the domestic industry took place in 1998 and Q1-1999.
Moreover, the AD Agreement does not require that any specific period of time be established for thepurpose of data collection with regard to the investigations of dumping and of injury.  As noted in
Egypt’s First Submission, the period of data collection for dumping and injury is consistent with the
Recommendation of the Committee on Anti-Dumping Practices Concerning the Periods of Data
Collection for Anti-Dumping Investigations  adopted 5 May 2000.  Indeed, the period of data
collection for injury, which examined the period of 1997 to Q1-1999, included the full period of data
collection established by the Investigating Authority for dumping, which covered 1998.
4. Scope of the Investigation
14. Turkey claims that, by failing to give notice of the change in the scope of the investigation
from threat of material to present material injury, the Investigating Authority violated Articles 6.1 and
6.2 of the AD Agreement.  However, no provision of the AD Agreement requires an investigating
authority to inform interested parties, during the course of the investigation, that it has changed the
legal basis for its injury determination ( Guatemala – Cement II , Panel at 8.237).
III. DUMPING
15. The Investigating Authority made numerous attempts to obtain the requisite information from
the respondents, but was met with insufficient co-operation and unreliable data.  As a consequence,
the Investigating Authority had no other alternative but to base its determinations on the information
at its disposal.
A. REQUESTS FOR ADDITIONAL INFORMATION16. Contrary to Turkey’s allegations, the letters of 19 August 1999 did not constitute “a long,
supplemental cost questionnaire that was, in fact, an entirely new cost questionnaire”.  The
Investigating Authority’s requests for additional information on cost of production of rebar were sent
as a result of two facts.  First, all respondents with the exception of IDC had submitted incomplete
and partial replies to the section of the Manufacturers’ Questionnaire concerning cost of production,WT/DS211/R
Annex 2-2
Page 22
and second, the reported costs data were inconsistent with the hyperinflation experienced by Egypt
during the investigation period.
17. In Egypt’s view, the letter of 19 August 1999 is consistent with the provisions of Articles 2.4,
6.1, 6.1.1, 6.2, 6.6 and 6.7 as well as with paragraph 7 of Annex I and paragraphs 1 and 6 of Annex II
of the AD Agreement.
18. The Investigating Authority complied with paragraph 1 of Annex II when it sent to each
respondent in February 1999 a Manufacturers’ Questionnaire specifying the information required and
the manner in which the information should be structured.  The Questionnaire also drew the attention
of the respondents to the fact that the Investigating Authority could make determinations on the basisof facts available if the required information was not supplied in a reasonable period of time.  The
same level of assistance was provided in all subsequent requests for additional information.
Compliance with Article 6.1 is evident since the purpose of the requests for additional information
was precisely to give notice to the interested parties of the information which the InvestigatingAuthority required to make its determinations.  The Investigating Authority did not contraveneArticle 6.2.  This Article is irrelevant to the requests for additional information since it only concerns
the submission of oral information.  The requests for additional information were sent in accordancewith Article 6.6 which entitles, and in fact obliges, the Investigating Authority to satisfy itself as to
the accuracy of the information used as a basis for its determinations.  The Investigating Authority
furthermore informed the respondents of the reasons why the information submitted on costs ofproduction could not be accepted, and granted them ample opportunity to present in writing the
evidence required, in accordance with Article 6.1 and paragraph 6 of Annex II
.  In Egypt’s view,
however, Article 6.1.1 is not applicable as it relates solely to the deadline to be granted for the
response to questionnaires, which clearly the requ ests for additional information were not.  With
respect to the claim under Article 6.7 and paragraph 7 of Annex I , Egypt considers that, contrary to
Turkey’s allegations, the AD Agreement does not suggest that the Investigating Authority must verify
information solely through on-the-spot verification visits nor that verification visits should be
preferred over other means of verification.  Furthermore, the AD Agreement does not prevent the
Investigating Authority from requesting the submission of additional information and documentary
evidence after having carried out verification visits.
19. Lastly, the claim of violation of Article 2.4 is ill-founded since this Article, and the burden of
proof requirement contained therein, only concern the issue of fair comparison between export price
and normal value.
B. THE USE OF PARTIALLY FACTS AVAILABLE WAS FULLY JUSTIFIED
20. Contrary to Turkey’s allegations, the decision to use facts available is in full compliance with
Egypt’s obligations under the relevant provisions of the AD Agreement.  The costs data submitted by
the respondents were incomplete, unsubstantiated by sufficient supporting evidence and did not
demonstrate that they duly reflected the costs associated with the production and sale of rebar, in
accordance with Article 2.2.1.1 of the AD Agreement.  In consequence, the Investigating Authority
was entitled to make its determinations on facts available in accordance with Article 6.8 and
paragraph 5 of Annex II.  Pursuant to paragraph 6 of Annex II , the Investigating Authority informed
the respondents of the reasons why their costs data could not be accepted and gave them ample
opportunity to provide further explanations.  The Investigating Authority furthermore stated in the
Final Report the reasons why the explanations and the information provided were not satisfactory,therefore justifying the use of facts available.  It was furthermore demonstrated that the claims of
violation of Articles 2.2.1.1, 2.2.2 and 2.4 are redundant.WT/DS211/R
Annex 2-2
Page 23
C. DATA SUBMITTED BY THE RESPONDENTS
21. The Investigating Authority decided to use the data submitted by the respondents as
appropriate facts available.  This methodology is considered to be reasonable and fair since, in spite ofthe poor quality of the reported costs data, the respondents were given the benefit of their own data.
The cost of production and constructed normal value of the respondents were calculated in accordance
with the above methodology.  Turkey contends th at the Investigating Authority violated various
provisions of the AD Agreement in the reconstruction of the cost of production and normal value of
Icdas, Habas, IDC and Diler.  No claim is presented concerning the calculations pertaining to
Colakoglu. It was explained that those claims are wi thout any merit and must, therefore, be rejected.
D. DISALLOWANCE OF INTEREST REVENUE
22. Egypt considers that interest income, which is generated by the financial activities of the
respondents, should not be included in the computation of the cost of production.  This is in line with
the provisions of Article 2.2 of the AD Agreement as well as with the usual practice of other
jurisdictions, such as the United States and the European Communities.
E. ABSENCE OF A CREDIT COST ADJUSTMENT23. Egypt considers that, unlike actual selling prices that are negotiated between seller and buyer
on the basis of, among other things, the conditions and terms surrounding the sale, the construction of
the normal value produces a notional price, the level of which cannot be influenced by any conditions
and terms of the relevant sales.  As such, Egypt considers that the constructed normal value does not
need to be adjusted for differences in credit term s, since such normal value is not affected by any
credit terms.  In any case, since all domestic sales were made at a loss, the Investigating Authoritycould not use any credit terms granted in the ordinary course of trade to calculate the adjustment.  For
the foregoing reasons, Egypt considers that the absence of an adjustment for credit costs to a
reconstructed normal value is based on a permissible interpretation of Article 2.4 of the AD
Agreement and should therefore be upheld by the Panel.
F. ARTICLE X:3 OF GATT 1994
24. In Egypt’s view, actions taken by an Investigating Authority in one single anti-dumping case
should only be reviewed under the obligations of Article X:3 if such actions had a significant impact
on the overall administration of the law, and not simply on the outcome of the single case in question.
Furthermore, a conclusion that Article X:3 is violated could in any case not be reached where the
actions in question are found to be consistent with more specific obligations of the applicable WTOAgreement.WT/DS211/R
Annex 3
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ANNEX 3
RESTATEMENT BY TURKEY OF  ITS CLAIMS IN RESPONSE
TO A REQUEST FROM THE PANEL
I. INJURY CLAIMS
A. ARTICLE 3.1
1. According to the Appellate Body, the phrase “positive evidence”, as used in Article 3.1,
means “the evidence must be of an affirmative, objective and verifiable character, and that it must be
credible”.1
1. Failure to Develop Specific Evidence Linking Imports to Adverse Volume and Price
Effects Upon the Domestic Industry
2. As noted in the Executive Summary of the Statement of Turkey at the First Substantive
Meeting (paras. 1 & 2), the principal indicia of injury relied upon by Egypt for its affirmative injury
determination was falling prices and profitability in 1998 and 1999.  In this connection, the Final
Report attributed the price decline to price underselling by imports from Turkey.  Turkey claims thatEgypt violated Article 3.1 by failing to develop “positive evidence” that dumped imports had an effect
on domestic prices or, indeed, that dumped imports had any impact on the domestic industry.
3. The mere existence of increases in the volume of allegedly dumped imports is insufficient
evidence of an injurious impact on the domestic industry where the domestic industry is substantiallyincreasing the volume of its own sales, and experi encing strong increases in market share.  The
existence of some price underselling is also insufficient “positive evidence” of injury causation.
Without something more, the Investigating Authority “may mistake a coincidence in time for a causal
relationship”.
2
4. “Positive evidence” that imports caused domestic prices to fall would include evidence thatpurchasers considered Turkish imports to be the “price leaders” in the market, evidence of specific
sales lost by the domestic industry to Turkish imports, or evidence that domestic producers dropped
their prices, or had to retract planned prices increases, because customers cited, in price negotiations
with the domestic producers, the availability of rebar from Turkey at lower prices.  None of this
evidence was developed by the Investigating Authority.  Indeed, there is no “positive evidence” on the
administrative record that there was any head-to- head competition between imports and the domestic
industry.
2. Failure To Make a Proper Determination of Price Undercutting
5. Egypt also failed to make a proper determination of price undercutting.  (See Section D below
and First Submission of Turkey at III.G.).  By failing to establish properly that imports from Turkey
were priced below comparable sales prices charged by the domestic industry, the Investigating
Authority failed to develop “positive evidence” of, and failed to undertake an “objective examination”
of the “effect of the dumped imports on prices in the domestic market” in violation of Article 3.1.
                                                     
1 Hot Rolled Carbon Steel Products from Japan at 192.
2 United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan , WT/DS
184/R, 28 Feb. 2001, at para 7.252.WT/DS211/R
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3. Failure To Link the Imports Which Were Specifically Found To Be Dumped to the
Injury
6. Egypt failed to demonstrate that dumping and injury occurred at the same point in time such
that there was a link between the imports that were specifically found to be dumped and the injury
found.  This was a violation both of Article 3.5 (see Section C below and First Submission of Turkey
at III.J) and of Article 3.1.
7. During its investigation, the Investigating Authority found most of the injury upon which it
relied for its affirmative injury determination in the first quarter of 1999.  Specifically, the largest
price and profitability declines occurred during that period.  But the Investigating Authority made nofindings that imports were sold at less than normal value during that period and there is no evidence
or reasoning that would link the injury found in 1999 to the dumped imports in 1998.  By failing to
establish such a linkage, the Investigating Authorit y failed to develop “positive evidence” linking “the
effect of the dumped imports on prices in the domestic market for like products”.  The Investigating
Authority also failed to develop “positive eviden ce” linking the imports which were dumped to the
“impact of these imports on domestic producers of such products”.  In both respects, the Investigating
Authority violated Article 3.1.
B. ARTICLE 3.4
1. Failure to Examine “All Relevant Economic  Factors and Indices Having a Bearing on
the State of the Industry,” Affecting “P rofits” and “Affecting Domestic Prices”
8. The Investigating Authority failed to “evaluate[] .  .  . all relevant economic factors and
indices having a bearing on the state of the industry”, including all relevant economic factors andindices “affecting domestic prices”.  Specifically, the Investigating Authority failed to examine, or
failed to examine adequately, the following factors which had a direct bearing on the state of the
domestic industry:
(a) The dramatic capacity expansion at the two major Egyptian rebar producers and its
likely temporary effects on their cost structures;
(b) The effect of the capacity expansions, which started production at the end of 1998, on
competition between the Egyptian producers as they attempted to fill newly expanded
order books;
(c) Sharpening competition between Al Ezz and Alexandria National as Al Ezz sought to
increase market share by capitalizing on its cost advantages over Alexandria
National;
(d) Falling prices for steel scrap, the primary raw material input at Al Ezz;
(e) A sharp contraction in demand in January 1999, the very month in which prices for
rebar fell; and
(f) The effect of comparably priced, fairly traded imports.
3
9. Factor (a) has a bearing on the costs of production experienced by the domestic industry.  It
is, therefore, a “relevant factor[] or indice[] having a bearing on the state of the industry”.  It is also a
                                                     
3 See First Submission of Turkey at III.B, III.C, III.D, III.E.WT/DS211/R
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factor that affects the domestic industry’s profits.  “[P]rofit[]” is a factor specifically mentioned in
Article 3.4.
10. Factors (b)-(e) are factors “affecting domestic prices”, yet they were either not mentioned in
the Final Report or their effects on domestic prices were not examined by the Investigating Authority
or were not given any weight in the Authority’s analysis of why prices fell.  While the Investigating
Authority noted that falling raw material prices should increase profits, rather than vice-versa, the
Investigating Authority failed to consider that falling scrap prices affected only Al Ezz, and not
Alexandria National, and that the increase in Al Ezz’s cost advantages might have allowed it to reduce
prices and gain market share from Alexandria Natio nal without sacrificing profitability.  Al Ezz’s
growing cost advantages and growing market share mu st have been evident in the cost data received
by the Investigating Authority.
11. Factor (f) may or may not have had an effect on domestic prices.  However, given that there
were comparably priced non-subject imports in the market at the same time as imports from Turkey,
and there was no support for a finding that imports from Turkey had materially different effects ondomestic prices than imports from other sources, the Investigating Authority’s finding that imports
from Turkey caused price declines, while imports from other sources did not, is inconsistent at least.
2. Failure to Examine Factors Specifically Listed in Article 3.4
12. Moreover, the Investigating Authority did not evaluate all of the factors specifically listed in
Article 3.4.  These factors include productivity, actual and potential negative effects on cash flow,
employment, wages, growth, and ability to raise capital or investments.
4
13. As held by the Panel in European Communities – Anti-dumping duties on Imports of Cotton-
Type Bed Linen from India , the list of factors enumerated in Article 3.4 of the Agreement “must be
evaluated by the investigating authorities in each case in examining the impact of the dumped imports
on the industry concerned”.5  While the investigating authority may determine that some of the
Article 3.4 factors are not relevant in a particular case, it may not disregard those factors, and must
explain the lack of relevance such that its objective consideration of all factors is apparent in the final
determination.6  Egypt failed to meet that requirement in this case.
3. Failure of the Public Final Report to Disclose Adequate Examination of Certain Factors
Listed in Article 3.4
14. The public version of the Essential Facts and Conclusions Report provides no evidence that
there was a sufficient examination or evaluation of capacity utilization or return on investment.  Thisalso violated Article 3.4 because the record does not permit the Panel to discern an objective and
complete consideration of these factors.
7
C. ARTICLE 3.5
1. Absence of Positive Evidence That Imports Were Having an Adverse Volume or Price
Effect on the Domestic Industry
15. The absence of any positive evidence that imports were having an adverse volume or price
effect on the domestic industry, as discussed in Se ction I.A above in connection with the violation of
                                                     
4 Statement by Turkey at the First Substantive Session at 12.
5 WT/DS141/R, 30 Oct. 2000 at para. 6.159
6 Id. at para 6.162.
7 Id.WT/DS211/R
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Article 3.1, also represents a violation of Article 3.5.  By failing to develop “positive evidence” that
imports were having a volume or price effect on the domestic industry, the Investigating Authority
also failed to demonstrate “a causal relationship between the dumped imports and the injury to the
domestic industry” as required in Article 3.5.8
2. Failure to Separate and Distinguish the Effects of Known Factors Other Than Imports
Which Were, or May Have Been, Causing Injury to the Domestic Industry
16. The factors listed above in Section I.B were “known factors other than the dumped imports
which at the same time” were, or may have been, causing injury to the domestic industry.  The failure
to “appropriately separate[] and distinguish[]” the effects of those factors from the effects of thedumped imports violated Article 3.5.
9  This failure resulted in improper attribution of the effects of
those factors to imports from Turkey.10
3. Failure to Demonstrate that the Imports Caused Injury to the Domestic Industry
“Through the Effects of the Dumping” Found
17. As discussed above in connection with Article 3.1, Egypt failed to demonstrate that dumping
and injury occurred at the same point in time such  that there was a link between the imports that were
specifically found to be dumped and the injury found.  This was a violation both of Article 3.1 (see
Section I.A above and First Submission of Turkey at III.J)  and of Article 3.5.
18. During its investigation, the Investigating Authority found most of the injury upon which it
relied for its affirmative injury determination in the first quarter of 1999.  Specifically, the largest
price and profitability declines occurred during that period.  But the Investigating Authority made no
findings that imports were sold at less than normal value during that period and there is no evidenceor reasoning that would link the injury found in 1999 to the dumped imports in 1998.  By failing to
establish such a linkage, the Investigating Author ity failed to demonstrate “that the dumped imports
are, through the effects of the dumping , .  .  . causing injury within the meaning of this Agreement”, as
required by Article 3.5.
19. Whatever else this clause may mean, it must mean that the injury must be found to have been
caused by imports which have been shown to have been dumped, i.e., sold at less than normal value.
While there was a finding of dumping with respect to imports from Turkey in 1998, there was no
comparable finding with respect to imports in 1999.  Nor was there any information or analysis in the
Final Determination linking imports in 1998 with the injurious impacts to the domestic industry found
in the first quarter of 1999.  Therefore, the Investigating Authority failed to meet the requirements of
Article 3.5, first sentence.
D. ARTICLE 3.220. Egypt failed to determine accurately whether there was price undercutting by imports of rebar
from Turkey because the Investigating Authority fa iled to make price comparisons on a delivered-to-
                                                     
8 See First Submission of Turkey at III.A.
9 “In order that the investigating authorities, applying 3.5, are able to ensure that the injurious effects of
the other known factors are not ‘attributed’ to dumped imports, they must appropriately assess the injuriouseffects of those other factors.  Logically, such an assessment must involve separating and distinguishing theinjurious effects of other factors from the injurious effects of the dumped imports.  If the injurious effects of the
dumped imports are not appropriately separated and distinguished from the injurious effects of other factors, the
authorities will be unable to conclude that the injury they ascribe to the dumped imports is actually caused bythose imports, rather than by other factors.”  Hot-Rolled Carbon Steel Products from Japan , at para. 223.
10 See First Submission of Turkey at III.B, III.C, III.D, III.E, and III.F.WT/DS211/R
Annex 3
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the-customer basis.  The Essential Facts and Conclusions Report does not reveal the channels of
distribution for the domestic and imported product or where in the chain of distribution any actual
price competition between the imported product and the domestic product takes place.  Without
knowing these facts, it is impossible to ascertain whether the Investigating Authority measured price
competition between the imported and domestic products at the correct level of trade.
21. If, for example, the manufacturer sells directly to end users and the importers sell to
middlemen who then sell to end users, the real competition is at the end user level.  The importer’s
price to the middle man will have no effect on the domestic producer’s price if the middleman mark-
up is greater than the difference between the importer’s price to the middleman and the producer’s
price to the end-user.  Price undercutting, in this situation, must be measured at the end-user levelwhere there is direct competition between the price of the imported rebar and the price of the domestic
rebar.
22. Similarly, if the domestic manufacturer and the importer sell on a delivered basis, comparison
of domestic and import prices on an ex-factory basis will mask differences in transportation costs thatare included in the price to the customer and that affect price comparability.  Because the Final Report
does not disclose whether price comparisons were made on an appropriate basis, Egypt failed to make
a proper determination that import prices were undercutting domestic prices, in violation of
Article 3.2 (“With regard to the effect of the dumped imports on prices, the investigating authorities
shall consider whether there has been a significant price undercutting by the dumped imports ascompared with the price of a like product in the importing country .  .  .  .”)
E. ARTICLES 6.1 AND 6.223. Article 6.1 of the Agreement provides that “All interested parties in an anti-dumping
investigation shall be given notice of the information which the authorities require and ample
opportunity to present in writing all evidence which they consider relevant in respect of the
investigation in question.”  Article 6.2 provides:  “Throughout the anti-dumping investigation, all
interested parties shall have a full opportunity for the defence of their interests.”
24. Turkey considers that Egypt violated Articles 6.1 and 6.2 of the Agreement by changing the
scope of its injury investigation – from an investigation solely concentrated on threat of injury to aninvestigation of present material injury – after the deadline for submission of factual information and
comment and without adequate notice to the Turkish respondents.  Failure to give this notice deprived
the Turkish respondents of their right to submit relevant information and comment on the present
material injury question.  It also deprived them of their fundamental due process right to know what
allegations were being lodged against them at the time that they were called upon to submitinformation and comment.
25. The Investigating Authority clearly indicated in its Initiation Report that the allegations
received from the domestic industry were allegations of threatened material injury only.  Under
“Other Causes of Injury”, for example, the Initiati on Report states that “[t]he industry indicated that
there were no other causes of a threat of injury other than the allegedly dumped imports.  Therefore,
the Investigating Authority did not consider other factors that are likely to threaten to cause material
injury”.
11  The Investigating Authority did consider it necessary to mention that there were no causes
of current injury, other than the allegedly dumped imports, no doubt because the allegations of injury
contained in the domestic industry’s application were limited to allegations of threat of injury.  In itsquestionnaires to the Turkish interested parties, th e Investigating Authority also stated that “[t]he
application by the Egyptian industry for an investigation was based on threat of material injury
resulting from importation of the allegedly dumped goods from Turkey.  Therefore, the Department
                                                     
11 TUR-1 at 19.WT/DS211/R
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must examine whether the Egyptian industry is likely to suffer material injury in the near future if the
dumped imports continue.”12
26. Later in the investigation, after the time for submitting factual information and argument onthe injury question had passed, the Investigating Authority changed the scope of its investigation in
order to examine the present material injury question.  By failing to give adequate notice of the
change in the scope of its investigation and by failing to give the Turkish interested parties an
adequate opportunity to submit information and comment on this issue, the Investigating Authority
violated Articles 6.1 and 6.2.
II. CLAIMS REGARDING DETERMINATION OF DUMPING
A. ANNEX II, PARAGRAPH 1; ANNEX II, PARAGRAPH 6; ARTICLE 6.7; ANNEX 1,
PARAGRAPH 7
27. Egypt turned the normal sequence of events in an anti-dumping duty investigation on its head
in this case, and in so doing seriously prejudiced the rights and interests of the Turkish respondents.
28. Normally, it is anticipated that the anti-dumping duty questionnaire will contain all basic
questions setting forth the format in which home market sales and costs of production will be reported
as well as requesting all basic documentary support for such costs that must be submitted outside ofthe on-the-spot investigation.  Furthermore, such qu estionnaires must be sent out as soon as possible
after initiation of the investigation.  Thus, paragraph 1 of Annex II to the Anti-Dumping Agreement
states:
"As soon as possible after the initiation of the investigation, the investigating
authorities should specify in detail the info rmation required from any interested party,
and the way in which that information should be structured by the interested party in
its response. "
29. The Investigating Authority also has an obligation to examine the responses to that
questionnaire closely and to inform the respondents promptly if it has rejected any part of that
information or if supplemental information is requ ired.  Thus, paragraph 6 to Annex II to the Anti-
Dumping Agreement states:
"If evidence or information is not accepted, the supplying party shall be informed
forthwith of the reasons thereof and have an opportunity to provide further
explanations within a reasonable period .  .  . ."
30. Following this step, an on-the-spot verification may be scheduled at respondents’ place of
business.  See Article 6.7 and Annex I.  The purpose of the verification is to check the information
reported in the responses to the company’s books and records in order to determine its accuracy.
Once the verification is completed, the factual record of the investigation is ordinarily closed.
According to Paragraph 7 of Annex I, “[a]s the main purpose of the on-the-spot verification is to
verify the information provided or to obtain furthe r details, it should be carried out after the response
to the questionnaire has been received”.  Further, paragraph 8 of Annex I provides that “[e]nquiries or
questions put by the authorities .  .  . and essential to a successful on-the-spot investigation should,
whenever possible, be answered before the visit is made”.
31. In the Egyptian rebar investigation, the anti-dumping duty questionnaire was issued to each of
the six Turkish exporters and each of the exporters, with the exception of Ekinciler’s supplier,
                                                     
12 TUR-2 at 9.WT/DS211/R
Annex 3
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responded in full to that questionnaire.  The cost questionnaire contained in the original questionnaire
was a relatively simple one, requesting just one figure for all raw materials costs and failing to specify
the period over which costs should be reported.  Respondents were directed to report home market
sales as near as possible at the same time as their sales to Egypt, and given the hyperinflationarycharacter of the Turkish economy and common practice in other jurisdictions, the Turkish respondents
reported their monthly costs of production for the same months in which they reported home market
sales.
32. The responses to the original questionnaire filed by Colakoglu, Diler, Habas, Icdas and IDC
were found to be complete by the Investigating Authority and no supplemental questionnaire was
issued prior to verification.  Verification was conducted and it found no discrepancies between thereported information and the companies’ books and records.  Preliminary margin calculations were
made as to each of respondents’ export sales to Egypt and they found margins ranging from zero to
4.17 per cent.
33. Then, more than a month after the verification took place, more than four months after the
questionnaire responses were filed, and when, in the Investigating Authority’s own words, the end of
its investigation was “near”, the Investigating Authority suddenly issued a long, supplemental cost
questionnaire that was, in fact, an entirely new and much more complex cost questionnaire.  Much of
the data requested was basic preliminary data that might be used to evaluate a cost response but which
should have been requested either in the original questionnaire or at verification.
34. Moreover, the Investigating Authority required that the respondents provide substantial new
basic cost information by requiring that monthly co st data be provided not only for the months during
which sales were made to Egypt but for all other months as well.  And then, instead of extending its
investigation in order to conduct a new cost verification, the Investigating authority asked respondentsto do the impossible – to respond to a substantially expanded and more complex cost questionnaire
than was contained in its original questionnaire and to submit tables and charts tying each aspect of
cost and sales responses to their books and records, together with adequate source documentation to
verify each and every sales price and cost.  All of  the source documentation was, of course, supposed
to be fully translated, organized, explained and tied together in English so that the Egyptian
authorities could follow the trace from the response to the books.  Literally thousands of pages would
have had to have been translated, organized and explained in order to respond fully to thequestionnaire.
35. As explained by three of the Turkish respondents at the time, this attempt at a “long-range” or
“mail order” verification was doomed to failure from the start.  In fact, given the tone, content and
deadline set by the August 19 August letter, the fact that nearly identical letters were sent to each of
the five respondents notwithstanding the absence of evidence that they had coordinated their
responses, the timing of this letter just 24 hours after a major earthquake hit Turkey and the absurd
deadline imposed for a response, it seems that Egypt hoped and expected that respondents would be
unable to respond providing a pretext for a final determination with margins much higher than
preliminarily calculated based on “facts available”.
36. By failing to request the basic cost data identified in its 19 August letter in its original
questionnaire, the Egyptian Authorities violated Paragraph 1 of Annex II of the Agreement.  The
Investigating Authorities failed “as soon as possible after the initiation of the investigation, .  .  . [to]
specify in detail the information required from any interested party, and the way in which thatinformation should be structured”.  Moreover, E gypt had no excuse for waiting until the investigation
was nearly over to issue its supplemental request for information.  All of the information upon which
the Egyptian Authorities based their request for supplemental cost information was contained in the
responses filed by respondents on 7 April 1999.  If the Egyptian Authorities wished to question
aspects of those responses, they should have done so by issuing supplemental questionnaires at thatWT/DS211/R
Annex 3
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time, given the Turkish respondents time to respond, and then conducted a full verification of both the
price and cost issues.
37. By waiting until after the verification to raise these issues and then insisting that respondents
provide full “mail order” verification of their previously submitted cost responses and the new
information that the Investigating Authority for the first time requested on 19 August Egypt violated
Annex 1, paragraph 7 and Article 6.7.  “In order to verify information”, on-site verifications are
permitted under the agreement, “mail order” verifications are not authorized.  By taking these steps,
Egypt also seriously prejudiced the rights of respondents and impaired their “opportunity to provide
further explanations” in violation of Paragraph 6 of Annex II.
B. ARTICLE 6.1.1, ANNEX II, PARAGRAPH 6, AND ARTICLE 6.2
1. Deadline for August 19, 1999 Questionnaire Response
38. Under Article 6.1.1, a party must be given 37 days to reply after “receiving a questionnaire
used in [an] anti-dumping investigation[].”  “Due co nsideration” must then be given to any request for
an extension of the original period for a response.  Turkey contends that Egypt failed to meet this
obligation when it gave only 13 days for a response to the questionnaire issued on 19 August 1999,
and when it extended the deadline upon request  to no more than 27 days after the questionnaire was
issued.
39. Although the questionnaire issued on 19 August 1999 was not the first questionnaire issued in
this proceeding, it amounted to an entirely new cost questionnaire, requesting several new kinds of
information, various basic documents that would ordinarily be requested, if at all, in an original cost
questionnaire (such as a chart of accounts, income tax returns, a written summary of the company’sbooks and records, a flow-chart of the accounting system, a list of each type of accounting record
kept, lists of all products manufactured and their accounting codes, lists of depreciable assets, and an
explanation of how inflation is taken into accoun t in the company’s accounting system), the reporting
of costs of production over a much larger number of months, and the preparation of detailed tables
and charts tying each aspect of the cost sales responses to the companies’ books and records, together
with adequate source documentation to verify each and every sales price and cost.
40. The document issued on 19 August 1999 was certainly in the form of a “questionnaire” for
use in anti-dumping investigations.  By the plain terms of Article 6.1.1, therefore, the Investigating
Authority was obliged to give the respondents at least 37 days in which to respond and to give “due
consideration” to any extensions requested by the respondents.
41. In the alternative, the Investigating Authority violated Annex II, paragraph 6  and Article 6.2
by failing to give the respondents a reasonable period of time in which to respond to the
19 August 1999 questionnaires.  Annex II, paragraph 6 provides that that parties receiving
supplemental requests for information should be given “an opportunity to provide further explanations
within a reasonable period.  .  .  ”.  Article 6.2 provides that “[t]hroughout an anti-dumpinginvestigation all interested parties shall have a full opportunity for the defense of their interests”.
42. The initial deadline of just 13 days in which to respond to the 19 August questionnaire was
plainly inadequate in the best of circumstances in light of the expansive new requests for Information
and for self-verification that that questionnaire contained.  It was utterly devoid of consideration forthe actual circumstances respondents faced in light of the massive earthquake that hit Istanbul the day
before.  Respondents reasonably requested extensions to 11 October 1999 and 22 October 1999 in
which to respond to the questionnaire in light of its contents, the disruption to normal business
operations caused by the earthquake and the fact that, in several instances, competing verificationWT/DS211/R
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were scheduled in Canadian and European anti-dumping investigations being conducted at the same
time.  The denial of these requests violated Annex II, paragraph 6 and Article 6.2.
2. Deadline for September 23, 1999 Questionnaire Response
43. On 23 September 1999, the Investigating Authority, for the first time, required of Colakoglu,
Habas and Diler to provide a monthly break-down of all costs to produce billet, supplied on a monthly
basis.  The Investigating Authority also demanded that these three companies translate each and every
page of the hundreds of pages of documentation that they were required to provide in their
15 September responses.  The period given for a response to this questionnaire, just two to five days,
was manifestly inadequate and contrary to Articles 6.1.1 and 6.2 of the Agreement, as well asAnnex II, paragraph 6.
3. Failure to Notify Icdas and IDC of Continuing Deficiencies After Receipt of Their
Responses to the 19 August 1999 and 23 September 1999 Follow-Up Questionnaires
44. Icdas and IDC provided full and complete responses to the 19 August 1999 questionnaire.
The Investigating Authority only had a few, minor follow-up questions, which were answered in a
timely fashion.  No other communications were received from the Investigating Authority noting any
other deficiencies or missing data.  The Investigating Authority’s subsequent decision to rely for its
determination completely on facts available is plainly contrary to Annex II, paragraph 6.  Ifinformation is “not accepted”, that section requires that the supplying party be informed “and have an
opportunity to make further explanations”.  Icdas and IDC were deprived of that right in this case.
4. Denial of Requests for Meetings
45. After receiving the Investigating Authority’s letter of 23 September 1999, Colakoglu, Diler
and Habas requested a hearing during which they could explain how the information submitted in
their 15 September 1999 responses replied to the Investigating Authority’s information requests.  The
denial of this request violated Article 6.2, which provides, inter alia , that “[i]nterested parties shall .  .
. have the right .  .  . to present .  .  . information orally”.  Icdas requested a hearing as soon as it
reviewed the Essential Facts and Conclusions Report.  IDC stated that it was available for further
verification of its cost data if the Investigating Authority desired one.  The denial of these requestsalso violated Article 6.2.
46. The denial of these requests also violates paragraph 6 of Annex II, which provides:  “If
evidence or information is not accepted, the supplying party should be informed forthwith of the
reasons therefor, and should be given an opportunity to provide further explanations within areasonable period .  .  .  .”  In this case, the Turkish respondents were denied that basic right.
C. ARTICLE X:347. The denial of respondents’ requests for meetings at which they could explain how their
responses to the Investigating Authority’s request for information were complete and accurate and
show that their responses could be tied to their books and records was abusive, discriminatory and
unfair to respondents in violation of Article X:3 of the GATT.
48. The calculation of an interest charge for IDC that overstated IDC’s interest expenses as a
percent of cost of goods manufactured by a factor of eight was also abusive and discriminatory in
violation of Article X:3.
13
                                                     
13 See First Submission of Turkey at 74-76.WT/DS211/R
Annex 3
Page 33
D. ARTICLE 6.8 AND 17.6 (I)
49. The Investigating Authority’s rationale for requesting additional cost data after the
verification was that respondents’ costs and prices for rebar did not increase as the InvestigatingAuthority had anticipated given high inflation in Turkey.  However, this reasoning was purely
speculative.  The only support for the Investigating Authority’s supposition in this regard is the
undisputed fact that Turkey’s economy was experi encing high inflation during the period of
investigation.  However, hyperinflation in the economy as whole certainly does not mean that each
sector and product group is experiencing inflation at the same rate.  This is particularly true of
industries, like the Turkish rebar industry, that import most of their raw materials and where the raw
material input is a commodity product su bject to significant swings in price.
50. Respondents showed in their responses, filed on 15 September 1999, that the Investigating
Authority was incorrect in assuming that constant, sl ightly declining or slightly increasing costs meant
that there was something missing from respondents’ reported costs of production.  Specifically,
respondents showed that their scrap prices declined by 30 per cent-40 per cent in dollar terms during1998.  The TL was also devaluing against the dollar during this period.  However, where the constant
currency cost declines by this much, the cost in TL could decline as well, or stay stable, or rise only a
bit, but by much less than inflation.
51. Moreover, respondents explained that labour contracts are renegotiated once per year, such
that one would not expect changes in the unit labour cost throughout the year all other things being
equal.   What causes unit labour costs to rise and fall in these circumstances are changes in the volume
of production.  Similarly, in the case of depreciation expenses, respondents showed that the expense is
adjusted at year-end for inflation.  Some companies used the year-end total depreciation to calculate
their monthly depreciation costs.  Other companies used their monthly values but explained thatannual inflation is predicted at the beginning of the year and included in the monthly depreciation
expenses in the companies’ books.  Therefore, while 1998 depreciation costs were certainly higher
than 1997’s, all other things being equal, the unit depreciation expense would not vary from month to
month during 1998.
52. Finally, the Government of Turkey provided official import statistics showing that inflation
did not increase at 5 per cent month as had been assumed by the Investigating Authority.  Duringmany months, including the May-August 1998 period, inflation did not exceed 2.5 per cent per
annum .  Thus, in the context of this industry, it is not at all surprising that neither costs nor home
market prices increased at 5 per cent per month.
53. The Investigating Authority’s findings that respondents’ costs did not include the effects of
inflation, which the Investigating Authority put at 5 per cent per month, were contrary to all of the
facts on the record.   For this reason, the Investiga ting Authority’s determination of the facts was not
“proper”, nor was its evaluation of the facts “objective” and “unbiased” within the meaning of
Article 17.6(i).  Because the basis for initially questioning and then rejecting Turkish respondents’
costs was unfounded, resort to facts available was unjustified under Article 6.8 of the Agreement.The Turkish respondents provided all “necessary information” and certainly did not “impede” the
investigation.
E. ANNEX II, PARAGRAPH 5
54. Annex II, Paragraph 5 provides that “[e]ven though information provided may not be ideal in
all respects, this should not justify the authorities from disregarding it, provided the interested party
has acted to the best of its ability ”. The Investigating Authority sought to characterize the
Colakoglu’s, Habas’s and Diler’s responses to the 19 August and 23 September letters as a “refusal”
to provide necessary information.  However, given the enormous amounts of information and analysisWT/DS211/R
Annex 3
Page 34
requested and the limited amount of time provided for a response, the voluminous responses provided,
and the respondents’ expressed willingness to come to Cairo to explain the information submitted, this
panel should conclude that each respondent, at a minimum, “acted to the best of its ability”.
Accordingly, resort to facts available violated paragraph 5 of Annex II.
F. ARTICLES 2.2.1.1, 2.2.2 AND 2.4
1. Breach of Article 2.4 by Imposing an Unreasonable Burden of Proof on Respondents
55. As discussed in Section II.A, the Investigating Authority waited until the last minute to raise
issues requiring the submission of new factual information and then imposed an unduly burdensome“mail order” verification requirement upon the respondents.  In so doing, it imposed an “unreasonable
burden of proof” upon respondents in violation of Article 2.4 of the Agreement.
2. Breach of 2.2.1.1 and 2.2.2 and 2.4 Due to Unjustified Resort to Facts Available
56. As noted in our First Submission at page 69, because the Investigating Authority’s resort to
facts available was unjustified, its final determination was not compliant with Articles 2.2.1.1 or 2.2.2
or 2.4.
57. Article 2.2.1.1 states that “costs shall normally be calculated on the basis of records kept by
the exporter or producer under investigation”.  The Investigating failed to meet this requirement
reasonably by picking the very highest cost for each cost element from among the monthly costs
supplied.  Article 2.2.2 provides that “amounts for administrative, selling and general costs and for
profits shall be based on actual data pertaining to production and sales in the ordinary course of trade.
.  .  ”.  The Investigating Authority failed to m eet this requirement when it included in constructed
normal value interest expenses from months other than the month in which the constructed value was
being calculated.  Finally, Article 2.4 requires “a fair comparison” “between the export price and the
normal value”.  The Investigating Authority breached this provision by comparing a constructed value
based on higher costs incurred in months other than the months in which the sales to Egypt took place,
distorting the dumping margin calculation.
3. Breach of Articles 2.2.1.1 and 2.2.2 Due to Failure to Deduct Short-Term Interest Offset
58. The Investigating Authority did not deduct short-term interest earnings from interest expense
in computing the net interest expense which it included in the cost of production and constructed
normal value.  The Investigating Authority claimed that “decisions by respondents to invest funds in
interest-bearing accounts do not, in the Investigating Authority’s view, bear a sufficiently closerelationship to a company’s cost of producing the subject products”.  This finding is inconsistent with
generally accepted accounting principles and thus with the Agreement.  It also inconsistent with
generally accepted dumping practice in other jurisdictions.
59. Article 2.2.1.1 provides that “costs shall normally be calculated on the basis of records kept
by the exporter or producer under investigation, provided that such records are in accordance with the
generally accepted accounting principles of the exporting country and reasonably reflect the costs
associated with production and sale of the product under consideration”.  Article 2.2.2 provides that
amounts for administrative, selling and general costs .  .  .  shall be based on actual data pertaining to
the production and sales in the ordinary course of trade by the exporter or producer underinvestigation”.
60. In this case, Turkish respondents’ financial statements were prepared in accordance with
generally accepted accounting practices in Turkey.  There is a separation in respondents’ financial
statements between operating income and non-operating income.  Operating expense and income isWT/DS211/R
Annex 3
Page 35
expense and income that relates directly to the companies’ core operations involving the production
and sale of rebar.  Non-operating expense and income is expense and income that is divorced from the
production and sale of the companies’ main products.
61. In each case, short-term interest income is clas sified as an operating income in the companies’
financial statements.  Therefore, as a matter of generally accepted accounting principles, such income
is related to the production and sale of the product under investigation.  Moreover, in each case, in
arriving at net income, short-term interest income is offset against interest expense and other
expenses.  Therefore, in order to arrive at an accurate picture of the fully distributed cost to produce
the product under consideration, this income must be deducted.
62. The United States, the EU and Canada all give such an allowance because companies
commonly maintain a working capital reserve in inte rest-bearing accounts in order to meet daily cash
requirements and working capital requirements.  A NAFTA panel reviewing a decision by Revenue
Canada in this area reversed and remanded with instructions to offset interest expense with short-term
interest income.  It explained in doing so that, under generally accepted accounting rules, short-terminterest income is considered part of the current operating cycle.  As a US court has explained,
moreover, a company that chooses to invest short-term funds rather than use them to pay off or avoid
short-term debt should not be penalized in the calculation of net overhead expenses.  It is the net cost
(interest income minus interest expense) that represents a company’s true interest financing expense.
63. Because each of the companies’ records show that short-term interest income is operating
income and because that income is fungible, the In vestigating Authority’s failure to offset interest
expense with interest income violates Article 2.2.1.1 and 2.2.2 of the Agreement.
4. Breach of Article 2.4 Due to Failure to Make An Adjustment to Normal Value for
Differences in Terms of Sale
64. The Investigating Authority also failed to ma ke a credit cost adjustment to the normal value
for differential payment terms on home market and export sales to Egypt.  The Government of Turkey
considers that this inaction violated Article 2.4 of the Agreement.
65. Article 2.4 provides that the comparison between the export price and the normal value “shall
be made at the same level of trade, normally, at the ex-factory level, and in respect of sales made at as
nearly as possible the same time.  Due allowance shall be made in each case .  .  . for differences
which affect price comparability, including differences in .  .  . terms of sale.  .  .  .”
66. An imputed credit cost adjustment was claimed by the respondents to adjust export prices and
home market prices with deferred payment terms to a common sight price basis in order to make an
apples-to-apples comparison.  Where prices carry different payment terms, a credit cost adjustment is
necessary in order to adjust for “differences in te rms of sale”.  The credit cost adjustment claimed by
respondents is normally granted by the United States, EU, Canada, Chile and Australia.  Such
adjustments are made both to the normal value and the constructed normal value.  As noted by theThird-Party Submission of the EU, it is EU policy to make such adjustments where the normal value
is based on constructed normal value, because the constructed normal value “will typically include an
element for costs relating to the grant of credit terms”.
14  Specifically, the interest expense that is
included in administrative, selling and general costs includes interest expenses related to the financing
of receivables.  Consequently, in order to make an apples-to-apples comparison, an adjustment shouldbe made and that adjustment should be based on the imputed credit cost computed on
contemporaneous identical or similar home market sales.
                                                     
14 Third-Party Submission of the European Communities, 1 Nov. 2001, at para. 32.WT/DS211/R
Annex 3
Page 36
67. The Investigating Authority did make a credit cost adjustment to the export sales to Egypt.
By making an adjustment to the export price but not to the normal value, Turkey considers that Egypt
produced a distorted comparison in violat ion of Article 2.4 of the Agreement.
G. ANNEX II, PARAGRAPHS 3 AND 7
68. The Investigating Authority selected as facts available costs that were highly distorted in
several instances and used that data in place of more reliable, verified data.  In so doing, the
Investigating Authority violated the letter of Annex II, paragraph 3 and the spirit of Annex II,
paragraph 7.
69. Annex II, paragraph 3 provides that “All information which is verifiable . . . [and] which is
supplied in a timely fashion .  .  . should be taken into account when determinations are made.”  This
provision was violated when the Investigating Authority declined to use Icdas’ scrap costs for the
period September–October 1999 for purposes of constructing normal value for comparison to that
company’s sales to Egypt.  Icdas provided detailed monthly scrap costs to the Investigating Authority,as well as invoices and purchase orders verifying the accuracy of its submitted scrap costs.  Icdas also
showed that its scrap cost in September-October 1999 was substantially lower than its scrap cost in
January 1999.
15  Because these facts were provided in a timely fashion and were verified, the
Investigating Authority’s determination to use Icdas’ January scrap cost in these circumstances
violated Annex II, paragraph 3.
70. This action also violated the spirit, if not the letter, of Annex II, paragraph 7.  That paragraph
provides:  “If the authorities have to base their findings, including those with respect to normal value,
on information from a secondary source, .  .  . they should do so with special circumspection”.
Although this paragraph refers to data taken from a secondary source, rather than data taken directlyfrom the responses, it expresses the drafters’ intent that data used in place of specific data supplied by
the respondents for a particular cost be checked for its fundamental fairness and accuracy.  In this
case, reference to verified data reveals that the data used was grossly distorted.  Its use was therefore
in conflict with the considerations underlying Annex II, paragraph 7.
71. A similar error was made in the case of IDC.  There, the Investigating Authority managed to
compute an interest expense that amounted to [XX] per cent of the company’s cost of manufacturing.However, IDC’s audited financial statement shows that the company’s interest expense should be no
more than [XX]% of the company’s cost of manufacturing.  Once again, the failure to use verified
information to calculate this expense violated Annex II, paragraph 3 and the considerations
underlying Annex II, paragraph 7.
72. The interest expense computed for Diler is similarly overstated by comparison to the expenses
shown in that company’s audited financial statement.
16
73. Finally, the addition of an arbitrary 5 per cent to Habas’ reported costs finds no support
anywhere in the record.  This amount was, if anything, based on a “secondary source”.  Therefore, inmaking this adjustment, the Investigating Authority violated Annex II, paragraph 7 and made an
improper finding of fact.
                                                     
15 See TUR-28, First Submission of Turkey at 70-71.
16 See First Submission of Turkey at 76.WT/DS211/R
Annex 4-1
Page 37
ANNEX 4-1
RESPONSES OF TURKEY TO QUESTIONS POSED
IN THE CONTEXT OF THE  FIRST
SUBSTANTIVE MEETING OF THE PANEL
QUESTIONS POSED BY THE PANEL TO TURKEY
Question 1
Could Turkey set out in summary format its legal argumentation in support of each of
its claims, i.e., listing the respective provisions of the Anti-Dumping Agreement and the GATT
1994, and explaining briefly in the light of the Vienna Convention on the Law of Treaties how
the cited factual circumstances constitute violations of those provisions.  For example, [cites to
claims in brief/oral statement]
Response
1. Please see Appendix (reproduced in Annex 3).
Question 2.1
Claim 2:  Failure to take account of, and attribution to dumped imports of, the effect of
other factors :  In Turkey's Request for Establishment of a Panel (WT/DS211/2 and Corr. 1) at
para. 3, and its Executive Summary of its First Submission, (at para. I.3.c) Turkey cites
Article 3.1, along with Articles 3.4 and 3.5, in connection with the non-attribution claim, but in
the text of the argument on this claim, there is no mention of Article 3.1.  Could Turkey please
clarify.
Response
2. We do not rely on Article 3.1 in making this claim.
Question 2.2
Claim 4:  Finding of price undercuttin g based on a flawed price comparison :  It is noted
that in paragraph 5 of its Request for Establishment of a Panel, Turkey claims a violation of
Articles 3.1 and 3.2 with regard to price undercutting.  However, in its First Written
Submission, Turkey also alleges a violation of Article 3.5 in connection with this claim (see page
21 of Submission).
Should the Panel regard the violation of Article 3.5 as a separate claim, and if so, what is
the legal basis for the claim, as a violation of Article 3.5 was not claimed in the context of this
specific claim in WT/DS211/2?
Response
3. Our claim that Egypt has made a flawed finding of price undercutting does not depend on
reference to Article 3.5.WT/DS211/R
Annex 4-1
Page 38
4. We have, however, claimed that the Investigating Authority failed to establish by “positive
evidence” a causal link under Article 3.5 between imports from Turkey and injury to the domestic
industry in Egypt.1  The absence of valid evidence of price undercutting, as discussed in
Section III.G., could be viewed as further support for this claim.
Question 2.3
Claim 9:  Factual basis to seek additional information was unfounded and therefore basis
to resort to facts available improper :  In its Request for Establishment of a Panel Turkey cites
Article X:3 of GATT 1994, and AD Agreement Articles 2.4, 2.2.1.1, 2.2.2 and 6.8 and Annex II,
paragraph 3, 5, 6 and 7.  However, in its First Written Submission, Turkey cites only Article2.2.1.1, 2.2.2, 2.4 and 6.8 and Annex II, paragraph 5 and 6 in connection with this claim.
Could Turkey confirm that the scope of this claim is as set forth in its First Written
Submission, i.e., Articles 2.2.1.1, 2.2.2, 2.4 and 6.8, and Annex II, paragraphs 5 and 6?
Response
5. We did make claims as to Article X:3, paragr aph 3 of Annex II and Annex II, paragraph 7.
See Appendix and response to Question 2.4, below.
Question 2.4
Claim 11:  Selection of particular data as facts available was not proper, biased and not
objective :  In the Request for Establishment of a Panel, Turkey cites Articles 2.4, 2.2.1.1, 2.2.2
and 6.8 and Annex II, paragraphs 5 and 7. However, in its First Written Submission, Turkeycites only Article 2.4 and Annex II, paragraphs 5 and 7, but claims, in addition, a violation of
Article X:3(a) of GATT and Annex II, paragraph 3.
Could Turkey confirm that the scope of this claim is as set forth in its First Written
Submission, i.e., Article 2.4 and Annex II, paragraph 5 and 7, and clarify its position regarding
the claims relating to a violation of Article X:3(a), and Annex II, paragraph 3, i.e., whether the
reference to these two provisions should be regarded as separate claims by the Panel, and if so,what is the legal basis thereof, as they were not cited in the Request for Establishment of a Panel
in the context of this specific claim?
Response
6. We reference Article X:3,  paragraph 3 of Annex II and Annex II, paragraph 7 in claim
number 9 which broadly asserts that resort to facts available was a violation of Article X:3 and several
provisions of the Agreement.  Claim number 9 is integrally related to claim number 11.  In particular,
we question in claim 11 the selection and use of particular facts available in place of information the
accuracy of which should not be in question, i.e., data in audited financial statements and scrap cost
data that was supported by invoices, raw material ledgers and other such documentation.  The
argument that data from audited financial statements or data verified to source documentation should
have been used by the Investigating Authority instead of facts available relies on paragraph 3 of
Annex II and the considerations underlying paragraph 7 of Annex II.  Article X:3 is also cited in
claim 9 as having been violated because the selection of facts available in particular circumstanceswas so distorted as to be abusive and discriminatory.
                                                     
1 See Claim 2, Request for Establishment of a Panel by Turkey; Section III.A, First Submission of the
Government of the Republic of Turkey (“First Submission of Turkey”).WT/DS211/R
Annex 4-1
Page 39
Question 2.5
Claim under Article VI of GATT 1994 :  At page 81, section V, "Conclusion" of its First
Submission, and at page 1 of its First Oral Statement, Turkey asks the Panel to find thatEgypt's final anti-dumping determination was inconsistent with, inter alia , Article VI of GATT
1994.  There is no reference to a claim under this provision in Turkey's Request for
Establishment of a Panel, and there is no ot her reference to any such claim elsewhere in the
First Submission or the Oral Statement.  Could Turkey please clarify.
Response
7. Our citation to Article VI of GATT 1994 is in recognition of the fact that the Anti-Dumping
Agreement interprets the obligations contained in GATT Article VI and that we have made an
argument that several provisions of the Antidumping Agreement have been violated.  Turkey does not
purport to set out any separate claim by its reference to Article VI in this context.
Question 2.6
Reference to Annex I, para. 8 :  At page 27 of its First Oral Statement, Turkey refers to
Annex I, paragraph 8.  Could Turkey please indicate whether it is claiming a violation of this
provision.  If so, could Turkey provide the legal basis for this claim, as it is not referred to in Turkey'sRequest for Establishment of a Panel.
Response
8. Turkey is not claiming a violation of Annex I, paragraph 8.  In Turkey’s view this provision
sheds light on the normal sequence of events in antidumping investigations, but Turkey does not
claim that Annex I, paragraph 8 has been violated in this case.
Question 3
Claim 1:  Failure to establish by positive evidence a causal link :  Is Turkey claiming that
under Articles 3.1 and 3.5, only evidence of the specific kinds that it lists at III.A.4, could
"demonstrate" a causal link between imports and injury?
Response
9. No, there may be other ways to link imports to injury.  These examples are illustrative.
However, we do think that it was incumbent upon the Investigating Authority to secure this kind of
information pursuant to Article 3.5 in order to determine whether or not there was a causal link
between dumped imports and injury.  The absence of any lost sales or confirmed examples of price
reductions due to competing offers from import sources would be “positive evidence” that no such
link exists.
10. The Investigating Authority bears a special burden to collect this data – it is uniquely
available from the petitioners in Egypt and cannot be secured through other means by the Turkish
respondents.WT/DS211/R
Annex 4-1
Page 40
Question 4
Could Turkey please clarify the status of Exhibits TUR-13, T UR-14, TUR-19 and TUR-
32, and also of the documents listed in footnote 16 and 17 of its First Written Submission, thatis, were these documents submitted to the Egypti an Investigating Authority ("IA"), and if so,
when?  If not, please provide legal argumentation regarding the basis on which the Panel could
take these documents into consideration.
Response
11. The documents referenced in this question were not submitted to the Investigating Authority.
As discussed in the Additional Comments Made at the First Substantive Meeting by the Turkish
Delegation (at 1-2), Turkey believes that these documents should be taken into account in this
proceeding.
12. First, we note Egypt concedes in its submission that nothing in the DSU prevents
consideration by the Panel of evidence not presented to the competent authorities at the time of their
investigation.2
13. Second, the additional evidence contained in our submission on factors causing present
material injury was not presented by Turkish respondents to the Investigating Authority during thecourse of the investigation because respondents had been advised that the Investigating Authority’s
investigation was limited to the question of threat of material injury.
3  Moreover, the allegations
submitted by the Egyptian industry to the Investig ating Authority in their application for the
imposition of anti-dumping measures was apparently limited to allegations of threat of future material
injury as well.4  Turkish respondents had no reason to believe that evidence on possible causes of
present material injury was relevant to the inve stigation.  This understanding also informed the
manner in which respondents presented certain injury information early in the proceeding (e.g.,
information regarding the capacity expansions at ANSDK and Al Ezz).5
14. It would have been unusual, to the say the least, for the Turkish side to present evidence
showing that other factors were causing present  material injury the domestic industry where there had
been no claim by the domestic industry of current material injury and where the Egyptian authoritiesplainly stated at the outset that their conduct of the investigation was based on allegations of
threatened injury only.
15. Third, if the Panel decides, under Article 17.5(b) (as argued by the EU and the United States),
that the record should ordinarily be limited to the facts “made available” to the InvestigatingAuthority during the course of its investigation, then Turkey requests the Panel to adopt the legal
principle that the Panel can take “judicial notice” of certain other facts.  Both at English and American
common law, most proof in a court of law is presented by means of testimonial evidence or by the
offering of real evidence.  But there is an exception to the requirement that a party who relies on a
certain proposition must prove it, and that exception is facts that can be “judicially noticed”.  In theUnited States, there is a federal rule of evidence permitting both trial courts and appellate courts to
take “judicial notice” of facts that are not subject to reasonable dispute because they are either
(1) generally known;  or (2) capable of accurate and ready determination by resort to sources whose
                                                     
2 See First Written Submission of Egypt at 18.
3 See, e.g. , Initiation Report, TUR-1, at 1-1 and 4-5-7; Manufacturers Questionnaire, at 6, p. 10-11.
4 Id.
5 Compare  TUR-18 at 9-10  with  TUR- 20 at 18.WT/DS211/R
Annex 4-1
Page 41
accuracy cannot be reasonably questioned.6  Appellate courts may take judicial notice of such facts
even though they were not before, or were not considered by, the trial court.7
16. The first type of fact of which judicial notice may be taken is a fact that is “so well knownthat it would be a waste of judicial resources to require proof; reasonably informed people simply
could not differ as to the fact”.
8  The second type of fact is “one that is capable of ready verification
through sources whose reliability cannot reasonably be questioned”.9  This type of fact is “the one
more often relied upon, because a fair argument can be made that most facts are not generally known,
but yet that many of these facts can be reliably verified”.10
17. The requirement that panels base their review on facts presented to the competent authoritiesensures that the competent authorities have the ability to test and pass judgement on the validity of the
facts presented.  But the same considerations would not preclude a Panel from considering facts that
can be judicially noticed – such facts can be reliably and easily verified by reference to public
sources.
18. In our case, the fact that Alexandria National and Al Ezz were engaged in major expansion
projects, and the timing and size of those projects, were widely reported in the press.  The Turkish
respondents supplied some articles on this subject to the Investigating Authority.
11  The Investigating
Authority must have received other information directly from the Egyptian industry on these capacity
expansions, although none of this information appears directly in the public record.  Additional pressarticles with respect to these expansions are cited in Turkey’s first written submission.
12  The Panel
should take judicial notice of these articles and the information they contain regarding the expansion
projects.
19. The Panel should also take judicial notice of the Form 10Q filed by Birmingham Steel
Corporation with the Securities and Exchange Commi ssion cited in the First Submission of Turkey (at
note 20) with reference to start-up problems associated with that company’s new melt shop at
Memphis, Tennessee.  There are severe penalties for making false or misleading statements in such
reports to the SEC.  Moreover, Birmingham would have had no conceivable motive for mentioning
these embarrassing difficulties other than its statutory obligation to disclose all events having a
material effect on its operations.
20. The Panel may also take judicial notice of the decline in scrap prices as presented in the
American Metal Market  and Metal Bulletin  articles presented in our submission.13 American Metal
Market  and Metal Bulletin  are the most widely read periodicals in the steel industry worldwide.  Each
regularly publishes scrap prices.
21. The Panel should also take judicial notice of the fact that Al Ezz uses the electric arc furnace
technology.  (The fact that Alexandria National relies on the DRI technology to make rebar was
specifically made known to the Investigating Authority by Turkish respondents.14)  Once again, the
fact in question is readily verifiable from public sources.15
                                                     
6 See Rule 201, Federal Rules of Evidence – Judicial Notice of Adjudicative Facts.
7 See Rule 201(f).
8 Federal Rules of Evidence Manual, Editorial Explanatory Comment, Rule 201, at 122; Wooden v.
Missouri Pac. R.R ., 862 F.2d 560 (5th Cir. 1989).
9 Fed. R. Ev. Man. at 122.
10 Id.; Terrabone v. Blackburn , 646 F.2d 997 (5th Cir. 1981).
11 See infra .
12 See First Submission of Turkey, n. 16, 17, 19.
13 See TUR-13, 14.
14 See TUR 18 at Exhibit 4, page 5.
15 See Iron and Steel Works of the World , Metal Bulletin Books Ltd., 13th Edition (1999) at 104.WT/DS211/R
Annex 4-1
Page 42
22. Finally, even if the Panel declined to consider information not presented to the Investigating
Authority in reviewing this matter, we believe that there is sufficient evidence on the record to support
each of our claims.  The fact that there was a capacity expansion at Al Ezz and Alexandria Nationalwas certainly known to the Investigating Authority and it was mentioned in submissions made by the
Turkish respondents.
16
23. The decline in scrap prices was also made known to the Investigating Authority and was
documented in respondents’ submissions.17
24. The contraction in domestic demand in January 1999 was noted by respondents in theirsubmission of 19 May 1999 and is documented  in the exhibits to that submission.
18  The fact that
comparably priced non-dumped imports were in the market at greater volumes than imports from
Turkey was also specifically brought to the Investigating Authority’s attention.19
                                                     
16 See Letter from Law Offices of David Simon to the Investigating Authority, May 21, 1999,
(reproduced in TUR-18)(hereafter “TUR-18”) at 9, 10 and Exhibit 4 at page 5 (“The Ezz Group, one of the
country’s fastest growing private conglomerates, manufactures 600,000 tones of long products annually.  Itplans to increase production to 1.1 million tonnes by the end of 1998 .  .  .  .”); id. at Exhibit 4, pages 7-8
(“Other expansion projects of the steel sector include an increase in output capacity of 1.55 million tons at
Alexandria National Iron and Steel Company at the cost  of $170 million for a second direct reduction unit and
$225 million to expand and upgrade its existing steel plant (MEED, April 1996).  In Sadat City, the El Ezz
Group is also investing about $130 million in a new steel plant”); Letter from Law Offices of David Simon to
Investigating Authority, 15 October 1999 (reproduced in TUR-20)(hereafter “TUR-20”) at 18 (“[I]t is evidentthere has been no consideration of whether petitioners’ declining profitability might be due to  .  .  . petitioners’capital investment .  .  .  . As we have explained, the imports had no volume effect and no price effect, so it isnot appropriate to conclude that petitioners’ profit picture is the result of imports”); Views and Comments of theTurkish Government on “Essential Facts and Conclusions Report,” 15 October 1999 (reproduced as TUR-
30)(hereafter “TUR-30”) at 4 (“The decline in domestic producers’ profits and return on investment can not be
related to Turkish exports either. .  .  .[T]his decline can only be associated with the new investments made bythe Egyptian producers in recent years, which the ITPD mentioned in paragraph 4.3.2.4 of the Report”).
17 See TUR-18 at 13 ([F]alling prices are not the result of price suppression, but, rather, flow from the
decline in world scrap prices .  .  .”), 11, n. 7, 14 and Exhibit 3, page 3; TUR-20 at 17 (“If scrap goes down, thedomestic industry’s prices should also go down .  .  .  .  Hence, to suggest that in March 1999 the Turkish prices
suppressed prices in Egypt is an unwarranted conclusion without evidentiary support”), 18 (“Scrap prices were
substantially down during Q-1 (see Table on page 4, above), and the pricing in Egypt was simply reflecting thedrop in input prices”); TUR-30 at 4 (According to the provisions of the GATT 1994 Anti-Dumping Agreement,the investigating authorities should examine any known factors other than imports in question, which at thesame time are injuring the domestic industry, and the injuries caused by these factors must not be attributed to
the dumped imports.  ITPD fails to comply with these provisions as it does not take into consideration
decreasing international market prices for scrap in 1998 .  .  .  .  In fact, as the prices of scrap -- whichestablishes the majority of the rebar costs – decreased so did the prices of rebars in the Egyptian market, as inmost of other countries”).  See also  Letter from Law Offices of David Simon to IA, 15 September 1999 (TUR-
21)(“[W]e are submitting data – tallies of Colakoglu, Diler and Habas raw material purchases – which show thatthe input (scrap) costs for these companies declined  from [[$XX/MT to $XX/MT, thence to $XX/MT and
thence even to $XX/MT]] during {1998}; First Written Submission of the Government of the Republic of
Turkey at 63 (reproducing scrap cost data from 15 September 1999 response of Icdas showing steady decline inscrap costs totaling 33.93 per cent during 1998).
18 See TUR-18 at 13 (“Regarding the allegation of price depression, we have three comments.  First, the
rebar industry is seasonal, as is apparent from the monthly Egyptian sales figures in Exhibit 3 hereto, with adistinct seasonal trough in January.  .  .  .”) and Exhibit 3, page 3.
19 See TUR-18 at 5-6 (Saudi Arabia and Libya charact erized by Turkish respondents as the “largest
[foreign] suppliers” of rebar to Egypt), 11 (“Egyptian import statistics clearly establish that Turkish importswere at the same price level as other major suppliers to the Egyptian market in 1998, on a duty-paid basis”), andExhibit 2 (chart showing imports from Saudi Arabia increased in volume by more than imports from Turkey).WT/DS211/R
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25. The fact that Al Ezz was increasing its market share at the expense of Alexandria National
and had a much lower unit cost of production should have been apparent from the domestic
manufacturer responses filed by the two parties with the Investigating Authority.
26. With respect to TUR-13 and TUR-14, we note that we supplied this information to refute a
finding made by the Investigating Authority for the first time in this proceeding in the Final Report
that scrap prices were relatively constant during 1998.  In the context in which this finding was
explained, the false impression was given that scrap prices in constant currency were relatively
constant during this period.  This finding is clearly contrary to fact, as can be easily determined by
reference to the scrap prices published in Metal Bulletin and American Metal Market .
27. In sum, this Panel should consider the additional evidence presented in our briefs on injury
because Turkish respondents had no advance warning prior to the deadline for submission of new
factual information that the Investigating Authority would change the focus of its investigation and
find current material injury.  They also had no notice of any allegations that current material injury
existed and thus nothing to rebut.  In the alternative, the Panel should take “judicial notice” of thosefacts which are capable of ready verification by reference to public sources and whose accuracy
cannot be reliably questioned.  The Panel should also take judicial notice of the information contained
in TUR-13 and TUR-14 for the same reasons.
28. Finally, the basic facts and argument with respect to Turkey’s claims regarding improper
attribution of other causes of injury to imports from Turkey were made available to the Investigating
Authority during the investigation itself, contrary to Egypt’s claims.  Therefore, the Panel should
address those claims even if it decides to exclude evidence not available before the Investigating
Authority during its original investigation.
Question 5
What in Turkey's view legally falls under th e term "any known factors other than the
dumped imports which at the same time are injuring the domestic industry"?
Response
29. Article 3.5 of the Antidumping Agreement provides  that “[t]he authorities shall also examine
any known  factors other than the dumped imports which are at the same time injuring the domestic
industry, and the injuries caused by these other factors must not be attributed to the dumped imports.”
30. Turkey agrees with the European Communities’ position that such factors are, in the first
place, factors that are brought to the attention of the investigating authority by the interested parties in
the domestic procedure.  In addition, Turkey agrees with the European Communities that there are
circumstances where an interested party can raise other factors but cannot itself prove conclusively
that those factors are causing injury.  In such a case, such factors are “known” to the investigating
authority and should be examined.20
31. Moreover, Turkey believes that other factors and conditions of competition which are evidentin the factual record before the Investigating Authority and are having a large effect on the domestic
industry, are “known” factors that should be examined, regardless of whether or not a specific
allegation has been made by an individual party that those factors are injuring the domestic industry.
32. There is, in Turkey’s view, a special burden  on the competent authorities to identify other
known factors that, at the same time, may be causing present material injury when the competent
                                                     
20 See Third Party Submission of the European Communities, 1 November 2001, at 3.WT/DS211/R
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authorities commence their investigation based on allegations filed by the domestic industry that are
confined to threatened future material injury and the authorities subsequently, after the time for notice
and comment has expired, discovers evidence of what they consider supports a finding of current
material injury.  In such a case, the respondents, not having had notice of any allegation of presentmaterial injury, cannot be expected to have researched and briefed that theoretical possibility.  The
protection of the non-attribution requirement in Article 3.5 would lose its force if the Investigating
Authority could, in such a situation, decline to in vestigate any factor other than the subject imports
that might at the same time be causing injury to the domestic industry.
33. The obligation to identify other factors, which at the same time may be causing injury to the
domestic industry, also stems from Article 3.4, which, regardless of what is “known” by theinvestigating authority, requires a full investigation “of all relevant economic factors and indices
having a bearing on the state of the industry, including actual and potential decline in sales, profits, .  .
. productivity, return on investments, or utilization of capacity [and] factors affecting domestic prices.
.  .  .”
34. In interpreting a parallel provision in the Ag reement on Safeguards, the Appellate Body ruled
that:
[the central role played by interested parties in the investigation] does not mean that
the competent authorities may limit their examination of “all relevant factors,” underArticle 4.2(a) of the Agreement on Safeguards, to the factors which the interested
parties have raised as relevant.  The competent authorities must, in every case, carry
out a full investigation to enable them to conduct a proper evaluation of all the
relevant factors expressly mentioned in Article 4(2)(a) of the Agreement on
Safeguards.  Moreover, Article 4(2)(a) requires the competent authorities  -- and not
the interested parties  – to evaluate fully the relevance, if any, of “other factors.”  If
the competent authorities consider that a particular “other factor” may be relevant to
the situation of the domestic industry, under Article 4(2)(a), their duties of
investigation and evaluation preclude them from remaining passive in the face of
possible shortcomings in the evidence submitted, and views expressed, by the
interested parties.  In such cases, if the competent authorities do not have sufficient
information before them to evaluate the possible relevance of such an “other factor,”they must investigate fully that “other factor ”, so that they can fulfill their obligations
of evaluation under Article 4(2)(a).
21
35. In that case, the Panel had ruled that Article 4.2(a) required an examination of only thosefactors, other than those enumerated in Article 4.2(a), that were clearly raised as relevant by the
interested parties in the domestic investigation.
22  The Appellate Body disagreed, holding that “the
investigating authorities must undertake additional investigative steps, when the circumstances so
require, in order to fulfill their obliga tion to evaluate all relevant factors.”23
                                                     
21 Appellate Body Report, United States – Definitive Safeguard Measures on Import of Wheat Gluten
From the European Communities , WT/DS166/AB/R, adopted 19 January 2001 (hereafter “ Wheat Gluten ”),
para. 55.  Accord  Third Party Submission of the European Communities, at 4.  See also  United States – Anti-
dumping Measures on Certain Hot-Rolled Carbon Steel Products from Japan , WT/DS184/AB/R, 24 July 2001
(hereafter “ Hot-Rolled Carbon Steel Products from Japan ”), at para. 230 (causation requirements under
Antidumping Agreement and Safeguards Agreement are sufficiently similar that adopted panel and Appellate
Body Reports on the injury causation requirements under the Safeguards Agreement can provide guidance in
interpreting the language of the Antidumping Agreement).
22 Wheat Gluten  at para. 46.
23 Id. at para. 55.WT/DS211/R
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36. The same analysis should apply to the Antidumping Agreement.  The competent authorities
have an obligation under Article 3.4 to examine “all relevant factors and indices having a bearing on
the domestic industry”.  Therefore, where the record before the competent authorities indicates that a
particular factor is having a significant effect on the domestic industry, such as the capacity expansionin this case, increasing market share by a new, lo w-cost entrant (which should have been evident from
Al Ezz’s questionnaire responses), falling scrap prices, high volumes of comparably priced non-
subject imports, and falling demand coincident with the fall in domestic prices, the Investigating
Authority has an obligation under Article 3.4 to investigate that factor fully, regardless of whether or
not interested parties have brought those factors specifically to its attention.  And where that factor is
causing injury to the domestic industry, the Investigating Authority has an obligation under
Article 3.5 to isolate the effects of that factor and not to attribute those effects to the subject imports.
Question 6
Turkey lists four important factors which it says are relevant to consider under Article
3.5:  (1) a capacity expansion of the domestic industry; (2) non-subject imports; (3) declining
scrap prices; and (4) contraction in domestic demand.  Is it Turkey's case that these were
"known factors" which were before the IA, or is it Turkey's case that they were not factors
placed before the IA but should have been "known factors" nevertheless?
Response
37. As stated above, these factors were “known” to the Investigating Authority during the
investigation.
Question 7
Is Turkey arguing, in respect of third coun try imports, that the reference at para. 4.3.2
of  the Essential Facts and Conclusions Report and para. 4.5.2 of the Final Report is the IA's
only reference to such imports. If not, what ar e Turkey's arguments, especially in the light of
the reference to third country imports in par a. 4.3.4 of the Essential Facts and Conclusions
Report and paras. 4.3.4 and 4.3.5 of the Final Report.
Response
38. Turkey is not taking the position stated in the first sentence of this question.  Paragraph 4.3.2
of the Essential Facts and Conclusions report concerns domestic production and makes no reference
to non-subject imports.
39. First, we note that imports from Latvia, Ukraine and Romania, previously found by the
Investigating Authority to be dumped and injurious, remained in the market until 22 June 1998, when
antidumping duties were imposed.24  However, there was no attempt to discern and segregate the
effects of these imports in order to assess their effects on prices in 1998.  That is, the InvestigatingAuthority found that prices fell in 1998, but did not state whether that price decline occurred in the
first half of 1998 when imports from Latvia, Ukraine and Romania were in the market, or the second
half of 1998 when Turkish imports were in the market.  If it was during the first half of 1998, then it
would have been incumbent upon the Investigating Au thority to segregate the effects of imports from
Latvia, Ukraine and Romania so as not to attribute those effects, already found to be injurious, toimports from Turkey.
                                                     
24 See TUR-1 at 10 (4.1.6) and TUR-18 at Exhibit 2-1.WT/DS211/R
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40. With respect to the second half of 1998, we believe that the Investigating Authority should
have examined the other import sources which rema ined in the market after the exit of imports
covered by the first round of antidumping cases.  These included imports from Saudi Arabia, the
largest import source, and imports from Libya.  According to published statistics, imports from SaudiArabia increased in volume in 1998 by 136 per cent of the increase in the volume of imports from
Turkey and, on a landed, duty-paid basis, were comparably priced.
25  Imports from Turkey were
higher priced than imports from Libya.
41. Notwithstanding the presence of comparably priced imports of greater volume simultaneously
in the market with imports from Turkey just pr ior to the price decline in the first part of
January, 1999, the Investigating Authority “examined other economic factors but concluded that suchfactors were not causing injury to the domestic industry”.
26  Presumably, those other economic factors
included non-subject imports.  Egypt has also asserted that the Investigating Authority found material
injury both in 1998 and in the first quarter of 1999.
42. As discussed in our First Written Submission (at III.A), the Investigating Authority made no
findings that imports from Turkey were causing any specific injury to the domestic industry or were
having different effects than imports from Saudi Arabia and Libya.  Because non-subject imports of
comparable or even more pronounced volume trends and comparable or lower prices were in the
market at the same time as imports from Turkey, in  the absence of any more specific information, it
must be assumed that they were having comparable effects.  The failure of the Investigating Authorityto identify and distinguish those effects violated Article 3.5.
27
43. While it is true that the market share of imports from Turkey, Saudi Arabia and Libya
increased in 1998, the market share of imports from third countries declined by a greater amount.  Put
another way, the market share of all import sources, including Turkey, declined in 1998.  Does this
mean that imports from Turkey were non-injurious?  One could conclude so.  What one cannot
conclude from this data is that there is any logical basis upon which to distinguish the effects of
imports from Turkey in 1998 from imports from Saudi Arabia and Libya in 1998, as was done by the
Investigating Authority.
44. It is unreasonable and unsound to base a determination of current material injury on a period
as short as one calendar quarter.  However, an objective review of the facts from the first quarter of1999 discloses, once again, no basis to conclude that imports from Turkey were causing the effects
claimed.  According to the Inve stigating Authority, imports from Turkey undersold the domestic
product by only 0.3 per cent in March 1999, an insignificant amount.
28  The price effects of imports
from Turkey in the first quarter of 1999 were, therefore, negligible.  If it is the position of the
Investigating Authority that the price decline which took place in January 199929 was caused by the
volume and pricing of imports in 1998, then it is essential that the Investigating Authority segregate
the effects of imports from Turkey from the effects of imports from other, comparably priced sources
prior to making that determination.
45. Furthermore, Saudi Arabia lost its duty-free status in Egypt at the beginning of 1999, possibly
explaining its declining shipments in the first quarter of 1999.30  Imports as a whole in that quarter,
                                                     
25 See TUR-18 at 5-6 and Exhibit 2-1.
26 TUR-16 at 4.5.1.
27 See Hot-Rolled Carbon Steel Products from Japan  at paras. 223 and 226.
28 Final Report, TUR-16, at 4.2.1.2.
29 We know from the Initiation Report that the price decline in fact took place early in January 1999.
See TUR-1 at 4.1.9.
30 TUR-32 at 20.WT/DS211/R
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including imports from Turkey, stood at 117,000 tons.31  This converts an annual import level of
468,000 tons.  This is a drop of 50 per cent as compared to annual import levels in 1998!  Therefore,
while imports from Turkey increased in the quarter, they merely replaced a small part of the volume
formerly represented by imports from other sources.  Using the same trend analysis employed by theInvestigating Authority, one should reach the conclusion that imports as a whole were not causing
material injury to the domestic industry in the first quarter of 1999.  The Investigating Authority’s
focus on the increase in imports from Turkey and its failure to take into account the countervailing
effect of the decline in imports from other sources underlines the lack of an objective and reasoned
analysis by the Investigating Authority.
46. Finally, domestic market share also increased by 23 per cent in the first quarter of 1999, at the
same time that imports from Turkey increased.
32  Thus, imports from Turkey in the first quarter of
1999 did not displace one ton of rebar formerly shipped by the Egyptian industry.  Imports of rebar
from Turkey cannot be said to have had a significant volume effect upon the domestic industry in the
first quarter of 1999.
Question 8
The focus of Turkey's arguments regarding third country imports is on imports from
Libya and Saudi Arabia.  The IA's references to third country imports seem to cover total
imports from third countries.  Is Turkey arguin g that the IA committed a legal error in not
looking separately at imports from Libya and Saudi  Arabia?  If so, what is the legal basis for
such an allegation?
Response
47. Yes, because these imports were large volume players in the market in the second half of
1998 when the injury allegedly occurred.  Also Turkish respondents specifically showed that,
according to published statistics, Saudi Arabia’s volume increased by more than Turkey’s and that
Turkish prices were within 2 per cent of Saudi Arabia’s and were higher than Libya’s.33  Therefore the
price effects of these imports and the volume effects of these imports were comparable to Turkey’s
and yet the IA found that non-subject imports were not injuring the domestic industry.
48. We should note at this point that there is an unexplained discrepancy in the import statistics
from Turkey that were used by the Investigating Au thority for its investigation.   The Investigating
Authority cites an import figure of 210,000 tons in its Final Report (4.1.1.1).  However, according to
import statistics published by the Government of Egypt, total imports of rebar from Turkey amounted
to only 116,194 tons in 1998.34  According to the same, published import statistics, imports from
Saudi Arabia totaled 239,749 tons in that year, up from 86,227 tons in the prior year.35  Egypt
acknowledged the discrepancy between its official import statistics and the figures used in the
investigation during negotiations with Turkey, but claimed that there was an error in the published
statistics with respect to imports from Turkey.  Egypt further claimed that it had computed total
imports from Turkey by reference to actual import documentation, but that documentation has neverbeen provided to respondents.  Nor do respondents believe that any comparable effort was made to
correct the import database for imports from third countries, such as Saudi Arabia and Libya.
                                                     
31Final Report, TUR-16, at 4.3.4.1.
32Id.
33 TUR-18 at 5-6.
34 TUR-18 at Exhibit 2, page 6.
35 Id.WT/DS211/R
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49. We are doubtful that the number ultimately stated in the Final Report is accurate, for the
following reasons.  The figure 210,000 was initiall y described to the Egyptian Authorities in their
initiation report  as an “estimate” of total imports from Turkey.36  This report is dated
26 January 1999.  Egyptian Government import statistics would not have been finalized as of thatdate.  The estimated number is, moreover, a very round number – it looks like an estimate by
comparison to the published import statistics and the figures published in the Final Report for non-
subject imports.  The same number, without modification, appeared in the Essential Facts and
Conclusions report in October 1999 and in the Final Report that same month.   In addition, this figure
exceeds the figure shown for total exports by Turkey to Egypt in 1998 and 1997 by more than 5 per
cent.
37  There were substantial exports from Turkey in December 1998 and, given shipping times, it is
unlikely that all of the exports from Turkey in December were entered into Egypt before the end ofthe year.  Hence, the figure used appears to be significantly overstated and appears to overstate the
volume of imports from Turkey as compared to the volume of imports from Saudi Arabia and Libya.
Question 9
Please respond to Egypt’s argument that Turk ey has not alleged any particular violation
in its claim that Egypt misinterpreted certain data on domestic sales (Egypt’s First Submission
at pp. 39-40, section III.B.7).
Response
50. This is not a separate claim; it is part of our claims under 3.1, 3.4 and 3.5.  This section shows
that the finding that Turkish imports caused injury to the domestic industry by causing domestic
shipments to rise in 1998 is illogical and improper and thus cannot constitute a separate basis for
finding that the Egyptian authority’s injury determination was supported by the facts found.  Thisargument should be considered in connection with Turkey’s other claims in Section III.B of the First
Written Submission.
Question 10
Please identify the factors listed in Arti cle 3.4, if any, that in your view were (1) not
evaluated properly; or (2) not evaluated at all.
Response
51. The Article 3.4 factors not addressed at all in the Final Report are productivity, actual and
potential negative effects on cash flow, employment,  wages, growth, and ability to raise capital or
investments.  Furthermore, the public information in the Essential Facts and Conclusions Report and
in the Final Report does not reveal whether or not the Investigating Authority conducted a sufficient
examination of capacity, capacity utilization or return on investment.
52. We also maintain, in Section III.B of our First Written Statement, that the following factors
were not evaluated at all or were not evaluated adequately:
1. Capacity expansion at the two major Egyptian rebar producers.
2. Effects of the capacity expansion on the producers’ costs of production.
3. Effects of the capacity expansion on intra-industry competition.4. Falling prices for steel scrap.
5. Contraction in demand in 1999
                                                     
36 TUR-1 at 17.
37 TUR-18 at Exhibit 1.WT/DS211/R
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6. Effect of comparably priced, fairly traded imports
53. While these factors, other than contraction in demand, are not specifically listed in
Article 3.4, that Article does require “an evalua tion of all relevant economic factors and indices
having a bearing on the state of the industry”, and it is Turkey’s position that each of these factors
falls into that category.  Moreover, it is Turkey’s position that Factors 1, 3, 4, 5 and 6 are potential
“factors affecting domestic prices”, a factor specifically listed in Article 3.4.
54. Factors 1, 4 and 6 were evaluated, but not properly.  It would appear from the public record
made available to the Government of Turkey that factors 2, 3 and 5 were not evaluated at all.
Question 11
Turkey states in its First Submission that "the two prices [of the domestic goods and the
imported goods] must be compared on a delivered  basis to a customer who is in a position to
choose between purchasing domestic or imported products".  Is it Turkey's case that the
importers are not actual or prospective customers for the domestic manufacturers?
Response
55. Since the price undercutting was measured by comparing the importer’s ex-warehouse price
to the domestic manufacturer’s price, we presume this not to be the case.   If the importer were a
customer of the manufacturer, its resale price would not be the appropriate basis for a comparison –
the importer’s acquisition price would be the appropriate basis for a comparison.  However, the facts
on the record do not disclose whether the importers also purchased from the manufacturers, so we do
not know whether this was the case or not.
Question 12
How broadly does the burden of proof requirement of Article 2.4 apply in anti-dumping
investigations.  What is your legal reasoning in support of your view, based on a "Vienna
Convention" analysis of that provision?
Response
56. Article 31 of the Vienna Convention on the Law of Treaties provides that “[a] treaty shall be
interpreted in good faith in accordance with the or dinary meaning to be given to the terms of the
treaty in their context and in light of its object and purpose”.
57. The first sentence of Article 2.4 provides that “a fair comparison shall be made between the
export price and the normal value”. This is a general obligation imposed upon the parties.  The last
sentence of Article 2.4 is also general in nature:  “The authorities shall in dicate to the parties in
question the information that is necessary to ensure a fair comparison and shall not impose anunreasonable burden of proof on the parties”.  Turkey believes that this obligation extends to all
aspects of fact finding necessary to determine the export price and the normal value and to ensure a
fair comparison between the two.  That is, in collecting information with respect to the export price
and the normal value or information necessary to adjust these values to a common basis, the
authorities are prohibited from “impos[ing] an unreasonable burden of proof”.
58. This is consistent with the Appellate Body’s statement in Hot-Rolled Carbon Steel Products
from Japan , albeit interpreting other sections of the Agreement, that “[t]he Investigating AuthoritiesWT/DS211/R
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are not entitled to insist upon absolute standards or impose unreasonable burdens upon . . .
exporters”.38
Question 13
In relation to the issue of the alleged change in the grounds for action to be taken against
dumped imports being considered by the IA (from threat of injury to present injury).  Could
Turkey comment on the Panel report in Guatemala-Cement II , which appears to support the
proposition that no obligation to notify arose in a similar circumstance?  Should this Panel
adopt the same view?  Is it Turkey's view that the statement in paragraph 1.8 of the
Manufacturers' Questionnaires (page 6) (Exh. TUR- 3) in any case did not constitute notification
that present injury would be investigated?
Response
59. Turkey disagrees with the Guatemala-Cement  panel decision on this issue and we urge this
Panel to consider the inequity of applying that decision in this case.
60. Moreover, the specific finding of the panel in Guatemala-Cement is that there is no obligation
in the Agreement upon investigating authorities to info rm interested parties “of the legal basis for its
final determination on injury”.39  We are not arguing that Egypt was obliged to inform us in advance
that its final determination would be based on a finding of current material injury.  Our claim is that,
where Egypt initiated its investigation based on alleged threat of material injury and advised
respondents in its questionnaires that its injury investigation was limited to consideration of whether
there was a threat of material injury, it was incumbent upon Egypt to give the parties notice when it
expanded its investigation to consider the question of present material injury.  It was also obliged atthat time to give the parties an opportunity to submit factual comment and argument on this question.
As a matter of fundamental due process, a party accused of engaging in unfair trade practices should
know, prior to the due date for its submission of factual information and argument, what the nature of
the charges are that have been lodged against it and that are being investigated by the competent
authorities.  That notice and opportunity to submit information was not provided in this case.
61. In light of the clearly expressed passages in the Manufacturers Questionnaire and in the
Initiation Report, we do not consider the passage in paragraph 1.8 as a clear indication that the IA
would investigate present material injury.
Question 14
At page 6 of its First Oral Statement, Turk ey argues that capacity expansion by the
Egyptian industry would have caused an increase  in the industry's per unit cost of production,
due to low start-up levels of production.  How does this argument reconcile with the statements
in the Essential Facts and Conclusions Report and the Final Report that capacity utilization was
stable during the period of investigation?
Response
62. We have no idea how capacity utilization figures were developed or what they show as none
of these data have been released to the public.  Specifically, we do not know what capacity level wasreported by the domestic industry.  Was it the level at the beginning of 1998 or end of 1998?  It does
                                                     
38 Hot-Rolled Carbon Steel Products from Japan , at para. 102
39 Guatemala – Antidumping Investigation Regarding Portland Cement from Mexico , WT.DS
60/AB/RW, 2 Nov. 1998 at para. 8.238.WT/DS211/R
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not appear that monthly data were provided, so which was it?  Conceivably, the value reported by the
domestic industry was the value at the beginning of the year, in which case the data reported masked
what was really going on.
63. This points up a broader problem with the record that the Panel must examine.  So little data
has been disclosed that it is impossible to discern whether a proper factual determination was made
with respect to the trend in capacity utilization, as required in Article 3.4, and whether the
determination noted in the Panel’s question is truly inconsistent with our claim.
64. We know, in the case of Al Ezz, that it took 2-3 months for its rebar expansion project to
reach full production.40  Thus, unit costs must have been affected, if only for a short period of time.
We do not have similar information for Alexandria National but it would be truly extraordinary if one
day the expansion projects were opened and they immediately achieved full capacity utilization.  This
simply never happens in real life.
Question 15
At page 20 of Turkey's First Oral Statement, Turkey states that the questionnaire
provided no direction concerning how to respond to the questionnaire concerning costs of
production.  Some of the Turkish respondents t ook the decision to provide certain information
on a monthly basis, and only for certain months during the period of investigation.  Under thecircumstances in which Appendix 9 to the questionnaire did not indicate any particular basis
for the provision of the cost of production information, while the questionnaire did specify the
period of investigation for the dumping investigation, what justified these respondents in
selecting periods less than the full period of investigation for provision of cost data?
Response
65. Turkey’s economy is acknowledged to be hyperinflationary.  During 1998, annual inflation
exceeded 40 per cent per annum.  In such cases, on average, it would be grossly distortive to compare
an annual average cost of production to individual sales prices.  Assuming constant monthly
production and constant cost increases, the use of a single, average annual cost of production would
tend to understate, by as much as 20 per cent, the cost to produce goods sold at the end of the periodand would overstate, by as much as 20 per cent, the cost to produce goods at the beginning of the
period.
66. It should be noted that the last sentence of Article 2.2.1 of the Anti-Dumping Agreement
contemplates separate calculations of costs of production for comparison to sales prices during sub-periods of the period of investigation when costs vary over the investigation period.  Thus, that
sentence states:  “If prices which are below costs of production at the time of sale are above weighted
average costs for the period of investigation, such prices shall be considered to provide for recovery of
costs within a reasonable period of time.”  This sentence contemplates different results depending on
whether one is comparing sales prices to cost of production “at the time of sale” or sales prices to“average costs of production for the period of investigation”.  If sales prices are above cost of
production “at the time of sale,” they may not be treated as “outside the ordinary course of trade,”
within the meaning of the first sentence of Article 2.2.1.
67. Because the use of average costs of production for comparison to individual sales prices can
be so distortive in a hyperinflationary economy, many jurisdictions, including the United States, the
European Communities and Israel, require respondents in hyperinflationary economies to calculate
                                                     
40 First Submission of Turkey at 14.WT/DS211/R
Annex 4-1
Page 52
monthly costs of production and then limit cost-to-price comparisons to sales prices on sales
transactions in the same month that costs are calculated.41
68. The Egyptian questionnaire requested respondents to report only those sales prices in thehome market that were contemporaneous with respondents’ export sales to Egypt.  Respondents
complied with this request.  Because it would have been distortive to compare an annual average cost
of production to these sales, and because the common practice in other jurisdictions is to limit cost
comparisons to sales prices and monthly costs in the same month, respondents reported monthly costs
only for those months for which they reported sales.  If Egypt followed the same practice as these
other jurisdictions, it would have no use of costs for the other months because there were no sales
reported in those other months.
69. Respondents were very clear about what they were doing in their April 7, 1999 responses and
what they did was reasonable under the circumstances.  There was no complaint from the
Investigating Authority prior to verification about incompleteness in the responses.  Indeed, when,
after the responses were filed, counsel for Colakoglu, Habas and Diler inquired of the InvestigatingAuthority regarding the timetable for supplemental questionnaires, the Investigating Authority replied
that that the responses filed were “sufficient” and that no supplemental questionnaires would be
issued.
42  It seems that early in the investigation, pr ior to its u-turn in August, the Investigating
Authority found respondents’ response methodology reasonable as well.
Question 16
Is interest income properly considered as a cost under Article 2.2.2?  Assuming that
interest income can be part of the cost of produc tion calculation, is the accounting definition of
operating and non-operating income a sufficient determinant of whether the cost is associated
with or pertaining to the production of the goods?
Response
                                                     
41 See, e.g., Certain Steel Wire Ropes and Cables from Turkey , Regulation No. 230/2001 (2/2/2001),
Official Journal of the European Communities,  No. L34/4 (3/2/2001) at 11:
In line with the general methodology, it was possible, for some of the
product types, to establish normal value on the basis of the domestic price ofcomparable types in accordance with Ar ticle 2(1) of the Basic regulation.
Representativeness and ordinary course of trade tests for the domestic sales
of comparable types were carried out on a monthly basis given the high
inflation in Turkey during the IP.
For all other types of the product concerned sold for export to the Community by the cooperating companies,
normal value was constructed in accordance with Article  2(3) of the basic Regulation. The companies' own
domestic SG&A expenses and the profit margin realised on the domestic market in the ordinary course of tradewere added to the manufacturing cost. To account for th e high inflation, constructed normal values were
calculated for each month of the IP.
See also Notice of Final Results of Anti-Dumping Duty Administrative Review: Certain Welded Carbon
Steel Pipe and Tube From Turkey , 62 Fed. Reg. 51,629 (2 Oct. 1997) (Comment 3) (citing Final Results of Anti-
Dumping Duty Administrative Review: Ferrosilicon from Brazil , 61 Fed. Reg. 59,407, 59,408
(22 November 1996)).  The reporting of cost data in this manner “reflects the increases in materials costs from
month to month due to inflation.” Notice of Final Results of Antidumping Duty Administrative Review: Certain
Welded Carbon Steel Pipe and Tube From Turkey , 62 Fed. Reg. 51,629 (Oct. 2, 1997) (Comment 3) (emphasis
added).
42 Facsimile from IA to Law Offices of David Simon, 20 May 1999, TUR-31.WT/DS211/R
Annex 4-1
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70. Interest income must be considered a negative cost or a normal cost offset.  There are other
kinds of offsets as well, including revenue from sa les of byproducts.  In rebar production there are
some very short ends of billets, some very short ends of rebars and some shavings from the rebar in
the rolling process.  These scraps or byproducts are either returned to the production process andcredited to the cost of manufacturing or sold to cu stomers and credited to the cost of manufacturing or
reported as other income by the producers.  These revenues also must be taken into account in
calculating the true net cost of production.
71. Another example is foreign exchange gain on loans.  Foreign exchange loss on loans is
normally considered a financing expense, while foreign exchange gain on loans is ordinarily
considered an offset to financing costs.  It is a common practice in the EU and the United States atleast to recognize these offsets.  If the agreement were read to include only those items that involve
cash outlays, it would have to be read to require calculation of a fully distributed cost of production
that was far in excess of the true net cost of produc tion.  It is very unlikely that that this was the
original intent of the Contracting Parties in drafting the language of Article 2.
72. The accounting definition of operating income and non-operating income is a sufficient
determinant of whether the cost is associated with or pertains to the production of the particular goods
in question when the income is a fungible item, like short-term interest income on working capital
accounts.  There might be non-fungible items of income for which further investigation is required.
For example, income from the provision of shipping se rvices on ships that are also used to transport
the subject merchandise or which constitute a separate line of business, might be considered not
sufficiently related to the production and sale of the subject merchandise to take into account.  But
interest income on working capital accounts is a fungible item – it cannot be segregated to any
particular business line.  Therefore, it benefits all production activities of the firm.
Question 17 -- Additional Documents To Be Submitted
Could Turkey please submit the following documents:
1. Documents referred to in footnote 16 and 17 (except TUR-32).
2. Annexes to letter of 15 September 1999 from the Law Offices of David Simon to
IA.
3. Letter of 10 May 1999 from the Law Offices of David Simon to the IA to which
the IA responded on 20 May 1999.
4. IDC's comments on the Verification Report.
5. Turkey states on page 43 of its First Written Submission that the Law Offices of
David Simon requested an extension to submit information required and to holda meeting in Cairo. Please submit request and response by the IA.
6. Letter of 23 September 1999 from the IA to IDC.
Response
73. Pease see the attachments to this submission.
74. Please note that we did not state, as implied in Question 17.5, that the Law Offices of David
Simon requested a specific period of time as an extension in which to submit the information required
by the Investigating Authority in its letter of 23  September 1999.  We stated that “Colakoglu, Habas
and Ekinciler ( sic – should be Diler) sent a letter to the IA noting that it would be impossible to
respond to the request for additional information sent on 24 September 1999 within the 2-5 day time-WT/DS211/R
Annex 4-1
Page 54
frame requested by the Administering Authority”.43  This could be taken as an implicit request for an
extension.  However, there was no explicit request for a particular period of time.
75. We further stated:  “The IA did not provide an extension of time for Colakoglu, Habas and
Diler to respond to the 23 September 1999 letter .  .  . ”.  There was no letter to this effect.  The IA
simply did not respond to Mr. Simon’s letter dated 28 September 1999.
QUESTIONS POSED BY THE PANEL TO BOTH PARTIES
Question 1
Concerning the period of data collection, what  is the legal status and relevance of the
recommendation of the Anti-Dumping Committee for the interpretation of the Anti-Dumping
Agreement?
Response
76. Article 31 of the Vienna Convention on the Law of Treaties states:
1. A treaty shall be interpreted in good faith in accordance with the ordinary
meaning to be given to the terms of the treat y in their context and in light of its object
and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in
addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties
in connection with conclusion of the treaty;
(b) any instrument which was made by one or more parties in connection with
the conclusion of the treaty and accepted by the other parties as an instrument related
to the treaty.
3.  There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding interpretation of the
treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the
agreement of the parties regarding its interpretation;
(c) any relevant rules of international la w applicable in the relations between the
parties.
77. A recommendation by the Antidumping Comm ittee does not qualify as “a subsequent
agreement between the parties regarding the interpretation of the treaty or the application of itsprovisions”, nor does it qualify as “a subsequent practice in the application of the treaty”.  We note in
this regard that there was a proposal before the Antidumping Committee at its meeting in April 2001,
that the Committee adopt a decision concerning the legal status of adopted recommendations.  No
                                                     
43 First Submission of the Government of the Republic of Turkey, at 43.WT/DS211/R
Annex 4-1
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consensus could be reached on this proposal.  Nor could a consensus be reached at the Committee’s
meeting in October 2001.44  It is clear, therefore, that the legal status of the Committee’s
recommendations remains controversial even among members of the Committee.  Consequently,
recommendations of the Committee should have no bearing on the Panel’s consideration of the legalissues presented in this case.
78. We further note that Recommendation of the Anti-Dumping Committee does not specifically
address the issue that Turkey has raised in th is case.  The recommendation of the Committee that
there be a three-year period of investigation for injury does not endorse findings by Investigating
Authorities in violation of the requirement in Article 3.5 that there be a demonstration that “the
dumped imports are, through the effects of the dumping, causing injury within the meaning of thisAgreement”.
Question 2
Could the parties comment on the significance for this dispute, if any, of the ruling of
the Panel in the Argentina – Bovine Hides  dispute on the claims under Article X:3 of the GATT
1994.
Response
79. We believe that the Argentina-Bovine Hides  panel decision offers the following guidance to
this Panel’s consideration of Turkey’s claims under Article X:3:
(a) Article X applies to the administration  of the laws, regulations, decisions and rulings.
It does not apply to inconsistency between the letter of the law and the GATT 1994 orthe Anti-Dumping Agreement.  (paras. 11.60-11.61)
(b) There is “no requirement that Article X:3(a) be applied only in situations where it is
established that a Member has applied its Customs laws and regulations in an
inconsistent manner with respect to the imports of or exports to two or more
Members”.  (para 11.67)
(c) “A WTO Member may challenge the substance of a measure under Article X.  The
relevant question is whether the substance of such a measure is administrative in
nature or, instead, involves substantive issues more properly dealt with under other
provisions of the GATT 1994.”  (para. 11.70)
(d) Resolutions which do not establish substantive Customs rules for enforcement of
export laws are administrative in nature and may be challenged under Article X:3.
(para. 11.72)
(e) “It would seem that any rule of "general application" would be deemed a substantive
rule by Argentina based on its use of that term elsewhere in its arguments.  This
would then leave a situation where any rule of general application could not come
under Article X because it would involve substantive rules rather than administrative
ones.  On the other hand an administrative rule, as that would appear to be defined,
could not be a rule of general application.  This also would render Article Xeffectively a nullity, which obviously cannot be the case.”  (para. 11.75)
                                                     
44 Report (200 1) of the Committee on Antidumping Practices , G/L/495 (31 October 2001) at
Section V, para. 15 (Possible Committee Decision on the Status of Adopted Recommendations).WT/DS211/R
Annex 4-1
Page 56
80. Turkey has alleged violations of Article X:3 in connection with Egypt’s refusal to schedule a
meeting with Turkish respondents to discuss the adequacy of their responses on 15 September 1999
and in connection with Egypt’s calculation of a “highly inflated and distorted interest charge” for
IDC.45  Both of these decisions were clearly “administrative” in nature.  Furthermore, neither was
based directly on a substantive law or rule.  While Egypt may have a rule permitting resort to facts
available in cases in which a party fails to respond adequately to a questionnaire, that rule certainly
cannot be said to have dictated the selection of facts available in IDC’s case.  That action was purely
administrative in nature.  Moreover, the decision not to grant a hearing to various parties was clearly
an administrative decision.
81. Egypt seeks to avoid review by this Panel of Turkey’s claim under Article X:3, claiming that
no review is warranted unless the actions complained of had a significant impact on the overall
administration of the law.  This interpretation, like Argentina’s in Bovine Hides , would run the risk of
rendering Article X a nullity, because actions which have general application, similar to rules of
general application, would likely be reviewable under the other substantive rules of the GATT and
thus would not be reviewable under Article X.
82. Article X is focused on administration of the laws and on particular administrative rulings and
decisions.  It thus covers an area not covered by  the formal rules of the Anti-Dumping Agreement –
the administration of the anti-dumping rules.  Turkey  has challenged Egypt’s application of its rules in
this case in two respects as inherently unreasonable.  Turkey maintains that this was precisely the sortof conduct intended to be reached under Article X, as confirmed by the Panel in Argentina – Bovine
Hides .
Question 3
In relation to the claim of a breach of Annex II, paragraph 1 by reason of the alleged
late request for cost information,  what is the relevance of Annex II, paragraph 1 at a time in an
investigation prior to the decision to use facts available?
Response
83. The first sentence of Annex II, paragraph 1 clearly imposes an independent obligation upon
the parties.  Failure to meet this obligation invalidates the subsequent use of “facts available” under
the Agreement.
                                                     
45 See First Submission of Turkey at IV.D.2 and IV.J.8.WT/DS211/R
Annex 4-2
Page 57
ANNEX 4-2
RESPONSES OF EGYPT TO QUESTIONS POSED
IN THE CONTEXT OF THE  FIRST
SUBSTANTIVE MEETING OF THE PANEL
QUESTIONS POSED BY THE PANEL TO EGYPT
Question 1
Egypt argues at p. 30 of its first submissi on (section III.B.3.b) that the IA examined
SG&A and COP of the industry as potential sources of injury to the domestic industry.  Where
in the Essential Facts and Conclusions Report, the Final Report, and any other documents of
record is this examination found?
Response
1. The information requested by the Panel as regards the Investigating Authority’s examination
of SG&A and COP is contained in the Public File , which is specifically referred to in the Notice of
Initiation at paragraph 12 (attached as EX-EGT-7.3) and in the Essential Facts and Conclusions
Report (see TUR-15) and the Final Report (see TUR-16) at Section 1.7.
2. A copy of the relevant report of the public file is provided for the Panel’s reference in EX-
EGT 6 (see in particular paragraph V).
3. In the examination of material injury during the investigation period, the SG&A and COP of
ANSDK and EZZ were analyzed (1) individually on a company basis; and (2) together  as part of the
examination of the total domestic industry.
Question 2
Concerning Egypt's argument that new evid ence that was not before the investigating
authority cannot be taken into account by the Panel, what if anything is the significance of the
recent ruling by the Appellate Body in the US – Cotton Yarn dispute (WT/DS192/AB/R at para.
77 et. seq.); and the ruling of the Panel in US – Hot-rolled steel  (WT/DS184/R, paras. 7.6-7.7)?
Does Egypt view these rulings as complementary or contradictory?  Please explain.  Is the
Cotton Yarn ruling applicable or relevant in the context of anti-dumping?
Response
4. The rulings of the Panel in US-Hot-rolled Steel and of the Appellate Body in US-Cotton Yarn
confirm that the role of the DSB is not to conduct a de novo  review of the facts of the case.
Article 17.5(ii) effectuates this general standard of review in the context the AD Agreement and
directs the DSB to disregard evidence that was not made available to the Investigating Authority
during the course of the domestic proceeding.
5. The findings of the Appellate Body in Cotton Yarn  concern a panel’s review of the authority’s
determination under Article 6.2 of the ATC Agreement.  In particular, the ruling addresses the issue ofwhether the DSB may consider evidence relating to facts which predate the determination, but which
did not exist at the time the determination was made.  In other words, the question is whether a panelWT/DS211/R
Annex 4-2
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is entitled to take into account evidence that coul d not possibly have been examined by that Member
when it made that determination.  To this, the Appellate Body replied in the negative, emphasizing
that in connection with the investigative obligations of Members, “[t] he exercise of due diligence by a
Member cannot imply, however, the examination of evidence that did not exist and that, therefore,could not possibly have been taken into account when the Member made its determination ”.
1
6. Egypt considers the above rulings to be complementary as they both rely on the basic
principle that the Panel is not to conduct a de novo  review of the facts of the case.  In Egypt’s view,
however, the Cotton Yarn  ruling is not applicable in the context of anti-dumping for two fundamental
reasons.
7. First , unlike anti-dumping investigations, interested parties are not involved in the context of
ATC investigations and, in particular, do not normally have the opportunity to actively participate in
the data collection exercise carried out by the Investigating Authority.  Accordingly, Egypt considers
that, in the context of an ATC investigation, the exercise of due diligence by a Member is all the more
important in reaching a determination under Article 6 of the ATC.2.
8. Second , the ATC does not contain a similar provision to Article 17.5(ii) of the AD
Agreement, which expressly limits the review of the Panel to the evidence that was made available to
the Investigating Authority in conformity with the appropriate domestic procedures.  Thus, the
standard of review to be applied by a panel in the content of an ATC investigation is higher that thatapplied under the Anti-Dumping Agreement.  The standard of review to be applied by a panel in the
context of an ATC investigation is not limited to the evidence as presented to the investigating
authority during the course of the investigation.  To the contrary, under the ATC Agreement a panel
may consider evidence that existed during the investigation, but which was not presented to the
Investigating Authority.
Question 3
Egypt also argues at p. 31 of its first submis sion that no new claims can be raised before
the Panel that were not before the IA during the co urse of the investigation.  What are the legal
basis and any relevant precedents for this assertion?
Response
9. As stated before the Panel on 28 November 2001, the term “new claims” does not refer to
new “legal” claims in the context of this sentence, but to new factual considerations that were not
presented to the Investigating Authority during the course of the investigation.
Question 4
Section II.B of Egypt's First Submission deals with the standard of review.  Is it correct
that an IA can arrive at a decision that is fact ually incorrect as long as it properly established
the facts and evaluated them without bias and obj ectively?  What is the legal test for a panel to
determine whether an evaluation of facts by an Investigation Authority was "unbiased and
objective" under Article 17.6(i)?
Response
                                                     
1 WT/DS192/AB/R, at para. 77.
2 WT/DS192/AB/R, at para. 76.WT/DS211/R
Annex 4-2
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10. Egypt submits that it is conceivable that an Investigating Authority can arrive at a decision
that is factually incorrect even though it properly established the facts and evaluated them without
bias and objectively.  It must be borne in mind that the Investigating Authority essentially relies on
information provided by interested parties. As illustrated in the Rebar case, the quality of suchinformation may be poor and the Investigating Auth ority’s ability to verify the accuracy thereof
limited. Moreover, the possibility to resort to facts available in the circumstances contemplated by the
AD Agreement is evidently another factor that will affect the factual correctness of the Investigating
Authority’s decision.
11. As regards the legal test for a Panel to determine whether an evaluation of facts was
“unbiased and objective”, Egypt wishes to refer to the findings of in US-Hot-rolled Coils , where the
Appellate Body held that:
3
“Article 17.6(i) of the Anti-Dumping Agreem ent also states that the panel is to
determine, first, whether the investigating authorities' "establishment of the facts was
proper " and, second, whether the authorities' "evaluation of those facts wasunbiased and objective" (emphasis added). Although the text of Article 17.6(i) is
couched in terms of an obligation on panels – panels "shall" make these
determinations – the provision, at the same time, in effect defines when investigating
authorities can be considered to have acted inconsistently with the Anti-Dumping
Agreement in the course of their "establishment" and "evaluation" of the relevantfacts. In other words, Article 17.6(i) sets forth the appropriate standard to be applied
by panels in examining the WTO-consistency of the investigating authorities'
establishment and evaluation of the facts unde r other provisions of the Anti-Dumping
Agreement. Thus, panels must assess if the establishment of the facts by the
investigating authorities was proper and if the evaluation of those facts by thoseauthorities was unbiased and objective. If these broad standards have not been met, a
panel must hold the investigating authorities' establishment or evaluation of the facts
to be inconsistent with the Anti-Dumping Agreement.”
12. In consequence, the Panel may only reject the factual findings made by the national
authorities in special cases, such as where the conclusions drawn by the authorities are not supported
by the evidence examined or where there is a clear indication of bias in their evaluation of the facts.
As explained by the Appellate Body in Thailand – Steel , “Article 17.6(i) places a limitation on the
panel in the circumstances defined by the Article. The aim of Article 17.6(i) is to prevent a panel from
"second-guessing" a determination of a national authority when the establishment of the facts is
proper and the evaluation of those facts is unbiased and objective. ”
4
Question 5
Could Egypt direct the Panel to where in th e record of the investigation each of the
factors listed in Article 3.4 was examined.
Response
13. The following table shows the factors that the Investigating Authority considered relevant to
the injury determination under Article 3.4, which are referred to in the Essential Facts & Conclusions
Report as well as in the Final Report.
                                                     
3 WT/DS184/AB/R, at para. 56.
4 WT/DS122/AB/R, at para. 117.WT/DS211/R
Annex 4-2
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Economic Factor EFCR FR
Sales Section 2.4.1
Section 4.3.1
Section 4.5.2
Section 4.5.4Section 2.4.1
Section 4.3.1
Section 4.6.2
Section 4.6.4
Profits Section 4.3.5
Section 4.5.2Section 4.5.4Section 4.3.5
Section 4.6.2Section 4.6.4
Output Section 2.4.2
Section 4.3.2Section 2.4.2
Section 4.3.2
Market Share Section 2.4.1
Section 4.3.4
Section 4.5.4Section 2.4.1
Section 4.3.4
Section 4.6.4
Return on investments Section 4.3.7
Section 4.5.2Section 4.3.7
Section 4.6.2
Capacity utilization Section 4.3.6 Section 4.3.6
Prices Section
4.2.1.2
Section
4.2.2.1
Section 4.5.1
Section 4.5.2Section 4.5.3
Section 4.5.4Section
4.2.1.2
Section
4.2.2.1
Section 4.6.1
Section 4.6.2Section 4.6.3
Section 4.6.4
Dumping margin Section 3.3 Section 3.3
Section 4.4
Section 4.6.2
Inventories Section 4.3.3
Section 4.5.2Section 4.3.3
Section 4.6.2
EFCR = Essential Facts & Conclusions ReportFR = Final Report
14. The fact that the injury analysis of the Investigating Authority was thorough and indeed
covered all the factors listed in Article 3.4 is evident in the Confidential Injury Analysis  of the Rebar
Investigation.  A copy of the Confidential Injury Analysis  is available only for the Panel’s review and
upon request.  If required, a non-confidential summary will be provided for Turkey’s review.
Question 6
The test of causation referred to in the E gyptian submission is to ask whether any
"other factor was sufficient to break the causal  relationship between the dumped imports and
the injury to the domestic industry" (e.g., Section III.B.1, page 24).  This (a) assumes that a
causal link between the dumped imports and the injury has been found; but then (b) tries to
find a cause, or at least a different cause, to replace dumping as a cause.  Turkey says that other
causes of injury were improperly discounted.  First, can Egypt direct the Panel to where the
causal link finding is reported by the IA?  Second, is the test Egypt has enunciated ("to break
the causal relationship") one wh ich is consistent with either the words of the Anti-Dumping
Agreement or the way in which it has been interpreted (c.f., US – Hot-rolled steel
(WT/DS184/AB/R at paras. 226 et. seq.)?WT/DS211/R
Annex 4-2
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Response
(a) Causal link finding
15. The conclusions regarding the causal link between the dumped imports and the material
injury to the domestic industry can be found in the Essential Facts & Conclusions Report at
Sections 4.4 and 4.5 (see TUR-15) and in the Final Report at Sections 4.5 and 4.6 (see TUR-16).  The
specific findings upon which these conclusions are based are indicated in the following table.
Causal link factor EFCR FR
Volume of dumped imports Section 2.3.1
Section 4.1.1.1
Section 4.1.1.2Section 4.1.2.1
Section 4.1.2.2
Section 4.1.2.3Section 2.3.1
Section 4.1.1.1
Section 4.1.1.2Section 4.1.2.1
Section 4.1.2.2
Section 4.1.2.3
Price undercutting Section 4.2.1.2
Section 4.2.1.3
Section 4.2.1.4
Section 4.2.1.5Section 4.2.1.2
Section 4.2.1.3
Section 4.2.1.4
Section 4.2.1.5
Price suppression and depression Section 4.2.2.1
Section 4.2.2.2Section 4.2.2.3Section 4.2.2.1
Section 4.2.2.2Section 4.2.2.3
Sales Section 4.3.1.1
Section 4.3.1.2Section 4.3.1.1
Section 4.3.1.2
Production Section 4.3.2.1
Section 4.3.2.2
Section 4.3.2.3
Section 4.3.2.4Section 4.3.2.1
Section 4.3.2.2
Section 4.3.2.3
Section 4.3.2.4
Inventory Section 4.3.3.1
Section 4.3.3.2
Section 4.3.3.3Section 4.3.3.1
Section 4.3.3.2
Section 4.3.3.3
Section 4.3.3.4
Market share Section 2.4.1
Section 4.3.4.1
Section 4.3.4.2
Section 4.3.4.3
Section 4.3.4.4Section 2.4.1
Section 4.3.4.1
Section 4.3.4.2
Section 4.3.4.3
Section 4.3.4.4
Section 4.3.4.5
Price of raw materials Section 4.3.5.3
Profits Section 4.3.5.1
Section 4.3.5.2Section 4.3.5.3Section 4.3.5.1
Section 4.3.5.2Section 4.3.5.3
Section 4.3.5.4
Return on investment Section 4.3.7.1
Section 4.3.7.2Section 4.3.7.1
Section 4.3.7.2
Margin of dumping Section 3.3.2 Section 3.3.2
Section 4.4.1
Section 4.4.2
Section 4.4.3
EFCR = Essential Facts & Conclusions ReportFR = Final ReportWT/DS211/R
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(b) Causal link test
16. The causal link test referred to by Egypt does not imply that the dumped imports as a cause of
injury are subsequently replaced by other causes of injury.  Indeed, the AD Agreement does not
require that dumped imports be the sole or even the principal cause of injury.  To the contrary, the
purpose of the examination of other factors of injury is to determine whether the impact of other
factors on the state of the domestic industry is such that the dumped imports are not contributing to
the existence of the injury of the domestic industry.  If, conversely, the dumped import remain a cause
of material injury in spite of the impact of other factors, the causal link test is positive.
17. In Egypt’s view, this is consistent with Article 3.5 of the AD Agreement and the findings of
the Appellate Body in US-Hot-rolled Steel.5  Indeed, under Article 3.5 of the AD Agreement, the
Investigating Authority must separate the injuries ca used by other factors in order to ensure that they
are not attributed to the dumped imports.  As noted by the Appellate Body in US-Hot-rolled Steel ,
“[t]his requires a satisfactory explanation of the nature and extent of the injurious effects of otherfactors, as distinguished from the injurious effects of the dumped imports”.
6
18. The non-attribution obligation of Article 3.5, in practice, means that the Investigating
Authority must determine whether the injury experienced by the domestic industry is caused entirely
by other factors, to the exclusion of the dumped imports.  In other words, that there is no injury thatcan be attributed to the dumped imports.  Accordingly, the non-attribution obligation should not be
interpreted to mean that the injury caused by th e dumped imports must be greater than the injury
caused by other factors. Indeed, such an interpretation would mean that the injury caused by dumped
imports must be the principal or sole cause of the material injury to the domestic industry, which as
explained above, the AD Agreement does not require. Indeed, that the dumped imports must be theprincipal cause of injury was specifically deleted from the Anti-Dumping Code during the Tokyo
Round .
19. Egypt’s position is furthermore consistent with the Appellate Body’s interpretation of
Article 4.2(b) of the Agreement on Safeguards in United States – Definitive Safeguard Measures on
Imports of Wheat Gluten from the European Communities
7 and in United States – Safeguard
Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia.8
20. In United States – Wheat Gluten , the Appellate Body noted that:9
“The word "link" indicates simply that increased imports have played a part in, or
contributed to, bringing about serious injury so that there is a causal "connection" or"nexus" between these two elements.  Taking these words together, the term "the
causal link" denotes, in our view, a relationship of cause and effect such that
increased imports contribute to "bringing about", "producing" or "inducing" the
serious injury. Although that contribution must be sufficiently clear as to establish theexistence of "the causal link" required, the language in the first sentence of
Article 4.2(b) does not suggest that increased imports be the sole cause of the serious
injury, or that "other factors" causing injury must be excluded from the determination
of serious injury.  To the contrary, the language of Article 4.2(b), as a whole,
suggests that "the causal link" between increased imports and serious injury may
                                                     
5 WT/DS184/AB/R.
6 WT/DS184/AB/R, at para. 226.
7 WT/DS166/AB/R.
8 WT/DS178/AB/R.
9 WT/DS166/AB/R.WT/DS211/R
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exist, even though other factors are also contributing, "at the same time", to the
situation of the domestic industry.” (emphasis added)
21. Given the considerable similarities between Article 4.2(b) of the Safeguards Agreement and
Article 3.5 of the Anti-Dumping Agreement, the Appellate Body’s interpretation of Article 4.2(b) is
indeed relevant to the interpretation of the non-attribution language in Article 3.5, as emphasized by
the Appellate Body in US-Hot-rolled Steel.10
22. In any event, as a final point Egypt wishes to stress that the non-attribution obligation is
relevant only in cases where the Investigating Authority has found that there were factors other than
the dumped imports that caused injury to the domestic industry.  If, as in the Rebar case, the
Investigating Authority has found that the other factors alleged to cause injury are in fact not causing
injury to the domestic industry, the non-attribution obligation does not apply.  In such cases, there is
no injury that could possibly be mistakenly attributed to the dumped imports.  In this respect, Egypt
would like to direct the Panel’s attention to the Appellate Body’s finding in US-Hot-rolled Steel.11
The Appellate Body stated very clearly that:
“The non-attribution language in Article 3.5 of the Anti-Dumping Agreement applies
solely in situations where dumped impor ts and other known factors are causing
injury to the domestic industry at  the same time.” (emphasis added)
Question 7
At pp. 37-38 of its first submission (Section III.B.5.b(i)-(iii)), Egypt refers to an analysis
of the price of non-dumped imports, the volume of non-dumped imports, and consideration of
price and volume over the period of 1996-1998.  Where in the Essential Facts Report, the Final
Report, and any other documents of record are these analyses found?
Response
23. These analyses can be found, inter alia , in Section 4.3.4.1 of the Final Report.  See also the
Public File, in particular EX-EGT-6 at paragraph III.
Question 8
At page 9 of its First Oral Statement, Egypt states that the IA considered increased
domestic competition.  Where can this consideration be found in the Essential Facts and
Conclusions Report, the Final Report, and any other documents of record?
Response
24. As stated at page 34 of our First Submission, which is based on, inter alia , the conclusions
reported in Section 4.3.4 of the Final Report, when examining whether there was any increased
competition in the domestic industry, the Investigating Authority found that the individual marketshares of the domestic producers from 1996 to Q1-1999 had increased
12, together with an increase of
sales.13  At the same time, the market share of non-subject imports decreased by 80 per cent.14  Thus,
                                                     
10 WT/DS184/AB/R, at para. 229.
11 WT/DS184/AB/R, at para. 223.
12 See Essential Facts & Conclusions Report and Final Report at Section 4.3.4.
13 Id., at Section 4.3.1.
14 Id., at Section 4.3.4.WT/DS211/R
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the increase of market share of the domestic industry and sales volume was gained at the expense of
the non-subject imports and also as a result of the increase in consumption during that period.15
25. Supporting documentation is contained in the Public File, which is provided for the Panel’sreference in EX-EGT-6 at paragraph VIII.
Question 9
Egypt seems to imply in its arguments con cerning the use of “partial facts available ”
that it was not selecting facts so as to arrive  at an outcome “less favourable” than would have
been the case had the Turkish companies “coopera ted” (p. 62, section IV.B.1.e).  Rather, Egypt
argues (p. 58, section IV.A.13) that the “most a ppropriate” approach was to choose the highest
monthly cost of production reported by the respondents to verify whether there were below-cost
sales and to calculate constructed normal values.  What was, specifically, the IA’s basis under
Article 6.8 for the use of partial facts available?   That the Turkish companies “refused access
to” necessary information, “ otherwise failed to provide” such information, or “significantlyimpeded the investigation”?  (For example, at page 22, section D.1, of Egypt's First Oral
Statement, reference is made to both insufficient cooperation and to failure to provide
information.)
Where is this basis for resort to facts ava ilable reflected in the Essential Facts and
Conclusions Report, the Final Report, and any other documents of record?
How was it that only the highest monthly costs were found to be “reliable ” (see heading
of Section IV.A.13)?
In connection with Egypt’s argument that the IA used “favourable” facts available by
using the data of respondents in spite of insuff icient co-operation (p. 62, section IV.B.1.e), where
in the text of the AD Agreement is it provided that “adverse facts available” would by definition
exclude any and all data provided by investigated companies, no matter how such data were
employed in dumping calculations?
What is meant by the expression "facts a vailable" as referred to in Article 6.8 and
paragraph 1 of Annex II of the Anti-Dumping Agreement?
Response
26. Egypt confirms that, when making use of “partial facts available”, it was not seeking to arrive
at an outcome less favourable than would have been the case had the Turkish companies offered
satisfactory cooperation.  The Investigating Authority resorted to “partial facts available” for the sole
purpose of arriving at appropriate and meaningful determinations in view of the lack of or insufficient
probative value of the information provided by the Turkish respondents.
(a) Basis under Article 6.8 of the AD Agreement for the use of partial facts available
27. The basis for the Investigating Authority’s use of partial facts available is that three
respondents “refused access to necessary informatio n” and “failed to provide necessary information
(Habas, Colakoglu and Diler); and that the other two respondents “otherwise failed to provide” thenecessary information (IDC and Icdas).
                                                     
15 Id., at Section 2.4.1.WT/DS211/R
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28. The basis for resort to facts available can be found, inter alia , in Section 3.2 of the Essential
Facts & Conclusions Report as well as page 15 (Gen eral issues, para. 4) and 3.2 of the Final Report.
(b) Use of the highest monthly costs
29. In its First Submission at Section IV.A.13, E gypt is not suggesting that “only the highest
monthly costs were found to be ‘reliable’”.  Th e heading of Section IV.A.13 explains that, when
calculating the margin of dumping of the respondents, the Investigating Authority used the data
provided by the respondents to the extent that such data were found to be reliable.  Thus, the export
sales data and adjustments thereto were found reliable and therefore used in the determination of the
export price.  For the determination of the normal value, the Investigating Authority had to resort tofacts available because the costs data submitted by the respondents were found unreliable.  As facts
available, the highest monthly costs data was in this respect found to be “the most appropriate
approach in the circumstances of the case”.
(c) Notion of “favourable” facts available
30. In connection with the Panel’s question concerning the notion of “favourable” facts available,
Egypt does not suggest that the use of the party’s own data necessarily leads to a good result, e.g. a
finding of no dumping or a low margin of dumping.  The use of the party’s data only ensures that the
Investigating Authority’s findings will reflect as closely as possible the actual situation of thecompany.  In anti-dumping investigations, the mo st favourable result to which an investigated
company is legitimately entitled is a dumping determination based on the data it submitted.  This pre-
supposes that the company provided verifiable and reliable data within a reasonable period of time.  If
the investigated company fails to meet these requ irements, the Investigating Authority is entitled to
resort to “facts available” in order to rectify th e deficiencies of the information provided by the
companies concerned.
31. The AD Agreement does not provide and Egypt did not suggest that “ ‘adverse facts
available’ would by definition exclude any and all data provided by investigated companies, no matter
how such data were employed in dumping calculations” (emphasis added).  It should be noted that the
AD Agreement contains no guidance on how data used as “facts available”, whatever their origin (the
respondent or secondary sources), must be employed  by the Investigating Authority.  It is however
conceivable that, when resorting to “facts available”, an Investigating Authority decides to use the
data provided by the investigated companies in such  a way that it intentionally seeks to reach adverse
determinations.
32. This is not the case in the Rebar investigation. In this case, the Investigating Authority used
the costs data submitted by each company in order to calculate the cost of production and to construct
the normal value of the companies concerned.  This ensured that the determinations made with respect
to those companies were as close as possible to the findings that would have been reached, had those
companies offered sufficient cooperation and provided verifiable and reliable data on cost.  This is
what Egypt means by “favourable facts available” in this case.
33. As explained in Egypt’s First Submission at  Section IV.B.1.e, the decision of Habas, Diler
and Colakoglu to terminate their cooperation with the Investigating Authority would have entitled the
Investigating Authority to seek to reach adverse results in accordance with paragraph 7 of Annex II.
(d) Meaning of “facts available” in Article 6.8 a nd paragraph 1 of Annex II of the AD Agreement
34. In Egypt’s view, the notion of “facts available” covers information that is available to the
Investigating Authority and that needs to be used in order to make appropriate determinations in a
situation where interested parties do not supply reliable and verifiable information within a reasonableWT/DS211/R
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period of time, as requested.  Two sets of circumstances are therefore envisioned, namely (1) the
investigated parties refuse to provide the requested data, and (2) the investigated companies submit
the requisite data, but these data are found unreliable and, therefore, unsuitable to reach meaningful
determinations.
Question 10
Additional documents to be submitted:
Could Egypt please submit the following documents:
1. Information on scrap steel prices on a monthly basis on which the final
determination was based.
2. Cover letter of the Essential Facts and Conclusions Report which was sent to
interested parties in October 1999.
3. The Notice of Initiation of the Investigation.4. Letter of 17 July 1999 to Habas, Diler and Colakoglu.
5. Letter to Law Offices of David Simon on 28 September 1999 to advise of the use
of facts available.
6. Egypt states on page 56 of its First Written Submission that the auditors of the
respondents certified that their fina ncial statements were not prepared
according to IAS 29.  Please submit documentation to substantiate the allegation.
7. Documentary evidence on which the ca lculation of the 5 per cent Turkish
inflation rate was based, and the other sources of information on inflation in the
IA's possession as referred to in the Final Report.
8. Letter of 21 September 1999 by the IA to the Law Offices of David Simon.9. The reply by IDC and Icdas referred to in the second paragraph of section
III.E.2 (page 24) of Egypt's First Oral Statement.
Response
35. A copy of the documents requested by the Panel is attached as EX-EGT-7.
QUESTIONS POSED BY THE PANEL TO BOTH PARTIES
Question 1
Concerning the period of data collection, what  is the legal status and relevance of the
recommendation of the Anti-Dumping Committee for the interpretation of the Anti-Dumping
Agreement?
Response
36. Egypt agrees with the Panel in Guatemala – Cement II  that the Recommendation
Concerning the Periods of Data Collec tion for Anti-Dumping Investigations  adopted by the
Committee on 5 May 2000 is non-binding, but constitute s relevant indication of the understanding of
WTO Members as to the selection of the appropriate period of data collection for the injury anddumping determinations.
16
                                                     
16 Guatemala–Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico,
WT/DS156/R,  at footnote 68.WT/DS211/R
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Question 2
Could the parties comment on the significance for this dispute, if any, of the ruling of
the Panel in the Argentina – Bovine Hides  dispute on the claims under Article X:3 of the GATT
1994.
Response
37. In Egypt’s view, the findings in Argentina – Bovine Hides17 confirm Egypt’s position that the
Investigating Authority’s actions in the context of an anti-dumping investigation should not reviewed
under Article X:3 of GATT 1994.
38. Indeed, the Panel stated:
“In our view, Argentina has attempted to stretch the Appellate Body finding that
Article X is not applicable when the alleged inconsistency involves the substance ofanother GATT 1994 provision, to argue that Article X cannot be referred to when
challenging the substance of any measure.  Of course, a WTO Member may challenge
the substance of a measure under Article X.  The relevant question is whether the
substance of such a measure is administrative in nature or, instead, involves
substantive issues more properly dealt with under other provisions of the GATT
1994.”(underline added)
39. This finding confirms that actions that are covered by other WTO provisions do not fallwithin the scope of Article X:3(a).  In the Rebar case, the actions of the Investigating Authority are
evidently covered by Article VI of GATT 1994 and the WTO AD Agreement. Accordingly,
Article X:3 does not apply.
Question 3
In relation to the claim of a breach of Annex II, paragraph 1 by reason of the alleged
late request for cost information,  what is the relevance of Annex II, paragraph 1 at a time in an
investigation prior to the decision to use facts available?
Response
40. Annex II, paragraph 1 imposes upon the Investigating Authority the obligation to specify in
detail the information required from any interested party, and the manner in which that information
should be structured, as soon as possible after the initiation of the investigation.  The InvestigatingAuthority must furthermore inform the party that, if information is not supplied within a reasonable
time, determinations will be made on the basis of facts available.
41. In Egypt’s view, Annex II, paragraph 1 applies only to the issuance of the initial
questionnaire, where the information the Investigating Authority requires to base its determinationsmust be specified.  This interpretation is consistent with the requirement that the notification should
be made as soon as possible after the initiation of the investigation. Conversely, Annex II, paragraph 1
does not apply to requests for clarification and additional information that the Investigating Authority
might send in the course of the investigation.  Indeed, such requests will be sent after a preliminary
review of the information provided in the questionnai re responses.  Contrary to Turkey’s suggestions,
it goes without saying that Annex II, paragraph 1 does not prevent the Investigating Authority from
                                                     
17 Argentina – Measures Affecting the Export of Bovine Hides and the Import of Finished
Leather, WT/DS155/R, at para. 11.70WT/DS211/R
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requesting additional information in the course of the investigation, if necessary.  To decide otherwise
would contradict the possibility for an Investigating Authority to verify the information submitted in
response to the initial questionnaire and to seek further details, as explicitly provided in Article 6.7 of
the AD Agreement. In any event, assistance was prov ided for all  requests for additional information
and/or clarification.  The letters of 19 August 1999 and 23 September 1999, for instance, provided
detailed guidance to the exporters as to the nature  of the information sought and the manner in which
that information should be structured.
42. Egypt considers that requests for clarification and additional information might fall within the
scope of Annex II, paragraph 6 of the AD Agreement, which requires the Investigating Authority to
inform interested parties of the reasons why the information submitted is not accepted and to give
them an opportunity to provide further explanations within a reasonable period, due account being
taken of the time-limits of the investigation.  As demonstrated in Egypt’s First Submission, the
Investigating Authority fully complied with those requirements in the course of the Rebar
investigation.WT/DS211/R
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ANNEX 5-1
REBUTTAL SUBMISSION OF TURKEY
EXECUTIVE SUMMARY
1. The Panel should not consider evidence, purportedly of a public nature, that was not supplied
to all interested parties during the course of E gypt’s anti-dumping investigation.  The “Report of
Other Causes of Injury” in EGT-6 was not supplied to interested parties and was not “available” to
Turkish respondents during the investigation.  It should therefore be disregarded under Article 6.4 of
the Anti-Dumping Agreement.
2. The Panel should not consider the confidential information on injury, referred to in Egypt’s
Response to Panel Question #5, if Turkey is denied access to the information in the same form.  To do
otherwise would involve an impermissible ex parte communication.
3. Turkey is not seeking de novo  review by the Panel.  Turkey is seeking a determination of
whether Egypt’s “establishment” of the facts was “unbiased” and “objective,” as required by
Article 17.6(i), and whether its injury findings were based on “positive evidence” under Article 3.1.
Article 17.6(i) requires panels to make an assessment of the facts.  In order to determine whether an
injury finding is supported by “positive evidence”, a panel must examine the factual basis for thefindings to determine whether the Investigating Au thority properly identified the appropriate facts,
and whether the stated factual basis reasonably supported the findings.
4. The Panel should consider the so-called “new” information supplied in Turkey’s First
Submission because respondents were deprived of adequate notice that the scope of the investigationhad changed from consideration of threat of injury to consideration of present material injury.  The
respondents would have or could have submitted this information had they had adequate notice that it
would be relevant to the Investigating Authority’s determination.  Alternatively, the Panel should take
“judicial notice” of those facts.
5. The Panel need not accept the Investigating Authority’s interpretation of the agreement unless
the Panel finds that that interpretation is “permissi ble”.  This standard is less deferential than one
requiring deference to interpretations that are merely “reasonable”.
6. The only “positive evidence” cited by Egypt as support for its finding that a “causal link”
existed between imports from Turkey and injury to the domestic industry is (a) an increase in the
volume of imports; and (b) a finding by the Investigating Authority of price undercutting by imports.However, increases in the volume of imports cannot be said to be injuring the domestic industry when
the domestic industry is, itself, experiencing strong increases in both sales volume and market share.
In the first quarter of 1999, when the Investigating Au thority claims that most of the injury occurred,
the domestic producers increased their market share by 22 per cent!  Moreover, imports overall,
including imports from Turkey, declined in volume by 50 per cent in the first quarter of 1999.Contrary to a finding by the Investigating Authority, imports from Turkey did not increase by 40 per
cent in the first quarter of 1999 over import levels in the second half of 1998.   Rather, the volume of
imports from Turkey declined in the first quarter of 1999 as compared to import levels in the second
half of 1998.
7. A finding of price undercutting, standing alone , without other evidence that import prices are
having an adverse effect on domestic prices, is not sufficient “positive evidence” that import pricing is
having any effect on domestic prices.  Because of long lead times for import shipments, uncertaintiesWT/DS211/R
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regarding delivery or the condition of the merchandise when delivered, and difficulties in making
returns or quality claims, imports of commodity products must nearly always be priced below
domestic prices.  But that does not mean that they are having any impact on domestic prices.  Where
there is no specific “positive evidence” that imports caused prices to fall, the price declines could just
as well have been caused by other factors (as Turkey claims has occurred in this case).
8. Turkey does not claim that imports must be the “sole” cause of injury to the domestic
industry.  Turkey claims that Egypt has not established that the dumped imports were even a
“contributing cause” of the injury found to the domestic industry.
9. Turkey does not claim that Egypt had to consider and evaluate each and every factor listed in
Article 3.5 as Egypt contends, only that Egypt had to consider those factors that were “relevant” to the
case before it.  Article 3.5 requires a “demonstration of a causal relationship between the dumped
imports and injury to the domestic industry”.  This demonstration must be made based on “an
examination of all relevant evidence before the authorities”.  Injuries caused by “known factors” other
than the dumped imports must be “separated” and “distinguished” so that they are not attributed toimports.
10. Contrary to Egypt’s claims, “known factors” does not include solely those factors that the
foreign interested parties have brought to the attention of the Investigating Authority.  Nor is there an
obligation that the foreign interested parties make a prima facie  case that those factors are injuring the
domestic industry.  The foreign interested parties may not be in possession of the information
necessary to make such a case.  Furthermore, “known” factors should include factors that are having a
large, and discernible, effect on the conditions of the competition or on the size and shape of the
domestic industry.  Wheat Gluten  indicates that the Investigating Authority has an independent
obligation to conduct a full investigation in order to identify all factors having a bearing on the stateof the domestic industry, including other factors that might be, at the same time, causing injury to the
domestic industry.  The Investigating Authority bears a special burden to identify such factors where
there has been no public allegation that the domestic industry is suffering from current “material”
injury, and the final determination is based upon an affirmative finding of present “material” injury.
11. The Investigating Authority failed to engage in an objective and thorough investigation of
causes of injury other than imports.  In this case, the other causes of injury include (1) large capacityexpansions at the two major Egyptian producers; (2) the effects of the capacity expansion on the
producers’ costs of production; (3) the effects of the capacity expansion on intra-industry competition;
(4) increasing competition between Al Ezz and Alexan dria National; (5) falling prices for steel scrap;
(6) a sharp contraction in demand in January 1999; and (7) the effect of comparably priced, fairly
traded imports.  Each of these other factors was identified by the Turkish interested parties or knownto the Investigating Authority.
12. With respect to the capacity expansions, Egypt alternately claims that it did investigate the
expansion, citing a finding in the Final Report with respect to capacity utilization, and that the
Investigating Authority did not “know” that the capacity expansions were causing injury.  However,this was a factor that was known to the Investigating Authority and it should have been obvious that a
change in the size and shape of the domestic industry of this magnitude (700,000 new tons of
capacity) could have had an adverse effect upon the domestic cost structure during start-up and on
intra-industry competition after start-up.  The findings in the Report on Other Causes of Injury, if they
are to be considered by this Panel, do not contradict this analysis.
13. With respect to contraction in demand, the investigating authority noted a demand increase
from 1997 to 1998 but ignored a decline in demand of 33 per cent in January 1999, the very month in
which domestic prices fell.  While demand picked up after January, the demand decline in January
coincided with a number of other factors that acted to depress prices, including:  (a) theWT/DS211/R
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commencement of operations at two capacity expansion projects; (2) falling scrap prices that
permitted Al Ezz to reduce prices while maintaining profitability; and (3) sharpening competition
between Al Ezz and Alexandria National.
14. With respect to non-dumped imports, Egypt claimed that (a) imports from Saudi Arabia and
Libya declined in the first quarter of 1999, while imports from Turkey increased; (b) prices from
Turkey are below those from Saudi Arabia and Libya; and (c) additions should be made to the Saudi
and Libyan prices prior to comparison with prices from Turkey.  These claims ignore the fact that
Saudi Arabia was the largest foreign supplier in 1998, with volume increases exceeding those from
Turkey, according to published statistics.  In addi tion, the published data, when corrected for an error
in Egypt’s brief, show that Turkey’s prices were comparable to those of imports from Saudi Arabiaand above those for Libya.  The published data are reported on a CIF basis, so there is no basis for
further adjustment for transportation expenses.   And, while the volume of imports from Saudi Arabia
fell in the first quarter of 1999, after that country lost duty-free treatment, this meant that imports
overall, including those from Turkey, declined substantially in the first quarter of 1999.
15. With respect to the decline in raw material prices, Egypt noted that, because of a simultaneous
decline in profits, that factor cannot explain falling prices.  However, this analysis ignores the fact that
declining scrap prices affected Al Ezz, but not Al exandria National.  Thus Al Ezz could reduce prices
without sacrificing profitability, which was strong during the period.  Al Ezz had an incentive to do
so, with the confluence of declining demand in January and the start-up of a new, 400,000-ton facility.
16. The Investigating Authority failed to exam ine all of the mandatory factors listed in
Article 3.4, including productivity, actual and potential negative effects on cash flow, employment,
wages, growth and ability to raise capital.  The Investigating Authority also failed to provide a
sufficient examination of capacity, capacity utilization and return on investment.  In High Fructose
Corn Syrup , the Panel found that Article 3.4 requires more than the mere recitation of the Article 3.4
factors in the final determination – it requires a meaningful analysis.
17. Egypt claims that its determination of price undercutting was made by comparing prices at the
same level of trade.  This is, however, insufficient unless the level of trade at which prices are
compared happens to be the level where those prices are in actual competition with each other.  There
is insufficient information to establish whether that was the case in the rebar investigation.
18. Egypt argues that Turkey’s claim with respect to lack of adequate notice of a change in the
scope of the injury investigation was considered and rejected by the Panel in Guatemala-Cement II.
Turkey considers the decision in Guatemala-Cement II  to be highly inequitable and, in effect, a denial
of fundamental due process.  Parties cannot defend themselves adequately if they do not know whatallegations are being investigated.  Turkey therefore urges this Panel to reach its own determination
on the issue.
19. With respect to Turkey’s claim that Egypt vi olated Article 3.5 by failing to find a linkage
between the imports found to be dumped in 1998 and the injury found in 1999, Egypt asserts that theAgreement does not contain any requirements for the period over which data should be collected.  But
that is not the issue.  The issue is the absence of  a finding of a link between the imports specifically
found to be dumped and the injury to the domestic industry.  Egypt also claims that such a finding
was made but provides no citation to the Final Report.  In fact, there was no such finding.
20. Egypt contends that the original manufacturers’ questionnaire requested cost data for a full
twelve-month period.  Egypt further contends that the Investigating Authority’s letter of
20 May 1999, characterizing the responses filed by Colakoglu, Habas and Diler as “sufficient,” such
that no supplemental questionnaires or requests for information would be issued, as being confined to
the price and sales aspects of respondents’ questionnaire responses.  This bit of historical revisionismWT/DS211/R
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does not match the facts.  Respondents were instructed to report only those home market sales that
were contemporaneous with their reported sales to Egypt.  Costs are ordinarily compared to sales on a
transaction-by-transaction basis.  Respondents operate in hyperinflationary conditions.  Investigating
authorities in other jurisdictions limit their price-cost comparisons to sales prices and costs computedin the same month so as to limit the potential distorting effect of inflation.  Respondents reasonably
reported costs for those months in which they reported sales in Egypt and sales in the home market.
The Investigating Authority was initially satisfied with this methodology as indicated in its letter of
20 May 1999.  Neither the inquiry to which that letter responded nor the letter itself was limited to the
price and sales aspects of the response.  Moreover, the 19 August letter, where cost data was
requested for additional months, did not predicate its request on the rationale that this information
should have been supplied in response to the initial questionnaire.  Rather, the Investigating Authorityjustified its request for the data on the rationale that respondents’ submitted cost data did not appear to
reflect mounting inflation in Turkey.
21. Egypt claims that respondents’ limit on the repor ting of their costs to the month in which they
reported sales transactions was “tantamount to an absence of a response”.  If so, why did theInvestigating Authority wait for four months, un til the end of the investigation was, in the
Investigating Authority’s own words, “near,” to noti fy the respondents of the deficiency?  Even if this
explanation were accepted, the Investigating Authority’s delay in notifying respondents that it
considered their responses deficient violated Paragraph 6 of Annex II.  By failing to obtain the
necessary information in advance of verification, moreover, and then requiring respondents to self-verify all of their submitted costs and prices on paper, the Investigating Authority imposed an
“unreasonable burden of proof” in violation of Article 2.4, and violated Annex I, paragraph 7
(verification “should be carried out after the response to the questionnaire has been received”) and
Article 6.7.
22. Contrary to Egypt’s claims, the calculations attached to the verification reports were clearly
tentative dumping calculations.  The calculation sheet for Icdas, for example, states at the top “ICDAS
DUMPING CALCULATION”.  While a dumping margin was not calculated in the document itself, it
can easily be done with the data shown in the table.
23. Egypt questions why Turkey would claim it “extraordinary” that the Investigating Authority
would question in its 19 August letter whether respondents’ costs of production included the effects ofinflation.  While there are many “extraordinary” elements to that letter, Turkey characterized as
“extraordinary” the Investigating Authority’ questioning of respondents’ sales prices, and whether
those prices reflected inflation, when, in fact, the Investigating Authority had just verified those sales
prices to respondents’ books and records without discrepancy.
24. Egypt raises, for the very first time in its written submission to the Panel, the claim that
respondents’ financial statements did not comply with IAS-29, which deals with financial reporting in
hyperinflationary economies, as evidence that their submitted costs did not reflect to the effects of
inflation.  This argument is nothing more than post-hoc  rationalization of Egypt’s anti-dumping
determination.  “[E]rrors made during the investigation cannot be rectified in subsequent submissionsbefore a WTO Panel.”  (Hot-Rolled Carbon Steel Products from Japan  – Report of the Panel.)  The
Final Report does not mention IAS-29 and it is evident that the Investigating Authority never asked
any questions about it.  Moreover, the evidence on  the record shows that complying with IAS-29 is
not required by generally accepted accounting principles in Turkey.  None of the respondents comply
with IAS-29 and one of the auditors noted that “t here is currently no consensus in Turkey on the
application of IAS-29”.  Under Article 2.2.1.1 “costs shall normally be calculated on the basis of
records kept by the exporter or producer under investigation, provided that such records are in
accordance with generally accepted accounting principles in the exporting country ”.  Since
respondents costs were kept in accordance with generally accepted accounting principles in Turkey,
they should have been used under the Agreement.WT/DS211/R
Annex 5-1
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25. Egypt states throughout its written submission that the information submitted by Icdas and
IDC did not demonstrate that their costs reflected inflation.  But Egypt has not shown that their
submitted costs do not reflect the costs shown in their books and records, or that their books andrecords were not kept in accordance with generally accepted accounting principles in Turkey.  Nor
has Egypt shown how it complied with the requirements of Annex II, paragraph 6.  That paragraph
provides that if information is “not accepted”, the supplying party must be informed and it must be
given “an opportunity to make further explanations”.  Neither Icdas, nor IDC, were so informed or
given such an opportunity.
26. Egypt claims that there is no “normal sequence of events” contemplated by the Agreement.
However, the provisions we have cited, Annex II , paragraph 1, Annex II, paragraph 6, Article 6.7 and
Annex I, paragraph 7, certainly appear to contemplate a normal sequence events – i.e., questionnaire,
supplemental questionnaire, verification (if there is one), preliminary determination, argument, final
determination.  This sequence is, in fact, how anti-dumping investigations are conducted throughout
the world.  The provisions cited also contemplate th at, if there is to be a verification, it will be
conducted on-site, and if there are further details to be gathered after the questionnaire responses have
been filed, they will be collected during the verification.  The respondents in this case were severely
prejudiced by the Investigating Authority’s failure to request the additional cost information it later
considered necessary early in the investigation, the Investigating Authority’s failure to take advantage
of the on-site verification to test the submitted data submitted, and the Investigating Authority’sdemand that respondents engage in a full “mail order” verification in order to compensate for the
Investigating Authority’s earlier failures to identify and ask questions at verification about the data
with respect to which it had questions or concerns.
27. Contrary to Egypt’s claims, and those of the United States, the obligations stated in the first
and last sentence of Article 2.4 (requirement of a “fair comparison” between the export price and the
normal value and prohibition against imposing an “unreasonable burden of proof”)  apply to all of
Article 2.  The Appellate Body took the position in Hot-Rolled Carbon Steel Products from Japan  that
the first sentence of Article 2.4 (“fair comparison”) “informs all of Article 2”.  The last sentence of
Article 2.4 is as general in its language and intended effect as the first sentence and so should be read
equally broadly.
28. Contrary to claims by Egypt, the United States and the EU, the 37-day period established in
Article 6.1.1 for responses to “questionnaires used in an anti-dumping investigation” does not apply
only to the initial questionnaires issued in those in vestigations.  It applies, by its terms, to any
“questionnaire” the response to which is to be “used in an anti-dumping investigation”.  Nor does the
context of Article 6.1.1 indicate that this provision is intended to be applied only to initialquestionnaires.  In the absence of an express limitation in the language or an implied limitation in the
context in which that language appears, Article 6.1.1 should be given its full effect.  It should
therefore be read to apply to questionnaires such as the one contained in the 19 August 1999 letter.
29. In the alternative, the deadlines established for a response to the 19 August questionnaire
were unreasonable, in violation of Annex II, paragraph 6.  “[W]hat constitutes a reasonable period or
a reasonable time, under Article 6.8 and Annex II of the Anti-Dumping Agreement, should be defined
on a case-by-case basis, in light of the specific circumstances of that investigation”.  ( Hot-Rolled
Carbon Steel Products from Japan  – Report of Appellate Body).  In this case, even the extended
deadline was clearly insufficient in light of the mass of detail, documentation and analysis requiredfor a response to the 19 August questionnaire.  And the specific circumstances facing the respondents
– a massive earthquake hitting Istanbul the day before the questionnaire was issued causing
widespread devastation and loss of life – made the deadlines even more unreasonable.  The deadlines
for the 23 September 1999 supplemental information request to Habas, Colakoglu and Diler were alsoWT/DS211/R
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plainly insufficient.  It would have been literally impossible to provide the requested data in just 2-
5 days.
30. Egypt claims that it properly denied a request by Colakoglu, Habas and Diler for an oral
hearing because that request came after respondent s supposedly informed the Investigating Authority
that they would not submit information in response to the information request of 23 September 1999.
Turkey notes, first, that Colakoglu, Habas and Diler did not refuse to answer the supplemental
information request of 23 September 1999 – they noted that the deadline for doing so was impossible
to meet.  Second, those companies’ failure to respond to the 23 September information request does
not excuse Egypt’s decision not to grant an opportu nity to “present other information orally”.  If
Egypt wanted to get at the truth – whether or not respondents’ submitted costs matched the costsshown in their books and records, and whether and how respondents’ booked costs reflected inflation
– it would have granted respondents an opportunity to come and explain these issues to it.  By
refusing that request, and a similar request by Ic das, Egypt violated Article 6.2 of the Agreement.
31. The inflation statistics provided in EGT-7.7 plainly show that inflation was significantly
lower than 5 per cent per month in 1998, and that inflation did not exceed 2.5 per cent per month in
the June-August period.  The Investigating Authority prominently relied on an assumption that
inflation was running at 5 per cent per month throughout the investigation period in its determination
to resort to facts available.  This represented an improper establishment of the facts.
32. The Investigating Authority has also provided Icdas’ scrap costs to the Panel as evidence of
scrap costs during the investigation period.  These scrap costs are the same costs that are discussed in
Turkey’s First Submission (at 63).  They in fact show that the conclusions reached by the
Investigating Authority with re spect to the movement of the scrap costs were unfounded.
Specifically, the Investigating Authority’s finding that scrap costs (in dollar terms) declined in onlythree months of the period of investigation is unsupported by the facts.
33. Turkey’s claims of violations of Articles 2.2.1.1, 2.2.2 and 2.4 are intended to demonstrate
that the normal value calculated in this case is in appropriate in the event that the Panel concludes that
resort to facts available was unjustified.
34. Turkey agrees that if data has been properly rejected because it cannot be verified or is
inaccurate, that data need not be used in the Investigating Authority’s determination.  However, when
some data is unverified and other data is verified or otherwise reliable, the verified or reliable data
should be used in accordance with Annex II, paragraph 3.  Moreover, the Investigating Authority
should endeavor, in finding other “gap filling” data, to approximate, as closely as possible, the costs
that would have been submitted or verified had th e party cooperated completely with the investigating
authority.  Nothing in the agreement permits an investigating authority to “punish” respondents with
adverse “facts available.”
35. Egypt claims that the Investigating Authority was “solely concerned with the reasonableness,
neutrality and consistency of its approach” and that the IA was actually acting leniently by usingrespondents’ own data as “facts available”.  This claim is ludicrous.  Egypt could not have constructed
a financial expense from secondary information equal to 64 per cent of IDC’s cost of manufacture as
it did in this case.  Nor could it have justified, based on secondary sources, the use of a January 1998
scrap cost to compute the cost of producing rebar sold  by Icdas to Egypt in the last half of the year.
The Investigating Authority has also not provided  a rational basis for arbitrarily increasing Habas’
costs by 5 per cent.  Why not 10 per cent or 50 per cent?
36. Egypt incorrectly claims Turkey has conceded that the short-term interest income claimed by
Turkey as an offset to interest expense was not related to the production or sale of the subject
merchandise.  To the contrary, Turkey claims that (a) this income was related to the production andWT/DS211/R
Annex 5-1
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sale of rebar; (b) evidence on the record supports such a classification (interest income is classified as
“operating income” on the companies’ financial statements); and (c) there is no information on the
record supporting the Investigating Authority’s conclusion that that revenue was not related to the
production or sale of rebar.
37. Turkey has argued that Egypt should have made an adjustment to the constructed normal
value for differences in imputed credit costs.  Egypt argues that the adjustments mandated by
Article 2.4 for differences in “conditions and terms of sale” are limited to situations in which the
normal value is based on sales prices and does not apply when the normal value is based on costs of
production.  Turkey notes that the United States, the EU and Canada make these adjustments when
the normal value is based on constructed normal value.  Moreover, Egypt deducted imputed creditcosts from the export price to Egypt.  Comparison of a “sight” price to Egypt with a cost of
production that includes the full cost of financing receivables in the home market and export market is
like comparing apples to oranges.  A “fair comparison”  requires that the cost of financing receivables
be deducted from the constructed normal value or that an adjustment be made based on the imputed
credit costs included in the prices of comparable sales transactions in the home market.
38. Egypt notes that some Panels have expressed doubt as to whether the actions of an
Investigating Authority in the context of one single anti-dumping investigation could be considered a
measure of “general application” contemplated in Article X:1 of the GATT 1994.  However, Turkey
has alleged a violation of Article X:3(a), not Article X:1.  Article X:3(a) obliges each contractingparty to “administer in a uniform, impartial and reasonable manner all its laws, regulations, decisions
and rulings of the kind described in paragraph 1 of this Article”.  Paragraph 1 includes “laws [and]
regulations . . . of a general application .  .  . pertaining to .  .  . rates of duty, taxes or other charges”.
Turkey’s claim in this case is that Egypt was administering its anti-dumping law in manner that
violated Article X:3(a).  Thus, Turkey needed to s how only that the anti-dumping laws of Egypt were
laws of “general application” not that the admini stration complained of was “of general application”.
Administration of laws of general application normally has a limited application to the case before the
investigating authority.  No requirement of “general application” should be read into this language.
39. Turkey agrees with the United States that the Agreement does not require a verification.
However, evaluation of Egypt’s refusal to conduct a second verification must be examined in the
context of the entire case and in consideration of the degree of “cooperation” extended by therespondents.
40. Turkey agrees with the views expressed by Japan in this proceeding.WT/DS211/R
Annex 5-2
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ANNEX 5-2
REBUTTAL SUBMISSION OF EGYPT
EXECUTIVE SUMMARY
I. PRELIMINARY REMARK
1. Turkey has, in its Response of 7 December 2001 to the Panel’s Questions, taken this
opportunity to (1) introduce new claims; and (2) m odify existing claims as regards injury and
dumping that were not mentioned in the Request for Establishment of a Panel.  Accordingly, thoseclaims are not within the terms of reference of the Panel and must be rejected. In particular, Turkey
alleges that:
• the Investigating Authority did not consider factors affecting domestic prices under Article 3.4;
• the Investigating Authority violated Paragraph 6 of Annex II of the AD Agreement by sending the
letter of 19 August 1999 to the Turkish respondents;
• the Investigating Authority violated Article 17.6(i) of the AD Agreement;
• the Investigating Authority violated Paragraph 3 of Annex II and Article X:3 of GATT 1994 in its
selection of facts as facts available.
2. Moreover, the majority of evidence upon which Turkey relies to substantiate its claims, which
themselves lack the requisite legal basis under the AD Agreement, have not been presented to the
Investigating Authority during the course of the investigation.  In fact, what Turkey is attempting is to
persuade the Panel to conduct a de novo  review of the Investigating Authority’s determinations.  The
obligations of the Panel under Article 17.5(ii) and 17.6 are very clear in this respect. Article 17.5(ii) of
the AD Agreement expressly limits the review of the Panel to the evidence that was made available ,
and thus made known  to the Investigating  Authority in conformity with the appropriate domestic
procedures.
3. Turkey urges the Panel to ignore these provisions by taking “judicial notice” (a concept which
has no foundation in DSB practice) of facts that were not before the Investigating Authority during
the course of the proceeding.  However, the reference to facts “ made available ” in Article 17.5(ii) is
significant as it precludes a panel from taking “ judicial notice ” of facts that were not made available
to the Investigating Authority during the course of the investigation.
II. INJURY
A. OBLIGATIONS OF THE INVESTIGATING AUTHORITY UNDER ARTICLE 3.4
4. An important distinction must be made.  That distinction is between the final determination  as
from the Final Report  of the Rebar Investigation.  Whereas the former reviews all factors listed in
Article 3.4 in its examination of the impact of the dumped imports on the domestic industry, the latter
focuses on the conclusions central to the Investigating Authority’s determination of material injury.
5. The fact that the injury analysis of the Investigating Authority was thorough and indeed
covered all the factors listed in Article 3.4 is apparent in the Confidential Injury Analysis  of the Rebar
Investigation.  Thus, in addition to factors specifically referred to in the Essential Facts &
Conclusions Report  and the Final Report , the following Article 3.4 factors were explicitly examined
by the Investigating Authority during the course of the investigation:WT/DS211/R
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• Sales volume and revenue;
• Cost of production, selling & administrative costs, cost of sales and finance costs;
• Gross profit, pre-tax profit and profit after cost;
• Output (i.e. volume of production);
• Market share (i.e. total sales of all Egyptian producers, including subject and non-subject
countries);
• Productivity (i.e. output per employee);
• Return on investments;
• Capacity utilization;
• Cash flow;
• Inventories;
• Employment (i.e. number of employees);
• Wages;
• Domestic prices;
• Growth (i.e. in terms of sales volume and market share);
• Ability to raise capital (i.e. pre-tax profit as a % of shareholders funds)
An analysis of the magnitude of the margin of dumping is clearly evident in Section 3.3 of the
Essential Facts & Conclusions Report  and Sections 3.3, 4.4 and 4.6.2 of the Final Report .
6. Accordingly, Egypt submits that  during the investigation of mate rial injury, the Investigating
Authority did indeed examine “ all relevant economic factors and i ndices having a bearing on the state
of the industry ” as required under Article 3.4 of the AD Agre ement.  Turkey’s claim is thus without
foundation and therefore must be rejected by the Panel in this present dispute.
7. Turkey claims that “ the Panel should disregard evidence not shared with the respondents in
assessing the consistency of the Egyptian anti- dumping investigation and findings with the Anti-
Dumping Agreement ”.1  In support of this claim Turkey refers to the decisions reached by the panels in
Korean Resins  and Thailand – H Beams .  The Panel should note, however, that Turkey has failed to
mention that the findings of the Panel in Thailand – H Beams , upon which Turkey relies, were reversed
by the Appellate Body on appeal.  Indeed, the Appellate Body in Thailand – H Beams  stated that there is
“nothing in Article 3.1 which limits an investigating authority to base an injury determination only
upon non-confidential information ” (emphasis added).2  It follows that the findings of the Panel in
Korean Resins , a pre-WTO claim brought under the GATT 1947, should be reviewed in this light.
B. TURKEY CONFUSES TH E RELEVANT OBLIGATIONS OF ARTICLES 3.4 AND 3.5
8. In Turkey’s First Written Submission in Section III.B.5 (page 9) and again in its Oral
Presentation at the First meeting of the Panel in Section II.B (page 5), Turkey alleges that:
“the Investigating Authority failed to examine all relevant economic factors and
indices having a bearing on the state of th e industry in violation of Article 3.4.
Specifically, that the Investigating Authority failed to consider the adverse effects on
domestic profitability and pricing produced by five factors.” (emphasis added)
                                                     
1 See page 7 of Turkey’s Oral Presentation at the First Meeting of the Panel.
2 Thailand – Anti-Dumping Duties on Angles Shapes and Sections of Iron or Non-Alloy Steel and H-
Beams from Poland WT/DS122/R, Appellate Body Report WT/DS122/AB/R at para. 107, adopted
5 April 2001.WT/DS211/R
Annex 5-2
Page 78
The five factors specifically referred to by Turkey are (a) capacity expansion of the domestic industry;
(b) increased domestic competition;  (c) falling prices for raw materials;  (d) contraction in domestic
demand; and (e) the effect of comparably priced, fairly traded imports.
9. It is clear that Turkey is alleging that Egypt improperly attributed the injury (i.e. falling prices
and a decrease in profitability) to imports from Turkey. According to Turkey, the injury was
“produced”, that is to say that it was caused, by factors other than the dumped imports, such as
increased domestic capacity and domestic competition, a decline in the price of raw materials anddomestic demand, and the effect of non-dumped imports.  Accordingly, Egypt maintains that the issue
is one of causation and attribution, in whic h the relevant provision is Article 3.5.
10. Attention should be called to the fact that nowhere in the Request for the Establishment of a
Panel, nor in Turkey’s First Written Submission or in its Oral Presentation at the First Meeting of the
Panel, has Turkey alleged that the Inves tigating Authority failed to investigate “ factors affecting
domestic prices ” under Article 3.4. Turkey should not be permitted, at this late stage, to modify its
allegations of inconsistency.  Should the Panel rule on this claim, Egypt submits that there is noprescribed method under the AD Agreement by which the Investigating Authority must consider
“factors affecting domestic prices ”.
11. Thus, contrary to what Turkey alleges, an examination of “ factors affecting domestic prices ”
under Article 3.4 does not necessarily require that the Investigating Authority consider capacityexpansion and its effects on intra-industry competition, falling prices of raw materials, contraction in
demand and the effect of non-dumped imports.  In any event, as demonstrated above, Egypt considers
that an examination of domestic competition, contraction in demand and the effect of non-dumped
imports are factors which may be relevant in the Investigating Authority’s examination of “ any known
factors other than the dumped imports ” under Article 3.5. As for the other alleged factors affecting
domestic prices, the capacity expansion of the domestic industry was indeed examined by the
Investigating Authority in addition to demand and the price of raw materials.
12. Turkey is of the opinion that it is incumbent upon the Investigating Authority to secure certain
kinds of information pursuant to Article 3.5 in orde r to determine whether or not there was a causal
link between the dumpe d imports and injury .  Thus, according to Turkey, the Investigating Authority
is under an obligation to develop “positive evidence” that:
• consumers purchased imported rebar from Turkey in place of rebar supplied by the domestic
manufacturers for price reasons;
• specific sales were lost by the domestic industry to imports from Turkey;
• domestic manufacturers lowered their prices specifically in response to competing offers by
suppliers of Turkish rebar;
• Turkey was considered by purchasers in Egypt as the price leader in the market.
13. Egypt would like to take this opportunity to clarify the obligations of the Investigating
Authority with respect to its examination of “ any known factors other than the dumped imports which
at the same time are injuring the domestic industry ”.  What is known to the Investigating Authority
clearly includes factors presented to the Investigating Authority during the course of the investigation.
We agree with the European Communities “ that an interested party must make a prima facie case that
a factor might be relevant in order for a factor to be known in the sense of Article 3.5 ” (emphasis in
the original).
14. Unlike Article 3.5 of the AD Agreement, the examination of causality under Article 4.2(b) of
the Safeguards Agreement does not specifically direct the Investigating Authorities to examine
“known factors ” other than the imports under investigation which might be injuring the domesticWT/DS211/R
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industry.  Moreover, interested parties are not as involved in the context of safeguard investigations
and do not actively participate in the data collection exercise carried out by the Investigating
Authority.  Accordingly, in the context of a Safeguard investigation, the exercise of due diligence by a
Member is all the more important in reaching a determination under Article 4.2(b).  Finally, theSafeguard Agreement does not contain a similar pr ovision to Article 17.5(ii) of the AD Agreement,
which expressly limits the review of the Panel to the evidence that was made available , and thus made
known  to the Investigating Authority in conformity with the appropriate domestic procedures.
C. SCOPE OF THE INVESTIGATION
15. Turkey claims that the additional evidence on causation that was presented in its First Written
Submission was not presented by the Turkish respondents during the course of the investigation
because the investigation was initially limited to a thr eat of material injury.  However, in the Notice of
Initiation with respect to the “ allegation of threat of injury ” (at paragraph 4), it is clearly stated that
“[t]he applicant alleged and provided supporting evidence that the dumped imports have started to
cause material injury to the domestic industry ”.  Accordingly, the Turkish respondents, assuming they
read the Notice, could not have been unaware that the investigation would include an examination of
present material injury.  Moreover, attention to this fact was again pointed out by the Investigating
Authority in a facsimile dated 17 July 1999 to David Simon, who acted as counsel for the Turkish
respondents during the investigation (attached as EX-EGT-8).
16. In any event, contrary to that submitted by Turkey, it would not be “inequitable” for the
current Panel to apply the decision in Guatemala – Cement II3 to the facts of this case.  The issue in
Guatemala – Cement II  is nearly identical to that in the current proceeding before the Panel.  Indeed,
it would be unreasonable to require an Investigating Authority to determine precisely the scope theinjury examination at the beginning of the proceedin g before it has even had a chance to review the
evidence and to evaluate its findings.
III. DUMPING
A. CLAIMS NOT WITHIN THE PANEL’S TERMS OF REFERENCE
17. Turkey alleges that the Investigating Authority violated Paragraph 6 of Annex II of the AD
Agreement by sending the letter of 19 August 1999 to the Turkish respondents4. Egypt submits that
this claim is not within the Panel’s terms of refere nce.  Indeed, in the Request for Establishment of a
Panel, a violation of Paragraph 6 of Annex II was invoked solely with respect to the deadline grantedto the respondents to reply to the letter of 19 August 1999.  Conversely, Turkey did not claim in its
Request for Establishment of a Panel that the sheer fact of sending the letter of 19 August 1999
constituted a violation of Paragraph 6 of Annex II.  Accordingly, this claim must be rejected as it is
not within the Panel’s terms of reference.
18. Turkey also alleges a violation of Articl e 17.6(i) of the AD Agreement in Section II.D.
However, that provision governs the standard of review to be applied by a panel when considering
whether the Investigating Authority’s establishment of the facts was proper and the evaluation
unbiased and objective.  It does not govern the rights and obligations of Members under the AD
Agreement.  In any event, it was not cited in the Request for Establishment of a Panel. As a
consequence, this claim is not within the terms of reference of the Panel and must be rejected.
                                                     
3 Guatemala – Definitive Anti-Dumping Measures on Grey Portland Cement from Mexico
WT/DS156/R, Report of the Panel, adopted 17 November 2000.
4 See last sentence of Appendix TUR. II.A.WT/DS211/R
Annex 5-2
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19. Turkey also contends that the Investigating Authority violated Paragraph 3 of Annex II and
Article X:3 of GATT 1994 in its selection of facts as facts available.  As noted by the Panel, those
provisions were not cited in support of Claim 11 of the Request for Establishment of a Panel.
Accordingly, the alleged violation of Paragraph 3 of Annex II and Article X:3 of GATT 1994 must be
rejected as not being within the terms of reference of the Panel in the context of Claim 11.
B. FAILURE TO SUBMIT COSTS DATA FOR THE ENTIRE INVESTIGATION PERIOD
20. Turkey attempts to justify the failure of all respondents except IDC to submit costs data forthe entire investigation period by referring to the practice of other jurisdictions. The practice of otherjurisdictions is not at issue in this case nor should this practice have been considered by the
respondents to determine the format in which they  needed to submit their costs data in the Rebar
investigation conducted by the Egyptian Investigating Authority.  The Questionnaire sent to the
respondents made it clear that data needed to be provided for the entire investigation period, and not
for selected parts of such period.
C. REQUESTS FOR ADDITIONAL INFORMAT ION DID NOT CONSTITUTE A NEW
QUESTIONNAIRE
21. Turkey suggested at the First Substantive Meeting and repeated in its replies to the Panel’s
Questions that the requests for additional information contained in the letter of 19 August 1999
constituted a new questionnaire because the letter contained a larger number of questions and raised
more complex issues on costs than the initial Questionnaire.  This is irrelevant.  The originalquestionnaire requested the respondents to provide their costs of production for the entire
investigation period.  Four of the five respondents did not comply with that request.  In fact, they
provided costs data for a maximum period of four months.  As thoroughly explained in Egypt’s First
Submission, the purpose of the letter of 19 August was therefore twofold:
• first, to provide an additional opportunity to the respondents to report their costs data for the
entire investigation period;
• second, to seek to clarify whether and, if so, to what extent the respondents’ costs data duly
reflected the hyperinflation that Turkey was experiencing during the investigation period.
D. DATA SUBMITTED DID NOT REFLECT COSTS ASSOCIATED WITH PRODUCTION AND
SALE
22. Turkey claims that the costs of production of the Turkish respondents were prepared in
accordance with the generally accounting principles of Turkey and should therefore have been used
by the Investigating Authority pursuant to Article 2.2.1.1 of the AD Agreement.  In Egypt’s view, it is
clear that records that are not prepared in order to reflect hyperinflation cannot be considered toreflect the costs associated with the production and sale of the product under consideration, even
though they would follow the generally accepted accounting principles of the exporting country.
23. Egypt considers that the fact that the respondents did not apply IAS 29 is not disputed by
Turkey.  Furthermore, Egypt disagrees with Turkey that the Panel could not consider the fact that IAS29 was not followed by the respondents. Indeed, this  fact is explicitly mentioned in the Auditors’
notes to the Audited Accounts of the respondents, which were submitted to the Investigating
Authority by the respondents themselves.
24. Turkey further alleges that there was no need to adjust raw material costs for hyperinflation
since the prices of raw materials in USD were converted into Turkish Lira at the exchange rate of the
day of purchase; however, the fact that Turkish respondents used the exchange rate of the date ofWT/DS211/R
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purchase of raw materials cannot cope with the effect of hyperinflation on the value of raw materials
that are not immediately used in the production.
E. INTEREST INCOME WAS NOT RELATED TO PRODUCTION OR SALE
25. Turkey alleges in its reply to Question 16 that interest income on working capital is
sufficiently related to production and sale of rebars because it is a fungible item that cannot be
segregated to any particular business line and therefore benefits all production activities of the firm. It
is precisely because this cost item is not associated to any business line that it must be excluded from
the calculation of the cost of production of the product concerned.
F. THE LETTER OF 28 SEPTEMBER 1999
26. Turkey states that the Investigating Authority did not reply to the letter of 28 September 1999.
This is factually wrong.  A reply was sent on the same day to the legal counsel of the three Turkish
respondents concerned informing them that the Inves tigating Authority would resort to facts available
in view of the absence of reply on several issues (see EX-EGT-7.5).  David Simon acknowledged
receipt of this letter on the same day (see EX-EGT-9).  The offer for a meeting in Cairo was
subsequently addressed by the Investigating Authority in a letter of 5 October 1999 to David Simon(See EX-EGT-10).  As a consequence, contrary to Turkey’s erroneous allegations, the Turkish
respondents were timely and appropriately informed of the legal consequences of their failure to
submit the information requested in the letter of 23 September 1999.WT/DS211/R
Annex 6-1
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ANNEX 6-1
SECOND ORAL STATEMENT OF EGYPT
EXECUTIVE SUMMARY
I. PRELIMINARY REMARK
1. Turkey has not challenged Egypt’s arguments from a legal standpoint.  To the contrary,
Turkey has treated its Rebuttal Submission as yet another opportunity to establish a prima facie  case
of the alleged inconsistencies and, even at this late stage, it is attempting to introduce new claims thatwere not included in the Request for the Establishment of a Panel.
2. Throughout the various stages of this proceeding, Turkey is attempting to persuade the Panel
to correct the deficiencies of the Turkish respondents’ participation in the rebar investigation. It was,
however, the responsibility of the Turkish respondents to cooperate and to present all the requisiteinformation and evidence pertinent to their defence during the investigation.  The Panel cannot now
correct that deficiency.
3. It has been noted that the majority of evidence upon which Turkey relies to substantiate its
claims was not presented to the Investigating Authority during the course of the investigation.  Byintroducing new information before the Panel, Turkey hopes to persuade the Panel that the
Investigating Authority’s establishment of the facts was not based on positive evidence.  Moreover,
Turkey has also exerted a considerable effort to rec onstruct the facts that were before the Investigating
Authority in an attempt to persuade the Panel that  the Investigating Authority’s establishment of the
facts was improper and that its examination with respect thereto was biased and not objective.  Inessence, by introducing new evidence and reconstruc ting the facts, Turkey is in fact attempting to
persuade the Panel to reconsider the Investigating Authority’s determination in light of the existing
evidence together with new facts; in other words, to conduct a de novo  review of the Investigating
Authority’s determinations.
4. As previously noted, the obligations of the Panel under Article 17 of the AD Agreement are
very clear in this respect: paragraph 6(i) directs the Panel to consider whether the authorities’
establishment of the facts was proper in light of the facts that were made available  as specified under
paragraph 5(ii). Still,  Turkey urges the Panel to ignore these provisions by taking “ judicial notice ” of
facts that were not before the Investigating Authority during the course of the proceeding.
II. INJURY
5. Turkey has failed to demonstrate that the In vestigating Authority’s determination of injury
under Article 3 of the Anti-Dumping Agreement was inconsistent with respect to Egypt’s obligations
thereunder.  In particular, Turkey alleges that the Investigating Authority failed to examine the
mandatory factors listed in Article 3.4.  Turkey also  alleges that the Investigating Authority failed to
establish, by positive evidence, a causal link between the dumped imports and the injury to the
domestic industry under Article 3.5.
A. THE EXAMINATION UNDER ARTICLE 3.4
6. It is apparent in the Confidential Injury Analysis  that the Investigating Authority’s final
determination with respect to material injury was based on positive evidence and that it involved an
objective examination of all the elements as required under Article 3, paragraphs 2 and 4 of the Anti-
Dumping Agreement.  A copy of the Confidential Injury Analysis  was presented to Turkey, as requestedWT/DS211/R
Annex 6-1
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by the Panel.  A non-confidential version of the Analysis would have been provided to the Turkish
respondents had a request been made to review the public file during the course of the investigation.
Indeed, the respondents must have been aware of the existence of the public file, as reference to its
availability was specifically made in the Notice of Initiation , the Essential Facts & Conclusions
Report  and the Final Report.1
7. The very first time a request was made to review the public file was by the Turkish
Government in a letter dated 12 July 2000 to the Investigating Authority.  Egypt responded to that
request at a meeting in Cairo on 6 August 2000.  As the investigation had been closed for almost one
year, access to the public file was accordingly denied.  Nonetheless, Turkey alleges that the Panel
should disregard evidence that was not previously made available to the Turkish respondents or to theTurkish Government.
2
8. In view of the findings of the Appellate Body in Thailand – H Beams3, it is clear that the Panel
cannot disregard the Confidential Injury Analysis  simply because it was not shared with the respondents
during the course of the investigation. In Thailand – H Beams , the Appellate Body confirmed that there
is “nothing in Article 3.1 which limits an investigating authority to base an injury determination only
upon non-confidential information ”.4  Accordingly, in its review of whether the Investigating
Authority’s examination of the factors listed in Arti cle 3.4 was complete, the Panel must consider the
information contained in the Confidential Injury Analysis .
9. Turkey also claims in its Rebuttal that the Panel should disregard c onsideration of certain
Article 3.4 factors mentioned in the working papers  of the Investigating Authority when evaluating
whether the Final Report  contains findings or conclusions sufficient to satisfy the requirements of
Article 12.2, with respect to each of the Article 3.4 factors.5  Egypt wishes to stress that whether all of
the Investigating Authority’s conclusions on material injury are reproduced in the Final Report ,
however, is not an issue that is before the Panel. A claim under Article 12.2 was not introduced in the
Request for the Establishment of a Panel and accordingly, is not within the Panel’s Terms of
Reference.
B. THE EXAMINATION UNDER ARTICLE 3.5
10. Turkey has raised a number of claims in connection with the Investigating Authority’s
examination of the causal relationship under Articl e 3.5.  In particular, Turkey alleges that the
Investigating Authority failed to demonstrate that the dumped imports caused injury “ through the effects
of dumping ” found and that the Investigating Authority failed to establish by positive evidence a causal
link by not thoroughly investigating other potential causes of injury.
11. As previously submitted, the Investigating Authority’s investigation of injury was based on
positive evidence and involved an objective examinati on of the volume of the dumped imports, both in
absolute terms and relative to consumption, and the effect of those imports on prices in the domestic
market.  Indeed, the Investigating Authority found significant price undercutting resulting in pricedepression and suppression.
                                                     
1 See Ex-EGT-7.3 ( Notice of Initiation ), Ex-TUR-15 ( Essential Facts & Conclusions Report ) and Ex-
TUR-16 ( Final Report ).
2 See the Rebuttal Submission of Turkey of 2 January 2002 at Claim II.A, page 1.
3 Thailand – Anti-Dumping Duties on Angles Shapes and Sections of Iron or Non-Alloy Steel and H-
Beams from Poland WT/DS122/R, Appellate Body Report WT/DS122/AB/R, adopted 5 April 2001.
4 Id., at para. 107.
5 See the Rebuttal Submission of Turkey of 2 January 2002 at Claim III.H, page 31.WT/DS211/R
Annex 6-1
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12. Turkey, however, suggests that because the dumping occurred in 1998 and the injury in 1999,
the Investigating Authority failed to show that the dumped imports caused injury to the domestic
industry.  As previously submitted, the Investigatin g Authority found that the injury in 1999 confirmed
the effects of the dumping that took place in 1998.  Moreover, it was demonstrated in our First Written
Submission that the periods for data collection fo r both injury and dumping as established by the
Investigating Authority are in line with the Recommendations of the Anti-Dumping Committee.
13. Turkey also claims that because the Investigating Authority allegedly failed to secure very
“specific ” positive evidence with regard to other potential  causes of injury, Egypt failed to meet its
obligations under Article 3.5.  To this end, Turkey presents new evidence to the Panel that was not
submitted to the Investigating Authority during the course of the investigation, which it alleges shouldhave been taken into account.  However, Article 3.5 only requires that the Investigating Authority
examine known factors that are simultaneously injuri ng the domestic industry.  Article 17.5(ii) of the
Anti-Dumping Agreement expressly limits the review of the Panel to the evidence that was made
available , and was thus known  to the Investigating Authority.  Article 3.5 does not require that the
Investigating Authority secure, for example, information pertaining to consumers’ perceptions as towhether the dumped imports were price leaders in the market.
14. Turkey also places a great deal of emphasis in its Rebuttal Submission that the Investigating
Authority did not separate and distinguish the injurious effects of these allegedly known factors that
were contributing to the injury.  Turkey in fact assumes that the injury was caused by a multitude of
factors.  However, the report on  Other Causes of Injury  demonstrates that the examination of the
causal relationship included an inquiry into a number of other potential causes of injury.  On the basis
of this review, the Investigating Authority found that there were no other causes of injury .
Accordingly, there was no need to separate and distinguish the injurious effects of factors other than
the dumped imports that were simultaneously injuring the domestic industry.
15. Turkey has failed to demonstrate that the Investigating Authority’s examination of a causal
relationship under Article 3.5 was inconsistent with Egypt’s obligations thereunder.  In view of the
evidence before the Investigating Authority, Turkey has failed to present a prima facie  case that there
were other known factors that were contributing to the injury.  The report on  Other Causes of Injury
was available for review in the public file of the Investigation.  The Turkish resp ondents therefore had
the opportunity to review and to  comment upon the report and to present refuting evidence.  Egypt
cannot be held accountable for the fact that the respondents did not avail themselves of that
opportunity.
III. DUMPING
A. THE USE OF FACTS AVAILABLE
16. With respect to the dumping determinations, the principal feature of this case is the fact that
Turkish respondents offered very poor cooperation from the very beginning of the investigationonwards.  The Anti-Dumping Agreement foresees and wisely provides for the circumstances in which
an interested party refuses access to, or otherwise does not provide necessary information within a
reasonable period or significantly impedes the invest igation.  In such instances, the Investigating
Authority may resort to the use of "the facts available" as provided under Article 6.8.
17. It must be emphasised, however, that the use of facts available in the rebar investigation was
not intended to be punitive.  Egypt was not seeking to arrive at an outcome less favourable than would
have been the case had the Turkish companies offered satisfactory cooperation.  In that respect, Egyptdisagrees with Turkey’s interpretation of the Appellate Body’s findings in United States – Hot-RolledWT/DS211/R
Annex 6-1
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Steel from Japan.6  Turkey’s understanding of the case is that the US Administration did not have the
grounds to resort to the use of facts available.  To the contrary, the use of facts available in the
specific circumstances of the case was held to be permissible by the DSB.7  What was found
incompatible with the Anti-Dumping Agreement was the fact that the US Administration sought toreach an unfavourable determination through the deliberate selection of certain “adverse facts”
available.
8
B. CLAIMS THAT ARE NOT WITHIN THE PANEL’S TERMS OF REFERENCE
18. Turkey alleges that the Investigating Authority violated Paragraph 6 of Annex II of the Anti-
Dumping Agreement by sending the letter of 19 August 1999 to the Turkish respondents.9  I n  t h e
Request for the Establishment of a Panel, however, a violation of Paragraph 6 of Annex II was
invoked solely with respect to the deadline grante d to the respondents to reply to the letter of
19 August 1999.  Conversely, Turkey did not claim in its Request for Establishment of a Panel that
the sheer fact of sending the letter of 19 August 1999 constituted a violation of Paragraph 6 ofAnnex II.  Accordingly, this claim must be rejected.
19. Turkey also claims that the Investigating Authority violated Paragraph 3 of Annex II and
Article X:3 of GATT 1994 in its selection of  particular data as facts available.
10  As previously noted
by the Panel, those provisions were not cited in Claim 11 of the Request for the Establishment of aPanel.  Accordingly, the alleged violation of Paragraph 3 of Annex II and Article X:3 of GATT 1994
cannot be considered in this regard.
C. THE DUMPING DETERMINATIONS WERE IN COMPLIANCE WITH THE AD AGREEMENT
20. All the issues raised in Turkey’s Rebuttal Submission consist essentially of a mere repetition
of the arguments developed in Turkey’s First Submission and other statements.  They were all
thoroughly addressed in Egypt’s previous Submissions to the Panel, in particular:
• All respondents except IDC failed to submit costs data for the entire investigation period, despite
the fact the Questionnaire sent to the respondents made clear that data needed to be provided for
the entire investigation period;
• The requests for additional information contained in the Investigating Authority’s letter of
19 August 1999 provided an additional opportunity to the respondents to report their costs data
for the entire investigation period and to clarify whether and, if so, to what extent the respondents’
costs data duly reflected hyperinflation;
                                                     
6 United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan
WT/DS184/R, Appellate Body Report WT/DS184/AB/R, adopted 23 August 2001.
7 Id., Report of the Panel at para. 7.69.
8 Id., at para. 7.70.
9 See Response of Turkey to Questions of the Panel of 7 December 2001, Appendix TUR.II.A (last
sentence).
10 Id., at Sections II.C and II.G.WT/DS211/R
Annex 6-1
Page 86
• The respondents’ records failed to reasonably reflect the costs associated with the production and
sale of the product under consideration by not taking into account the hyperinflation of the
Turkish economy;
• The 5 per cent monthly hyperinflation rate was determined on the basis of reliable data and was
also used to adjust the costs of production of Habas;
• The computation of a weighted average cost of production for the entire investigation period was
fully justified by the circumstances of the case and was in compliance with the AD Agreement.WT/DS211/R
Annex 6-2
Page 87
ANNEX 6-2
SECOND ORAL STATEMENT OF TURKEY
EXECUTIVE SUMMARY
I. RESPONSE TO EGYPTIAN REBUTTAL BRIEF
1. I would like to use this opportunity to address specifically the claims made by Egypt in its
Rebuttal Brief and to make some comments on the information provided in the confidential injury
analysis provided to us on 2 February 2002.
A. FAILURE TO EXAMINE ALL OF THE ARTICLE 3.4 FACTORS
2. Turkey has claimed that Egypt failed to exam ine all of the mandatory factors identified in
Article 3.4 in its final determination.  Specifically, Turkey has pointed out that the Essential Facts and
Conclusions Report and the Final Report contain no discussion of productivity, actual or potential
effects on cash flow, employment, wages, growth and ability to raise capital or investments.  Turkey
also noted that there is an insufficient examination and evaluation of capacity utilization or return on
investment in the Final Report.
B. CONFIDENTIAL EVIDENCE TO WHICH RESPONDENTS DID NOT HAVE ACCESS
3. We agree with Egypt and withdraw our claim that Egypt may support its final determination
only upon information placed in the public record.  However, this does not relieve the Egyptian
Authority of the requirement that it provide a meaningful analysis of all of the Article 3.4 factors in itsFinal Report.  Nor does it mean that, in supporting its determination before this Panel, Egypt may rely
on documents purportedly in the Public Record that were not shared with, or otherwise made
available to, the Government of Turkey and the Turkish private respondents.
C. ARTICLE 3.4 AND 3.54. Egypt attempts to re-characterize all of Turkey’s claims under Articles 3.4 and 3.5 as claims
under Article 3.5 in an attempt to avoid Panel review of the Egyptian determination under Article 3.4.
Articles 3.4 and 3.5 operate hand-in-hand.  First, the Investigating Authority must identify what
factors and indices are affecting the domestic industry under Article 3.4, including all relevant factorsand indices having a bearing on domestic prices and profitability.  Then, under Article 3.5, the
Investigating Authority must ensure that it does not at tribute effects of factors, other than imports, that
are injuring the domestic industry to the dumped imports.
D. FACTORS AFFECTING DOMESTIC PRICES5. Egypt claims that Turkey did not include a claim in its request for Panel review or in its First
Written Submission that the Investigating Authority failed to examine “factors affecting domestic
prices” under Article 3.4.  This claim is incorrect.  (See Turkey’s request for Panel consideration at
paragraph 3).WT/DS211/R
Annex 6-2
Page 88
E. THE OBLIGATION TO CONSIDER ANY KNOWN FACTORS UNDER ARTICLE 3.5
6. With respect to the obligation in Article 3.5 Egypt argues that respondents must make a prima
facie  case that other factors are causing injury to the domestic industry before any obligation is
imposed on the Investigating Authority to examine those factors.
7. We have extensively addressed this issue previously. (See, our reply to Panel Question
Number 5 and Section III.C-D of our rebuttal brief).
F. THE SCOPE OF THE INJURY INVESTIGATION
8. Turkey has claimed that additional evidence on causation of present material injury was not
submitted during the original investigation because respondents were led to believe that investigation
was limited to threat of injury issues.  In the only Notice of Initiation made available to the Turkish
respondents during the course of the investigation (S ee TUR-1), it is states that “the domestic industry
alleges that the significant and continuing increase of dumped imports of rebars from Turkey in 1998and the expected increase of imports .  .  . will threaten to cause  material injury to the domestic
industry.  Aspects of threat of injury were detected in the second half of 1998”.
G. TURKEY HAS NOT INTRODUCED ANY NEW CLAIMS NOT WITHIN THE PANEL’S
TERMS OF REFERENCE
9. Turkey claims that the Investigating Authority violated Annex II, paragraph 6 of the Anti-
Dumping Agreement by waiting until after the verification to raise the cost issues identified in the
August 19 letter. (See Response to Panel Question #1, at II.A.)
10. Egypt now asserts that this claim is not within the terms of reference for the Panel.  This
claim is incorrect.  Turkey raised this issue in Claims 8 and 9.
11. Turkey has also alleged a violation of Article 17.6(i) of the AD Agreement.  Egypt has
claimed that this provision concerns the standard of review and does not govern the rights and
obligations of the Members under the Agreement.   E gypt has also asserted that this particular claim
was not contained in Turkey’s request for the Panel.
12. Turkey disagrees on both points.  As indicated in our Rebuttal Brief at pages 3-4, the
Appellate Body specifically found in Hot-Rolled Carbon Steel Products from Japan  that
Article 17.6(i) imposes certain procedural obligations upon Investigating Authorities.
H. FAILURE TO SUBMIT COST DATA FOR THE ENTIRE INVESTIGATION PERIOD IN
THE ORIGINAL RESPONSE
13. Egypt claims that there was no justification for Turkish respondents to submit cost data in
their original responses that was limited to the months in which export sales and home market saleswere reported.  Contrary to Egypt’s claims, th e original anti-dumping duty questionnaire did not
clearly define the period over which costs should be reported.  The questionnaire required the
reporting of all sales to Egypt during the period of investigation, but it also directed respondents to
limit their reporting of home market sales to those sales that were contemporaneous with sales that
were made to Egypt.  Since home market and Egyptian sales were reported only in a few months, it isonly logical that costs of production should be reported for those months as well.  This conclusion
was particularly appropriate in the context of a hyperinflationary economy.WT/DS211/R
Annex 6-2
Page 89
I. THE REQUESTS FOR ADDITIONAL INFORMATION DID CONSTITUTE A NEW
QUESTIONNAIRE
14. Egypt claims that the 19 August 1999 letter did not constitute a new questionnaire.
Regardless of whether or not monthly costs were requested in the original questionnaire, there were a
substantial number of additional questions and demonstrations required in response to the
19 August 1999 letter that were in the nature of a questionnaire.
J. THE DATA SUBMITTED REFLECTED COSTS ASSOCIATED WITH THE
PRODUCTION AND SALE OF THE PRODUCT CONCERNED
15. Egypt claims that because no company in Turkey applies IAS-29, it should be free to apply
facts available.  The fact that respondents did not apply IAS – 29 was never investigated by the
Investigating Authority or mentioned in the Authority’s Final Report.  Second, if Egypt was
unsatisfied with the costs generated by the respondents’ internal accounting systems, even though
organized in accordance with generally accepted accounting principles in Turkey, then it wasincumbent upon Egypt to advise respondents how to  revise their costs in order to meet Egypt’s
requirements.
K. REPLY TO MR. SIMON’S LETTER OF 28 SEPTEMBER 1999
16. Egypt claims that Habas, Diler and Colakoglu did not request an extension of time in which to
respond to the 23 September 1999 supplemental questionnaire issued by the Investigating Authority.
While it is true that there was no request for a specific period of additional time in which to respond to
that questionnaire, counsel to Habas, Diler and Colakoglu noted, in his letter of 28 September 1999,
that it would be impossible to respond to Egypt’s request for additional information within the 2-5 day
period allowed for a response by the Investigating Au thority.  This, in Turkey’s view, constituted an
implicit request for an extension of time.
II. THE “CONFIDENTIAL INJURY ANALYSIS” RECENTLY PROVIDED BY EGYPT
SUBSTANTIATES MANY OF THE CLAIMS MADE BY TURKEY EARLIER IN
THIS PROCEEDING
A. THERE WAS AN ENORMOUS CAPACITY EXPANSION DURING THE PERIOD OF
INVESTIGATION
17. The “Confidential Injury Analysis” first supplied by Egypt to the Panel on 31 January 2002
establishes that there was a very large capacity expansion during the period of review.  Between 1996and 1998, domestic capacity to produce rebar increased by [[XX]] tons, or [[XX]] per cent.   Between
the end of 1998 and the first quarter of 1999, capacity increased by another [[XX]] tons, or [[XX]] per
cent as compared to 1996.
B. AN INCREASE IN FINANCE EXPENSES ATTRIBUTABLE TO THE CAPACITY
EXPANSION ADVERSELY AFFECTED PROFITABILITY
18. The Confidential Injury Analysis shows th at [[XX]] decline in profitability in 1998 is
attributable to an increase in finance costs per unit.  Profits per ton declined from 1997 to 1998 by
[[XX]] Egyptian lira per ton.  Finance costs per unit increased in that year by [[XX]] Egyptian lira perton.  Had finance costs per unit not increased, industry profits would have increased in 1998.WT/DS211/R
Annex 6-2
Page 90
C. IT APPEARS THAT THE CAPACITY EXPANSION HAD A TEMPORARY, ADVERSE
EFFECT ON AL EZZ’S PROFITABILITY IN 1998
19. Al Ezz uses steel scrap as a raw material input for making rebar.  Scrap accounts for 60-
70 per cent of the cost of a finished rebar and steel scrap prices declined by 34 per cent during 1998.
That should have translated into a 20-24 per cent decline in the cost of finished goods sold between
the beginning and end of 1998.  However, Al Ezz’s cost of goods sold declined in 1998 by only [XX]
per cent as compared to 1997.  Accordingly, it appears that temporary disruptions caused by the
capacity expansion acted to keep Al Ezz’s costs higher than they would otherwise have been in 1998,
adversely affecting the company’s profitability.
D. [[XX]]
20. Al Ezz’s expansion project came fully on stream at the end of 1998 its cost of goods sold
[[XX]].
21. This [[XX]].
E. [[XX]]22. [[XX]]F. IMPORTS TOOK A DECLINING SHARE OF THE DOMESTIC MARKET IN 199923. The confidential injury analysis supports our claims in previous submissions that total import
market share declined dramatically in the first quarter of 1999.  Thus, total import market sharedeclined from [[XX]] per cent of the market in 1998 to just [[XX]] per cent of the market in the first
quarter of 1999, a decline of nearly [[XX]] per cent.  The domestic industry also increased its market
share, from [[XX]] per cent of the market in 1998 to [[XX]] per cent of the market in the first quarter
of 1999.  While Turkey took an increasing share of the market in 1999, it did so at the expense of
other imports, including fairly traded imports from Saudi Arabia and Libya, it did not replace one ton
of rebar formerly sold by the domestic industry, nor did it increase its market share at the expense of
domestic market share.
G. THE INVESTIGATING AUTHORITY’S DETERMINATION OF PRICE
UNDERCUTTING WAS FLAWED IN VIOLATION OF ARTICLE 3.1
24. It was not clear from the Final Report or the Essential Facts and Conclusions Report how the
Investigating Authority made its determination of price undercutting – that is what prices were used
and at what level of trade prices were compared.   The Investigating Authority did not actually look at
“prices” or make a proper comparison between prices charged for the same product.  Prices for
different rebar products when sold in the domestic market normally vary with the size and grade of
the product sold.
III. CORRECTIONS TO REBUTTAL BRIEF
25. In Rebuttal Brief,  footnote 55 on page 23 should make reference to our response to Panel
Question # 4, rather than to Panel Question #16.  Footnote 107 on page 42 should have been omitted.Footnote 106 should be read as appearing in the spot where footnote 107 is currently located.WT/DS211/R
Annex 6-2
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IV. CONCLUSION
26. This statement must be read in combination with what we have said in our First Written
Submission, responses to the Panel’s questions, and Rebuttal Submission in order to appreciate ourposition on each of the issues.
27. For the reasons stated here, and in those prior submissions, we respectfully request the Panel
to render a decision that the Egyptian Anti-Dumping investigation was not in accordance with the
provisions of the Anti-Dumping Agreement that we have cited or with Article X:3 of the GATT.WT/DS211/R
Annex 7-1
Page 92
ANNEX 7-1
CONCLUDING STATEMENT OF TURKEY AT THE SECOND
SUBSTANTIVE MEETING OF THE PANEL
1. This Panel is reviewing an anti-dumping investigation by Egypt that took a very curious turn
in the middle of the case, just after the first draft anti-dumping margins were calculated by the
Investigating Authority.  Up to that point in tim e, the Investigating Authority’s informational demands
and treatment of the respondents was very proper and correct.  The Investigating Authority was
satisfied with the content and coverage of the initial responses and it verified the price and salesresponses at each of the respondents without discrepancy.  Communications between the Investigating
Authority and the respondents were quite cordial.
2. However, something happened in a short period of time after the tentative anti-dumping
margins, ranging from zero to just over 4 per ce nt, were calculated by the Investigating Authority
staff.  Suddenly, the Investigating Authority began to adopt a very hostile attitude toward the Turkish
respondents, sending threatening letters alleging various errors and omissions in the responses, even
those aspects of the responses that had been fully verified without discrepancy, and announcing the
Investigating Authority’s intention to apply “facts available” if additional information and
explanations were not provided within impossible deadlines.  We submit that the InvestigatingAuthority came under strong political pressure after the preliminary margins were calculated to come
up with a margin that would prevent further imports of rebar from Turkey, and that this explains the
subsequent series of events.
3. It explains why, four three weeks later, the Investigating Authority sent nearly identical letters
to each of the five respondents alleging that they had misreported or not reported various price
adjustments, when in fact, the Investigating Authority had already verified that those price
adjustments were not included in the price or were reported under an expense with a different label.  It
explains why the Investigating Authority sought to heap a huge new and burdensome cost reporting
requirement and self-verification requirement on the respondents and then initially provided only13 days for a response.  It explains why the Investigating Authority denied the respondents a
reasonable extension of the original deadline for a response to the 19 August questionnaire.  It
explains why the Investigating Authority persisted in its conclusion that each and every respondent
had failed to include inflation in its costs when the respondents had adequately explained why their
costs did not rise with inflation.  It explains why the Investigating Authority persisted in using an
inaccurate inflation figure after having been shown authoritatively that costs did not rise by 5 per cent
per month.  It explains why the Investigating Authority applied “facts available” to IDC and Icdasnotwithstanding the fact that it found those companies’ responses to all questionnaires to be complete.
It explains why, after securing what it considered to be an adequate pretext for the application of facts
available, the Investigating Authority refused to grant respondents an opportunity for a hearing in
Cairo to explain how their cost systems worked and why their costs did not increase by 5 per cent per
month as the Investigating Authority had anticipated.  And it explains the particular selection of factsavailable in each case – a selection that was plainly designed to secure the highest possible dumping
margin for each company.
4. Turkey considers that this investigation was not carried out in an objective and unbiased
manner and it urges the Panel to so find.
5. Egypt’s injury investigation was also severely flawed.  Egypt never gave the respondents
adequate notice that the focus of its investigation ha d shifted from threat of injury to material injury.WT/DS211/R
Annex 7-1
Page 93
Nor were any allegations or information concerning current material injury made available to
respondents prior to their deadline to submit information and argument on the injury issues.  Egypt
failed to develop any “positive evidence” linking the dumped imports to the injury that it found to the
domestic industry, which consisted solely of a loss of industry profitability and a price decline in thefirst quarter of 1998.  Egypt’s conclusion that import prices were undercutting domestic prices was
fundamentally flawed.  It remains unclear whether the import price used by Egypt in its calculation
was a price that was in direct competition with the prices being charged by the domestic industry; that
is, whether the price selected for comparison was a price to a purchaser who had to make a choice
between the domestic and imported product.
6. Moreover, it is clear now that Egypt never obt ained any actual pricing data from the domestic
industry.  Rather, it compared the average revenue per unit for the industry as a whole for an entire
year to average import prices for that year.  This comparison fails to recognize that rebar is a
commodity product and that prices change over time with changing raw material costs.  Most of the
Turkish material entered Egypt in the second half of 1998 when raw material costs were lower than
they were during the first half of the year.  More over, it fails to account for different prices being
charged for different products.  An accurate determination of price undercutting requires a
comparison of prices in competition with each other for a product of the same dimensions and grade.
7. Egypt failed to investigate adequately and failed to separate and distinguish the effects of the
very large capacity expansion that took place over the investigation period and, more particularly,during 1998 and the first quarter of 1999.  As we showed yesterday, that capacity expansion certainly
had negative effects on industry profitability in 1998 and 1999, yet those effects were never
“separated and distinguished” from the effects of dumped imports in assessing industry profitability.
Indeed, the increase in finance expenses per unit in 1998 explains the [[XX]] decline in industry
profitability.  If those finance expenses had remained at 1997 levels, industry profitability in the firstquarter of 1999 would have been comparable to industry profitability in 1996, the first year of the
investigation.  And, it is clear that at Al Ezz, at  least, manufacturing costs such as labour and probably
depreciation were adversely affected by the expansion.
8. As we showed yesterday, there was a confluence of two events that had a dramatic effect on
the domestic market at the same time.  As confirmed by the “Confidential Injury Analysis”, [[XX]]
tons of new capacity came on stream at the end of 1998.  At the same time demand dropped inJanuary 1999 by one-third as compared to the prior month.  It is textbook economics that an increase
in supply, all other things being equal, will cause a drop in the market price.  This particular increase
in supply was a very large one – it was a [[XX]] incr ease in total domestic supply as compared to the
prior year.  It is also textbook economics that a decline in demand will produce a decline in the
marketplace.  Yet the effects of neither of these two factors was fully examined or quantified by theInvestigating Authority.  Instead the entire decline in price and profitability experienced by the
domestic industry was attributed to dumped imports, notwithstanding the fact that the market share of
imports as a whole declined in the first quarter of 1999 by [[XX]] per cent.  The failure to investigate
fully the effects of these factors on domestic pricing and profitability violated Article 3.4 of the
Agreement.  The failure to separate and distinguish the effects of these other factors violatedArticle 3.5.
9. In sum, neither Egypt’s injury determination, nor its anti-dumping determination, was in
compliance with the Anti-Dumping Agreement and we ask the Panel to so find.
10. I would like to take this opportunity to thank the Panel for all of its time and attention to this
matter.WT/DS211/R
Annex 7-2
Page 94
ANNEX 7-2
CLOSING STATEMENT OF EGYPT AT THE
SECOND SUBSTANTIVE MEETING OF THE PANEL
1. We would like to conclude our presentation with the following comments on Turkey’s oral
presentation:
I. THE FINAL DETERMINATION
2. Turkey is confusing the Confidential Injury Analysis , which is a single set of documents, with
the “ final determination ” of the Investigating Authority in the rebar investigation.  For the record, we
wish to stress that the “ final determination ” is not a document and has never been presented as such
by Egypt.  The “ final determination ” is rather the complete overview of all the findings (injury and
dumping) of the Investigating Authority, including the information contained in the record of the
rebar investigation (e.g. statistics, questionnaire responses, internal notes, memos and analysis, etc.).
The Confidential Injury Analysis , on the other hand, comprises part of the set of findings which form
part of the “ final determination ” of the Investigating Authority with respect to injury.  The Final
Report  is a document that reflects the central points of these findings.
II. ARTICLE 3.4 AND ARTICLE 3.5
3. We notice that once again, Turkey is confused as to the respective objectives of Article 3.4
and Article 3.5.  Turkey is attempting to extend the mandatory nature of the obligations of the
Investigating Authority under Article 3.4 to the factors that may be relevant with respect to theexamination of a causal relationship under Article 3.5.  The questions before the Panel are simple:
(a) Did the Investigating Authority examine all the factors under Article 3.4?  We submit
that the Investigating Authority did.
(b) Did the Investigating Authority examine all the known factors that might have
contributed to the injury?  Again, we submit that the Investigating Authority did.
4. These two issues are separate.  One given factor cannot be an indicator of injury and the cause
thereof.  Take the example of a pedestrian who is hit by a car.  The injury is the broken leg and the
cause of the injury is the car accident.
III. PRIMA FACIE  EVIDENCE IN SUPPORT OF A CLAIM UNDER ARTICLE 3.5
5. An anti-dumping investigation is initiated at the request of a domestic industry, which must
submit prima facie  evidence of the allegations of injurious dumping.  Likewise, Egypt considers that
the other interested parties, including the exporting producers concerned, should play an active role inthe rebuttal of the allegations made in the complain t.  It is not sufficient to make unsubstantiated
claims without providing any supporting evidence.  There must be enough documentation to give an
indication that the examination of any given cause of injury is warranted.
IV. THE NOTICE OF INITIATION
6. There is only one single Notice of Initiation , which is the one submitted to the Panel in Ex-
EGT-7.3, together with a non-official English translation.WT/DS211/R
Annex 7-2
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7. The Notice of Initiation  should not be confused with the Initiation Report  (see Ex-TUR-1),
which is a document summarizing the complaint and recommending the initiation of the investigation.
Since the Initiation Report  was not published, a non-confidential version thereof was sent to the
interested parties.
8. The Notice of Initiation , on the other hand, was published in the Official Gazette .
Unfortunately, the non-official English translation submitted to the Panel as Ex-EGT-7.3 was
mistakenly stamped “ confidential ” by a clerk of the Investigating Authority when compiling the
documentation for the purposes of this DSB proceeding .  The official Arabic version, however, which
was also submitted to the Panel in Ex-EGT-7.3, is stamped “ public file ”.
V. COSTS DATA FOR THE INVESTIGATION PERIOD
9. There is no inconsistency in requesting the costs of production data for the entire
investigation period while requesting information on domestic sales for months during which exportsales were made.  Indeed, the Investigating Authority has a legitimate interest in making sure that no
cost incurred during the relevant period was allocated to certain months only, thus distorting the true
cost picture in any given month.
VI. MANIPULATION OF THE FACTS
10. Turkey continues to set great store on capacity expansion as a cause of injury.  By interpreting
the data contained in the Confidential Injury Analysis , Turkey is again trying to extrapolate the facts
in an attempt to present a different scenario than  that which was before the Investigating Authority
during the rebar investigation.
11. It is difficult to conceive that an increase in the production capacity, even of the magnitude
suggested by Turkey, is likely to be a cause of injury if this capacity increase was not met by a
corresponding reduction in capacity utilization.  On the contrary, the Confidential Injury Analysis
shows quite clearly that the capacity utilization increased between 1996 and 1998.  Furthermore, the
corresponding increase in the production volume did not translate into a disproportionate increase  in
inventory levels.  Indeed, the ratio  of inventory compared to production remained relatively stable
between 1996 and 1999.
12. In order to address Turkey’s comments on this issue, Egypt wishes to stress that it is not
suggesting that injury was not felt, among other fact ors, through increased inventory levels, but rather
that the capacity expansion did not have an injurious effect on those inventory levels.
13. Likewise, the increase in finance costs should be examined not in absolute terms, but with
reference to the evolution of production quantities.  In this respect, it is necessary to evaluate the
profitability on the basis of unit values, which is why a table on unit values was included in the
Confidential Injury Analysis .  Indeed, it makes no sense to compare absolute profit values between
one year and another without taking into consideration variations in total turnover.  Moreover, the
finance costs did not affect the profit before interest expenses.  As a matter of fact, the weighted
average unit profit before interest expenses declined by over 30 per cent in 1999 (86) compared to
1998 (127).  This simple comparison shows that the decline in the weighted average price had a direct
impact on profitability.
14. Last but not least, Turkey appears to focus on the figures of Al Ezz in particular. Egypt
wishes to stress that Al Ezz alone does not constitute the entire domestic industry.WT/DS211/R
Annex 7-2
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VII. THE INVESTIGATING AUTHORITY DID NOT DISREGARD THE COSTS OF
PRODUCTION OF THE RESPONDENTS
15. Once again, Turkey alleges that the Investigating Authority “disregarded” the costs data
submitted by the respondents.  As explained on many occasions, this allegation is incorrect.  All the
costs data were taken on board by the Investigating Authority, where possible and were only adjusted
in order to reflect the monthly hyperinflation rate of 5 per cent that the respondents failed to take into
account in the computation of their costs data.
VIII. OBJECTION BY EGYPT TO THE ALLEGATIONS THAT THE INVESTIGATING
AUTHORITY ACTED UNDER POLITICAL PRESSURE
16. Turkey states that from the beginning, everything was going smoothly in the rebar
investigation and that after the verification, the Investigating Authority suddenly became “ hostile ” to
the Turkish respondents, allegedly as a result of political pressure.
17. For the record, Egypt would like to state its very strong objection to the allegation that
the Investigating Authority acted under political pressure .  To the contrary, as previously
demonstrated, what occurred during the course of the investigation was that it became clear to the
Investigating Authority that the costs data submitted by the Turkish respondents seemingly did not
reflect the hyperinflation experienced by Turkey during the period under consideration.  Quitenaturally, as any other anti-dumping administration would have done in a similar situation, the
Investigating Authority simply requested that the respondents supply additional information and an
explanation as to how hyperinflation was taken into account in their costs data.
18. Thus, contrary to Turkey’s insinuations, there was no element of political pressure that
influenced the Investigating Authority’s determ inations in the Turkish rebar investigation.WT/DS211/R
Annex 8-1
Page 97
ANNEX 8-1
RESPONSES OF TURKEY TO QUESTIONS POSED
IN THE CONTEXT OF THE SECOND
SUBSTANTIVE MEETING OF THE PANEL
QUESTIONS POSED BY THE PANEL TO TURKEY
Q1. Turkey asserts that the respondents s ubmitted all the requested information and
documents, including the requested reconciliations of data to the financial statements.  Could
Turkey indicate for each of the respondent co mpanies (Habas, Diler, Colakoglu, IDC and Icdas)
where in the record these reconciliations could be found and for each one explain exactly, in a
step-by-step fashion, how the reconciliations were done?
Reply
1. Turkey does not believe that it ever claimed that respondents submitted all of the information
and documents requested by the Investigating Authority after the original questionnaire responseswere filed.  In fact, what Turkey has claimed is that it was impossible, or unreasonable to expect
respondents, to provide all of the information request ed within the deadlines imposed and that, in light
of those deadlines, the respondents “acted to the best of their ability”.  Restatement of Claims at
Sections II.B and E.
2. Moreover, Turkey has not claimed that all of the reconciliations requested in the
19 August 1999 letter were provided by each respondent.  It has claimed, with respect to Icdas and
IDC, that the Investigating Authority itself found little fault with the responses filed by the
respondents, requesting only a few follow-up documents and clarifications, which were promptly
provided.  The failure to notify Icdas and IDC of continuing deficiencies after receipt of their
responses violated Annex II, paragraph 6 of the An ti-Dumping Agreement.  Restatement of Claims,
Section II.B.3.
3. That said, the respondents individually provided many, and in some cases all, of the
reconciliations requested in the 19 August letter.  Each respondent traced its materials, labour and
overhead costs to internal invoices, books and ledgers, proving the accuracy of those costs.  One of
the respondents, IDC, provided a comprehensive trace of its extended reported costs through to itsannual financial statement.  Another, Colakoglu, provided a comprehensive trace for its reported costs
in two months for which it had sales to Egypt, April and August, to its cost of goods sold and
quarterly financial statements.  A third respondent, Habas, provided records establishing that its
extended costs reconcile to its annual cost of goods sold with only a minor difference.  Diler and Icdas
also reconciled their reported costs to internal books and records.
4. We review each respondents’ response to the 19 August 1999 questionnaire in turn below.
1. Colakoglu
5. The 19 August 1999 questionnaire (Question 4B) requested Colakoglu to reconcile its raw
material inventory ledgers to its general ledger and financial statement.  In Exhibit 9 to Colakoglu’s
15 September 1999 response (Exhibit TUR-34B), the company provided the raw material inventory
ledger as at 31/12/98 and reconciled that ledger to its financial statement.  The first page of the
Exhibit is a reconciling item.  The second page of the Exhibit is Colakoglu’s balance sheet atWT/DS211/R
Annex 8-1
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31/12/98.  The remainder of the Exhibit is Colako glu’s internal inventory movement record for each
month of the POR and each type of inventory (first billet, then rebar, then scrap).  The balance sheet
shows that raw material inventory totaled [XX] thousand TL at 31/12/98.  The last page of the Exhibit
shows a raw material inventory total of [XX] thous and TL.  The difference between these two figures
is shown on the first page of the exhibit and is attributable to material purchased, but not yet imported.
6. Questions 4D, 5C and 6C of the 19 August 1999 questionnaire requested worksheets
reconciling materials, labour and overhead costs that were submitted to the Investigating Authority for
certain months to the company’s audited financial statement.  Colakoglu provided in its response, at
Exhibit 4, a summary of its costs of production by m onth for the twelve months of 1998.  As indicated
in previous submissions to the Panel, Colakoglu, Habas and Diler submitted their billet costs as theraw material cost, since billet is the material that enters the rebar rolling mill.  This information was
submitted both in their original cost responses and in the 15 September 1999 response.  (The
Investigating Authority subsequently requested on 23 September 1999 that these respondents break
down their billet costs into component raw material, labour and overhead costs, but provided only 2-
5 days for the companies to do so.  See Exhibit TUR-12.)   Therefore, Colakoglu understood
Question 4D as requiring it to reconcile the cost of billet to its internal books and records.  This
reconciliation, as well as the reconciliation of labour and overhead expenses, is provided in Exhibit 10
to Colakoglu’s 15 September 1999 response.  See Exhibit TUR-34B.
7. For example, for August 1998, Colakoglu reported a material cost of [XX] TL/ton, a labour
cost of [XX] TL/MT, and a factory overhead expe nse of [XX] TL /ton.  See Exhibit 4.  The first page
of Exhibit 10 is an internal document (Rolling Mill Production Cost List (TL)) prepared in the
ordinary course of business that computes the m onthly cost of production for rebar and provides a
cost breakdown for the month of August ( Agustos ) 1999.
8. The total cost of direct material per ton of rebar in the month is shown as [XX] TL per ton.
See line item 1510301 Total ( Toplami ), far right column (TL/ton).  This is the same amount that
Colakoglu reported in its response.  It reflects the sum of scrap (1510301001), scrap loss ( hurda
firesi ), electricity (1510301011), gas (1510301021), and other costs (1510301031 – 81).  Labour cost,
[XX] TL per ton, is shown on line 1510302001.  This is also the same amount that Colakoglu reported
in its response.  Overhead is shown just below line 1510303.  It also matches the amount reported in
the response, after an adjustment to exclude packing costs (ambalaj), which are separately reported onthe cost listings.  The overhead includes depreciation ( amortisman ).
9. The total monthly cost of rebar production from this page, [XX] TL, is shown in the August
trial balance on the next page opposite an item referencing total cost of rebar ( neverulu ve cubuk ).
The difference between this amount and the total co st shown on the August trial balance four lines
down is the value of scrap by-product produced ( haddehane  (2) hurda ).  Entries in the general ledger
(kebir defteri ) in August total the same amount.  See Page 4 of Exhibit 10 (part of TUR-34B).  The
Subsidiary Ledger (on page 7) shows the derivation of August cost of goods sold as the beginning
balance for finished goods inventory on 1 August 1998 (item 33), plus cost of goods manufactured in
August (item 35 = total costs shown on page one; i.e., the costs that Colakoglu reconciled previouslyto its submission cost), less cost of finished goods remaining in inventory on 31 August 1998.  The
cost of goods sold for the month is [XX] TL.  (Item 41).  This matches the figure on page 9, cost of
goods sold detail for August in the Subsidiary Ledger.
10. On page 11, marked Subsidiary Ledger - COGS Rebar, the cost of rebar goods sold in August
is added to the cost of rebar goods sold for January–July and September to arrive at a cost for the first
nine months of the year ([XX]).   On page 13, marked September Trial Balance, this figure is shown
being added to the cost of goods sold for other products to arrive at a nine-month cumulative cost of
manufactured goods sold of [XX] TL.  On page 14, this figure is shown on Colakoglu’s cumulative
income statement for the first nine months of the year as the cost of manufactured goods sold.WT/DS211/R
Annex 8-1
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11. Thus, Colakoglu comprehensively tied its reported raw material cost, reported labour cost and
reported overhead cost in August to its financial statement.
12. A demonstration for April 1998 is also provided.    Although the first page of the April
demonstration (Rolling Mill Production Cost List (TL) for April) is difficult to read because of the
darkness of the copy, one can make out the total billet cost at line 1510301 Total as [XX] TL/ton, the
amount reported for total raw material cost by Colakoglu on Exhibit 4.  One can also make out a
labour cost of [XX] TL/ton (line 1510302001) and an overhead cost, less packing, of [XX] TL/ton,
the amounts reported.  The total cost of manufacture of rebar on the page before deduction of scrap is
[XX] TL.  After the scrap deduction, the cost of manufacture is [XX] TL.
13. Colakoglu reconciles these figures to its trial balance, general ledger and monthly cost of
goods sold on the following pages.  Specifically , on the page marked Subsidiary Ledger, Colakoglu
calculates its cost of goods sold in the month by adding beginning inventory to cost of manufacture in
the month ([XX]) and deducting ending inventory to arrive at a total of [XX] TL.  This figure is thenshown being added on a Subsidiary Ledger to the cost of goods sold of rebar in other months for the
first half of 1998 to a cumulative total of [XX] for the first six months.  The cumulative total for rebar
is then added on the next page to the cumulative totals for other products to arrive at a cumulative
total cost of goods sold for all finished products of  [XX].  This figure is shown on the next page, on
Colakoglu’s cumulative income statement for the first half of 1998, as cost of manufactured goodssold.
14. Thus, Colakoglu comprehensively tied its reported raw material costs, overhead expenses and
labour costs in April to the cost of goods sold on its half-yearly financial statement as well.
15. Colakoglu was separately asked to reconcile its reported depreciation expenses.  We note that
it did so in reconciling its total reported costs, in cluding overhead (which, in turn, included a separate
element for depreciation expenses), to the cost of goods sold reported in its financial statement.
2. Habas
16. Habas was also asked to provide a reconciliation of its raw material costs, labour costs and
overhead costs to its internal books and financial statements.
17. In Exhibit 4 to its September 15, 1999 respon se (Exhibit TUR-34C), Habas provided monthly
costs of production for 1998.  Like Colakoglu, Habas reported its cost of billet as the raw material
entering the rebar rolling mill.  For December 1998, Habas reported a raw material cost of [XX]TL/ton, a direct labour cost of [XX] TL/ton and a factory overhead expense of [XX] TL/ton.  See
Exhibit 4 (attached to Exhibit TUR-34C).
18. On Exhibit 4, Habas grossed up its total material costs by multiplying the quantity produced
by the reported raw material cost per unit in each  month and then summing the costs for all of the
months.  Thus, the total cost of direct material in December is [XX] (TL/ton) * [XX] (total tons
produced) = [XX] TL (total material cost of manufacture in the month).  The total material cost of
manufacture for all months of 1998 is [XX] TL.  See Exhibit 4.  Page 11 of Exhibit 10 (marked page
one on the page itself), reconciles this amount to the cumulative cost of billet incurred for the year.
The item at the top of the page reports the total cost of billet ( kutuk ) for the year at [XX] TL.  (Note
that this cost relates to [XX] kg of billet.  See same line under the heading Aciklama .)  The difference
between the TL amount shown on this line and th e reported amount is shown on the bottom of the
page and is accounted for by scrap that was recycled into the production process.  The scrap cost is
listed on the same report with the letter “b” beside it.  It is normal to claim a byproduct credit for
scrap produced that can be reused in production as long as the cost of that scrap is included in the newWT/DS211/R
Annex 8-1
Page 100
production cost.  Page 10 of Exhibit 10 (marked page 2) also shows the yearly cost of billet
(hammade ).
19. Page 8 of the Exhibit (marked page 4) is a trial balance showing the booking of labour costs
in December 1998, and the derivation of the per unit charge (dividing by total monthly production).
Page 9 of the Exhibit (marked page 3) is a monthly trial balance showing the booking and derivation
of the labour cost per unit reported in November 1998.  There is a slight adjustment in the books,
reflecting a year-end adjustment.
20. Page 4 of the Exhibit (marked page 8)  shows total yearly overhead expenses in the rolling
mill.  These, with an adjustment for tolling ch arges, equal the extended total amount of overhead
reported in Habas response for the twelve month period.  Compare  Exhibit 4.  We note in this regard
that factory overhead includes depreciation ( yili ayirlan amortisman ).
21. Habas also provided data that shows that its reported costs reconcile to its monthly and annual
cost of goods sold:
Reported Raw material costs 27,584,102,6091
Scrap Offset      214,338,2882
Direct Labour      328,764,5803
Overhead Expenses   1,241,196,0364
Adjusting Entries for Overhead      456,383,8625
Total Cost of Manufacture 29,368,401,513Total Cost of Manufacture Per Subsidiary Ledger:
29,608,110,717
6
Difference      239,709,204% 0.8%
22. Habas reconciled its cost of manufacture for rebar for the year, [XX], to its cost of goods sold
for rebar for the year, [XX] on Exhibit 10, page 2.  This figure was then reconciled to its overall cost
of manufactured goods sold ([XX]) on page one of the Exhibit.  Compare Exhibit 2, third page from
the end, item D.1 (cost of goods manufactured  [XX]) (difference of less than half of one per cent
apparently due to auditor adjustments).
7
                                                     
1 See Exhibit 10, page 11.  Compare Exhibit 4.
2 See Exhibit 10, page 11.
3 See Exhibit 4; Exhibit 10, page 8.
4 See Exhibit 4; Exhibit 10, page 4.
5 See Exhibit 10, pages 3-4.
6 See Exhibit 10, page 2, second item.
7 The difference between the amount shown on this income statement in Turkish and the audited
statement appears to be due in large part to reclassifications between SG&A expenses and cost of goods sold,because the net profit is approximately the same.WT/DS211/R
Annex 8-1
Page 101
23. Thus, Habas reconciled its total submission costs to its financial statements with a minor
difference.
24. Habas was separately asked to reconcile its reported depreciation expenses to its financial
expenses.  It already did so, however, by reconciling its reported overhead expenses (which included
depreciation expenses) and its total reported expenses to its annual cost of goods sold.
3. Diler
25. Diler was also requested to provide reconciliations of its monthly reported raw material,
labour and overhead expenses to its internal books and records and financial statements.
26. Diler provided its monthly costs of production in Exhibit 4 to its 15 September 1999
response.  See Exhibit TUR-34A.  For December 1998, Diler reported a raw material cost of [XX]
TL/ton, a labour cost of [XX] TL per ton and an overhead expense of [XX] TL/ton.  See Exhibit 4.
Diler has two affiliated companies that each produce rebar in Turkey, Yazici Demir Celik and DilerDemir Celik (described as Yazici or YDC and Diler or DDC).  In Exhibit 10, page one, is a worksheet
on which Diler showed  how it weight-averaged the direct material, labour and scrap costs between
these two companies.  Subsequent pages and other Exhibits show how these costs reconcile to the
companies’ books and records.
27. Page 2 of the Exhibit is an internal cost calculation by Yazici in December ( Aralik ), prepared
in the ordinary course of business.  The costs on the left-hand side of the chart are total costs for all
sections of the mill.  Malzeme  is materials, Genel Uretim  is factory overhead, Iscilik  is labour – as
indicated on the Exhibit in English. The costs under Celikhane  are costs in the electric arc furnace for
steelmaking.  The costs under Haddehane  are for the rolling mill.
28. The total materials cost for all sections in the mill is [XX] TL for the month of December.
This total cost is reconciled to the company’s internal books on page 4 of the Exhibit ( Sark Cekislari
means withdrawal from inventory for consumption).
29. The total labour cost in the month is [XX] TL.  See Exhibit 10, page 2.  This cost is shown
entering the company’s trial balance subsidiary journal on page 12 of the Exhibit.  The overhead costis shown entering the trial balance subsidiary ledger on page 13 of the Exhibit.  We note that this
expense includes depreciation ( amortisman giderleri ).
30. Haddehane is the rolling mill.  The total cost of billet ( kutuk ) consumed in production in the
rolling mill December is shown as [XX] TL on page 2 of the Exhibit, the internal monthly costcalculation.  This is the figure that appears under Material Cost opposite YDC (Yazici) on page one of
the Exhibit where the weight-averaging occu rs.  Total production in the rolling mill ( Uretim  Kg) is
shown as [XX] Kgs.  Compare page one of the Exhib it.  As shown on page one of the Exhibit, the raw
material cost is equal to the billet entering production less recycled scrap.   The total cost of recycled
scrap is the sum of edges ( ucbas ) ([XX]) plus defective bar ( hadde bozu )([XX]), or [XX].  Compare
pages one and two of the Exhibit.
31. Total labour cost in the rolling mill ( Iscili ) is [XX].  Total factory overhead ( malezeme  plus
genel yo ) is [XX] TL ([XX] in malzeme  plus [XX] in genel yo ).  Compare page one of the Exhibit.
We note in this regard that factory overhead includes depreciation.
32. Thus, Diler reconciled its total raw material costs, labour costs and factory overhead expenses
to its trial  balance for the month and showed the allocation of expenses between the different sections
of the mill based on a record generated monthly in the ordinary course of business.WT/DS211/R
Annex 8-1
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33. A similar demonstration is then provided for Diler.
4. Icdas
34. Icdas was also asked to provide a reconciliation of its submitted materials, labour and
overhead expenses to its internal books and records and financial statements.
35. Icdas presented its monthly costs in Attachments 2 and 11 (part 2) to its 15 September
response.  See Exhibit TUR-39.  Attachment 2 reports the costs in dollars per ton on a monthly basis;
Attachment 11, part two shows total costs in TL, th e exchange rate for each month and the production
quantity in the month.  Icdas divided the total TL cost by the  production quantity to arrive at a TLcost per ton and by the exchange rate to derive a cost per ton in US dollars.  Thus, in January 1998,
the total scrap cost was [XX] TL and total billet production was [XX] metric tons.  The cost per ton
was [XX] TL/ton.   The exchange rate for the month is 212,830 TL/$.  Hence, the dollar cost of scrap
is [XX] $/ton.  Compare Attachment 11, part two, page one with Attachment 11, part two, page two
and Attachment 2, page 3.
36. Note that there are also two affiliated mills producing rebar at Icdas – Icdas Celik Enerji
Tersane ve Ulasim San. and Demir Sanayi Demir ve Celik Ticaret ve Sanayi A.S., hence the separate
cost charts for each.  We shall refer to the first as Icdas and the second as Demir Sanayi.
37. Raw materials costs (all items marked with a single * on Attachment 11, part two, page one)
are reconciled to the company’s books and records in Attachment 11, part one.  Page one of this
attachment shows the average cost of scrap in TL/Kg for each month.  The figure shown for January,
[XX] per kg, is the same figure derived above ([XX] per ton/1,000 kgs per ton).  The pages following
the first page of this attachment are used to reconcile the production quantities shown on the first pageto company internal production control records.  The circled figures are the monthly production
amounts in kilograms.
38. The next page is a worksheet showing the monthly consumption of electrodes and the
monthly consumption of ferroalloys, together with the average inventory value, for each month of
1998.  The TL per ton amount reconciles to page one.  The next set of pages are records kept in the
ordinary course of business by the Inventory Cont rol Department showing w ithdrawals of these items
from inventory, quantity and value for each month of the period of investigation.  The figures on these
chart reconcile to the monthly summary described earlier and to the submission costs.  A report on
other materials and refractories follows.
39. Following that are documents referencing purchases of scrap.  The page marked 1998/05/01 –
1998/05/31 Hurda Fiyat Ortalamasi is a document produced in the ordinary course of business
showing the total quantity and value of different types of scrap purchased in May 1998, and the unit
value of the purchases.  Similar information is provided for other months of 1998.  Note that the cost
of scrap used by Icdas for May, [XX] TL per kilogram, exceeds the average cost of scrap purchased in
the month, because the reported cost was based on the average inventory cost of scrap taken out ofinventory to put into production in the month.  The cost of scrap purchased in the month of May, in
constant currency terms, was lower than the average value of scrap in inventory.  This proves, as we
have claimed throughout this proceeding, that use of a replacement cost would have produced a lower
reported cost than use of the company’s actual costing system.
40. Attachment 6 provides purchase documentation relating to Icdas’ purchases of scrap during
the period of investigation, including a material purchase contract in May for delivery in September–
October showing scrap prices of $[XX] per ton, several invoices showing the same price, a purchase
contract in November for delivery in November s howing a price of $[XX] per ton, an invoice in theWT/DS211/R
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same amount, a contract in October for delivery in  November 1998 showing a price of $[XX] per ton,
a numerous other similar documents for scrap purchased in August through November.
41. Icdas reconciled its reported labour cost to its books and records in Attachment 8.  The figures
on pages two and three of that attachment reconcile to the total labour cost shown in the rolling mill
for the months of February and March 1998.  Compare Attachment 8, pages two and three with
Attachment 11, part two, page two.  These are the figures for Section 1 (rolling mill).  There are also
monthly pages for Section 2 (transport) and Section 3 (steelmaking).  The figure for January for
Section 1 ([XX]) and the figure for January for Section 3 ([XX]) seem to have been inadvertently
switched.  The sum of the figures for sections two an d three in February reconcile to the total labour
cost shown for the electric arc furnace on Attachment 11, part two, page two ([XX]) and the figuresfor January match two if those for Section 1 and Section 3 are switched.
42. Attachment 11, part two, page six, shows the monthly trial balance in January 1998 regarding
financing expense ( kredi faizleri ).  The amount shown, [XX] TL, reconciles to the item marked “A”
on page one of that attachment.  Copies of the trial balance for each month of 1998 are providedshowing the booking of this expense.  Financing revenue (marked “B”) on page one of the attachment
is shown on the succeeding pages (you must add item 642 and item 646).  On the monthly trial
balance page labelled “Other”, the amounts incurred  in January for electricity, natural gas in the
electric arc furnace, oxygen, natural gas in the ro lling mill, other overheads in the meltshop (Item
marked A plus item marked B, plus item marked C, less items 5,6,7  = [XX]) and other overheads inthe rolling mill (Item D less item 8 = [XX]) are shown as booked into the trial balance.
43. In Attachment 4, Icdas provided its inventory ledgers as at 31/12/98.  Attachment 5 reconciles
those inventory ledgers to the trial balance.  Attachment 10 provides a complete listing of all sales in
the domestic and export markets and reconciles those figures to Icdas’ income statement.
5. IDC
44. IDC was also asked to reconcile its raw material costs, labour and overhead expenses to its
internal books and records.
45. In Worksheet 2, attached to IDC’s 9 September 1999 response, the company reconciled the
costs it reported on a monthly basis to the annual co st of goods sold shown on its income statement.
8
The income statement provided as an attachment to IDC’s original response (and one in Attachment 1
– see detailed income statement in English) show s a total cost of goods sold for 1998 of [XX] TL.
That is the figure that appears at the bottom right-hand corner of Worksheet 2.
46. Worksheet two shows both the gross materials,  labour and factory overhead costs of goods
sold in each month and the unit costs, after division by the number of units sold.  The total materials
cost shown for January on Worksheet 2, [XX], divide d by the total production of rebar, [XX], yields
the reported materials cost of [XX] TL/ton.  This is the amount that Icdas reported as its materials cost
in its original response.  Labour cost and manufacturing overheads per ton were similarly calculated.The sum of the raw materials, labour, and factory overhead shown in each month for the calendar year
is [XX].  See Worksheet 2, far hand side bottom.  This is the cost of goods sold for rebar during the
year.
47. To this figure, some adjustments must be made to arrive at the cost of goods sold in the
financial statement.  First, the cost of products manufactured by IDC other than rebar is added.  Also
added is depreciation on the meltshop and the rolling mill, service costs, and the cost of commercial
                                                     
8 This document will, we understand, be submitted as an Exhibit by Egypt in response to a Panel
Question.  Counsel for Turkey first obtained this document from the company on Monday, 11 March 2002.WT/DS211/R
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goods purchased and resold.  See Worksheet 2, far right.  Wo rksheet 5 shows how depreciation
expenses should be allocated to the product.  Service costs, the costs of products other than rebar and
the cost of commercial goods purchased and sold are not costs of production of the subject
merchandise and so were appropriately excluded from the submitted costs.  The cost of other productsincludes the cost of round bar that is not deformed.
48. Page 2 of Worksheet 2 shows the detailed trial balance at 31/12/98.  The detailed trial balance
confirms the amount of the reconciling items.  Thus, it shows the total cost of service sales at item
62200, the total cost of other sales (spares) at item 62300, and the total cost of bar sales at line 62001
that were reported on Worksheet 2.  The total cost of bar sales, [XX] TL (item 620), plus an adjusting
item (item 621), is equal to the cost of rebar, the cost of other products and the cost of depreciationshown on Table 2.  Thus, IDC showed that it incorpor ated all of the cost of goods sold in its income
statement, with the exception of the adjusting items, in the costs of production that it reported to the
Investigating Authority.  And, as noted, other than depreciation, which was quantified and separately
reported in IDC’s 15 September 1999 response, none of the adjusting items should have been
included in IDC’s cost.
49. Worksheet 3 reconciles the reported labour cost to the books.  It shows total labour cost
consumed in the meltshop in January of [XX] TL and total labour consumed in the rolling mill of
[XX] TL.   The rebar labour cost per ton is [XX], calculated by dividing total labour cost by total
production.  This is the labour cost included in the cost of manufacture in the month.  Since IDCreported the average labour cost in cost of goods sold, some adjustments were required.
50. The labour cost per ton of material in invent ory was [XX] TL/ton.  The labour cost per ton for
product produced and sold in January, as calculated above ([XX] TL/ton), was averaged with labour
cost per ton for product sold from inventory in the same month to arrive at a weighted average labour
cost of goods sold of [XX] TL/ton.  This amount, multiplied by the quantity sold in the month, yields
the total labour cost in cost of goods sold for the month, [XX] TL.  Compare Worksheet 2, page one.
Similar worksheets are provided for December, August, September and October.  The following
pages are extracts from the detailed trial balance showing the booking of each of the detailed entries
on the worksheets.  For example, the first figure on the labour cost worksheet for January under item
number 72101100, [XX] TL, is the first item on the detailed Trial Balance extract for January.  Thus,
for labour cost, IDC has traced from its detailed trial balance, through a worksheet, to the figuresreported in the response, and from there to the cost of goods sold reported on the income statement.
51. Worksheet 4 is a similar exercise for manufacturing overhead expenses.  It operates in just the
same way.
52. Worksheet 5 shows calculation of the unit cost of depreciation.  Since this is based on the
year-end total depreciation amount, divided by total production, it is a fixed amount that should be
added to the production cost in each month.  The following pages reconcile the amounts on the
worksheet to the subledger ( muavin defter ).
53. Worksheet 1 reconciles IDC’s inventory movement records to the company’s internal
inventory records.  There are separate charts for scrap, billet and rebar.  The figures on the scrap
inventory movement are tied to the stock records.  Thus, the beginning balance for scrap on January 1,
1998, [XX] TL, is tied to the first figure on the page entitled ILK MADDE VE MALZEME STOKLARI
(stock record).  A similar reconciliation is provided for billet and rebar.
54. Attachment 4, part one, provides substantial documentation with respect to IDC’s purchase
invoices and payment ledgers for ferroalloys and scrap.  For example, in the October scrap section,
IDC has provided a payment ledger listing individual payments for scrap in October 1998.  IDC has
coded the ledger with numbers that relate the detail to the scrap invoices paid by the company in thatWT/DS211/R
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month.  The first set of invoices are from domestic suppliers, and show the quantity ( miktari ), unit
price ( fiyati ) and total invoice amount ( tutar ).  The second set of invoices are related to imports and
are all in English, showing prices denominated in dollars, ranging from $[XX] per ton to $[XX] per
ton.  Full documentation is provided for four months.  Invoices and payment ledgers for othermaterials and factory overhead items ar e provided in Attachment 4, part two.
55. IDC provided a complete sales ledger in Attachment 6 and reconciled that sales ledger into its
internal ledgers and financial statement in Attachment 7.
Q2. Could Turkey comment on the legal basis of a claim of a violation of Article 17.6(i) by a
Member, in light of the fact that Article 17.6(i) seemingly sets the standard of review which the
Panel needs to follow when reviewing the measures in question in a dispute.  That is, can a party
to a dispute bring a legal claim of violation by an  investigating authority of the provision?  If so,
what would be the legal basis for such a claim?
Reply
56. This issue is addressed at pages 12-13 of Turkey’s Oral Statement at the Second Substantive
Session, 25 February 2002.  We further elaborate on that response below.
57. As confirmed by the Appellate Body in Hot-Rolled Carbon Steel Products from Japan ,
Article 17.6(i) imposes an obligation upon investigating authorities with respect to their establishment
and evaluation of the facts in an anti-dumping duty proceeding – their establishment of the facts in the
context of an anti-dumping duty proceeding must be “proper” and their “evaluation” of the facts must
be “unbiased and objective”.9  In this case, Turkey claims that the investigating authorities
“establishment of the facts” was improper and their “evaluation of the facts” was neither unbiased norobjective.  It is not clear, under the Agreement, that Turkey must allege violation of a separate
substantive obligation under the Agreement in order to make this claim.  Turkey believes there is a
violation of the Agreement if, in reaching its final determination on any issue, the investigating
authorities’ establishment of the facts is improper or its evaluation of the facts fails to meet the test of
objectivity and lack of bias.
58. However, to the extent that the panel considers that it may only review a violation of
Article 17.6(i) in the context of a separate substantive claim, we note that in Section II.D of the
restatement of our claims, where reference to Article 17.6(i) is made, Turkey’s claim is that Egypt’s
decision to apply “facts available” was a violation of both Article 6.8 and Article 17.6(i) of the
Agreement because that decision was based on an improper determination of the facts and upon an
evaluation of the facts that was neither unbiased nor objective.  Thus, to the extent that the Panelconsiders that Article 17.6(i) merely sets forth a standard of review for Panel consideration of other
substantive violations, then we invite the Panel to consider this claim in connection with our claimed
violation of Article 6.8.
Q3. Turkey asserts that all Icdas’ scrap cost data were “verified” (7 December 2001
response to questions posed by the Panel, Appendix at Section G, page 34).  Could Turkey
explain what is meant by the term “verified” as used in this context.
Reply
59. Icdas verified its scrap costs in the sense that it provided invoices and other internal
documentation establishing that the scrap costs it reported were based on actual purchases of scrap in
                                                     
9 United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan , WT/DS
184/AB/R, 24 July 2001, paras. 55-56.WT/DS211/R
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the month in question.  This documentation was provided in Icdas’ response to the 19 August 1999
letter-questionnaire.  (See Response to Question # 1, above.)
Q4. On page 58 of Turkey’s First Written Submission it is asserted that Icdas requested “a
hearing as soon as it had an opportunity to review the Essential Facts and Conclusions Report”,
Exhibit TUR-26 is cited as reference.  However, it seems as if the referenced exhibit does not
mention such a request.  Could Turkey please clarify.
Reply
60. It seems that Icdas did not, in fact, make such a request in its comments on the Essential Facts
and Conclusions report.  We apologize to the Panel for our error.
Q5. In its 7 December 2001 response to the Pa nel’s question 2.3, Turkey did not indicate
whether it has dropped its allegations of violation of Articles 2.2.1.1, 2.2.2, and 6.8 in connection
with its claim in paragraph 11 of the Request for Establishment of the Panel.  Could Turkeyplease clarify whether these allegations are maintained.
Reply
61. Turkey has not dropped its allegations of violation of Articles 2.2.1.1, 2.2.2 or 6.8 in
connection with its claims in Paragraph 11 of the Request for Establishment of the Panel.  These
claims are set forth in our restatement of claims at Section II.F.2, II.F.3 and II.D.  See Response of
Turkey to the Questions Posed by the Panel, 7 December 2001 at Appendix – Restatement of Claims
in Response to Question 1.
62. As we indicated previously, we would not object to a finding by the Panel that our claims in
Section II.F.2 are rendered moot if the Panel considers that Egypt was unjustified in resorting to “facts
available” and if the Panel then concluded that a re-determination was necessary.  See United States –
Definitive Safeguards Measures on Imports of Circular Welded Carbon Quality Line Pipe from
Korea , WT/DS 202/AB/R (February 4, 2001), para. 199.
63. Our claims in Section II.F.2 were intended to address and argue against any counter-argument
by Egypt that its determination of normal value was correct, even if it was not justified in applying
“facts available”.  To the extent that Egypt’s position can be understood to make this counter-
argument, we stand by our claim in Section II.F.2.
Q6. Turkey argues that the Investigating Authority “declined” to adjust constructed normal
value for credit costs.  Turkey indicates that such an adjustment was requested by
“respondents” during the course of the investigation.  Could Turkey please indicate where in
the record those requests and the relevant data can be found?  How does Turkey interpret the
reference in Article 2.4 to due allowance being ma de “on its merits” for differences which affect
price comparability, both in the context of Article 2.4 itself, and in the context of the review by a
panel pursuant to Article 17.6(i)?
Reply
64. This claim was made in the initial responses and on the original sales listings.  See Exhibit
TUR - 42.10
                                                     
10 See also  Exhibit TUR-25 at 14-16 (Letter from Law Offices of David Simon, 13 August 1999,
objecting to tentative decision not to adju st normal value for imputed credit costs).WT/DS211/R
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65. We note further that the verification report for Icdas states:
"Cost of Credit
The accounts for sales in Turkey can be received later than the date of the invoice.
[XX.]  The period between the date of settlement of the account and the actual date of
payment was established from the accounts outstanding ledger.  The average days per
ton was calculated and an adjustment was made.  The interest used was established
from the company records of short-term loans".
66. See Exhibit TUR-4 at 6.  The “Cost of Credit” for each sale is shown on the second page of
the dumping calculation attached to the verification report.  See Exhibit TUR-4, ICDAS DUMPING
CALCULATION (field Y).
67. A similar statement and calculation appears in the report for IDC (Exhibit TUR-5 at 4.3
“Adjustments to Normal Value” and dumping calculation, page 1, “Cost of Credit” ), Diler (Exhibit
TUR-6 at 7 “Cost of Credit” and dumping calculatio n, page 2, “Cost of Credit”), Colakoglu (Exhibit
TUR-7 at 6 and dumping calculation, page 2, “Cost of  Credit”), and Habas (Exhibit TUR-8 at 7 “Cost
of Credit” and dumping calculation page 4 “Cost of Credit”).  Thus, in each case, the imputed credit
cost calculations were verified as accurate by the Investigating Authority, including both the number
of days from shipment to payment and the interest rate used to calculate the adjustment.
68. Turkey believes “on the merits” means, in this context, whether or not the facts supporting the
claim are verified and whether an adjustment is necessary in order to achieve price comparability.
The verification reports show that each of the underlying facts claimed by the respondents were
verified, including the number of days the invoice was outstanding prior to payment and the
applicable interest rate.  Clearly, where there is a different payment term in the export and the
domestic market, or where the interest rates applicable to sales in local currency and in foreigncurrency are different, as here, an adjustment must be made for different payment periods in order to
ensure price comparability.  Therefore, respondents are entitled to this adjustment both as a matter of
the express obligation in the Anti-Dumping Agreement and on the facts of the case.
Q7. In the Appendix to its 7 December 2001 respo nses to the Panel’s questions, Turkey does
not refer to a claim under Article 6.1 in the context of its dumping-related claims.  Could
Turkey please clarify whether this allegation is maintained.  If so could Turkey please identify
in its submissions and statements to the Panel its arguments in support of this allegation.
Reply
69. Turkey cited Article 6.1 in Section II.B of its First Written Submission in support of its claims
of violation of other provisions of the Agreement in connection with the request, late in the
proceeding, for substantial new cost information.  However, Turkey did not claim there, or in its
Restatement of Claims, that this Article was specifically violated in that regard and it does not
maintain such a claim.
70. We note, as did the European Union, that Turkey  could have cited this provision in support of
its claims in Section II. B.
Q8. In the annexes to Exhs. TUR-34A-C, Turkey includes a series of tables preceded by a
cover sheet entitled “[company] databases”.  Co uld Turkey please explain whether these tables
were part of the 15 September submissions by Habas, Diler and Colakoglu.  Could Turkey also
please explain what these tables are, whether they  form part of the record of the investigation,
and what they are intended to show.WT/DS211/R
Annex 8-1
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Reply
71. These documents are the databases originally s ubmitted in the response to the original foreign
manufacturers’ questionnaire (Total Sales of Steel Reinforcing Bars – Appendix 1; Sales in the
Domestic Market – Appendix 2; Sales Price Structure – Appendix 3, and so forth), as revised on
11 June 1999 (see First Written Submission at II.A.9) and at verification.  Compare  Manufacturers
Questionnaire, Exhibit TUR-3 at Appendices 1-9. 11The revised databases were provided to the
Egyptian verification team during the verification together with the explanatory boxes that appear on
the charts to explain how the data fits together.
72. The file of documents submitted by the Turkish respondents to the IA, as forwarded to us by
the Law Offices of David Simon, indicates that these documents were also attached to the companies’
15 September 1999 response.  However, Mr. Simon has indicated to us that he has no specific
recollection concerning this matter and so we were not able to independently confirm this fact.
Nevertheless, Mr. Simon has confirmed that this data was submitted to the IA in exactly the sameform as it appears in TUR-34 A-C during the verification.
Q9. Did any of the Turkish respondents subm it any documents to the Investigating
Authority regarding how inflation is to be ta ken into account in accordance with Turkish
generally accepted accounting principles?  If so, did any such documents support theproposition that non-application of IAS 29 is in accordance with Turkish GAAP?  Please
explain, and indicate where in the record the relevant documents can be found.  If not already
submitted, please furnish copies of those documents.
Reply
73. We note, first, that the Investigating Authority never addressed a question to respondents with
respect to the non-application of IAS-29 and thus respondents never addressed this issue in their
responses.
74. With respect to the more general issue, IDC explained in its response of 9 September 1999
(Exhibit TUR-29) that:
"Izmir Demir Celik Sanayi A.S. has agreed ( sic) that Turkey is experiencing high
inflation during the period of investigation, but disagree[s] with the statement of
“The reported costs do not reflect inflation in effect.”  Because in our accounting
system all costs are already indexed and further indexations to account for inflation isunnecessary ( sic).
Material costs; these costs have not been indexed for inflation because they reflect the
cost of procurement of materials used in production.  Approximately 75% of the total
                                                     
11 More specifically, in the case of Colakoglu, the first table (Appendix A) reports the value and
volume of sales during the period of investigation.  The second table (Appendix 2) is a listing of home market
sales transactions made at the same time as, and of the same product and type as, the products sold in Egyptduring the period of investigation, together with tran saction specific prices and price adjustment information.
The “Interest” column is the imputed credit cost adjustment.  The third table (App. 3) is a listing of the domesticprices and price changes during the period of investigation for products also sold in Egypt.  The fourth table(Appendix 3B) is the sales price structure in the domes tic market.  The fifth table (Appendix 4) is a listing of
sales to Egypt during the period of investigation, together with price adjustment information.  The sixth table
(App. 5) is the sales price structure for export sales to Egypt.   The seventh table (App. 9A) is respondent’s costsof production for the domestic sales.  The eighth table (App. 9A) is respondent’s cost of production for sales inEgypt and the last table is the income statement.WT/DS211/R
Annex 8-1
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cost of manufacturing of deformed steel bars is coming from the imported materials
procurement and costs were converted from “foreign currency” to “Turkish lira” at
the current exchange rate of the Turkish Central Bank, in which the inflation rate has
been already taken into consideration.
Labour costs and overhead; these costs depend on production, not on sales.  The
increase in production results in a decrease in labour cost per ton, an increase in
manufacturing overhead per ton.   .  .
SG&A expenses reported to you was based on the fixed expenses of total SG&A
expenses.  .  .  Therefore, the total yearly fixed SG&A expenses were divided by the
total yearly export quantity and reported to you.  There is no need for an inflation
adjustment.  Because the fixed portion of SG&A expenses had already covered theeffect of the inflation, such as salary increases etc."
75. IDC is explaining here that the TL devalues against stable foreign currencies at approximately
the rate of inflation in Turkey in order to maintain constant purchasing power parity between the
currencies.  The devaluations occur on a weekly and often daily basis.  Therefore, a $100 raw material
cost in January will translate into 10,000 TL (at a rate of 100 TL/$) and into 15,000 TL in December(at a rate of 150 TL/$), reflecting an annual inflation/devaluation rate of 50 per cent.  Furthermore,
because labour costs are adjusted for inflation once per year, and the size of the labour force does not
change with changes in the production quantity, labour cost is essentially a fixed cost and it already
reflects inflation in the economy – certainly it reflects what is actually being paid out in wages and
benefits on a monthly basis.  SG&A expense was calculated by IDC on an annual basis (reflecting fullinflation over the entire year) and divided by total quantity.
76. Icdas provided a similar explanation in its response to the 19 August 1999 letter.  See Exhibit
TUR-28  (discussion of materials, labour and overhead).   Habas and Diler provided a similar
explanation in their response of 15 September 1999.  See Exhibit TUR-21.
77. Habas’ audited financial statement notes that company maintains its books of account and
prepares its statutory financial statement in accordance with accounting policies based on the Turkish
Tax Laws and the Turkish Commercial Code.  See Exhibit TUR-34C at note 2.1.  Moreover,
“transactions in foreign currencies during the year have been translated at rates ruling at the dates of
the transactions.”   Id., at note 2.7.   Finally, the financial statement notes, under the rubric “Inflation
Accounting”.
"IAS 29, which deals with the effects of inflation in the financial statements has
become applicable for the first time to financial statements covering the periods as
from 1 January 1990.  This standard requires financial statements prepared in
accordance with IAS be stated in terms of the measuring unit current at the balancesheet data and corresponding figures for previous periods be restated in the same
terms.  *  *  *
The Group has not reflected the results of this standard in the accompanying financial
statements as restatement of financial statements in terms of the measuring unit
current at the balance sheet date by applying a general price index is neitherenvisaged nor required by Turkish Commercial practice and tax legislation except for
the revaluation of fixed assets referred to in note 2.4 above.  As there is currently no
consensus in Turkey on the application of IAS 29, the Management of the Group
believes that the necessary restatement would be confusing and inappropriate at the
present time until such consensus is reached in particular since it would preventcomparison with financial statements of other companies or groups in Turkey".WT/DS211/R
Annex 8-1
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Id., at note 2.10.
78. Colakoglu’s financial statement is prepared in dollars.  See EGT 7.6; TUR-34B at
Appendix 1.  As noted in the auditor’s opinion lett er:  “[T] provisions of International Accounting
Standard 29 – Financial Reporting in Hyperinflationary Economies (“IAS 29”) .  .  . have not been
applied since we believe that they are not applicable to financial statements reported in a stable
currency.  The effects of inflation on the financial statement have been dealt with by selecting the
US$ (a stable currency) as the reporting currency and recording TL denominated transactions and
balances in US$”.  See Exhibit TUR 34-B at Appendix 1, audit opinion letter, page 2.
Q10 Concerning Turkey’s claim that the interest  income offset was related to production
such that it ought to be accepted as an element in  the cost of production of the subject goods, did
any of the Turkish respondents explain to the Investigating Authority, in detail or otherwise,
and/or furnish evidence to document, the exact natu re of the income offset or offsets concerned,
how they were generated, and their relationship to  the production of the subject goods?  If so,
please indicate where in the record such submissions can be found, and furnish copies of therelevant documents.
Reply
79. Specific information was not requested by the Investigating Authority on the nature of the
interest income at issue.  If the Investigating Aut hority had any doubt as to the validity of the offset in
question, it was incumbent upon the Investigating Authority to request additional information.  The
Investigating Authority cannot justify the denial of an adjustment based on the failure to provide
clarifications or supporting evidence that it itself did not seek.  We note that the Investigating
Authority never cited any evidence that the interest income was not related to production, nor hasEgypt produced such evidence to the Panel.
80. In Diler’s original response (at 14), the company noted that “[i]nterest expense is reported on
a consolidated basis (Group interest expense, offset by Group interest income) as is the practice in
anti-dumping investigations, because of the fungibility of money”.  See Exhibit TUR-42.  A separate
field appears on its App. 9A – Cost (TL/MT) (Domestic Merchandise) for Interest Expense
(Revenue).  Id.  This field is a negative reflecting net interest revenue.  The audited financial
statement for Diler (at note 21), attached as Exhibit 1 to TUR-34-A, indicates that most of the interest
income for Diler was comprised of “Bank Interest (Repo and TL Accounts)” – all of which are short-
term working capital accounts.
81. In the combined letter covering the responses of Colakoglu, Diler and Habas, dated
15 September 1999, it was explained:
"Regarding the issue of negative interest expenses, the fact is that interest income
exceeded interest expense.  Companies regu larly invest their working capital in very
short-term income instruments, such as overnight (“repo”) loans, on which interestincome can be as high as 120% per year".
See Exhibit TUR-34-A at 2.
Moreover,
"Regarding respondents’ interest expense factors, each respondent has provided its
financial statements in the file “mfr in come stmt” included in Exhibit 2 of the
questionnaire response (the database submissions).  From these income statements, as
well as the worksheets embedded in the cost submissions (disapp 9A), it is apparentWT/DS211/R
Annex 8-1
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that short-term interest inco me exceeded total interest expense.  This is the reason
that the respondents’ interest expense for purposes of cost of production is a negative
figure.
As for the ITPD’s question of why respondents deduct short-term interest income
from the interest expense component of cost of production, the answer is simply that,
in any reasonable measure of cost, interest income is netted against interest
expenses".
Id., at 7-8.
82. As in the case of Diler, for Colakoglu, the original response at App 9A – Cost of Production
contained a field for short-term interest income as an offset to cost of production.  See Exhibit TUR-
42.  Attachment 1 to the 15 September response is a financial statement audited by Pricewaterhouse
Coopers.  The income statement prepared by Pr iceWaterhouse Coopers shows net financial income
for 1998.  See Exhibit TUR-34B.
83. Habas’ original response notes that “[i]nterest expense is on a consolidated basis (Group
interest expense, offset by Group interest inco me).”  App 9A – Cost (TL/MT) – Domestic Market
shows a net negative interest expense;  i.e., that interest revenue exceeds interest income.  See Exhibit
TUR-42.  This is confirmed by Habas’ financial statement, audited by Grant Thornton.  See Exhibit
TUR-34-C, Attachment 1, at Income Statement.   Habas’ financial statement also shows that the
company had [XX] billion TL in cash at banks at 31/12/98.  See id.  at note 3.  Ordinarily, as indicated
above, these funds would be in interest bearing deposits to avoid loss of value in a highly inflationary
economy, accounting for the interest income.
84 In its original response in Appendix 9A – Factory Cost and Profit for Domestic Sales, IDC
listed no amount under financing costs, meaning that it had no net financial expense after theapplication of interest income.  See Exhibit TUR-42.  The income statement attached to its
9 September 1999 response shows that interest revenues offset [XX] of the company’s interest
expenses.
Q11. Could Turkey please provide the following documents:
- Annexes to Icdas 15 September 1999 submission (Exh. TUR-28);- Responses of Icdas and IDC to the 23 September 1999 letters from the Investigating
Authority.
Reply
85. See Exhibits TUR-39, TUR-40, and TUR-41 attached to this response.  Please note that
Attachment 9 to Icdas’ 15 September 1999 response is missing from our files.  The Investigating
Authority subsequently requested another copy of Attachment 9 on 23 September 1999 and it is our
belief that it became separated from the file when a copy of the Attachment was made and sent to theInvestigating Authority on 27 September 1999.
* * *
QUESTIONS POSED BY THE PANEL TO EGYPT – RESPONSES OF TURKEY
86. Turkey would like to take this opportunity to comment on a few of the questions addressed to
Egypt as well.WT/DS211/R
Annex 8-1
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Q2. In the Final Report at page 13, the IA refers to the scrap cost data provided by “another
respondent” and describes the trends in those data.  In Egypt’s oral response to this question at
the 26 February 2002 meeting with the Panel, Egyp t clarified that the “respondent” referred to
was Alexandria National.  Could Egypt please confirm this, and provide the scrap cost data
referred to and copies of the supporting documents from which those data were drawn.
Reply
87. Egypt gave a very surprising tentative answer  to this question during the Second Substantive
Meeting.  It stated that Alexandria National was the source of the scrap data referenced in the FinalReport as having been provided by “another respondent”.  This response seems dubious in light of the
context in which that statement was made in the Final Report.
88. First, as noted by Chairman Palecka, Alexandria National was not a “respondent” in this
proceeding; it was an applicant or petitioner for anti-dumping relief.  Everywhere else in the FinalReport where the term “respondent” or “respondents” is used, that term refers to the Turkish
producers and exporters.  Thus, for example, in Section 1.5, the report states:  “Review of the cost and
sales data provided by the respondents raised si gnificant questions regarding the accuracy of the
data.”  In Section 1.6.3, the report states:  “The Investigating Authority disagrees with respondents
regarding the requests for supplemental information”.   When the domestic producers are referred toin the Final Report, they are invariably referred to by name or as “the domestic industry” or as the
“Egyptian industry”.  See Exhibit TUR-16.
89. The particular reference and surrounding text also suggests that the source of this scrap data
was one of the Turkish respondents:
"Diler, Habas and Colakoglu claim that they “have proved in a number of different
ways that the sharp decline in such world scrap prices gave the respondents’ constant
currency declining costs, which in a hyperinflationary economy appear in local
currency as steady costs even though the macroeconomy is hyperinflationary *  *  *
Respondents then “tabulated the rebar pricing data from each respondents’ verified
sales database, and the result showed a steep decline in Turkish rebar prices during1998.”  Thus, they claim, Turkey’s domestic rebar prices collapsed in 1998.  They
conclude that prices fell because scrap cost fell. *  *  *
The Department disagrees for several reasons.  First, since respondents’ information
on world scrap prices was expressed in annual terms (prices at the end of the year
were lower than prices at the beginning of the year), it was not useful in determiningprice movements during the investigation period (calendar 1998).  When the
Department examined monthly domestic rebar and purchased scrap prices
throughout the period  (another respondent in this investigation submitted monthly
scrap prices ), a very different picture emerged.  For the first 7 months of the period,
both were fairly constant and did not decline to any noticeable extent.  For the nextthree months scrap prices declined sharply, and in the last 2 months, they began a
noticeable recovery.  The sharp decline, which respondents implied was sustained
throughout the period, was, in fact, limited to 3 out of 12 months of the investigation
period, despite a high inflation rate throughout the period .  Thus, the Department had
a reasonable basis for its concern whether domestic costs fully reflected inflation".
Exhibit TUR-16 at 12-13 (emphasis added).WT/DS211/R
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90. In this context, the term “domestic rebar and purchased scrap prices” clearly refers to
domestic rebar prices in Turkey (as opposed to export prices to Egypt) and purchased scrap prices in
Turkey.  Turkey is the relevant market to examine in evaluating the accuracy of respondents’ cost
information.  It is very unlikely that this language would have been drafted as it was if rebar priceswere based on prices in Turkey and the scrap prices were those in Egypt.  The IA would then have
had to explain this fact and that use of Egyptian scrap prices made sense in comparison to rebar prices
submitted by the Turkish respondents.  Moreover, the sentence – “The sharp decline, which
respondents implied was sustained throughout the period, was, in fact, limited to 3 out of 12 months
of the investigation period, despite a high inflation rate throughout the period ” – makes sense only if
the scrap prices were provided by a Turkish respondent – given the explicit reference to the high
inflation rate in Turkey during the period.
91. In addition, it is not entirely clear why Alexandria National would have provided this
information to the Investigating Authority.  Ordinarily, cost data obtained from a domestic industry is
not broken down to this level of detail because such  information is not needed to analyze the question
of whether the domestic industry has been materially injured by reason of imports.  Moreover, theconfidential injury analysis, submitted by Egypt, does not provide cost data at this level of detail.
92. Finally, in Panel Question #10, addressed to Egypt on 28 November 2001, the Panel
requested that Egypt supply to the panel “[i]nformation on scrap steel prices on a monthly basis on
which the final determination was based”.  This was an obvious reference to page 12 of the FinalReport.  That Egypt took it as a reference to page 12 of the Final Report and not as a request for all
scrap data upon which the final determination of normal value was based is evident in the fact that, in
its response, Egypt provided scrap costs from only three of the five respondents – Icdas, IDC and
Colakoglu.  Colakoglu was one of the companies whose costs were specifically being questioned at
page 12 of the Final Report and Icdas and IDC were the two other respondents whose costs were notbeing specifically questioned in that section of the report.  By submitting this data, the Investigating
Authority tacitly admitted that it was relying either on data submitted by Icdas or data submitted by
IDC in questioning the declining scrap cost data submitted by Colakolgu, Habas and Diler.  Certainly,
all of the scrap costs provided in that exhibit were those of Turkish respondents.
93. We noted in our rebuttal brief that the data presented for Icdas supports the claims we have
made challenging the factual findings in the Final Report and observing that the InvestigatingAuthority seems to have been quite confused about the interplay of inflation, devaluation and costs
reported in constant and nominal currencies.  See Rebuttal Brief of Turkey at 68-69.  Indeed, we
initially made this claim in our First Written Submission.  See First Submission of Turkey at II.E.11.
At no time prior to its response to this Panel question at the Second Substantive Session did Egypt
take the position that Turkey was incorrect in conclu ding that the Final Report was referring to scrap
data supplied by Icdas.  It had an obvious opportunity to do so both in its Rebuttal Brief and in its
response to the Panel’s First Set of Questions, but did not.
Q4. Could Egypt please indicate exactly which inflation data contained in Exhibit EGT 7.7 it
used as the basis for its conclusion that the average monthly inflation rate in Turkey was 5 percent.  In this regard, the Panel notes that the exhibit contains, inter alia , the same data from the
Turkish State Institute of Statistics (submitted by the Turkish Government in its response of 15
October 1999 to the Essential Facts and Conclusi ons Report (Exhibit TUR-30)) on which the
Turkish Government relied to indicate that the inflation rate was much lower during 1998.
Reply
94. In its tentative response, Egypt states that it used a simple average of the wholesale price
index and the consumer price index in 1998.  We note that the wholesale price index rose by only
40.2 per cent in 1998, which, on a monthly basis, converts to an inflation rate of 3.4 per cent perWT/DS211/R
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month.  Moreover, in its letters of 19 August 1999, the Investigating Authority cited comparisons
between costs in September, October and November (Icdas), August-December (Diler), April and
August (Colakoglu), and November and December (Habas).  See Exhibit TUR-11.  However, the
inflation rate was less than 3 per cent on average in those months.
95. The Consumer Price Index is irrelevant to the issue before the Investigating Authority.  The
Consumer Price Index refers to a market basket of goods purchased by i ndividual consumers, not
purchases of raw materials by large manufacturing enterprises.  As claimed by the Government of
Turkey in the Egyptian investigation, the relevant price index is the Wholesale Price Index.
Q5. Egypt has requested the Panel to dismiss a number of Turkey’s claims on the grounds
that they are outside the Panel’s terms of refere nce.  In respect of each claim that Egypt has
requested be dismissed, could Egypt please provide the two-part analysis referred to e.g. in EC –
Bed Linen , i.e., the asserted lack of clarity in the Request for Establishment of the Panel, and
evidence of any prejudice to Egypt’s ability to defend its interests in this dispute due to such
lack of clarity.
Reply
96. Turkey notes that it would like the opportunity to respond to any claims made by Egypt in this
regard.  Turkey believes that its Request for Establishment of the Panel contained all of the claimsthat it has asserted before the Panel.  See, e.g.,  Response of Turkey to the Questions Posed by the
Panel, 7 December 2001 at 1-2; Statement of Turkey at the Second Substantive Meeting at 12-14.
Moreover, Egypt has had a more than adequate opportunity to respond to each of those claims and has
in fact responded to each of the claims.  Therefore, under the test enunciated in EC-Bed Linens , Egypt
suffered no prejudice to its ability to defend its interests.
Q8. Concerning Icdas, at page 6 of the Final Re port, the IA stated that “Icdas … provided
incomplete data and most of the data submit ted were not supported by evidence”.  Further
concerning Icdas, at page 22 of the Final Repo rt, the IA stated that “[o]n 23 September 1999,
the Department requested a missing document and several documents to be translated into
English”.  At page 23 of the Final Report, the IA stated, “[a]s for Icdas’s claim that it ‘provided
all the necessary information’ in response to the Department’s 19 August 1999 request, and thatthe ‘remaining items are [ sic] timely submitted’ in response to the Department’s
23 September 1999 request, that is incorrect.  In fact, the firm did not furnish (1) the requested
breakdown of labour and overhead costs, (2) the requested supporting documents for labour
and overhead costs, (3) the requested allocation s and allocation methodologies for materials,
overhead, and SG&A, and (4) the requested reconciliations of submitted data to its financialstatement.  In addition, its explanation of how inflation was reflected/included in its costs was
inadequate and unsupported”.  At page 29 of the Final Report, the IA stated that “as described
above, Icdas did not provide sufficient informatio n for the investigating authority to confirm the
monthly specific costs of materials, labour, or overhead during the period of investigations,
despite being requested to do so”.  Could E gypt please precisely identify the documents
containing the IA’s requests for the information referred to in the Final Report as not having
been submitted.  Please describe the documents that were provided by Icdas on these points and
indicate how, in light of those documents, the IA was satisfied that AD Article 6.8 could be
applied.
Reply
97. As indicated in response to Question #1 to Turkey, Icdas did provide this data.  Specifically,
Icdas provided a breakdown of its labour and overhead costs in the electric arc furnace and in the
rolling mill in Attachment 11, part two, page two.  It provided supporting documentation for its labourWT/DS211/R
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costs in Attachment 8 and supporting documentation for its overhead expenses in Attachment II, part
two.  Its allocation methodology is obvious from th e documents in Attachment II, part two – total
costs incurred in the month in the electric arc furnace are divided by total production to arrive at a cost
of billet and total production costs incurred in the month in the rolling mill are divided by totalproduction of bar to arrive at a cost of bar processing through the rolling mill.  These two costs are
added to arrive at a total cost of manufacturing.
QUESTIONS POSED BY THE PANEL TO BOTH PARTIES
Q1. In paragraph 3 of the Request for Establishment of the Panel, four factors are specified
by Turkey as being grounds for a breach of th e cited Articles.  However, in the submissions
made by Turkey, it is arguable that other grounds are added.  In the view of the parties, is it
permissible:
(a) to use an inclusive expression when listing grounds for an alleged breach in
request for establishment;  and
(b) where a list of grounds is included in a request for establishment, to add another
or other grounds in submissions:
(i) where the list is said to be inclusive;  and(ii) where the list is not said to be inclusive.
Reply
98. If Turkey identified all of its grounds for claiming a violation of the Agreement clearly in its
Request for Establishment of the Panel, no issue of interpretation arises.  Turkey maintains that all of
the claims that it asserted in connection with Paragraph 3 are fairly raised in the language of
Paragraph 3 itself.
99. In the alternative, it is Turkey’s positi on that since the Articles of the Anti-Dumping
Agreement alleged to be breached were clearly set forth in the Request for Establishment of the Panel,together with a general description of how those Articles were breached and a non-inclusive list of
factors that were not evaluated or were not evaluated properly was provided, Egypt was on fair notice
as to Turkey’s claims.  Moreover, all of those claims were set out in Turkey’s First Written
Submission such that Egypt suffered no prejudice to it s position if there was any lack of clarity in the
Request for Establishment of the Panel.
100. In paragraph 3 of the Request for Establishment of the Panel, Turkey alleged a violation of
Articles 3.1, 3.4 and 3.5 of the Anti-Dumping Agreement because the Investigating Authorities
“failed to take account of, and improperly attributed to Turkish imports, the effects of other factors
that had a substantial adverse effect on the Egyptian industry and of other, neutral factors that causedprices to fall”.  The claim went on to state:  “Such factors include, but are not limited to, a large-scale
capacity expansion by the Egyptian rebar producers during the period of review, the effects of non-
subject imports from third countries, falling worldwide prices for steel scrap and a sudden contraction
in domestic demand in January 1999 .  .  .  .”
101. In its rebuttal brief, Turkey listed the following factors that had negative effects on industry
profitability and domestic prices:
Capacity expansions at the two major Egyptian rebar producers;
The effects of the capacity expansion on the producer’s costs of production;WT/DS211/R
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The effects of the capacity expansion on the intra-industry competition;
Increasing competition between Al Ezz and Alexandria National as Al Ezz sought to increase
market share capitalizing on its cost advantages;
Falling prices for steel scrap;Contraction in demand in January 1999, and
The effect of comparably priced, fairly traded imports.
See Rebuttal Brief at 21.  See also  First Written Submission of Turkey at II.C. (items 1-2), II.D (items
3 - 6), II.E (item 7).
102. Items 1, 5, 6 and 7 are specifically referenced in paragraph 3 of the Request for Establishment
of the Panel.  Items 2 and 3 are subsumed in item 1 – they are the “adverse effect[s]” of the capacity
expansion alleged in item 1 and in paragraph 3 of the Request for Establishment of the Panel.  Turkey
clearly alleged in its Request for Establishment of the Panel that the capacity expansion was having an
adverse effect on the domestic industry or was a neutral factor causing prices to fall.  Items 2 and 3
above merely specify how the capacity expansion had those effects.
103. Arguably, item 4 is subsumed in item 1 as well.  [XX]104. In any event, Turkey put Egypt on notice in paragraph 3 that it was alleging violations of
Article 3.1, 3.4 and 3.5 due to the failure to take account of, and improper attribution to Turkishimports of the effects of other factors.  Turkey also put Egypt on notice that the enumerated list of
factors in that paragraph non-inclusive through use of the words “including, but not limited to”.
Turkey then spelled out its claims in its First Written Submission and Egypt has had adequate
opportunity to respond.  Hence, even if the Request for Establishment of the Panel can be deemed to
lack clarity, there has certainly been no prejudice to Egypt’s position.
Q2. Could the parties please comment, in the li ght of Article 31 of the Vienna Convention on
the Law of Treaties, on the meaning of the phrases:
(a) “special circumspection” in Annex II, paragraph 7; and(b) “to the best of its ability” in Annex II, paragraph 5.
Reply
105. Annex II, paragraph 7 provides:  “if the authorities have to base their findings, including those
with respect to normal value, on information from a s econdary source, .  .  .  they should do so with
special circumspection.   In such cases, the authorities should, where practicable, check the
information from other independent sources at their disposal, such as published price lists, official
import statistics and customs returns, and from in formation obtained from other interested parties
during the course of the investigation.”
106. “Special circumspection” means, in this context, with extreme care to ensure the accuracy and
pertinence of the data relied upon.  Whenever it must rely on information from a secondary source as
“facts available,” the Investigating Authority should endeavour to replicate, as closely as possible, the
missing data and should check the data selected to verified data or other reliable public data.  This
provision also informs an investigating authorit y’s obligations when it uses data provided by
respondents, but that data is other than the data that the respondents supplied as costs for the particular
sale concerned.  See Rebuttal Brief of Turkey at 77-79.  When this step is taken, the Investigating
Authorities must compare the data they have chosen to other verified or reliable data in the record and
to published data in order to determine the pertinence and accuracy of the data.  The InvestigatingWT/DS211/R
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Authority failed in this obligation in several respects in the Egyptian rebar investigation.  See, e.g.,
Rebuttal Brief of Turkey at 80-82.
107. Egypt maintained, up to the convening of the commencement of the Second Substantive
Session, that it relied solely on the information submitted by the Turkish respondents for its final
determination and that, therefore, Article II, paragraph 7 was inapplicable.  See, e.g.,  Oral
Presentation of Egypt, 27 November 2001, at 27.   We note, however, that during the Second
Substantive Session, Egypt claimed, for the first time, that it obtained scrap data from Alexandria
National and that it relied upon that data in determining the normal value of respondents.
Specifically, Egypt now claims that scrap data obtained from Alexandria National was compared to
scrap data supplied by Colakoglu, Habas and Diler and, based on that comparison, it was concludedthat the data submitted by Colakoglu, Habas and Diler was incorrect.  We note, in this regard, that the
Investigating Authority apparently did not follow the requirement of Annex II, paragraph 7 that data
from this secondary source be used only with “special circumspection.”  In particular, it evidently did
not compare the data allegedly supplied by Alexandria National to public pricing information
published in American Metal Market  and Metal Bulletin , the two most widely read periodicals on the
steel industry worldwide.  If  it had, it would have seen that the data allegedly provided by Alexandria
National do not reflect the worldwide trend in scrap prices, while the scrap price data provided by
Colakolgu, Habas and Diler did reflect those trends.  See First Written Submission of Turkey at
II.E.14-15 and TUR 13-14.
108. Regarding Annex II, paragraph 5, please see our response to joint question #4 below.
Q3. Do you consider that the BCI submission of Egypt ( Confidential Injury Analysis ), by
itself, constitutes an “evaluation” of the factors that it covers, in the sense of Article 3.4?  Please
cite any relevant legal authority and/or precedent.
Reply
109. No, we do not.  See Statement of Turkey at the Second Substantive Session, 1-3.
Q4 Could the parties please comment, in the li ght of the Vienna Convention on the Law of
Treaties, on the Appellate Body’s ruling in United States – Hot-rolled Steel , (at paragraph 101
and 102)12 concerning Annex II, paragraphs 2 and 5.
Reply
110. Annex II, paragraph 2 provides that the authorities may request that the response be put in a
particular computer medium (e.g., computer tape).  However, “[w]hen such a request is made, the
authorities should consider the reasonable ability of the interested party to respond in the preferred
medium or computer language, and should not request the company to use for its response a computer
system other than that used by the firm”.  Moreover, “The authorities should not maintain a request
for a response in a particular medium or computer language .  .  .  if presenting the response asrequested would result in an unreasonable extra burden on the interested party,  e.g.,  it would entail
unreasonable additional cost and trouble”.
111. In United States – Hot-Rolled Steel  from Japan , the Appellate Body drew on this language to
conclude that
"investigating authorities [must] strike a balance between the effort they can expect
interested parties to make in responding to questionnaires and the practical ability of
                                                     
12 WT/DS184/AB/R.WT/DS211/R
Annex 8-1
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those interested parties to comply fully with all demands made of them by the
investigating authorities.  We see this provision as another detailed expression of the
principle of good faith, which is, at once, a general principle of law and a principal of
general international law, that inform s the provisions of the Anti-Dumping
Agreement, as well as the covered agreements.   This organic principle of good faith,
in this particular context, restrains investigating authorities from imposing on
exporters burdens which, in the circumstances, are not reasonable".13
112. Annex II, paragraph 5 provides that “[e]ven though information provided may not be ideal inall respects, this should not justify the authorities from disregarding it, provided the interested party
has acted to the best of its ability”.
113. Considering both of these provisions in combination, the Appellate Body in United States –
Hot-Rolled Steel from Japan  concluded:
"We, therefore, see paragraphs 2 and 5 of Annex II of the Anti-Dumping Agreement
as reflecting a careful balance between the interests of investigating authorities andexporters.  In order to complete their investigations, investigating authorities are
entitled to expect a very significant degree of effort – to the “best of their abilities” –
from investigated exporters.  At the same time, investigating authorities are not
entitled to insist upon absolute standards or impose unreasonable burdens upon those
exporters".
14
114. Turkey agrees with all of these observatio ns.  In the Egyptian rebar investigation, the
investigating authorities imposed an unreasonable burden on the exporters by requesting all of the
new cost information identified in the 19 August 1999 questionnaire, and then insisting upon a “mail
order” verification of all of that data and, in addition the cost and pricing data submitted in the
original responses too.  As discussed elsewhere, this was an impossible task, requiring the review,collation, translation and synthesis of thousands of pages of company books and records.  If the
investigating authorities desired a verification of the data in question, they should have scheduled a
second “cost” verification in Turkey.  There was sufficient time, given administrative deadlines, to do
so.
15
115. Moreover, the investigating authorities, according to the interpretation of their rationale
offered by Egypt to the Panel in this proceeding, imposed an absolute standard or unreasonableburden on respondents by insisting that their cost data was useless because the companies’ cost of
                                                     
13 United States – Imposition of Definitive Anti-Dumping Measures on Hot-Rolled Steel Products from
Japan,  WT/DS 184/AB/R, July 24, 2001, para. 101.
14 Id. at para. 102.
15 As noted in our Rebuttal Brief, Egyptian law imposes a 12-month deadline for completion of  anti-
dumping investigations, with the possibility of a six month extension in certain circumstances.   Rebuttal Brief
of Turkey at note 152 and related text.  Thus, in August 1999, the Investigating Authority still had at least fivemonths in which to complete its investigation, and could have sought an extension of its investigation foranother six months if necessary.WT/DS211/R
Annex 8-1
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inventory was not indexed to inflation – a practice that is not common in Turkey and that was
certainly not followed by the companies in their internal book-keeping systems.  Annex II,
paragraph 2 and Article 2.2.1.1 suggest that the Investigating Authority should accept costs drawn
from the companies’ own computerized accounting systems.  At a minimum, as a matter of “goodfaith,” it was incumbent upon the Investigating Auth ority, if it felt that the companies’ internal book-
keeping systems required modification, to advise the respondents how their costs should be modified,
and in doing so, not to impose an unreasonable burden upon the respondents.WT/DS211/R
Annex 8-2
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ANNEX 8-2
RESPONSES OF EGYPT TO QUESTIONS POSED
IN THE CONTEXT OF THE SECOND
SUBSTANTIVE MEETING OF THE PANEL
QUESTIONS POSED BY THE PANEL TO EGYPT
Q1. In paragraph 3.2.2.1 of the Final Report, the Investigating Authority states with
reference to the methodology used to calculate th e normal value of Habas that "[t]herefore, as
facts available for COP, the Investigating Authorit y used for each cost element (except interest)
the highest of the company's submitted costs and added 5 per cent to account for inflation
during the period for each month". It is not exac tly clear to the Panel how this was done.  Could
Egypt please explain in detail how the calculations were done.
Reply
1. Habas reported cost data for only two months of 1998.  The Investigating Authority took the
highest monthly value found for each cost element (except interest) and added 5 per cent monthly to
account for inflation.  This was done as follows.  The Investigating Authority used the raw materials,
labour and overhead expenses from the month of November 1998.  Those costs were adjusted by the
monthly inflation rate of 5 per cent according to the following formula.
(a) Adjustment for inflation rate of November 1998
Submitted Costs of November 1998 X 1.05
(b) Adjustment for inflation rate of December 1998
Adjusted costs in (a) X 1.05
2. The interest expenses were calculated as a percentage of costs of goods sold on the basis of
the data submitted by Habas. The result (5 per cent) was applied to the costs as adjusted above.
3. Lastly, a reasonable amount for profit of 5.5 per cent was added.  This margin was based on
the profit achieved by Habas as shown in the income statement submitted by the company.
4. We attach the costs data submitted by Habas in EX-EGT-11.1 and the normal value
constructed by the Investigating Authority as explained above in EX-EGT-11.2.
Q2. In the Final Report at page 13, the IA refers to the scrap cost data provided by "another
respondent" and describes the trends in those data.  In Egypt's oral response to this question at
the 26 February 2002 meeting with the Panel, E gypt clarified that the "respondent" referred to
was Alexandria National.  Could Egypt please confirm this, and provide the scrap cost data
referred to and copies of the supporting documents from which those data were drawn.
ReplyWT/DS211/R
Annex 8-2
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5. The other “ respondent ” from whom the Investigating Authority obtained information on scrap
costs is Alexandria National Steel, one of the complainant respondents.  The data submitted by this
“respondent” is attached in EX-EGT-12.
Q3. The Panel notes the comments made in Annexes 1 to Exhibit TUR-34A, B and C,
respectively, by the auditors of the three companie s to the effect that there is no consensus in
Turkey on the use of IAS 29 and that it seems to  be only of value when a comparison is to be
made with a previous period (which would not be the case with a POI of one year only).  In the
light of these comments, could Egypt please ex plain the relevance of IAS 29 in this dispute.
Reply
6. The absence of consensus in Turkey on the application of IAS 29 is irrelevant to the current
issue.
7. Indeed, as explained in previous submissions, it is not sufficient that costs data be prepared in
accordance with the generally accepted accounting principles of the exporting country in order for
such data to be used by the Investigating Authority without adjustment.  In addition, the records must
reasonably reflect the costs associated with the production and sale of the product under
consideration.  In this respect, Egypt considers that the non-application of IAS 29 can seriously distort
the accuracy and reliability of cost records of companies operating in an hyperinflationary economysince such records will underestimate the actual costs incurred by the company in producing and
selling the product concerned.
8. Furthermore, IAS 29 is not only of value for co mparison with previous years but also for the
restatement of values of the reporting year.
9. IAS 29 is summarized as follows
1:
“- Hyperinflation is indicated if cumulative inflation over three years is 100 per
cent or more (among other factors).
- In such a circumstance, financial statements should be presented in a
measuring unit that is current at the balance sheet date.
- Comparative amounts for prior periods are also restated into the measuring
unit at the current balance sheet date.
- Any gain or loss on the net monetary position arising from the restatement of
amounts into the measuring unit current at the balance sheet date should be included
in net income and separately disclosed.”
10. While it is correct that IAS 29 seeks to readjust the corresponding amounts of previous
periods to reflect hyperinflation when comparing these amounts to the current balance sheet as
pointed out in Question 3, the summary of IAS 29 also specifically refers to the effects of
hyperinflation on the profit/loss accounts of the reporting year.  Accounts that are not restated in
accordance with IAS 29 will therefore not reflect the full costs of production during the reportingperiod.
11. Furthermore, contrary to what Turkey stated in point J of its Oral Statement of
25 February 2002, Egypt did not conclude that the co sts of production did not reflect hyperinflation
                                                     
1 Source:  International Accounting Standard BoardWT/DS211/R
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simply because IAS 29 was not applied.  The non-application of IAS 29 constitutes only one
indication that the reported costs data may not have reflected hyperinflation.  However, the
Investigating Authority was careful not to rely exclus ively on this factor.  Indeed, it also relied on the
information received from the respondents that the costs were not adjusted to reflect hyperinflation ofwhich the Panel received a copy (audited accounts, admissions by the respondents themselves).  This
was specifically acknowledged by Turkey in its rebuttal.
Q4. Could Egypt please indicate exactly which inflation data contained in Exhibit EGT 7.7 it
used as the basis for its conclusion that the average monthly inflation rate in Turkey was 5 per
cent.  In this regard, the Panel notes that the exhibit contains, inter alia , the same data from the
Turkish State Institute of Statistics (submitted by the Turkish Government in its response of 15
October 1999 to the Essential Facts and Conclusi ons Report (Exhibit TUR-30)) on which the
Turkish Government relied to indicate that the inflation rate was much lower during 1998.
Reply
12. Egypt used the average yearly inflation rate for wholesale (54.3 per cent) and for retail
(69.7 per cent) expressed on a monthly basis and rounded to 5 per cent.  The details of the calculations
are as follows:
- 54.3/12 = 4.5%- 69.7/12 = 5.8%- (4.5 + 5.8)/2 = 5.1%, rounded to 5%.
Those data are contained in the document 1(b) TURKEY UPDATE  in EX-EGT-7.7.
13. In response to Question 2 submitted by Turkey, Egypt wishes to confirm that the above
inflation rates relate to the calendar year 1998.
Q5. For each respondent company, please identify the communication or communications
that in Egypt's view informed that respondent that its eviden ce was not being accepted, and
giving it an opportunity to pr ovide further explanations within a reasonable period, as referred
to in Annex II, paragraph 6.
Reply
14. The communications by which the respondents were informed that their costs data were not
accepted and giving them an opportunity to provide further explanations are as follows:
(1) Letters of 19 August 1999 to all respondents
15. On 19 August 1999, the Investigating Authority sent all respondents a letter informing them
that it had reasons to believe that the reported costs of production were unreliable and insufficient for
the purposes of the dumping investigation and provided an initial period of 13 days to provide
clarification and additional data.  The deadline was later extended by 14 days.  The responses received
from the respondents were incomplete.
(2) Letters of 23 September 1999 to all respondents
16. On 23 September 1999, after review of the responses to the letter of 19 August 1999, the
Investigating Authority sent a second letter to all respondents offering them another opportunity toWT/DS211/R
Annex 8-2
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clarify the matters raised in the letters of 19 Au gust 1999.  The Investigating Authority granted a
deadline of two to five days.
17. Since Habas, Diler and Colakoglu informed th e Investigating Authority that they would not
supply the information requested in the letter of 23 September 1999, the Investigating Authority
informed these respondents that it would use facts available by letter of 28 September 1999 to counsel
to the said respondents.
18. As to Icdas and IDC, the information submitted did not show that the costs data duly reflected
hyperinflation and, therefore, could not be used as submitted for the determination of the normal
value.  In consequence, the Investigating Authority had to resort to facts available in order tocompensate for the unreliability of the submitted costs data.
19. The reasons for the use of partial facts available were given in the Essential Facts &
Conclusions Report  and the Final Report .
20. For the Panel’s reference, a copy of the above-mentioned communications to the respondents
is attached in EX-EGT-13.
Q6. Egypt has requested the Panel to dismiss a number of Turkey's claims on the grounds
that they are outside the Panel's terms of refere nce.  In respect of each claim that Egypt has
requested be dismissed, could Egypt please provide the two-part analysis referred to e.g. in EC –
Bed Linen , i.e., the asserted lack of clarity in the Request for Establishment of the Panel, and
evidence of any prejudice to Egypt's ability to defend its interests in this dispute due to such
lack of clarity.
Reply
21. In view of the reasoning of the Panel in EC – Bed Linen and the Appellate Body in Korea –
Dairy Safeguards , Egypt requests that the following claims be dismissed:
(a) Claims under Article 3.4 as regards “ factors affecting domestic prices ”
22. Throughout its various submissions, Turkey presents the same arguments in relation to
Article 3, paragraphs 4 and 5 and even goes so far as to allege a violation under Article 3.4 or
Article 3.52 as regards the Investigating Authority’s examination of “ factors affecting domestic
prices ”.  Turkey’s claims in relation to these two provis ions as stated in the Panel Request at Claim 3 or
4 were not in any way clarified in Turkey’s First Wr itten Submission.  Nor were these claims clarified at
the First Meeting of the Panel on 27 November 2001.  Indeed, it will be recalled that the very first
question of the Panel, dated 28 November 2001, was that Turkey set out in summary format its legal
argumentation in support of each of its claims, includi ng those relating to the Investigating Authority’s
examination of injury under Article 3.  Moreover, when requested by the Panel to clarify its position
on this issue at the First Meeting of the Panel on 27 November 2001, Turkey stated that it waspresenting a claim solely under Article 3.4.  The following day, on 28 November 2001, Turkey
modified that response and stated that it was presenting a claim under both Articles 3.4 and 3.5.
23. In applying the approach of the Appellate Body in Korea – Dairy Safeguards to the particular
facts of this case, Egypt submits that the Panel must look further into the nature of the particularprovision at issue – i.e. where the Articles listed establish not one single distinct obligation, but rather
multiple obligations.  Articles 3.4 and 3.5 establish multiple obligations.  If any violation with respect
thereunder is not presented with sufficient clarity in the Panel Request, (1) the burden on the
                                                     
2 See for example the Rebuttal Submission of Turkey of 2 January 2002 at Claim III.C, page 15.WT/DS211/R
Annex 8-2
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respondent becomes too onerous; and (2) both the Panel and the respondent are at risk of being misled
at to which claims are in fact being asserted against the respondent.
24. Article 6.2 of the DSU requires at the very le ast, that the claims, although not the arguments,
must be presented with sufficient clarity in the Panel Request.  This was not done in the present case
before the Panel. Because it was unclear as to which provision under Article 3 Turkey was presenting
its argumentation with respect to “ factors affecting domestic prices ”, Egypt was prejudiced as regards
the preparation its defense with respect to those particular factors.
(b) Paragraph 6 of Annex II
25. In the Request for Establishment of a Panel, a violation of Paragraph 6 of Annex II was
invoked with respect to the deadline granted to  the respondents to reply to the letter of
19 August 1999.  In its Restatement of Claims, Turkey additionally claimed that the sheer fact of
sending the letter of 19 August 1999 constituted a violation of Paragraph 6 of Annex II.  However, as
the Panel will have noted, Turkey fails to explain its reasoning underlying the claim that the simplefact of sending a letter constitutes by itself a violation of Paragraph 6 of Annex II.
26. Yet, such an explanation was particularly called for in this case.27. Indeed, it will be recalled that Paragraph 6 of Annex II imposes upon the Investigating
Authority the obligation to inform a responding party of the reasons why information submitted by
such party is not accepted and to grant that party an opportunity to provide further explanations within
a reasonable period, due account being taken of the tim e-limits of the investigation.  Since the purpose
of the letter of 19 August 1999 was precisely to inform  the respondents of the reasons why some of their
data were not accepted and to provide them with an opportunity to supply additional information and
clarification, the claim of violation presented by Turk ey in its Restatement of claims is quite perplexing
and should have been given special consideration by Turkey.
28. As a result of the absence of any explanation of the claim presented by Turkey with respect to
Paragraph 6 of Annex II, Egypt’s ability to defend its interests in this context was severely prejudiced
and, in fact, simply denied.
(c) Paragraph 3 of Annex II and Article X:3 of GATT 1994
29. Turkey alleged that the Investigating Authority violated Paragraph 3 of Annex II and
Article X:3 of GATT 1994 in its selection of facts as facts available.  As noted by the Panel, those
provisions were not cited in support of Claim 11 of the Request for Establishment of a Paneladdressing the selection of facts available.
30. For the reasons set out below, Egypt submits that the alleged violation of Paragraph 3 of
Annex II and Article X:3 of GATT 1994 must be rej ected as not being within the Terms of Reference
of the Panel in the context of Claim 11.
(i) Paragraph 3 of Annex II
31. As regards the alleged violation of Paragraph 3 of Annex II, Turkey failed to identify the
obligations contained in that provision that the In vestigating Authority would have violated in its
selection of “facts available”, therefore preventing Egypt from presenting a meaningful defence.  As
already noted in Egypt’s First Written Submission
3, Paragraph 3 of Annex II concerns the
circumstances in which the data submitted by respondents must be accepted or can be rejected.  This
                                                     
3 Section IV.B.8.b).i)WT/DS211/R
Annex 8-2
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provision, however, does not address the selection  of facts available once it has been decided to reject
the data submitted by the respondents.  The reference to Paragraph 3 of Annex II in this latter context
was definitely odd.  Accordingly, Egypt would have expected Turkey to be particularly careful and
thorough in explaining the legal basis for its claim that the Investigating Authority violated thisprovision by its selection of facts available. However, although invited to elaborate on this claim by
the Panel, Turkey merely restated that the Investigating Authority’s selection of facts available was
inconsistent with Paragraph 3 of Annex II without any further detail.
32. In those circumstances, Egypt submits that its rights of defence were severely prejudiced with
respect to the alleged violation of Paragraph 3 of Annex II since Turkey never explained the legal
basis for the alleged violation.
(ii) Article X:3 of GATT 1994
33. The allegations of a violation of Article X:3 of GATT 1994 were equally vague and
unsubstantiated.  Thus, at page 30 of its Restatement of Claims, Turkey alleges that
“The denial of respondents’ requests for meetings at which they could explain how
their responses to the Investigating Authority’s request for information were complete
and accurate and show that their responses could be tied to their books and records
was abusive, discriminatory and unfair to respondents in violation of Article X:3 ofthe GATT. The calculation of an interest charge for IDC that overstated IDC’s
interest expenses as a per cent of costs of goods sold manufactured by a factor of
eight was also abusive and discriminatory in violation of Article X:3.” (emphasis
added)
34. Besides the fact that the language of Article X:3 does not seem to contain the obligations of
non-discrimination and unfairness that Turkey considers were violated, it must be stressed that Turkey
failed at any point during the proceeding to explai n the elements of “abusiveness”, “discrimination”
and “unfairness” which allegedly would characterize the decisions to refuse a meeting and the
calculation of interest expenses.  In other words, Turkey has made unsubstantiated and legally-ill
allegations of violation to which therefore it is virtually impossible to respond in any meaningful way.
(d) Failure to refer to the relevant  treaty article in the Panel Request
35. According to the Panel in EC – Bed Linen, a “[ f]ailure to even mention in the request for the
establishment the treaty Article alleged to have been violated in our view constitutes failure to state a
claim at all”
4. It follows that the following claims must be dismissed.
(i) Whether the Final Report contains findings or conclusions sufficient to satisfy the
requirements of Article 12.2
36. Turkey claims that the Panel should disregard consideration of certain Article 3.4 factors
mentioned in the working papers of the Investigating Authority when evaluating whether the Final
Report  contains findings or conclusions sufficient to satisfy the requirements of Article 12.2, with
respect to each of the Article 3.4 factors.
37. Again, Egypt wishes to stress that whether all of the Investigating Authority’s conclusions on
material injury are reproduced in the Final Report  is not an issue that is before the Panel.  A claim
under Article 12.2 was not introduced in the Request for the Establishment of a Panel and
                                                     
4 WT/DS141/R at para. 6.15.WT/DS211/R
Annex 8-2
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accordingly, is not within the Panel’s Terms of Reference.  As a result, Egypt did not prepare any
defense in this regard.
(ii) Whether the Panel can disregard evidence under Article 6.4
38. In its Rebuttal Submission, Turkey claims that the Panel should not consider evidence that
was not provided to interested parties during the course of the investigation, such as the report on
Other Causes of Injury .  In support of this contention, Turkey refers to Article 6.4 of the Anti-
Dumping Agreement.
39. Apart from the fact that a violation of Article 6.4 was not alleged in the Request for the
Establishment of a Panel and accordingly, is not within the Panel’s Terms of Reference, it is indeed
ironic that Turkey should ask the Panel to dismiss evidence that was not provided to the Turkish
respondents, while at the same time claim that the Panel should accept evidence that was not provided
to the Investigating Authority during the course of the investigation.  This is even more unreasonable
in view of the fact that the Turkish respondents did not, at any time during the course of theinvestigation, request that the Investigating Authority provide non-confidential information to
interested parties through its public file system.
(iii) Article 17.6(i) of the AD Agreement
40. Turkey alleges a violation of Article 17.6(i) of the AD Agreement.  However, that provision
governs the standard of review to be applied by a panel when considering whether the Investigating
Authority’s establishment of the facts was proper and the evaluation unbiased and objective.  It does
not govern the rights and obligations of Members under the AD Agreement.  In any event, it was not
cited in the Request for Establishment of a Panel.  As a consequence, this claim is not within theTerms of Reference of the Panel and must be rejected.
Q7. At page 6 of the Final Report, the IA stat ed that "IDC … provided incomplete data and
most of the data submitted were not supported by evidence".  At page 29 of the Final Report,
the IA stated in respect of IDC that "[f]or ma terials, labour and overhead, … the company did
not adequately demonstrate or support its claim that inflation was included…".  At para. 3 of
page 2 of Egypt's Rebuttal, it is said that it was clear that the records of the respondents were
not prepared in order to reflect hyperinfla tion.  However, in TUR-29, IDC submits that
"inflation had been taken into account by the procurement price mechanism automatically" (in
relation to materials).  In your Oral Presentati on dated 25 February 2002, it is said that "it
cannot be contested that the costs data of the respondents was not adjusted to reflect
hyperinflation".  It is also said that ampl e evidence was submitted to establish that, and
reference is made to EX-EGT-7.6.  There is no docu ment relating to IDC in that Exhibit.  Could
Egypt please identify how, and on the basis of  what specific information in the record, the
investigating authority arrived at its above-cited  opinions and conclusions about hyperinflation
in relation to IDC?  Please furnish the documents relied upon by Egypt in reaching these
conclusions.
Reply
41. In EX-EGT-7.6, Egypt submitted a copy of the Auditors’ notes to the Financial Statements in
which IAS 29 was specifically discussed. Conversely, as explained in Egypt’s First WrittenSubmission, the Audited Accounts of IDC seemingly di d not contain any indication that the financial
statements had been prepared in accordance with the provisions of IAS 29, or were otherwise adjustedWT/DS211/R
Annex 8-2
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to reflect inflation.5  It should be noted that Turkey admitted on several occasions that no company
applies IAS 29.
42. However, the fact that the costs data of IDC were not duly adjusted for inflation is apparent
from other documents submitted by Egypt to the Panel.
43. Egypt wishes to refer to the documents attached in EX-EGT-7.9. This exhibit contains a copy
of the reply of IDC to the Investigating Authority’s questions on cost and sales data. In its response,
IDC acknowledges that it makes “ no adjustments for inflation in [its] accounting practice ”.  The
“procurement price mechanism ” for materials mentioned by IDC in point 4 of its reply and
reproduced in the Panel’s question refers only to the fact that IDC converts the prices of importedmaterials at the exchange rate “ on the day which the materials were imported ”.  As explained on
many occasions, this is irrelevant since it cannot cope with the effect of hyperinflation on the value of
raw materials that are not immediately used in th e production. Indeed, as from the moment the value
of the raw materials is converted into Turkish Lira, e.g. at the date of purchase, this value is “frozen”
and will not be adjusted for inflation during any subsequent months until the raw materials concernedare used.
44. As regards the other costs items, IDC either failed to provide any explanation on whether
hyperinflation was taken into account (labour and overhead) or supplied unconvincing and
unsubstantiated explanations (depreciation expenses).
45. Accordingly, the Investigating Authority legitimately came to the conclusion that IDC did not
demonstrate that the above-captioned cost items adequately reflected hyperinflation.
Q8. Concerning Icdas, at page 6 of the Final Re port, the IA stated that "Icdas … provided
incomplete data and most of the data submit ted were not supported by evidence".  Further
concerning Icdas, at page 22 of the Final Repo rt, the IA stated that "[o]n 23 September 1999,
the Department requested a missing document and several documents to be translated into
English".  At page 23 of the Final Report, the IA stated, "[a]s for Icdas's claim that it 'provided
all the necessary information' in response to the Department's 19 August 1999 request, and that
the 'remaining items are [ sic] timely submitted' in response to the Department's 23 September
1999 request, that is incorrect.  In fact, the fi rm did not furnish (1) the requested breakdown of
labour and overhead costs, (2) the requested supporting documents for labour and overhead
costs, (3) the requested allocations and allocati on methodologies for materials, overhead, and
SG&A, and (4) the requested reconciliations of submitted data to its financial statement.  In
addition, its explanation of how inflation was refl ected/included in its costs was inadequate and
unsupported".  At page 29 of the Final Report, the IA stated that "as described above, Icdas didnot provide sufficient information for the investigating authority to confirm the monthly
specific costs of materials, labour, or overhead during the period of investigation, despite being
requested to do so".  Could Egypt please precisely identify the documents containing the IA's
requests for the information referred to in th e Final Report as not having been submitted.
Please describe the documents that were provided by Icdas on these points and indicate how, inthe light of those documents, the IA was satisfied that AD Article 6.8 could be applied.
Reply
46. The documents and explanations regarding Icdas’s costs data were requested in the
Investigating Authority’s letters to Icdas of 19 August 1999 and 23 September 1999, respectively.
                                                     
5 See IV-B.6.b)WT/DS211/R
Annex 8-2
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47. The main purpose of the questions was to give Icdas an opportunity to explain whether,
contrary to what the submitted data appeared to reveal, such data duly reflected the hyperinflation
experienced by Turkey during the investigation period.
48. The main questions raised in the letter of 19 August 1999 as well as the responses and
documentation submitted by Icdas can be described as follows:
(a) Materials
“A. Provide the material inventory ledgers for the subject merchandise showing
the raw materials, work in process, and finished goods inventory showing the balanceand activity in the accounts for each month during 1998 and an explanation of
whether and how inventory values are adjusted for inflation in ICDAS’s accounting
records.”
49. Icdas did not provide the inventory ledgers on a monthly basis as requested, but only at year-
end 1998 arguing that monthly inventory ledgers are not prepared within the ordinary course of trade.
50. Icdas furthermore stated that inventory is not adjusted “ with regard to the inflation ”.
“B. Reconcile the total value from the inventory ledgers for the months of
January, September, October, November and December, to ICDAS’ general ledgerand financial statement.”
51. No monthly reconciliation of inventory va lues was provided. Icdas only supplied a
reconciliation of the year-end stock values to the inventory ledger.  It was therefore impossible for the
Investigating Authority to reconcile the monthl y cost of production to the company’s records.
52. Furthermore, no reconciliation to the Financial Statements was provided.
“C. Provide a copy of all raw material purchase orders placed during the months
of January, September, October, Novemb er, and December 1998.  Provide a copy of
the appropriate pages from the payments ledger showing payment for those
purchases.”
53. Icdas provided copies of purchase contracts and invoices together with copies of listings
which were presented as “payment documentation” for the purchase invoices.
54. However, the listings were not translated into English and Icdas failed to explain how the
payment of the submitted purchase invoices could be verified on the basis of the listings.
55. Lastly, no data was submitted for December 1998, as requested.
“D. [Provide] a worksheet reconciling the materials costs that you submitted in
your summary to the Investigating Authority to the company’s audited financial
statement”
56. Icdas provided a table showing the monthly production volumes of billet and rebar as well as
the monthly unit value in Turkish Lira of scrap, electrodes, ferro-alloys, other materials and
refractories.  Were appended to this table copies of unidentified documents.
57. If some of the figures reported in the table could be found in the appended documents such as
the production figures of billet, Icdas failed to give any description of the submitted documents and,WT/DS211/R
Annex 8-2
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more importantly, Icdas did not supply any explanation on how these documents should be read and
interpreted by the Investigating Authority.  As a result, it was impossible for the Investigating
Authority to perform any kind of verification of the data submitted.
58. Furthermore, no reconciliation to the Financial Statements was provided.
(b) Labour
“A. Explain whether any adjustments have been made in ICDAS’ accounting
records to recognize the inflation that occurred during this time”
59. Icdas replied that wages and salaries were allegedly adjusted for inflation on an annual basis
and stated that, with respect to the investigation period (January–December 1998), the adjustment was
performed in January 1998.
60. Besides the fact that Icdas did not provide any detail on the adjustment concerned, it should
be noted that an adjustment in January evidently cannot account for the hyperinflation occurring inany subsequent month until the end of the year.
61. Accordingly, the allegation that labour costs data for the investigation period were adjusted
for inflation could not be accepted.
“B. Explain the basis on which labour was allocated to the subject merchandise”
62. The explanation was provided as requested.
“C. Reconcile the labour costs reported for January, September, October,
November and December 1998 to the general ledger and to the financial statement,
and provide supporting documents, including bank statements for those months”
63. The reconciliation of labour costs was not submitted in Icdas’ response of
15 September 1999.  Accordingly, the Investigating Authority requested by letter of
23 September 1999 that such reconciliation be submitted within five working days.
64. The documents received in response to the letter of 23 September 1999 were presented in the
same format as the so-called reconciliation of material costs.  Thus, Icdas presented a table showing
total monthly labour costs and attached copies of extracts from an unidentified ledger.  No data was
provided for December 1998.
65. Once again, Icdas failed to provide any narrative explanation on how these documents should
be used in order to reconcile the submitted data.
66. Furthermore, Icdas only provided copies of the relevant ledger but failed to provide a
reconciliation to the financial statements, as requested.
67. Lastly, Icdas failed to submit the requested supporting documents, such as bank statements.
(c) Overhead
“A. Explain whether any adjustments have been made to account for the inflation
that occurred during this time”WT/DS211/R
Annex 8-2
Page 130
68. Icdas failed to explain whether any adjustments for inflation were made to the overhead
expenses.
“B. Provide a complete list of all depreciation expenses and reconcile those
expenses to the summary which you provided to the Investigating Authority for the
months of January through December, 1998”
69. Instead of supplying monthly depreciation expenses as requested, Icdas supplied one single
amount for the full calendar year 1998 and allocated this amount equally to each month of the
investigation period.
“C. Specifically explain whether your recorded depreciation expenses take into
account inflation that occurred during this time”
70. The explanation provided by Icdas was minimal. Indeed, Icdas limited its response to the
general statement that “depreciation expenses are calculated over the revalued rates of the fixed assets
according to the revaluation rate which is determined annually by the Ministry of Finance according
to the inflation rate”.  Icdas failed however to give any detail on this alleged revaluation.  Inparticular, Icdas did not indicate whether this reva luation was performed at the end of the year or at
the beginning of the year, as for labour costs (see above).  As a consequence, the Investigating
Authority could not accept the claim.
(d) Conclusions71. As demonstrated above, the minimal explanations and insufficient documentary evidence
submitted by Icdas in response to the Investigating Authority’s letters of 19 August 1999 and
23 September 1999 could not allow the Investigating Authority to verify the accuracy of the costs data
submitted by Icdas.  In fact, far from presenting a reconciliation of its costs data as requested, Icdassimply submitted copies of voluminous raw documents without any walk-through instructions which
would have allowed the Investigating Authority to perform a meaningful verification of the costs data.
72. Furthermore, Icdas’s responses did not contradict but in fact confirmed that its costs data did
not reflect the hyperinflation experienced by Turkey in 1998.  Icdas’s allegations to the contrary can
only be considered as disingenuous or, at best, erroneous.
73. As a consequence, Egypt submits that the Inve stigating Authority was entitled to use partial
facts available with respect to Icdas pursuant to Article 6.8 of the AD Agreement in order to arrive at
meaningful determinations.
Q9. In Egypt's 7 December 2001 response to Ques tion 5 from the Panel, Egypt highlighted
how, in its opinion, the Confidential Injury Analysis demonstrates that the injury analysis was
thorough and covered all factors listed in Arti cle 3.4.  Could Egypt please indicate where the
analysis of each factor is reflected in the E ssential Facts and Conclusions and/or Final Reports.
Reply
74. The Panel has asked Egypt to indicate “ where ” in the Essential Facts & Conclusions Report
and the Final Report  the analysis of each factor listed under Article 3.4 is reflected.  We would like to
refer the Panel to the table provided in Question 5 of Egypt’s 7 December 2001 response to the Panel,
which has been reproduced for ease of reference below:WT/DS211/R
Annex 8-2
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Economic Factor/Indices EFCR FR
Sales Section 2.4.1
Section 4.3.1
Section 4.5.2
Section 4.5.4Section 2.4.1
Section 4.3.1
Section 4.6.2
Section 4.6.4
Profits Section 4.3.5
Section 4.5.2Section 4.5.4Section 4.3.5
Section 4.6.2Section 4.6.4
Output Section 2.4.2
Section 4.3.2Section 2.4.2
Section 4.3.2
Market Share Section 2.4.1
Section 4.3.4
Section 4.5.4Section 2.4.1
Section 4.3.4
Section 4.6.4
Return on investments Section 4.3.7
Section 4.5.2Section 4.3.7
Section 4.6.2
Capacity utilization Section 4.3.6 Section 4.3.6
Prices Section 4.2.1.2
Section 4.2.2.1
Section 4.5.1
Section 4.5.2
Section 4.5.3
Section 4.5.4Section 4.2.1.2
Section 4.2.2.1
Section 4.6.1
Section 4.6.2
Section 4.6.3
Section 4.6.4
Dumping margin Section 3.3 Section 3.3Section 4.4Section 4.6.2
Inventories Section 4.3.3
Section 4.5.2Section 4.3.3
Section 4.6.2
EFCR = Essential Facts & Conclusions Report
FR = Final Report
75. It may be the case that the Panel considers that the Confidential Injury Analysis is not fully
reflected in the Essential Facts & Conclusions Report  and/or the Final Report .  However, we repeat
that whether all of the Investigating Authority’s conclusions on material injury are reproduced in
these reports is not an issue that is before the Panel.  A claim under Article 12.2 was not introduced inthe Request for the Establishment of a Panel and accordingly, is not within the Panel’s Terms of
Reference.
76. What is relevant, however, is whether the Investigating Authority’s examination under
Article 3.4 was complete.  Accordingly, we wish to direct the Panel’s attention Question 3 of the
“Questions to Both Parties” below.
Q10. In respect of each of the five respondents (Habas, Diler, Colakoglu, Icdas and IDC), the
Investigating Authority stated in the Final Repo rt that "[t]he Investigating Authority did not
offset this interest expense by interest revenue,  as the Investigating Authority does not consider
interest revenue as sufficiently related to production to be includable in the calculation of
constructed value".  Where in the record can the basis for this conclusion be found in respect of
each of these companies?  That is, what info rmation and considerations were relied upon in the
Investigating Authority's analys is on this point for each?WT/DS211/R
Annex 8-2
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Reply
77. The determination that interest revenue was not found to be sufficiently related to production
was based on the treatment of this income as a non-operating income by the auditors of the companiesconcerned and/or on the extraordinary nature of this income in comparison to previous years.
(a) Icdas78. First, the interest income was reported after the calculation of the operating profit or loss and
could therefore not be considered as related to production or sales activities. Second, it was apparent
from the amount of interest income of 1998 that such interest income could not reasonably be relatedto production or sales activities.  Indeed, according to the “Detailed Statement of Income” of Icdas,
the amount of interest income for 1998 was as high as 1,022,244 million Turkish Lira for a total
turnover of 80,561,205 million Turkish Lira and a total cost of sales of 74,529,114 million Turkish
Lira.  By contrast, in 1997, interest income amounted to only 13,728 million Lira while the total
turnover and costs of sales amounted to 44,072,138 million and 38,722,381 million Turkish Lira,respectively.
79. The above figures show beyond any doubt that the amount of interest income in 1998 is in no
way related to production or sale activities but repr esents rather an extraordinary income.  Should the
interest income be related to production or sale, then the ratio between interest income on the one
hand and turnover/cost of sales on the other hand would not vary so significantly from one year to the
next.
(b) Habas
80. The interest income of Habas was reported as a non-operating income in the company’s
Income Statement and, accordingly, was considered by the Investigating Authority as not being
sufficiently related to production or sale activities.
(c) Colakoglu81. The interest income of Colakoglu was also reported as a non-operating income in the Income
Statement (i.e. it was reported after the calculation of the operating profit or losses of the company).
Furthermore, the absence of any relationship to production and sale was underlined by the fact that the
interest income in 1998 was almost 6 times higher than in 1997 while, in the same period of time,
gross sales had increased by approximately 50 per cent only.
(d) Diler
82. The interest income of Diler was reported as a non-operating income in the Income Statement
of the company (i.e. it was reported after the calculation of the operational profit or losses of the
company).  Accordingly, such income was not cons idered to be sufficiently related to production
activities.
(e) IDC83. The interest income of IDC was reported as a non-operating income in the Income Statement
of the company (i.e. it was reported after the calculation of the operating profit or losses of the
company).  Accordingly, such income was not cons idered to be sufficiently related to production
activities.
* * *WT/DS211/R
Annex 8-2
Page 133
84. In view of the foregoing considerations, Egypt submits that the Investigating Authority was
entitled to reject interest income from the ca lculation of the construction normal value since the
evidence on the record indicated that such income was not sufficiently related to production activities.It should be noted that no respondent provided any evidence to the contrary.
85. As explained in Egypt’s First Written S ubmission and subsequent submissions, the
Investigating Authority’s actions in this regard are in line with the practice of other major jurisdictions
such as the European Communities and the USA.
Q11. Could Egypt please provide a copy of the following documents:
- letter dated 26 August 1999 from the Investigating Authority to all of the respondents
granting the 14-day extension for responses to the letters of 19 August 1999 (the
granting of the extension is referred to at page 35 of the First Written Submission of
Turkey);
- letter dated 23 September 1999 from the Investigating Authority to Icdas;- Annexes to IDC's 9 September 1999 submission (Exh TUR-29)
Reply
(a) Letter dated 26 August 1999 to all respondents
- Icdas: EX-EGT-14.1
- IDC: EX-EGT-14.2
- Counsel to Diler, Colakoglu and Habas: EX-EGT-14.3
(b) Letter dated 23 September 1999 from the Investigating Authority to Icdas- EX-EGT-13.2.2
(c) Annexes to IDC’s 9 September 1999 submissions
-E X - E G T - 1 5
QUESTIONS POSED BY THE PANEL TO BOTH PARTIES
Q1. In paragraph 3 of the Request for Establishment of the Panel, four factors are specified
by Turkey as being grounds for a breach of th e cited Articles.  However, in the submissions
made by Turkey, it is arguable that other grounds are added.  In the view of the parties, is itpermissible:
(a) to use an inclusive expression when listing grounds for an alleged breach in a
request for establishment; and
(b) where a list of grounds is included in a request for establishment, to add another
or other grounds in submissions:WT/DS211/R
Annex 8-2
Page 134
(i) where the list is said to be inclusive; and
(ii) where the list is not said to be inclusive?
Reply
(a) Egypt considers that, while it is permissible to use an inclusive expression when listing
grounds for an alleged breach in a request for the establishment of a panel, the list of factors contained
therein should be as exhaustive as possible.  The DSU does not impose any time limits as to when the
request for establishment of a panel must be submitted once consultations are formally initiated.
Accordingly, the complainant has ample opportunity to  identify the specific measure at issue and the
relevant legal basis of the complaint.
(b.i) Where the list of grounds is said to be inclusive, Egypt considers that it is permissible to add
additional grounds in submissions on the condition that the legal basis of those grounds is clearly
identified in connection with each treaty article in the request for the establishment of a panel.Moreover, the complainant must be able to explain why these grounds were not included in the panel
request if the information on which the grounds are based is not new to the complainant.  Lastly, the
respondent must be granted adequate opportunity in which to prepare a defence.
(b.ii) Where the list of grounds is not said to be inclusive, Egypt considers that it is not permissible
to add additional grounds in submissions, unless new facts come to light during the course of the
proceeding that were not previously available to the complainant.  In this latter situation, Egypt
considers that it is permissible to add other grounds to a non-inclusive list, provided that the
complainant can demonstrate that these grounds are relevant to the legal basis of its claim and that the
respondent is granted adequate opportunity in which to prepare a defence.
Q2. Could the parties please comment, in the li ght of Article 31 of the Vienna Convention on
the Law of Treaties, on the meaning of the phrases:
(a) "special circumspection" in Annex II, paragraph 7; and(b) "to the best of its ability" in Annex II, paragraph 5.
Reply
86. Egypt considers that the following interpre tations are in accordance with the ordinary
meaning to be given to the terms of the provisions in their context and in light of their object and
purpose under the AD Agreement.
(a) The meaning of “special circumspection”87. As a preliminary remark, it should be noted that Annex II, paragraph 7 contemplates
circumstances in which the Investigating Authority must use information from a secondary  source, as
opposed to information obtained from the respondents concerned.  Accordingly, as explained in
Egypt’s First Written Submission, this provision does not apply to the rebar investigation since all
dumping findings were made on the basis of the data submitted by the respondents, with the sole
exception of the hyperinflation rate which was based on official statistics and the data on scrap priceswhich were obtained from another respondent that furnished supporting evidence (see reply to
Question 2 to Egypt).
88. In Egypt’s view, the use of the terms “ special circumspection ” indicates that the Investigating
Authority should resort to information from secondary sources only to the extent strictly necessary toWT/DS211/R
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fill the gaps in the information obtained from the respondents concerned, i.e. from the primary source.
The terms also indicate that the Investigating Au thority should carefully check the information used
as facts available with other information that the Investigating Authority has at its disposal from other
sources.  In the rebar investigation, the only information coming from a secondary source was themonthly hyperinflation rate of 5 per cent. As explained previously (see, e.g., Egypt’s reply to
Question 4), this rate was calculated on the basis of the average yearly inflation rate for wholesale and
for retail reported by the State Institute of Statistics of the Republic of Turkey.
(b) The meaning of “to the best of its ability”89. Egypt considers that the terms “ to the best of its ability ” in Annex II, paragraph 5, qualifies
the level of cooperation that an Investigating Authority may legitimately expect from respondents in
an anti-dumping investigation.  In particular, the word “best” indicates that the level of cooperation
must be very high.
90. Thus, Egypt considers that respondents are expected to provide within a reasonable period of
time all information required by the Investigating Authority which is at the immediate disposal of the
respondents concerned or can be obtained by them without undue difficulty.
91. Thus, a respondent cannot be considered to have acted “ to the best of its ability ” if it does not
submit copies of its own records and meaningful ex planations on how these records were prepared.
On the other hand, Egypt recognizes that a responde nt may encounter more difficulties in complying
with an Investigating Authority’s request if the data requested by the Investigating Authority have to
be obtained from a source upon which the respondent has no or little control.  In such case, the
Investigating Authority should take into account the specific circumstances of the respondents,
without prejudice, however, to its right to resort to “fact available” if meaningful data are not obtainedfrom the respondents in order to reach accurate determinations.  The fact that some respondents
provide all the documents requested while others do not is already an indication that, all other things
being equal, the failing respondents do not act to the best of their ability.
92. In the rebar investigation, the requests for additional information and explanations exclusively
concerned the respondents’ own records and data.  Accordingly, the Investigating Authority was
entitled to expect full and complete answers to  its questions. Failure to submit full and complete
answers indicates that the respondents concerned did not act to the best of their ability  within the
meaning of Annex II, paragraph 5.
Q3. Do you consider that the BCI submission of Egypt ( Confidential Injury Analysis ), by
itself, constitutes an "evaluation" of the factors that it covers, in the sense of Article 3.4?  Please
cite any relevant legal authority and/or precedent .
Reply
93. Egypt considers that the Confidential Injury Analysis  demonstrates that the injury analysis
was thorough and covered all the factors listed in Article 3.4.  The Confidential Injury Analysis is the
set of findings upon which the Investigating Authority based its final determination of injury, the
central points of which are reflected in the Final Report .
94. It is clear from the Confidential Injury Analysis  that a substantial amount of data was
requested and collected for the Article 3.4 factors listed therein.  The data was compiled individually
for each domestic producer and for the entire domestic industry.  Each factor was analysed separately
for each individual domestic producer and for the entire domestic industry and set in a table format so
as to enable the Investigating Authority to compare the trends and review the situation of the domestic
industry as a whole from 1996 to Q1 1999.  The Investigating Authority was therefore able toWT/DS211/R
Annex 8-2
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examine the data in context, and assess its internal evolution and vis-à-vis  the other factors examined.
Accordingly, the Investigating Authority was able to determine which of the factors had a bearing on
the state of the industry.  The Confidential Injury Analysis  therefore constitutes an evaluation of the
factors that it covers in the sense of Article 3.4.
95. Egypt submits that this approach is consistent with the findings of the Panel in United States –
Hot-Rolled Steel from Japan.6  In that case, the Investigating Authority analysed all relevant
economic factors having a bearing on the state of the industry on the basis of data covering a three-
year period and discussed the trends at various instances in its Final Report7, which is similar to the
approach adopted by the Egyptian Investigating Authority in the rebar investigation.
96. In United States – Hot-Rolled Steel , the question before the Panel was whether the
Investigating Authority failed to sufficiently eval uate certain factors by failing to discuss and to
compare particular data over a specified period.8  Similarly, in the present dispute before this Panel,
Turkey alleges that the Investigating Authority failed  to take into account certain trends in the data
and it is on this basis that Turkey concludes that the examination of the IA was not based on positiveevidence.  However, as noted by the Panel in United States – Hot-Rolled Steel , a proper evaluation is
dynamic in nature and takes into account changes in the market that determine the current state of the
industry – the fact that the Investigating Authority did not explicitly address certain trends should not
undermine the adequacy of its evaluation with respect thereto.
9  Accordingly, the evaluation was
upheld by the Panel.
97. Moreover, the Panel in United States – Hot-Rolled Steel made very clear that it is indeed
“another question whether the evaluation and the conclusion with regard to these factors is supported
by the facts”.10  What is important in this respect is to keep in mind that the Panel is bound in its
analysis by the standard of review set forth in Article 17.6 of the AD Agreement.11
Q4. Could the parties please comment, in the li ght of the Vienna Convention on the Law of
Treaties, on the Appellate Body's ruling in United States – Hot-rolled Steel , (at paragraphs 101
and 102)12 concerning Annex II, paragraphs 2 and 5.
Reply
98. The Appellate Body’s ruling in United States - Hot-rolled Steel  concerning Annex II,
paragraphs 2 and 5 was reached in the context of the US Administration’s decision to apply “ adverse ”
facts available to one of the Japanese respondents, namely KSC, on the grounds that KSC had not
sufficiently cooperated with the US Administration in the course of the domestic investigation.  The
issue before the DSB was whether the quality of cooperation offered by KSC during the investigation
entitled the US Administration to seek to arrive at unfavourable results.
99. The questions that the DSB needed to examine were twofold: (1) the meaning of the term
“cooperation ” and (2) the efforts that an Investigating Authority may legitimately expect from
respondents in the course of an investigation.
                                                     
6 WT/DS184/4, at para. 7.232.
7 Id., at paras. 7.226 – 7.227.
8 Id., at paras. 7.228 – 7.231.
9 Id., at para. 7.234.
10 Id., at para. 7.235.
11 Id.
12 WT/DS184/AB/R.WT/DS211/R
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100. Thus, the Appellate Body noted that “cooperation is a  process,  involving joint effort,
whereby parties work together towards a common goal.  In that respect, we note that parties may very
well "cooperate" to a high degree, even though the requested information is, ultimately, not
obtained”.13
101. Examining the level of cooperation expected from respondents, the Appellate Body noted thatthe provisions of Annex II, paragraph 5 “ suggest[s] to us that the level of cooperation required of
interested parties is a high one – interested parties must act to the "best" of their abilities ”
14, although
an Investigating Authority should not impose an “ unreasonable extra burden ” upon the respondents.
On this basis the Appellate Body concluded that “[paragraph 2 of Annex II]  requires investigating
authorities to strike a balance between the effort that they can expect interested parties to make inresponding to questionnaires, and the practical ability of those interested parties to comply fully with
all demands made of them by the investigating authorities ”. In order to complete their investigations,
investigating authorities are entitled to expect a very significant degree of effort – to the "best of their
abilities" – from investigated exporters.  At the same time, however, the investigating authorities are
not entitled to insist upon  absolute  standards or impose unreasonable  burdens upon thoseexporters” .
 15
102. Applying the above principles to the case at  hand, the Appellate Body upheld the Panel’s
findings that KSC had acted to the best of its ability  in trying to obtain the data requested by the US
Administration and that, therefore, the Investiga ting Authority was not entitled, when resorting to
facts available, to seek to reach intentionally an adverse outcome.
103. The exact scope of the above ruling must be understood well.  Contrary to Turkey’s
interpretation, it was not held in United States – Hot-rolled Steel  that the use of facts available is not
warranted when a company acts to the best of its ability.  To the contrary, the Appellate Bodyspecifically stated that cooperation does not necessarily result in obtaining the information requested.
In such case, as held by the Panel, the use of facts available is fully justified.  Thus, the Panel stated
that “ [i]t is undisputed in this case that KSC did not provide the requested information regarding
resale prices and further manufacturing costs with respect to its sales through its affiliate CSI.  Thus,
it appears that USDOC was justified in deciding to apply facts available with respect to the
information not provided by KSC concerning CSI's further manufacturing costs, as this necessary
information was not provided within a reasonable period.” (emphasis added).
16
104. Conversely, according to the DSB, the use of “ unfavourable ” facts available is only
permissible when the respondent fails in its duty to cooperate within the meaning of the AD
Agreement.
105. In conclusion, United States – Hot-rolled Steel  confirms that the use of facts available is
legitimate also in case of full cooperation by the respondents if the information provided is not
sufficient to reach meaningful findings.
QUESTIONS POSED BY TURKEY TO EGYPT
Q1. Egypt claims that the “another responde nt” who submitted scrap costs that were
reviewed by the Investigating Authority as mentioned in the Final Report was Alexandria
                                                     
13 WT/DS184/AB/R, at para. 99.
14 Id., at para. 100 – emphasis added.
15 Id., at paras. 101-102.
16 WT/DS184/R, at para. 7.69.WT/DS211/R
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National.  We understand, however, that Alexandria National uses the direct reduction iron
(DRI) method of steelmaking, which uses iron pellets as the raw material, and that Alexandria
National does not use an electric arc furnace (EAF) to melt steel scrap.  Please comment on
whether this understanding is correct and, if so, what is the nature and relevance of the scrapprice data submitted by Alexandria National?
Reply
106. Contrary to Turkey’s understanding, Alexandria National Steel uses both the DRI method for
steelmaking and the electric arc furnace method for melting scrap.
Q2. Please identify the period over which the in flation figures supplied in your oral response
to Panel Question Number 4 were calculated.
107. The period over which the inflation figures were calculated is the calendar year 1998.WT/DS211/R
Annex 8-3
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ANNEX 8-3
RESPONSE OF EGYPT TO FOLLOW-UP QUESTIONS POSED BY THE
PANEL, AND COMMENTS BY TURKEY ON EGYPT'S RESPONSE
B. RESPONSE OF EGYPT TO PANEL'S FOLLOW-UP QUESTIONS
Question 1
Could Egypt please explain the context in which Alexandria National provided the scrap
price data in its fax to the IA dated 15 September 1999 (Exhibit EGT-12).  In particular, was
this information provided in response to a request  from the IA?  If so, please furnish a copy of
that request.  If not, please explain Alexandria National's having provided the information.
Response
2. The scrap prices data in Exh. EGT-12 were provided by Alexandria National further to a request
made by the Investigating Authority upon receipt of the claim by Turkish respondents that scrap
prices would have collapsed throughout the investigation period.  In order to verify the veracity of this
factual claim, the Investigating Authority asked the Egyptian industry to supply information on the
evolution of scrap prices on a monthly basis for 1998.  This request was made by telephone.
Question 2
Could Egypt please provide the calculations  showing exactly how each of the monthly
scrap prices for 1998, shown in the first page of EGT-12, were derived from the "source
reference" in the second page of EGT-12, and could Egypt explain why the methodology
employed was chosen.
Response
3. The prices indicated on the first page of Exh. EGT-12 were computed by Alexandria National,
and not by the Investigating Authority.  This matter is, in any case, irrelevant.  Indeed, the
Investigating Authority's assessment of the evolution of scrap prices was based on the "source
reference" in the second page of Exh. EGT-12, and not on the prices mentioned on the cover page ofAlexandria National.  The evidence submitted by Alexandria National revealed that the Turkish
respondents' claim that scrap prices would have collapsed throughout the investigation period was
factually wrong.  Indeed, as explained in the Final Report , scrap prices were found to be fairly
constant for the first seven months of the investigation period.  During the next three months, prices
collapsed.  Then, prices started to recover in the last two months of the investigation period.  In otherwords, the "sharp decline" was in fact limited to three out of twelve months.
4. Incidentally, Egypt wishes to stress that the Investigating Authority's assessment of the evolution
of scrap prices during the investigation period on the basis of the information provided by Alexandria
National is in line with the trends showed in th e documents submitted by Turkey in Exh. TUR-13 and
Exh. TUR-14.  Indeed, those documents, which were submitted for the first time by Turkey in thecourse of the current dispute, show that the scrap prices were relatively stable during the first seven
months of 1998, and then, collapsed for a period of approximately three months.WT/DS211/R
Annex 8-3
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5. Lastly, it is important to note that, contrary to Turkey's contentions, the scrap prices submitted by
Alexandria National were not used to calculate the normal value of the Turkish respondents.  This
information was used for the sole purpose of verifying the accuracy of the claim made by the Turkish
respondents regarding the decrease of scrap prices during the investigation period.  Conversely, thematerial costs used for the calculation of the normal value of the Turkish respondents were based
exclusively  on the costs data submitted by each respective respondent.
6. Egypt considers that the Investigating Authority's  actions are in full compliance with the WTO
Anti-Dumping Agreement and, in particular, with paragraph 7 of Annex II thereof.
* * *
C. COMMENTS OF TURKEY ON EGYPT’S RESPONSE TO CERTAIN QUESTIONS
POSED BY THE PANEL
1. Egypt states in its April 5, 2002 response to a panel question that the scrap data it used for its final
determination appears on page two of EX-EGT-12.  Egypt then states that this data on the “evolution
of scrap prices during the investigation period .  .  . is in line with the trends showed in the documents
submitted by Turkey in EX-TUR-13 and EX-TUR-14.”   We agree that the scrap prices on page twoof EX-EGT-12 are in line with the data in EX-TUR-13 and EX-TUR-14.  In fact, the prices shown on
the Egyptian Exhibit in question for  HMS 1&2 scrap are precisely the same as the scrap prices
provided in EX-TUR-14 – as they should be since they are both from the same source, Metal
Bulletin .
1
2. Where we disagree is with Egypt’s statement that “those documents” – a reference to EX-TUR-13
and EX-TUR-14 – “show that the scrap prices were relatively stable in the first seven months of 1998
and, then collapsed for a period of approximately three months.”  As the panel can plainly see by a
review of EX-TUR-13 and EX-TUR-14, as well as  the second page of EX-EGT-12, HMS 1&2 scrap
prices declined steeply between January 1998 ($114 – 116 per ton) and April 1998 ($96-$97 per ton)
and continued their decline into July 1998 (to $92-94 per ton). This is an overall decline of 19%,hardly evidence of scrap price stability during the first seven months of the year.
2  Certainly, these
data, which Egypt now acknowledges the IA had before it when it rendered its Final Determination,
do not support the factual finding in the Final Report that “[f]or the first seven months of the period,”
scrap prices “were fairly constant and did not decline to any noticeable extent.”  Final Report at 12.
That finding is patently incorrect.  Moreover, the data on these charts do not support the conclusion
that the sharp decline in scrap prices was limited to three months out of the twelve month period.
While there was an additional decline between July and October of some $35 per ton, or an additional30% as compared to January, contrary to the impression given in the Final Report, the decline during
the latter three-month period was only 3/5 of the total decline between January and October.  There
certainly were significant declines that took place earlier in the year.
3. The significance of these declines must be examined in terms of the issue being considered by the
Investigating Authority (IA).  The IA was specifically responding to a claim by respondents that thedecline in stable currency scrap prices offset the effects of the inflation and devaluation in the Turkish
                                                     
1 Since EX-TUR-14 is merely a graphical representation of the data that Egypt acknowledges was
presented to the IA during the original investigation, the Panel should not disregard EX-TUR-14 for the reasons
that Egypt set forth earlier in this pr oceeding.  Specifically, the Panel is not barred from considering this data
under Article 17.5(b) of the Agreement.
2 Scrap prices for HMS 1 show similar declines – from $123-$124 per ton in January 1998 to $105-
$107 per ton in April 1998  and $98-99 in July (an overall decline of 20%).  Prices then dropped from August toOctober ($70-$72 per ton) or a further decline of 23% from January levels.  Note that the decline in A ugust to
October is not that much greater, in percentage terms, than the decline that took place earlier in the year.WT/DS211/R
Annex 8-3
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economy such that their costs in Turkish lira were  not increasing with the inflation rate.  In this
context, a decline in constant currency costs of 19-20% for the first seven months of the period of
investigation is very significant indeed, and it dire ctly undermines the IA’s finding that scrap costs
should have increased by 5% per month over this period.   In addition, as we pointed out earlier, mostsales of rebar to Egypt took place in the second half of 2001 when the scrap price declines had their
most significant impact on rebar costs of production.  During this period, scrap  prices were up to 44%
below January 1998 levels, or by more than the intervening inflation rate.
4. Finally, we never claimed, as Egypt contends, that the scrap price data  purportedly submitted
by Alexandria National was used by the IA to calculate respondents’ cost of production.  We
acknowledged that the IA used respondents’ data; however, we claimed that that data was based, in at
least some instances, on scrap costs in January for comparison with selling prices in the second half of2001, when scrap prices were demonstrably much lower.WT/DS211/R
Annex 9
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ANNEX 9
THIRD PARTY ORAL STATEMENT OF CHILE
1. Thank you Mr. Chairman and members of the Panel.
2. We appreciate your giving us the opportunity to express our views in this dispute.  As we
stated in our letter on 1 November, we did not present any written submission but we wanted to
reserve our rights to raise some points during this hearing.
3. Chile has no commercial interest in this case but strong systemic concerns, resulting from the
alarming increase in the use of anti-dumping measures among WTO members.  Especially when these
measures are applied in an arbitrary way that, in our view, give grounds to the conclusion that the
final intention is to keep out imports and protect uncompetitive local industries.
4. The way some national laws and practices interpret and apply the provisions of Article VI of
GATT 94 and the Anti-Dumping Agreement clearly go beyond the true meaning, scope, spirit and
text of those multilateral provisions.  These rules provide for remedy in exceptional cases when real
and effective injury occurs and when the specific  conditions laid down in the AD Agreement are
fulfilled.
5. Therefore, it is the duty of Panels to confirm - by rejecting unfounded interpretations and
practices - the principles of transparency and fairness on which the WTO Agreements are based.
Guaranteeing that the multilaterally agreed principles and rules will be fully respected and, in
particular, that the disciplines of the AD Agreement will be strictly observed.
6. Thank you.WT/DS211/R
Annex 10-1
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ANNEX 10-1
THIRD PARTY WRITTEN SUBMISSION
OF THE EUROPEAN COMMUNITIES
I. INTRODUCTION
1. The European Communities welcomes this opportunity to present its views in the proceeding
brought by Turkey concerning the consistency with Article X of the General Agreement on Tariffs
and Trade (hereafter “GATT 1994”), and with Articles 2, 3, 6 and Annexes I and II of the Agreementon Implementation of Article VI of the GATT (h ereafter the “Anti-Dumping Agreement”) of the
definitive anti-dumping duties imposed by Egypt on Steel Rebar originating in Turkey.
2. The European Communities has decided to intervene as third party in this case because of its
systemic interest in the correct interpretation of the Anti-Dumping Agreement. Many of the issues in
dispute relate to questions of fact on which the European Communities is not in a position to
comment.  Accordingly, the European Communities will limit its submission to a number of issues of
legal interpretation which are of particular interest to the European Communities.  Indeed, given that
some of the underlying factual situations remain unclear, the European Communities remains at the
Panel’s disposition should it be interested in the views of the European Communities on issues whichemerge at a later stage and which have not been addressed in the present submission.
3. The European Communities shall set out below a number of comments on three aspects of the
dispute brought before the Panel. In turn, the European Communities will examine 1) the range of
evidence which the Panel is entitled to examine; 2) issues relating to the dete rmination of injury and
causal link, and 3) issues relating to the determination of dumping.
II. THE RANGE OF EVIDENCE WHICH THE PANEL IS ENTITLED TO EXAMINE
4. Egypt has argued that Turkey has placed evidence before the Panel which was not placed
before the investigating authority.  The Europ ean Communities understand that while the specific
evidence before the Panel was not brought to the attention of the investigating authority, the
underlying arguments on causal link were made before the investigating authority.  Turkey argues that
Egypt failed to prove, on the basis of positive evidence, the existence of a causal link between
dumping and injury.
1  Egypt considers that the Panel should regard as inadmissible all evidence
submitted to it which was not made available to the Investigating Authority.  Egypt bases this
argument on Article 17.6(i) of the Agreement and on requirements of “due process”.2
5. However, Article 17.6(i) does not direct a Panel to consider inadmissible any evidence whichwas not before the investigating authority. Rather it  directs the Panel to “verify whether the authorities
establishment of the facts was proper and whether their evaluation of those facts was unbiased and
objective”.  As the Appellate Body has pointed out:
                                                     
1 Turkey – First Written Submission, 27 September 2001, page 6 et seq.
2 Egypt – First Written Submission, 24 October 2001, page 28.WT/DS211/R
Annex 10-1
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[Article 17.6(i)], at the same time, in effect defines when investigating authorities can
be considered to have acted inconsistently with the Anti-Dumping Agreement in the
course of their “establishment” and “evaluation” of the relevant facts.3
6. It may thus be the case that a panel could be asked whether the exclusion of certain evidencefrom a domestic procedure was consistent with an investigating authority’s obligation to establish the
facts in a “proper” manner.  In such an event a panel may be confronted with evidence which was not
before the investigating authority, and may need to take such evidence into consideration to examine
whether the investigating authority has “properly” established the facts.
7. Article 17.5(ii) is also relevant in this regard. If it is alleged that an investigating authority did
not examine a particular issue, through excluding it from the domestic procedure, then the record of
“the facts made available in conformity with appropriate domestic procedure” will shed light on the
investigating authority’s examination of this issue.
8. However, as already noted, the European Communities understands that Turkey is not
alleging that Egypt improperly excluded evidence from the domestic record.  Rather, Turkey alleges
that by failing to base itself on “positive evid ence” in conformity with Article 3.1 Egypt did not
properly establish the facts or did not make an unbiased an objective evaluation of those facts.  In
such an event, Article 17(5)(ii) directs a Panel to consider facts made available in conformity with the
appropriate domestic procedures.  In so doing the Panel should look to see whether facts madeavailable were not taken into consideration and also whether all appropriate steps have been taken to
establish the necessary facts.
III. THE DETERMINATION OF INURY AND CAUSAL LINK
A. ARTICLE 3.5 OF THE AGREEMENT
9. Egypt points out that the list of factors to be examined in the last sentence of Article 3.5 is an
illustrative rather than mandatory list.  This conclusion has also been reached by the Panel in US-Hot
Rolled Steel.4  The European Communities does not disagree with this interpretation, but notes that
Article 3.5 imposes an obligation on the investigatin g authority to “examine any known factors other
than the dumped imports which at the same time are injuring the domestic industry”.  The list in the
final sentence suggests a number of factors which may be relevant in conducting this examination.  It
is, however, of crucial importance to determine what is understood by “known factors”.  The
European Communities considers, in the first place, that such factors would be those brought to the
attention of the investigating authority by the inte rested parties in the domestic procedure.  However,
there may be circumstances where an interested party can raise other factors but cannot itself prove
conclusively that other factors are causing injury.  In such circumstances, the European Communities
would consider that that such factors would be “known” to the investigating authority in the sense of
Article 3.5, and should therefore be examined.  Indeed, the Appellate Body, when considering
Article 4(2)(a) of the Agreement on Safeguards (which also deals with the investigation of causallink) has stated:
[the central role played by interested parties in the investigation] does not mean that
the competent authorities may limit their evaluation of “all relevant factors”, under
                                                     
3 Appellate Body Report, , United States – Anti-Dumping Measures on Certain Hot-Rolled Steel
Products from Japan, WT/DS184/AB/R, adopted 23 August 2001, para. 56.
4 Panel report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from
Japan , WT/DS184/R, adopted 23 August 2001, as modified by the Appellate Body Report, WT/DS184/AB/R,
para. 7.247WT/DS211/R
Annex 10-1
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Article 4(2)(a) of the Agreement on Safeguards, to the factors which the interested
parties have raised as relevant.  The competent authorities must, in every case, carry
out a full investigation to enable them to conduct a proper evaluation of all of the
relevant factors expressly mentioned in Article 4(2)(a) of the Agreement onSafeguards. Moreover, Article 4(2)(a) requires the competent authorities – and not
the interested parties – to evaluate fully the relevance, if any, of “other factors”.  If
the competent authorities consider that a particular “other factor” may be relevant
to the situation of the domestic industry, under Article 4(2)(a), their duties of
investigation and evaluation preclude them from remaining passive in the face of
possible shortcomings in the evidence submitted, and views expressed, by the
interested parties.  In such cases, where the competent authorities do not havesufficient information before them to evaluate the possible relevance of such an
“other factor”, they must investigate fully th at “other factor”, so that they can fulfil
their obligations of evaluation under Article 4(2)(a).
5 (emphasis in original)
10. Thus, the European Communities consider that where the investigating authority knows of the
existence of other factors which may be causing injury it is under an obligation to fully investigateany such factor.  It cannot fail to react in the fa ce of limitations on the information presented to it by
interested parties, where it has the means to investigate further.
B. DETERMINATION OF THE INVESTIG ATION PERIOD FOR DUMPING AND INJURY
11. Turkey has argued that the period of the injury determination must coincide with the period of
the dumping determination.6  The European Communities does not understand Turkey as suggesting
that the two periods of investigation should be the same length.  The requirements set down in the
Anti-Dumping Agreement on injury assessment logica lly require that the injury investigation period
include a substantial period preceding the investigation period for dumping, in order to allow an
evaluation of the trends affecting the domestic industry over a number of years.  The European
Communities rather understands Turkey as suggesting that a difference in the periods of investigation
may lead to injury being found where there is no causal link to dumping, and that such a situation
would be inconsistent with the Anti-Dumping Agreement.
12. The European Communities notes first of all that the Anti-Dumping Agreement does not
establish any particular period of investigation, either for dumping or for injury.  In any particular
case, various factual considerations may require a particular investigation period.  On the other hand,
there can be no doubt that the Agreement sets in place an overarching substantive obligation; viz. that
anti-dumping duties can only be imposed where a causal link between dumped imports and injury has
been established, in accordance with Articles 3.1 and 3.5.  It is noted that the Panel in EC -Bed Linen
found that the injury assessment should be made for all imports originating in a country from which it
has been determined that dumping has occurred and that it was not necessary to assess the injurious
impact of only those individual impor ts which had been found to be dumped.7
13. Thus, as a matter of substance, in order to prove a causal link, it is likely that the period of
investigation for injury must be broadly contemporaneous with the period of investigation for
                                                     
5 Appellate Body Report, United States – Definitive Safeguard Measures on Import of Wheat Gluten
from the European Communities (“United States – Wheat Gluten Safeguards”), WT/DS166/AB/R, adopted
19 January 2001, para. 55
6 Turkey – First Written Submission. page 24.
7 Panel Report, European Communities – Anti-Dumping Duties on Imports of Cotton-type Bedlinen
from India (“European Communities – Bedlinen”) , WT/DS141/R, adopted 12 March 2001, as modified by the
Appellate Body Report, WT/DS141/AB/R, para. 6.132 to 6.142.WT/DS211/R
Annex 10-1
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dumping, and will, in most cases be considerably longer.8  As the injurious effects of dumping may
only be apparent some time after the dumping itself has taken place it would be an unwarranted
limitation on the investigatory powers of a domestic authority to prevent the period of investigation
for injury lasting longer than that for dumping. In any event, irrespective of the length and the extent
of overlap of the periods of investigation, it would be inconsistent with Articles 3.1 and 3.3 were a
Member to impose anti-dumping duties had it not found, in the respective investigation periods,
evidence of dumping, injury and a causal link.
IV. THE DETERMINATION OF DUMPING
A. APPLICABLE TIME-LIMITS FOR REQUESTS FOR FURTHER INFORMATION
14. Turkey argues that Egypt’s requests for further information after the on-the-spot verification
were in violation of Turkey’s rights under Articles 6.1, 6.1.1 of the Anti-Dumping Agreement and
Annex II, paragraphs 1 and 6 thereof.9  Turkey argues, in particular, that the time limits granted for
responses to requests for further information did not allow the exporters “ample opportunity” to
present all evidence, in conformity with Article 6.1 and that Egypt had not specified in detail the
information it required as it should have done under paragraph 1 of Annex II.  Turkey also argues that
Egypt should have applied the time limit set down in Article 6.1.1 to its requests for further
information.
15. The European Communities takes issue with Turkey’s suggestion that the deadlines set down
in Article 6.1.1 should apply to requests for further information.  Such a suggestion would inhibit the
ability of Members to conduct an in-depth investig ation consistent with the requirements set out in
Article 6.6 and within the time limits for the conduct of investigations set out in Article 5.10.
16. Turkey’s suggestion is, moreover, not supported in law. Article 6.1.1 refers to “questionnaires
used in an anti-dumping investigation”.  From its  context, it is apparent that this refers to
questionnaires issued at the initiation of an inves tigation.  Thus, Article 6.1.3 refers to the obligation
to send to known exporters the written application for an investigation.  Furthermore, paragraph 7 of
Annex I refers to “the questionnaire” in the singular ( “[i]t should be carried out after the response to
the questionnaire has been received” ).
17. Indeed, the Anti-Dumping Agreement makes several references to the possibility to obtain
“further information” without imposing an express time limit on such a request.  For instance,
Article 6.7 provides that on-the-spot verifications may be used to “obtain further details”.  Article 6.6
requires authorities to satisfy themselves as to the accuracy of information supplied, clearly implyingthat further questions may be posed.  Additionally, in a slightly different context, paragraph 6 of
Annex II requires an authority to inform an intere sted party of the reasons for rejecting information
and obliges it to give a “a reasonable period” for such a party to provide explanations.  If the party
succeeds in providing further satisfactory in formation, it may be taken account of in any
determination.  This is thus an opportunity for further information to be provided where the time limitof Article 6.1.1 is not applicable.  The European Communities note that the Panel in Guatemala –
                                                     
8 It is noted that the Committee on Anti-Dumping Practices recommended that the investigation period
for injury “should include the entirety of the period of data collection for the dumping investigation”.  Thisrecommendation has been considered to be non-binding. See Panel Report, Guatemala – Definitive Anti-
Dumping Measures on Portland Cement from Mexico (“Guatemala – Cement II”) , WT/DS156/R, adopted
17 November 2000, para. 8.266 and footnote 868 thereof, and Panel report, United States – Anti-Dumping
Measures on Certain Hot-Rolled Steel Products from Japan , (“United States – Hot Rolled Steel” )
WT/DS184/R, adopted 23 August 2001, as modified by the Appellate Body Report, WT/DS184/AB/R,para. 7.226, footnote 152.
9 Turkey – First Written Submission – page 56.WT/DS211/R
Annex 10-1
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Cement II  concluded that there were no applicable time-limits for the presentation of evidence or
arguments other than that contained in Article 6.1.1 for the questionnaire response.10
18. In conclusion, while the European Communities believe that the reasonableness of any timelimits imposed on requests for further information should be examined under Article 6.1, the
European Communities cannot see the justification, as a matter of law or practice, in applying the
time limit of Article 6.1.1 to requests for further information.
B. DEDUCTION OF SHORT-TERM INTEREST INCOME FROM INTEREST EXPENSES
19. Turkey considers that Egypt’s failure to deduct short-term interest income from interest
expenses in calculating normal value is in violation of Article 2.2.1, 2.2.1.1 and 2.2.2 of the
Agreement.11  Egypt claims that this was done because the interest earnings did not bear a sufficiently
close relationship to the cost of production.12
20. The European Communities considers that it follows from Articles 2.2.1.1 and 2.2.2 of theAgreement that short-term interest income can only  be deducted from interest expenses where such
income, as a matter of fact, can be linked to the sale or production of the product concerned.  Thus,
the Panel’s attention is drawn to the requirement in Article 2.2.1.1 that costs are to be based on
records which “reasonably reflect the costs associated with production and sale of the product underconsideration”.  In addition, Article 2.2.2 states th at amounts for the calculation of administrative,
selling and general costs shall be “based on actual data pertaining to production and sales in the
ordinary course of trade”.  From this, the Euro pean Communities in its practice has concluded that
interest income can only be deducted from interest expenses where it has a relationship to the
production or sale of the product concerned.  It is consequently a matter of fact, to be determined bythe investigating authority, whether the interest income in question is sufficiently closely related to the
production or sale of the product concerned.
C. ADJUSTMENTS FOR CREDIT COSTS TO NORMAL VALUE
21. Turkey has argued that there is a violation of  Article 2.4 of the Agreement since Egypt did not
make an adjustment to normal value for credit costs while doing so for the export price.13  Egypt
considers that since the normal value was constructed a possible adjustment for credit costs need not
be considered because, according to Article 2.4 due allowance should only be made for differences
affecting price comparability.14  According to Egypt, as the normal value has been constructed on the
basis of cost of production it cannot be influenced by conditions and terms of sale.
22. The practice of the European Communities is to grant adjustments for credit costs to both
normal value and export prices where they are justified also in the event that normal value has been
constructed.  The reason for this is that the constructed normal value will typically include an element
for costs relating to the granting of credit terms.  Thus, Article 2.2 of the Agreement provides thatconstructed normal value should be based on the cost of production in the country of origin plus a
reasonable amount for administrative, selling and general costs and for profits.  Article 2.2.2 provides
three possible means of calculating administrative selling and general cost and profits should it be
necessary to construct normal value.  These costs used to construct normal value may also include
                                                     
10 Guatemala – Cement II op cit. para. 8.118 - 8.120. Note that this Panel deals with the issue of the
submission of evidence and argument in the period between the imposition of provisional measures and theimposition of definitive measures.
11 Turkey – First Written Submission – page 77.
12 Egypt – First Written Submission – page 89.
13 Turkey – First Written Submission – page 78.
14 Turkey – First Written Submission – page 89.WT/DS211/R
Annex 10-1
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credit costs.  Thus, if an adjustment were to be made for credit costs on the actual amounts used under
Article 2.2.2 as a basis to calculate constructed normal value, the European Communities considers
that an adjustment should be permitted to constructed normal value.  The European Communities also
notes, by analogy, that the fourth sentence of Article 2.4 explicitly refers to the possibility of grantingallowances for costs where the export price has been considered to be unreliable and has to be
constructed.
V. CONCLUSION
23. In conclusion, the European Communities considers:
• That the admissibility of evidence which was not before the investigating authority should not be
determined on the basis of Article 17.6(i);
• That an investigating authority is under an oblig ation to fully investigate the existence of other
known factors which may be causing injury, even in the absence of short-comings in the evidencesubmitted;
• That the investigation period for injury and dumpi ng need not be identical, but should permit the
establishment, on the basis of positive evidence, of a causal link between dumped imports andinjury suffered by the domestic industry;
• That the Anti-Dumping Agreement does not impose deadlines on the submission of responses to
requests for further information from investigatin g authorities, but that any deadlines set must
respect Article 6.1 of the Anti-Dumping Agreement;
• That interest income can only be deducted from interest expenses when it is sufficiently closely
linked to production or sales of the product concerned; and,
• Credit costs may be deducted from constructed normal value where factually justified.WT/DS211/R
Annex 10-2
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ANNEX 10-2
THIRD PARTY ORAL STATEMENT
OF THE EUROPEAN COMMUNITIES
I. INTRODUCTION
1. Mr. Chairman, distinguished members of the Panel, on behalf of the European Communities,
let me express first our appreciation for the opportunity to submit our views in this dispute.
2. As was noted in our written third party submission, many of the issues before you in this
dispute relate to detailed questions of fact which the European Communities is not in a position to
comment upon.  As such this intervention will concentrate on some of the systemic issues which the
European Communities raised in its written third party submission.  Our comments will therefore
focus on:
• First, the interpretation of Article 3.5 of the Anti-Dumping Agreement;
• Second, the relationship between the investigation period for dumping and injury;
• Third, the time limits applicable to requests for further information in the course of an
investigation;
• Fourth, the treatment of interest income in calculating interest expenses; and,
• Finally, adjustments for credit costs to constructed normal value.
II. INTERPRETATION OF ARTICLE 3.5 OF THE AGREEMENT
3. The parties to the dispute have disagreed over whether the Egyptian investigating authority
carried out an analysis of the existence of a causal link which conformed with Article 3.5 of the Anti-
Dumping Agreement.  In particular, Egypt has argued th at the list of factors to be examined in the last
sentence of Article 3.5 is an illustrative rather than mandatory list.  The European Communities
agrees that Article 3.5 sets out a non-mandatory list, both on the basis of the language of Article 3.5
when compared to Article 3.4, and on the basis of the conclusion of the Panel in US-Hot Rolled Steel.1
4. Japan has argued, in its written third party submission, that Article 3.5 requires a detailed
examination of other factors injuring the domestic injury and a rigorous segregation of those factors
from the effects of dumping.2  The European Communities would agree that a detailed examination
must take place.  However, the initial focus of Ar ticle 3.5 in this respect, and the preliminary issue
before this panel, is whether other factors which are to be examined are “known factors”. In Thailand
– H Beams  the Panel considered:
"We consider that other "known" factors would include those causal factors that are
clearly raised before the investigating authorities by interested parties in the course of
an AD investigation.  We are of the view that there is no express requirement in
                                                     
1 Panel report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from
Japan , WT/DS184/R, adopted 23 August 2001, as modified by the Appellate Body Report, WT/DS184/AB/R,
para. 7.247
2 Third party Written Submission of Japan, 1 November 2001, para. 27.WT/DS211/R
Annex 10-2
Page 150
Article 3.5 AD that investigating authorities seek out and examine in each case on
their own initiative the effects of all possible factors other than imports that may be
causing injury to the domestic industry under investigation".3
5. This statement suggests that the onus lies on the interested parties to raise factors which may
be relevant to the causal link before the investigating authorities.  It would seem logical that in raising
other relevant issues, the interested parties must provide some prima facie  evidence or argument that a
particular factor may be relevant and merits detailed examination by the investigating authority.
Otherwise, an interested party would simply list the factors set out in Article 3.5 and an investigating
authority would be obliged to fully investigate such  factors, hence circumventing the deliberate choice
of language of Article 3.5 illustrated in the use of the term “any known factors”, by transforming the
list of factors into mandatory factors to be examined.
6. Thus, the European Communities considers that  the Panel should first examine whether the
Turkish exporters made a prima facie  case in the domestic investigation that a particular factor might
be a cause of the injury suffered by the Egyptian industry.  Should this be the case, then the Panel
should examine whether the examination made of such factors meets the standards set out in,inter alia , Article 3.1 and Article 17.6(i).  The relevance of Article 17.6(i) has recently been explained
by the Appellate Body in US – Hot Rolled Steel :
"[Article 17.6(i)], at the same time, in effect defines when investigating authorities
can be considered to have acted inconsistently with the Anti-Dumping Agreement inthe course of their “establishment” and “evaluation” of the relevant facts".
4
7. In conclusion, the Panel should determine first, whether the factors which Turkey allegesshould have led the investigating authority to conclude that imports were not responsible for injury
were known to the investigating authority, and second, whether the examination of such factors meets
the criteria set down by Article 3.1 and Article 17.6(i) of the Agreement.
III. RELATIONSHIP BETWEEN THE INVESTIGATION PERIOD FOR DUMPING
AND INJURY
8. Turkey has argued that the period of the injury determination must coincide with the period of
the dumping determination.
5  The European Communities understands Turkey as suggesting that a
difference in the periods of investigation may lead to injury being found where there is no causal linkto dumping, and that such a situation would be inconsistent with the Anti-Dumping Agreement.
9. The European Communities agrees that an inve stigating authority must always be able to
show that dumped imports are the cause of injury to the domestic industry.  This does not require,
however, that the investigation periods for dumping and injury must end at the same time.  In practice,in the case of investigations carried out by the European Communities, investigation periods for
dumping and injury do however end at the same time.
                                                     
3 Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy
Steel and H-Beams from Poland (“Thailand – H-Beams”), WT/DS122/R, adopted 5 April 2001, as modified bythe Appellate Body Report, WT/DS122/AB/R, para. 7.273. The European Communities does not understandTurkey as suggesting the existence of factors which the investigating authority should have known about
independent of the domestic investigation.
4 Appellate Body Report, , United States – Anti-Dumping Measures on Certain Hot-Rolled Steel
Products from Japan, WT/DS184/AB/R, adopted 23 August 2001, para. 56.
5  Turkey – First Written Submission. page 24.WT/DS211/R
Annex 10-2
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10. The European Communities has already noted in its written submission that the Anti-
Dumping Agreement does not establish any particular period of investigation, either for dumping or
for injury.  According to the recommendation adopted by the Committee on Anti-Dumping Practices
(G/ADP/6) the injury investigation period "should include the entirety of the period of data collectionfor the dumping investigation".  The end-points of both the investigation period for dumping and
injury will therefore have to be quite close to each other.
11. In any event, it would be inconsistent with Articles 3.1 and 3.3 if a Member imposed anti-
dumping duties without having found, in the respective investigation periods, evidence of dumping,
injury and a causal link between the two.  It will be for the Panel to evaluate whether such a causal
link exists on the basis of the facts before it.  To do so, the Panel is not required to make any findingsas to the respective lengths of injury and dumping investigation periods.
IV. APPLICABLE TIME-LIMITS FOR REQUESTS FOR FURTHER INFORMATION
12. The European Communities shares the pre-occupations of the United States with respect to
the notion, put forward by Turkey, that the tim e-limit set down in Article 6.1.1 should apply to
requests for further information made after the submission of the initial questionnaire.
6  S u c h  a
suggestion is without basis in the Agreement and would inhibit the ability of Members to conduct an
in-depth investigation consistent with the requirements set out in Article 6.6 and within the time limits
for the conduct of investigations set out in Article 5.10.
13. Article 6.1.1 refers to “questionnaires used in an anti-dumping investigation”.  From its
context, it is apparent that this refers to questionnaires issued at the initiation of an investigation.  As
the European Communities have already pointed out, paragraph 7 of Annex I refers to “the
questionnaire” in the singular ( “[i]t should be carried out after the response to the questionnaire has
been received” ).
14. Several provisions allow investigating authorities to request further information without
referring to a specific deadline.  For instance, Article 6.7 provides that on-the-spot verifications may
be used to “obtain further details”.  Article 6.6 requires authorities to satisfy themselves as to the
accuracy of information supplied, clearly implying that further questions may be posed. Paragraph 6
of Annex II requires an authority to inform an inte rested party of the reasons for rejecting information
and obliges it to give a “a reasonable period” for such a party to provide explanations.
15. The European Communities moreover note that the Panel in Guatemala – Cement II
concluded that there were no applicable time-limits for the presentation of evidence or arguments
other than that contained in Article 6.1.1 for the questionnaire response7.
16. In conclusion, while the European Communities believe that the reasonableness of any time
limits imposed on requests for further information should be examined under Article 6.1, the
European Communities cannot see the justification, as a matter of law or practice, in applying the
time limit of Article 6.1.1 to requests for further information.
                                                     
6 Third party Submission of the United States, 1 November 2001, part IV, page 9.
7 Panel Report, Guatemala – Definitive Anti-Dumping Measures on Portland Cement from Mexico
(“Guatemala – Cement II”) , WT/DS156/R, adopted 17 November 2000, para. 8.118 - 8.120. Note that this
Panel deals with the issue of the submission of evidence and argument in the period between the imposition ofprovisional measures and the imposition of definitive measures.WT/DS211/R
Annex 10-2
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V. DEDUCTION OF SHORT-TERM INTEREST INCOME FROM INTEREST
EXPENSES
17. The parties are also in dispute as to the legality of Egypt’s decision not to deduct short-term
interest income from interest expenses in calcula ting normal value.  Turkey argues that this is in
violation of Article 2.2.1, 2.2.1.1 and 2.2.2 of the Agreem ent while Egypt claims that this is possible
because the interest earnings did not bear a sufficiently close relationship to the cost of production.8
18. The European Communities broadly agrees with Egypt’s position as a matter of law.  It
follows from Articles 2.2.1.1 and 2.2.2 of the Agreement that short-term interest income can only be
deducted from interest expenses where such income, as a matter of fact, can be linked to the sale orproduction of the product concerned. Article 2.2.1.1 requires that costs are to be based on records
which “reasonably reflect the costs associated with production and sale of the product under
consideration”.  In addition, Article 2.2.2 states th at amounts for the calculation of administrative,
selling and general costs shall be “based on actual data pertaining to production and sales in the
ordinary course of trade”.  The European Communitie s interpret this as mean ing that interest income
can only be deducted from interest expenses where it bears a sufficiently close relationship to the
production or sale of the product concerned.  It is consequently a matter of fact, to be determined by
the investigating authority, and subject to review  by the Panel in accordance with Article 17.6(i),
whether the interest income in question is sufficiently closely related to the production or sale of the
product concerned.
VII. ADJUSTMENTS TO CONSTRUCTED NORMAL VALUE FOR CREDIT COSTS
19. Turkey has argued that there is a violation of  Article 2.4 of the Agreement since Egypt did not
make an adjustment to normal value for credit costs while doing so for the export price.
9  Egypt
considers that since the normal value was constructed a possible adjustment for credit costs need not
be considered because, according to Article 2.4, due allowance should only be made for differences
affecting price comparability.10  According to Egypt, as the normal value has been constructed on the
basis of cost of production it cannot be influenced by conditions and terms of sale.
20. The European Communities typically grants adju stments for credit costs to both normal value
and export prices where justified.  This also applies to the case where normal value has beenconstructed.  This interpretation is based on the fact that the constructed normal value will typically
include an element for costs relating to the granting of credit terms.  Article 2.2 of the Agreement
provides that constructed normal value should be based on the cost of production in the country of
origin plus a reasonable amount for administrative, selling and general costs and for profits.
Article 2.2.2 provides three possible means of calculating administrative selling and general cost andprofits should it be necessary to construct normal value.  These costs used to construct normal value
may thus also include credit costs.  Therefore, if an adjustment were to be made for credit costs on the
actual amounts used under Article 2.2.2 as a basis to calculate constructed normal value, the European
Communities considers that an adjustment should be permitted to constructed normal value.  The
European Communities also notes, by analogy, that the fourth sentence of Article 2.4 explicitly refersto the possibility of granting allowances for costs where the export price has been considered to be
unreliable and has to be constructed.
VII. CONCLUSION
21. In conclusion, the European Communities asks the Panel to find:
                                                     
8 Egypt – First Written Submission – page 89.
9 Turkey – First Written Submission – page 78.
10 Turkey – First Written Submission – page 89.WT/DS211/R
Annex 10-2
Page 153
• First, that under Article 3.5 it must first establish whether other factors were known to the
investigating authorities, and then review whet her the examination of the investigating authority
was consistent with the requirements of Article 3.1 and Article 17.6(i);
• Second, that the Agreement does not prescribe a specific investigation period for either injury or
dumping.  However, any periods chosen must permit the establishment, on the basis of positiveevidence, of a causal link between dumped imports and injury suffered by the domestic industry;
• Third, that the Anti-Dumping Agreement does not impose explicit deadlines on requests for
further information, but that any deadlines set must respect Article 6.1 of the Anti-Dumping
Agreement;
• Fourth, that interest income can only be deducted from interest expenses when it is sufficiently
closely linked to production or sa les of the product concerned; and,
• Finally, that credit costs may be deducted from constructed normal value where factually
justified.
22. Thank you for your attention.WT/DS211/R
Annex 10-3
Page 154
ANNEX 10-3
THIRD PARTY RESPONSES TO QUESTIONS FROM
THE PANEL OF THE EUROPEAN COMMUNITIES
Q1. What role does the EC foresee for an investigating authority in an anti-dumping
investigation establishing the existence of "other known factors" of Article 3.5 and what is the
legal basis for the EC's position?
Reply
1. The European Communities considers that the Anti-Dumping Agreement regulates the role of
an investigating authority principally in Article 17.6(i) and, for injury and causal link determinations,
in Article 3.1.  Article 17.6(i) requires that the establishment of the facts be proper and the evaluationof such facts unbiased and objective.  Article 3.1 requires that a determination of causal link shall be
based on positive evidence and involve an objective examination.
2. Article 3.5 requires the investigating authority to “examine any known factors”.  It obliges an
investigating authority to determine whether another known factors are causing injury and not toattribute injury caused by any such factor to dumped imports.  This raises the threshold issue of
whether a factor is “known” to the investigating au thority and then a secondary issue of whether the
investigating authority has examined it in accordance with Articles 3.1 and 17.6(i).  Evidently, a
factor must be “known” to an investigating authority where it is raised in the domestic procedure.
However, it cannot be the case that an interested party must simply make an unsubstantiated claim.Were this sufficient for a factor to be “known” to  the investigating authority, then the non-mandatory
nature of the list in the final sentence of Article 3.5 could easily be circumvented by an interested
party simply listing those factors.  From this, the European Community deduces that an interested
party must make a prima facie  case that a factor might be relevant in order for a factor to be “known”
in the sense of Article 3.5, thus engaging an analysis under Article 3.1 and 17.6(i).
3. The European Communities has not touched upon, and it does not seem to be an issue in this
dispute, whether an investigating authority might be deemed to “know” of the existence of other
factors possibly relevant for Article 3.5 when they have not been raised before it by an interested
party.
1
Q2. In the EC's view, is there a different obligati on on an investigating authority in an anti-
dumping investigating with regard to establishing "other known factors" in terms of Article 3,5
of the AD Agreement, compared with the establishment of "all relevant factors" in terms of
Article 4(2)b of the Safeguards Agreement, and if  so, what are the different obligations and the
legal bases for these obligations?
Reply
4. Article 4(2)(b) of the Safeguards Agreement, which concerns the establishment of a causal
link, uses neither the term “all known factors” (whi ch is found in Article 4(2)(a)) nor “other known
factors” (as in Article 3.5 of the Anti-Dumping Agreement).  Article 4(2)(b) is indeed silent with
                                                     
1 See, Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-
Alloy Steel and H-Beams from Poland  (“Thailand – H-Beams”), WT/DS122/R, adopted 5 April 2001, as
modified by the Appellate Body Report, WT/DS122/AB/R, para. 7.273WT/DS211/R
Annex 10-3
Page 155
respect to the issue of what are the other factors referred to in its second sentence.  The reference to
“all relevant factors” in Article 4(2)(a) of the Safeguards Agreement can be seen as a parallel to “all
relevant economic factors ..” in Article 3.4 of the Anti-Dumping Agreement (and, like Article 3.4,
prescribes the action to be undertaken by the investigating authority).
5. When comparing Article 3.5 of the Anti-Dumping Agreement and Article 4(2)(b) of the
Safeguard’s Agreement several differences can be noted.  The first two sentences of Article 3.5, like
the first sentence of Article 4(2)(b), set out the requirement for the existence of a causal link.
However, Article 3.5 provides examples of other factors which may be causing injury, unlike
Article 4(2)(b) (the language on non-attribution is similar).  Moreover, there is no list in
Article 4(2)(b) comparable to the non-mandatory list of factors in Article 3.5.  It can also be noted thatthe qualifier “known” is not used in Article 4(2)(b).  Thus, the European Communities considers that
while the underlying general obligation is similar viz. to examine other factors which might be
causing injury and not to attribute such injury to dumped or increased imports, Article 3.5 provides an
illustrative list of other factors which are possibly relevant and it also qualifies the nature of other
factors to be examined (“known”), while Article 4(2)(b) is silent thereupon.
6. For the avoidance of confusion, the European Communities reference to the Appellate Body
report in United States – Wheat Gluten  in its written submission was intended to illustrate by analogy
the fact-finding obligations incumbent upon an inves tigating authority when a factor is “known” to it
under Article 3.5, in the event that an interested party is not in a position to conclusively prove theeffect of such a factor.
Q3. Regarding your argument at paragraph 5 of  the EC's written submission, that Article
17.6(i) does not direct a panel to consider inad missible any evidence that was not before the
investigating authority, what is the significance of the provision of Article 17,5(ii), that a panel
"shall examine the matter based upon … the facts made available in conformity with
appropriate domestic procedures to the auth orities of the importing Member" (emphasis
added)?
Reply
7. The European Communities commented upon this issue because Egypt had argued that
certain evidence was inadmissible on the basis of Ar ticle 17.6(i), an argument clearly not borne out by
the text of this article.  Article 17.6(i) does not control the admissibility of evidence before a panel.  It
articulates a standard of review for matters of fact, and hence also imposes certain obligations on an
investigating authority.2  Thus a Panel cannot find evidence inadmissible on the basis of
Article 17.6(i). Article 17.5(ii), on the other ha nd, is the only provision of the Anti-Dumping
Agreement which regulates the status of evidence on which a Panel should base its examination.
Thus, as the Panel’s question suggests, Article 17.5(ii) is of significance in this respect.  Indeed, the
European Communities pointed out the relevance of Article 17.5(ii) in para. 7 of its written
submission.3
8. In so doing, the European Communities raised the hypothetical situation of evidence which aMember claimed was improperly excluded from an investigation and pointed out that it may be the
case that such evidence should not be excluded from a panel’s examination since the domestic record
                                                     
2 Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel
Products from Japan , WT/DS184/AB/R, adopted 23 August 2001, para. 56.
3 See, Panel report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products
from Japan , WT/DS184/R, adopted 23 August 2001, as modified by the Appellate Body Report,
WT/DS184/AB/R, para. 7.6, in which the Panel refused to consider evidence which had not been submitted inthe domestic procedures.WT/DS211/R
Annex 10-3
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would shed light on the treatment of such evidence.  Thus, the absence of the evidence on the record
might be of relevance to the sufficiency and objectiveness of an investigating authority’s
investigation.  However, since this issue is not before the Panel, the European Communities will not
develop this argument further.4
                                                     
4 See, ibid., para.7.8, where the Panel also reserved its position on whether evidence improperly
excluded could be considered by a panel.WT/DS211/R
Annex 11-1
Page 157
ANNEX 11-1
THIRD PARTY WRITTEN SUBMISSION OF JAPAN
.I. THE INVESTIGATING AUTHORITY HAS FAILED TO COMPLY WITH THE
PROCEDURAL REQUIREMENTS FOR ANTI-DUMPING INVESTIGATIONS
1. It appears that Egypt conducted its anti-dumping investigation of Steel Rebar from Turkey in
a manner that is not consistent with the Agreement on Implementation of Article VI of GATT 1947
(the “Agreement”).  The Agreement specifies procedural requirements for the conduct of anti-dumping investigations.  These requirements serve “the fundamental underlying principle that anti-
dumping investigations should be fair”.
1
2. In this case, Turkey has made certain compelling arguments that the Investigating Authority
failed to comply with the minimum procedural requ irements of the Agreement.  Indeed, extensive and
significant irregularities in Egypt’s investigation procedures call into question the fairness of the
investigation as a whole.
A. THE INVESTIGATING AUTHORITY DID NO T PROVIDE RESPONDENTS A “REASONABLE
TIME” TO ANSWER ITS QUESTIONS UNDER THE CIRCUMSTANCES
3. Turkey claims that, after the Investigating Authority received and verified the respondents’
answers to its questions, the Investigating Authority  asked the respondents to answer many additional
questions.  Turkey further claims that the Investig ating Authority required the respondents to provide
extensive supporting documentation and to translate all those documents into English.  These requests
were made immediately after Turkey had suffered a devastating earthquake, indeed, at a time when
key personnel of the respondents were absent from work to search for relatives and assist relief
efforts.  Yet, even in those trying circumstance s, the Investigating Authority did not afford the
respondents a reasonable time to respond.  In fact, the Investigating Authority repeatedly set short
deadlines – in one case as little as two days.
4. These deadlines are inconsistent with several provisions of the Agreement, including:
• Article 6.1 which requires, “All interested parties in an anti-dumping investigation shall be given
. . . ample opportunity to present in writing all evidence which they consider relevant in respect of
the investigation in question.”
• Article 6.2, whose first sentence , requires, “Throughout the anti-dumping investigation all
interested parties shall have a full opportunity for the defense of their interests.”
• Article 6.13 which requires, “The authorities shall take due account of any difficulties
experienced by interested parties, in particul ar small companies, in supplying information
requested, and shall provide any assistance practicable.”
5. These provisions make clear that Investigating Authorities must afford a reasonable period of
time to respondents to answer questions presented.  They also make clear, moreover, that
Investigating Authorities have a duty to provide additional time when circumstances warrant.  In that
regard, the Appellate Body recently emphasized that Investigating Authorities must set deadlines “in a
                                                     
1 European Communities – Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from India ,
WT/DS141/R, para. 6.181.WT/DS211/R
Annex 11-1
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manner that allows for account to be taken of the particular circumstances of each case”. 2  Among the
factors that “investigating authorities should consider ” are “the nature and quantity of the information
submitted” and “the difficulties encountered by an investigated exporter in obtaining the
information”.3  Turkey claims that several important factors warranted additional time in this case,
including the number of documents requested, the requirement for translating these documents into
English, and the after-effects of the tragic earthquake.  After setting short initial deadlines, the
Investigating Authority erred in these circumstances by refusing to grant an extension for “cause
shown” and by failing to assist the respondents with their “difficulties”.
6. Egypt tries to justify its short deadlines as being “more than adequate”.4  I t arg ues tha t the
time allowed is “somewhat longer than the normal time period granted by other jurisdictions insimilar circumstances”, i.e. the standard response time for supplemental questionnaires.
5  T h i s
argument shows that the Investigating Authority set the deadline without taking into account the
difficulties that the Turkish respondents would face in the particular circumstances of this case.  The
conduct of the Investigating Authority is therefore inconsistent with Article 6 of the Agreement.
B. THE INVESTIGATING AUTHORITY DI D NOT PROVIDE THE RESPONDENTS AN
ADEQUATE OPPORTUNITY TO EXPLAIN THEIR QUESTIONNAIRE RESPONSES
7. As mentioned, the supplemental questionnaires at issue were sent after the Investigating
Authority had verified the respondents’ answers to the initial questionnaires through an on-site
examination under Article 6.7 of the Agreement.  The Investigating Authority requested the
respondents to provide extensive supporting documentation – translated into English – so that the
Investigating Authority could attempt to verify the answers.  Turkey has shown, and Egypt has
conceded, that the Investigating Authority chose not to hold a second on-site examination to verify the
respondents’ answers to the new questionnaires.6  Respondents then offered to meet the Investigating
Authority in Cairo, but that offer was not accepted.7  When the Investigating Authority had questions
about the respondents’ answers and documents, appare ntly for lack of the routine explanations and
dialogue that take place at on-site examinations, it rejected the information submitted and used “facts
available”.
8. The Investigating Authority’s approach to verification is inconsistent with the procedural
requirements of the Agreement in at least four respects.8
9. First, the Agreement establishes that questionnaires and supplemental questionnaires
ordinarily should precede verification.9  This is not to say that Investigating Authorities are precluded
from ever issuing supplemental questionnaires after verification.  But if the Investigating Authority
considers that substantial new information is needed after verification, then it is incumbent on the
                                                     
2 United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan ,
WT/DS184/AB/R, para. 85 (discussing the factors affecting whether information is submitted within a“reasonable time” even though it is submitted after a deadline set by the Investigating Authority).
3 Id.
4 First Written Submission of Egypt (WT/DS211) (“Egypt Submission”), page 55 (“a time period of 13
days was, in Egypt’s view, more than reasonable”).
5 Id. at 55 n.26 (citing standard EC practice for requesting additional information in ordinary
circumstances).
6 See Egypt Submission, page 57.
7 See Egypt Submission, page 72.
8 The use of “facts available” is discussed in Part II infra .
9 “As the main purpose of the on-the-spot investigation is to verify information provided or to obtain
further details, it should be carried out after the res ponse to the questionnaire has been received. . . .”
Agreement, Annex I, para. 7. “Enquiries or questions put by the authorities . . . should, whenever possible, beanswered before the visit is made.”  Id., para. 8.WT/DS211/R
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Investigating Authority to obtain such informati on in a manner that ensures the fundamental fairness
of the proceeding.  At a minimum, the Investigat ing Authority must afford the respondent adequate
time to respond to the new questions and adequate opportunity to explain its new responses.
10. Second, the Agreement expressly authorizes on-site verifications; it does not provide for any
other type of verification.10  There are sound reasons for preferring on-site verifications over other
possible procedures – such as what Turkey calls “mail order verification” – because they reduce the
burdens on the respondent and allow the respondent a full opportunity to explain its documents to the
verifiers.  Therefore, if an Investigating Authority chooses not to conduct an on-site verification, it
should accept any timely information submitted by the respondents.11
11. Third, the Agreement recognizes the value of face-to-face meetings, providing respondentsthe right to meet the Investigating Authorities on request.
12  Turkey has shown, and Egypt conceded,
that the Investigating Authority chose not to meet with the respondents.  Respondents should have
been given such opportunity.
12. Finally, the Agreement prohibits Investigating Authorities from imposing “an unreasonable
burden of proof” on respondents.13  It is clearly unreasonable to require that respondents anticipate
every possible question the Investigating Authority might have about a document, and answer each
such question in writing.  A respondent should only have to answer questions in accordance with its
own cost and sales records and data; a respondent should not be required to make any additionaladjustments, such as the alleged hyperinflation adjustment, which it would not be required to make in
accordance with the GAAP(Generally Accepted Accounting Principle ).  Further, a respondent should
have the opportunity to explain its answers orally to the Investigating Authority’s satisfaction.
13. By requiring the respondents to defend by mail their responses to the post-verification
questionnaires without giving an opportunity to explain their responses in person, the Investigating
Authority violated Article 6 of the Agreement.
II. THE INVESTIGATING AUTHORITY IMPROPERLY USED “FACTS AVAILABLE”
14. As mentioned, when the Investigating Authorit y determined that it could not verify the
accuracy of certain questionnaire responses by examining the supporting documents mailed by therespondents, it rejected those responses and used “facts available” to calculate the normal value of
respondents’ rebar.  The decision to use “facts available” and the choice of the “facts” to use are both
inconsistent with the Agreement.  This improper reso rt to “facts available” inexorably led to errors in
calculation of the normal value and therefore to a failure to make a “fair comparison . . . between the
export price and the normal value,” as required by Article 2.4.
A. THE INVESTIGATING AUTHORITY SHOULD NOT HAVE USED “FACTS AVAILABLE” IN
THE CIRCUMSTANCES OF THIS CASE
                                                     
10 Agreement, art. 6.7 (“the authorities may carry out investigations”) (emphasis added).
11 “All information which is verifiable, which is appropriately submitted so that it can be used in the
investigation without undue difficulties, [and] which is supplied in a timely fashion, . . . should be taken intoaccount when determinations are made.”  Agreement, Annex II, para. 3.
12 “Throughout the anti-dumping investigation all interested parties shall have a full opportunity for the
defence of their interests.  To this end, the authorities shall, on request, provide opportunities for all interested
parties to meet those parties with adverse interests, so that opposing views may be presented and rebuttal
arguments offered. . . .  Interested parties shall also have the right, on justification, to present other informationorally.”  Agreement, art. 6.2.
13 Agreement, art. 2.4.WT/DS211/R
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15. Article 6.8 of the Agreement authorizes Investigating Authorities to use “facts available” only
where a party (1) “refuses access to, or otherwise does not provide, necessary information within a
reasonable period”, or (2) “significantly impedes the investigation”.  Annex II then elaborates on the
circumstances in which an Investigating Authority may use “facts available,” as follows:
"1.  . . . .  The authorities should also ensure that the party is aware that if information
is not supplied within a reasonable time, the authorities will be free to make
determinations on the basis of the facts available, including those contained in the
application for the initiation of the investigation by the domestic industry.
. . . .
3.  All information which is verifiable, which is appropriately submitted so that it can
be used in the investigation without undue difficulties, [and] which is supplied in a
timely fashion, . . . should be taken into account when determinations are made. . . .
. . . .
5.  Even though the information provided may not be ideal in all respects, this should
not justify the authorities from disregarding it, provided the interested party has acted
to the best of its ability.
6.  If evidence or information is not accepted, the supplying party should be informed
forthwith of the reasons therefor, and should have an opportunity to provide further
explanations within a reasonable period, due account being taken of the time-limits ofthe investigation.  If the explanations are considered by the authorities as not being
satisfactory, the reasons for the rejection of  such evidence or information should be
given in any published determinations.
7.  . . . .  [I]f an interested party does not cooperate and this relevant information is
being withheld from the authorities, this situation could lead to a result which is lessfavourable to the party than if the party did cooperate."
16. The Appellate Body recently had occasion to explain these provisions.  It concluded that an
Investigating Authority cannot reject information provided within a “reasonable time” by a
respondent that “cooperate[s]” and “act[s] to the best of its ability”.
14  The Appellate Body expressly
noted that a respondent’s mere inability to provide all the information requested by an Investigating
Authority does not, by itself, warrant use of “facts available”.  Rather, a respondent may “cooperate”
“to the best of its ability” and still not be able to answer every single question posed by theauthorities.
15  Accordingly, an Investigating Authority cannot simply make demands of respondents
and then use “facts available” whenever a respondent fails to completely satisfy those demands.
Instead, “cooperation” is “a two-way process involving joint effort” by the Investigating Authority
and the respondent.16  In imposing requirements for respondents, therefore, Investigating Authorities
must:
                                                     
14 United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan ,
WT/DS184/AB/R, paras. 99-100.
15 “[P]arties may very well ‘cooperate’ to a very high degree, even though the requested information is,
ultimately, not obtained.  This is because the fact of ‘cooperating’ is in itself not determinative of the end resultof the cooperation.”  Id. at 99.
16 Id. at 104 (citing Agreement, art. 6.13).WT/DS211/R
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"strike a balance between the effort that they can expect interested parties to make in
responding to questionnaires, and the practical ability of those interested parties to
comply fully with all demands made of them  by the investigating authorities.  We see
this provision as another detailed expression of the principle of good faith, which is,at once a general principle of law and a principle of general international law, that
informs the provisions of the Anti-Dumping Agreement , as well as the other covered
agreements.  This organic principle of good faith, in this particular context, restrains
investigating authorities from imposing on exporters burdens which, in the
circumstances, are not reasonable".
17
17. In this case, the Investigating Authority failed to “strike a balance” between its demands onthe respondents and their “practical ability” to comp ly – especially taking into account the short time
afforded the respondents to reply
18 and the dire circumstances then prevailing in Turkey.  Turkey
claims that the respondents “cooperated” consisten tly with the Investigating Authority throughout the
investigation, and that they “acted to the best of their ability” even after the earthquake.  In these
circumstances, the decision to reject the information provided by respondents in favour of “facts
available” was inconsistent with Article 6.8 and Annex II of the Agreement.  If the InvestigatingAuthority concluded that it needed further inform ation to verify the respondents’ answers, then it
should have specified its concerns and given the respondents an opportunity to address those concerns
through either an on-site examination under Article 6.7 or a meeting under Article 6.2.
19
18. Finally, it appears that the Investigating Authority decided to reject respondents’ answersbased not on contrary facts, but on a conflict be tween the answers and the Investigating Authority’s
own assumptions.  The Investigating Authority assume d that the respondents’ costs for steel scrap –
the main input for rebar – should have increased during the investigation period due to Turkish
hyperinflation at that time.  The Investigating Authority rejected respondents’ data on their steel scrap
costs, based on its finding that the reported costs decreased during the investigation periodnotwithstanding inflation in the economy as a whole.  It may be the case, however, that the cost of a
raw material declines even during a hyperinflationary period in the overall economy due to material-
specific factors.  When a conflict arose between the Investigating Authority’s assumption and the
actual data, the Investigating Authority should have discarded its own assumption – and not the
respondents’ data.
B. THE INVESTIGATING AUTHORITY SHOULD NOT HAVE USED, AS “FACTS AVAILABLE,”
AN INFLATION RATE AT ODDS WITH OFFICIAL INFLATION DATA
19. Turkey claims that, even if this were an appropriate case in which to use “facts available”, the
facts used by the Investigating Authority do not comport with the Agreement’s requirements.
Annex II, Paragraph 7 requires Investigating Authorities to use “special circumspection” when
resorting to “facts available”.20  In particular, “the authorities should, where practicable, check the
information from other independent sources at their disposal. . . .”.21
20. The Investigating Authority did not exercise “special circumspection” in the facts that it choseto use.  For example, as Egypt has conceded, the Investigating Authority selected 5 per cent as the
monthly inflation rate in Turkey during the investigation period.
22  Egypt, however, did not identify
                                                     
17 Id. at 101.
18 See Part I.A supra .  See also Egypt Submission, page 56 (conceding that Egypt provided only two to
five days to respond to its September 23 questionnaire).
19 Annex II, para. 6.
20 Agreement, Annex II, para. 7
21 Id.
22 Egypt Submission, pages 58, 84.WT/DS211/R
Annex 11-1
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the source of this figure even in its submission in this proceeding, while Turkey claims that the figure
does not comport with official inflation data.  Turkey called the official data to the Investigating
Authority’s attention during the investigation, but the Investigating Authority compounded its error by
rejecting the Turkish Government’s comments as untimely.23  In this case, it would have been
“practicable” for the Investigating Authority to “check” the inflation rate it proposed to use against
“independent sources,” such as the official publications on Turkey’s inflation rates, but the
Investigating Authority simply failed to do so.  It therefore violated Annex II, Paragraph 7 of the
Agreement.
C. THE IMPROPER USE OF “FACTS AVAILABL E” DISTORTED THE CALCULATION OF THE
DUMPING MARGINS
21. Article 2.4, first sentence , of the Agreement requires, “A fair comparison shall be made
between the export price and the normal value.”  A fair comparison cannot be made, however, whenthe export price or the normal value is calculated improperly.  Turkey claims that Investigating
Authority’s improper resort to “facts available” led to the calculation of a higher normal value than
otherwise would have been found.  Such an improper calculation in turn prevents a fair comparison of
export price to normal value, and leads to the determination of inflated dumping margins and the
imposition of excessive anti-dumping measures.
III. THE INJURY INVESTIGATION DOES NOT COMPORT WITH THE AGREEMENT
22. The Investigating Authority Failed To Notify the Respondents of the Information Required
for the Injury Investigation Turkey claims that th e Investigating Authority stated in its Initiation
Report that the investigation concerned an allegation of threat  of injury (and not of present injury).
Likewise, the questionnaires concerned threat of injury.  The respondents accordingly focused their
responses and arguments on issues pertaining to threat of injury.  Ultimately, however, the
Investigating Authority found present injury (and not a threat of injury).  Egypt concedes that it
changed the basis of its injury investigation from th reat of injury to actual injury without informing
the respondents.
24
23. The Agreement does not permit Investigating Au thorities to act in this manner.  Under
Article 6, Respondents must be “given notice of the information which the authorities require”.25
They also must be given “ample opportunity to present in writing all evidence which they considerrelevant in respect of the investigation in question”
26 and a “full opportunity for the defence of their
interests”.27
24. The basic fairness of an investigation is called into question if the Investigating Authorityinvites evidence and argument on one issue and then bases its ruling on a different issue.  A
determination of threat of injury must be based on one legal standard, while a determination of actual
injury must be based on a different legal standard.  To account for the prospective nature of a threatanalysis, and to avoid determinations based “merely on allegation, conjecture or remote possibility,”
                                                     
23 Article 6.9 of the Agreement provides: “The authorities shall, before a final determination is made,
inform all interested parties of the essential facts un der consideration which form the basis for the decision
whether to apply definitive measures.  Such disclosure should take place in sufficient time for the parties todefend their interests.”  Where an Investigating Authority informs the parties late in an investigation that it has
selected a 5 per cent inflation rate as one of the essential facts forming the basis for its decision, the parties(including the respondents’ government) must be allowed to “defend their interests” by submitting data thatestablishes a different inflation rate.
24 Egypt Submission, pages 10-11.
25 Agreement, art. 6.1.
26 Id.
27 Agreement, art. 6.2.WT/DS211/R
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Article 3.7 of the Agreement requires that a determination of threat of injury must be based on a
“conclusion that further dumped exports are imminent and that, unless protective action is taken,
material injury would occur”.  Actual injury investigations, by contrast, are not prospective in nature
and thus do not require consideration of such forwar d-looking factors.  In light of these significant
differences between threat cases and actual injury cases, a respondent cannot present the relevant
evidence and defend its interests under Articles 6.1 and 6.2 without knowledge of the issue in
question.
25. Should an Investigating Authority consider it necessary to change the basis for its injury
investigation after receiving responses to its initial questionnaire, then it has a duty to notify the
respondent of the change and afford the respondent a full opportunity to address the new issues.Absent such notice and opportunity, the Investigating Authority here violated Article 6 of the
Agreement.
B. THE INJURY ANALYSIS DID NOT CONSID ER ALL THE FACTORS AND ISSUES REQUIRED
BY ARTICLE 3 OF THE AGREEMENT
26. Under Article 3 of the Agreement, an Inves tigating Authority must consider in its injury
analysis for an anti-dumping investigation “any known factors other than dumped imports which atthe same time are injuring the domestic industry”.  It must not attribute to the dumped imports any
injury caused by any other factor.
28
27. The Appellate Body recently addressed the “non-attribution” requirement of Article 3.5.  It
held that Investigating Authorities must “examine all known factors other than imports. . . ”.29  Then
they “must ensure” that they do not attribute to dumped imports any injury due to other factors.30  To
satisfy that obligation, they must “separat[e] and distinguish[] the injurious effects of the other factors
from the injurious effects of the dumped imports”.31  The Appellate Body highlighted the importance
of this requirement in the WTO regime:
"[I]n the absence of such separation and distinction of the different injurious effects,
the investigating authorities would have no rational basis to conclude that the dumpedimports are indeed causing the injury which, under the Anti-Dumping Agreement ,
justifies the imposition of anti-dumping duties".
32
It is clear, therefore, that Article 3.5 requires both a detailed examination of other factors injuring thedomestic industry, and a rigorous segregation of the effects of those factors from the effects of
dumping.  Only then can an Investigating Authority legitimately conclude that dumped imports arecausing  injury to the domestic industry.
28. Turkey claims that the Investigating Authority failed to conduct a sufficiently rigorous
examination and segregation of the effects of several factors other than dumped imports on the
Egyptian rebar industry.  The critical factors incl ude production capacity within Egypt, competition
among Egyptian producers, contracted demand, input costs, and non-dumped imports.
                                                     
28 Id.
29 United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan ,
WT/DS184/AB/R, para. 222 (emphasis in original; internal punctuation omitted).
30 Id.
31 Id. at para. 223.
32 Id.WT/DS211/R
Annex 11-1
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29. In response, Egypt argues that “there were no other causes of injury sufficient to break the
causal link between the dumped imports an d the injury to the domestic industry”.33  Egypt, however,
does not claim that it examined the other possible causes of injury and concluded that none of them
contributed to the injury.  Rather, Egypt simply considers that no other single factor has a strongercausal link to injury to the domes tic industry than the dumped imports.  That approach misplaces the
causation standard.  Under Article 3 of the Agr eement, as explained by the Appellate Body,
Investigating Authorities have the burden to separate and distinguish the effects of other factors from
the effects of dumped imports.  In the end, therefore, Egypt does not address the “non-attribution”
allegations in this case.
30. As the effects of other factors were not adequately described and segregated from the effects
of the Turkish imports, the Investigating Authority has not met the “non-attribution” obligation of
Article 3.5.
IV. CONCLUSION
31. Due to the substantive and procedural errors discussed above, the Panel should conclude that
the anti-dumping investigation was conducted in a manner that breached the Agreement.  These
violations led to the imposition of improper and excessive anti-dumping measures on Turkish rebar.
The Panel, accordingly, should recommend that Egypt bring its anti-dumping measures into
conformity with the Agreement.
                                                     
33 Egypt Submission, pages 7, 24.WT/DS211/R
Annex 12-1
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ANNEX 12-1
THIRD PARTY WRITTEN SUBMISSION
OF THE UNITED STATES
I. INTRODUCTION
1. The United States makes this third party submission to provide the Panel with its view of  the
proper legal interpretation of the provisions of the Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994 (the “AD Agreement”) under which this dispute arises.In particular, the United States will address the fo llowing issues:  (1) the proper understanding of the
first sentence of Article 2.4;  (2) the proper unde rstanding of Annex I of the AD Agreement;  (3) the
proper understanding of Article 6.1.1;  and (4) the lack of clarity with respect to the Agreement
provisions alleged to have been breached.  The United States recognizes that many of the issues raised
in this dispute are strictly factual.  The United States takes no view as to whether, under the facts ofthis case, the measure at issue is consistent with the Agreement.
II. EGYPT'S CALCULATION OF THE COST OF PRODUCTION AND THE
CONSTRUCTED NORMAL VALUE DOES NOT IMPLICATE ARTICLE 2.4
2. Turkey has alleged that, in calculating cost of production and the constructed normal value,
Egypt did not act in compliance with Articles 2.2.1.1, 2.2.2, and the first sentence of Article 2.4.
1  The
United States takes no position with respect to Turkey’s claim under Articles 2.2.1.1 and 2.2.2.
Article 2.4, however, does not address the calculation of cost of production and the constructed
normal value.  Turkey’s limited argument on this point takes the first sentence of that article entirelyout of context.  Because detailed rules for making the calculations at issue are set forth in
Articles 2.2.1, 2.2.1.1 and 2.2.2, in the view of the United States, the Panel must resolve the issue
before it by reference to the specific rules negotiated to address those issues.
3. Articles 2.2.1, 2.2.1.1 and 2.2.2 relate to the proper establishment of normal value, by
permitting the elimination of sales below cost from normal value under certain circumstances, and by
providing for the use of constructed normal value as the basis for normal value under certain
circumstances.  Turkey has made its arguments under those provisions and Egypt has made its
replies.
2
4. However, Turkey has also asserted an argument under the first sentence of Article 2.4.
Although the basis of Turkey’s argument is some what unclear, in the view of the United States
Article 2.4, and in particular the first sentence, is wholly inapposite to the issue Turkey has put before
the Panel.  Moreover, it is wholly unnecessary for the Panel to address this issue, as the dispute can be
resolved by applying the specific rules of Articles 2.2.1.1 and 2.2.2, which Turkey alleges to have
been breached.
5. Article 2.4 addresses the comparisons and adjustments Members must make after identifying
the proper basis for normal value and export price and prior to calculating the margins of dumping.
Article 2.4 provides, in its entirety:
                                                     
1 First Submission of the Government of the Republic of Turkey , (“Turkey First Submission ”), section
IV-G, para. 4 and section IV-H, para. 1 (pp. 69-70).  As discussed further below, it is unclear whether Turkey
has actually asserted a breach of Article 2.4 in section IV-H of its brief (p. 70).
2 First Written Submission of Egypt  (25 October 2001) (“ Egypt First Submission ”), section IV.7
(pp. 79-82).WT/DS211/R
Annex 12-1
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"A fair comparison shall be made between the export price and the normal value.
This comparison shall be made at the same level of trade, normally at the ex-factory
level, and in respect of sales made at as nearly as possible the same time.  Dueallowance shall be made in each case, on its merits, for differences which affect price
comparability, including differences in conditions and terms of sale, taxation, levels
of trade, quantities, physical characteristics, and any other differences which are also
demonstrated to affect price comparability.  In the cases referred to in paragraph 3 of
Article 2, allowances for costs, including duties and taxes, incurred between
importation and resale, and for profits accruing, should also be made.  If in these
cases, price comparability has been affected, the authorities shall establish the normalvalue at a level of trade equivalent to the level of trade of the constructed export
price, or make due allowance as warranted under this paragraph.  The authorities shall
indicate to the parties in question what information is necessary to ensure a fair
comparison and shall not impose an unreasonable burden of proof on those parties".
6. Turkey’s arguments in this regard relate to the identification  of normal value under
Article 2.2, 2.2.1, 2.2.1.1 and 2.2.2, and not to its subsequent comparison  with export price under
Article 2.4.  As can be seen from the language of this provision quoted above, Article 2.4 presupposes
that export price and normal value have already been identified.  Specifically, under Article 2.4, once
the basis for normal value and export price have been established, the administering authority is
required to select the proper sales for comparison (sales at the same level of trade and as nearly aspossible the same time), and make appropriate adjustments to those sales (due allowances for
differences which affect price comparability).  In this way, the Agreement establishes a fair
comparison.
7. Thus, the United States does not agree that an improper calculation of cost of production or
constructed normal value can constitute a breach of the first sentence of Article 2.4.  The language of
Article 2.4, which relates solely to the comparison, should not be taken out of context and applied to
other issues related to calculation of dumping margins.  Article 31 of the Vienna Convention on the
Law of Treaties  requires that a treaty be interpreted in accordance with “the ordinary meaning to be
given to the terms of the treaty in their context” (emphasis supplied).
3  The Panel should not adopt
Turkey’s proposed approach to the Agreement of taking the general language of the first sentence ofArticle 2.4 out of context in order to override the detailed rules negotiated in Articles 2.2, 2.2.1,2.2.1.1 and 2.2.2.
8. Moreover, the fair comparison language simply does not apply outside of the context in which
it is contained:  the rules for making comparisons under the remainder of Article 2.4.  The language of
the first sentence of Article 2.4, which provides for a fair comparison, must be read in the context ofthe second sentence which defines how “this comparison” is to be made.  To the extent a comparison
has been made in accordance with the rules of Article 2.4, a fair comparison is established.
4  Claims
that do not relate to obligations under Article 2.4 cannot constitute breaches of the first sentence of
Article 2.4.
                                                     
3 The rules reflected in the Vienna Convention on the Law of Treaties  have attained the status of
customary rules of international law.  See, United States - Standards for Reformulated and Conventional
Gasoline , WT/DS2/AB/R, adopted 20 May 1996, p. 23; Japan - Taxes on Alcoholic Beverages , WT/DS8/AB/R,
WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, p. 12; Australia - Subsidies Provided to
Producers and Exporters of Automotive Leather (WT/DS126) - Recourse to Article 21.5 of the DSU by the
United States , WT/DS126/RW, 14 January 2000, para. 6.25.
4 Further support for this reading of Article 2.4 is found in the first sentence of Article 2.4.2 which
refers to “the provisions governing fair comparison in paragraph 4.”  This clause clarifies that the entirety ofArticle 2.4, and not just the first sentence, constitutes the provisions which “govern fair comparison”.WT/DS211/R
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9. In addressing the issues of calculation of cost of production and constructed normal value, the
Panel should limit its analysis to whether Turkey has established a breach of Articles 2.2.1.1 and
2.2.2.  To the extent the Panel is required to address arguments under Article 2.4, the Panel shouldfind that Turkey has failed to satisfy its burden of proof.
III. ARTICLE 6.7 AND ANNEX I DO NOT REQU IRE VERIFICATION, NOR DO THEY
PROHIBIT COLLECTION OF INFORMATION AFTER VERIFICATION
10. Turkey has argued that certain procedures relating to verification
5 followed by Egypt in the
subject anti-dumping investigation were inconsistent, inter alia , with Article 6.7 and Annex I of the
AD Agreement.6  Specifically, at several points in its argument Turkey complains that Egypt refused
an offer of a second verification, and collected a substantial amount of information after verification.7
As stated previously, the United States takes no position on the factual issues in this case, nor onwhether the facts raised by these issues may establish a claim under another provision of the
Agreement, such as Article 6.2.  However, the United States wishes to make clear its views onverification and collection of information after verification.
A. THE AGREEMENT DOES NOT PROHIBIT COLLECTION OF INFORMATION AFTER
VERIFICATION
11. First, collection of information after verification is not per se  prohibited by the Agreement.
Although the facts are somewhat unclear at this stage in the dispute, according to Turkey, after the
respondents made their initial submissions, and after Egypt conducted verification, Egypt requestedadditional information.  In a nutshell, Turkey asserts that the information requested was so substantial,
and the request was made so late in the proceeding, that respondents were severely prejudiced.  Thus,
Turkey has raised a factual issue relating to the exporters’ opportunity to present evidence and defend
their interests, which may best be analyzed under the obligations of Article 6, and on which the
United States takes no position.
12. In the course of its arguments, however, Turkey also asserts that “it is not contemplated in the
structure of the Agreement that new information will be sought after verification.  Such action should
be taken only in exceptional circumstances”.
8  In fact, the Agreement does not prohibit gathering
information after verification, and the “exceptional circumstances” standard advanced by Turkey
appears nowhere in the Agreement.
13. As a preliminary matter, verification is an entirely optional procedure.  Article 6.7 states that
authorities may conduct verification, but does not require that they do so.  The Panel must keep this
fact in mind when addressing Turkey’s arguments.  Given that verification is not required, it would be
absurd to interpret the Agreement to prohibit collection of information after an event which may never
take place.
14. This being said, the only provision of the Agreement arguably dealing with collection of
information after verification is Annex I, paragraph 7, which states in pertinent part:
                                                     
5 Turkey and Egypt have both repeatedly used the term “verification” to refer to the on-the-spot
investigations referred to in Article 6.7 and Annex I.  Because so many Members use the term “verification” torefer to these investigations, and to avoid confusion, the United States will continue to use this term in this
submission.
6 Turkey First Submission , section IV-B (pp. 52-55).
7 Id., paras. 5 and 6 (p. 53).
8 Id., para. 4 (p. 53).WT/DS211/R
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"As the main purpose of the on-the-spot investigation is to verify information
provided or to obtain further details, it should be carried out after the response to the
questionnaire has been received unless the firm agrees to the contrary and the
government of the exporting Member is informed by the investigating authorities ofthe anticipated visit and does not object to it".
15. The United States observes that the language of this provision is not mandatory.  As such,
there is no basis for Turkey’s assertion that, barring “exceptional circumstances”, investigating
authorities are restricted in their ability to seek information after verification.  While some Members
may limit collection of information after verification out of concern that such information will not be
subject to the check on completeness and accuracy which verification provides, there is nothing in the
Agreement which restricts the ability to solicit and accept information at that time.
16. Moreover, Annex I, paragraph 7, is limited on its face to responses to “questionnaires”.  This
limitation is important because not every request for clarification or follow-up question constitutes a
“questionnaire”.  Rather, the Agreement distinguishes between initial “questionnaires,” under
Article 6.1.1, and supplemental requests for “further explanation” under Annex II, paragraph 6.  Afterthe initial request for information under Article 6.1.1 the authorities may identify areas where the
response appears to be incomplete or confusing.  Rather than rejecting the response, authorities are
required, under Annex II, paragraph 6, to present supplemental requests for clarification and other
follow-up questions.  Because such supplemental requests for further explanation may occur
throughout the investigation, Annex I, paragraph 7, must be limited to the initial “questionnaire”.  Itmay be for this reason that Turkey emphasizes its view that the information solicited after verification
was so extensive that it amounted to a new questionnaire.
9
17. Additionally, interpretation of Annex I, para graph 7, to apply to all information requests,
rather than merely "questionnaires" could result in the absurd situation that conduct of verification,
the purpose of which is to clarify the issues, woul d cut off the authority's ability to seek further
clarification.  Such a rule would work either to discourage authorities from conducting verification or
to limit authorities’ ability to solicit clarifications.  Either situation could result in determinations
based upon unclear information, and greater reliance on the facts available under Article 6.8.
18. Finally, this provision must be read in light of its object and purpose.  A careful reading of
Annex I reveals two purposes: 1) ensuring that au thorities obtain permission before conducting a
verification; and 2) ensuring that interested parties and governments are notified of what they need to
do to prepare for verification, and that they are given sufficient time to prepare.10  Thus, paragraph 7
is not aimed at preventing authorities from gathering information after verification; rather, it is aimed
at preventing them from conducting verification before the party has even had an opportunity to
                                                     
9 See, e.g. Turkey First Submission , at Section IV-C, para. 2 (p. 56).  Egypt disputes this assertion.
Egypt First Submission , section IV.A.7 (pp. 51-55).
10  This understanding of the purpose of Annex I is reinforced by its history.  The United States notes
that Annex I began life as, and indeed remains virtually unchanged from, a recommendation adopted in
November, 1983 by the Committee on Antidumping Practices under the GATT Antidumping Code.
Recommendation Concerning Procedures for an On-the-Spot Investigation , adopted 15 November 1983, GATT
Doc. ADP/18, reprinted in  GATT, BISD  30th Supp., p. 28 (March 1984).  This document begins with the
following recitation of the problems which had caused Signatories to develop specific recommendations:
The Committee is aware that some difficulties have arisen in this area which have been caused
mainly by the failure of the investigating authorities to advise the exporting firms of the
proposed date of the visit and the purpose of the investigation. It should be borne in mind thatthe firms will require time to prepare for the visit. There have also been instances where theauthorities of the exporting country have not been specifically informed of the proposed visit.WT/DS211/R
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analyze the initial questionnaire and provide its response.  The fact that an authority realizes after
verification that it needs further explanation does not mean that the verification took place too early.
Indeed, as a full understanding of the information is necessary for an accurate determination of
whether dumping measures are warranted, authoritie s should not be discouraged from asking follow-
up questions, provided that they observe the requirements of Articles 6.1 and 6.2.
B. WHERE AUTHORITIES COLLECT INFORMATION AFTER VERIFICATION, MEMBERS DO
NOT HAVE AN OBLIGATION TO PROVIDE A SECOND VERIFICATION
19. Turkey also alleges that Egypt declined Turk ey’s offer to permit an additional verification of
the information collected after the initial verification.11  Not being familiar with the facts of this case,
the United States takes no position as to whether Turkey can establish a breach of Article 6.2 in light
of any such refusal.  The United States would like only to make clear that collection of information
after verification does not obligate a member to conduct a second verification.  Nor does it require aMember to make other arrangements for an oral explanation of the information submitted.
20. As noted above, Article 6.7 does not require an authority to conduct verification at all.
Article 6.7 states that authorities may carry out verifications in the territory of other members
provided that the appropriate procedures are followed.  It follows that interested parties in anti-dumping proceedings do not have a right to verification.  Moreover, even where verification is
conducted, Article 6.7 does not require verification of every piece of information submitted.  Indeed,
such a requirement would make verification extraordinarily burdensome to all involved.  Rather, as
the express purpose of Article 6.7 is to “verify” information, and to “obtain further details”,
authorities must be free to focus on those portions of the response which appear to raise issues ofaccuracy or clarity.  Thus, the Agreement gives to  authorities the latitude to determine whether to
verify any information submitted, including information solicited after verification.
21. Further, while verification permits the authority to “obtain further detail”, in light of the fact
that verification is optional, the possibility of verification does not relieve interested parties of the
obligation, in their written submissions, to explain clearly the information provided.  Ultimately, it is
the interested parties, and not the authority, who ar e in possession of the necessary information and, as
that information relates to their own business, ar e in the best position to explain it.  Moreover,
Article 6 makes clear that, while opportunities for oral presentations are necessary, the primary means
of providing evidence in a dumping investigation is in writing.  For example, while Article 6.2 gives
interested parties certain rights to present information orally, Article 6.3 prohibits authorities from
taking such information into account unless it is subsequently reproduced in writing and madeavailable to other interested parties.  The emphasis in the Agreement on written evidence is not only
important for the investigating authority, it is vital for the other interested parties to permit them to
understand the case and to defend their interests.  Thus, the Panel should be wary of reading the
Agreement in a way which would place heavy reliance on oral presentations rather than on written
submissions.
22. More importantly for purposes of dispute resolution, to the extent the written submissions of
fact by the exporters were unclear on their face, and could not be understood except through a
subsequent oral explanation, evaluation of the facts is particularly difficult.  The Panel must take such
lack of clarity into account in weighing whether establishment of the facts was proper and theirevaluation unbiased and objective under Article 17.6(i).
12
                                                     
11 Turkey First Submission , section IV-D (pp. 58-59).
12 See,  United States – Anti-Dumping Measures on Stainless Steel Plate in Coils and Stainless Steel
Sheet and Strip from Korea , Panel Report, WT/DS/179/R, adopted 1 February, 2001 (“ United States – Stainless
Steel ”), para. 6.26 - 6.31 (where unclear facts before the authority pointed to two possible conclusions, panelWT/DS211/R
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IV. THE TIME LIMIT CONTAINED IN THE FIRST SENTENCE OF ARTICLE 6.1.1
DOES NOT APPLY TO ALL REQUESTS FOR INFORMATION
23. Turkey asserts that in its request for information after the verification, Egypt did not provide
the full 30 days, plus 7 days for mailing, as required for questionnaires by Article 6.1.1, and
footnote 15.13  While not taking any position on the factual dispute, the United States would like to
reiterate that not every request for information constitutes a “questionnaire” for which a 37-day
response period must be provided.  Indeed, Turkey makes a point of alleging that Egypt’s request for
information was not a mere supplemental question, but rather “amounted to an entirely new cost
questionnaire”.14
24. The Agreement distinguishes between the deadlines for questionnaires, and the deadlines forsupplemental requests for further explanation.  Article 6.1.1 requires authorities to allow 30 days (plus
7 for mailing) for responses to “questionnaires”.  By contrast, Annex II, paragraph 6 addresses
subsequent requests for further explanation.  That provisions requires only that, with respect to suchrequests, authorities provide a “reasonable period” for response, “due account being taken of the time
limits of the investigation”.
25. This distinction is an important one for the Pane l to recognize.  If authorities were required to
grant 37 days to respond to every request for information, they would be severely constrained in theability to seek clarification.  This would disadvantage all parties and result in less accurate
determinations of dumping.  Such a rule would also greatly increase the likelihood that authorities
would have to take the full 18 months allowed by Article 5.10, and could even result in an increase in
breaches of that provision.
15  For this reason, the deadline for requests for “further explanation” is
flexible; it gives the authority the discretion to establish a deadline to reflect: 1) the amount of furtherexplanation being requested; and 2) the time-limits of the investigation.
26. Moreover, where the supplemental request under Annex II, paragraph 6, amounts to a second
opportunity to provide information that has already been requested, in assessing the “reasonableness”
of the deadline, the Panel must bear in mind that the respondent has already had at least 37 days to
respond, and has not done so adequately.
27. This is not to say that there are no limits on the deadlines which authorities may set for
responding to requests for information other than questionnaires.  Such deadlines must be
“reasonable” under Annex II, paragraph 6.  Further, the overall procedure may be reviewed by a Panel
for consistency with Articles 6.1 and 6.2.
16
                                                                                                                                                                    
limited its factual analysis to the issue of whether an unbiased and objective authority could  properly have made
the determination at issue).
13 The United States notes that, although Turkey makes arguments about Article 6.1.1 of the Agreement
in section VI-C of its First Submission (pp. 56-58), it only asserts a breach of Articles 6.1, 6.2 and Annex II,paragraph 6.  It is unclear whether this is a typographi cal error, or whether Turkey is actually asserting a claim
under Article 6.1 rather than Article 6.1.1.
14 Turkey First Submission , Section IV-C, para. 2 (p. 56).  As noted above, Egypt disputes this
assertion.  Egypt First Submission , section IV.A.7 (pp. 51-55).
15 For this reason, Annex II, paragraph 6, states th at the deadline for provid ing “further explanation”
must be set with due account being taken of the time-limit of the investigation.
16 Turkey also alleges that its requests for extension of the time to respond to Egypt's supplemental
request for information was denied, and addresses the second sentence of Article 6.1.1 which states, "[d]ue
consideration should be given to any request for an extension of the thirty day period and, upon cause shown,
such an extension should be granted whenever practicable."  Turkey First Submission , Section IV-C, paras. 3
and 4 (pp. 56-57).  In this regard, the United States emphasizes only that the second sentence of Article 6.1.1simply does not impose a specific obligation upon authorities to grant extensionsWT/DS211/R
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V. PARTIES MUST SPECIFY IN THEIR SU BMISSIONS THE PROVISIONS OF THE
AGREEMENT WHICH THEY BELIEVE TO HAVE BEEN BREACHED
28. As a final matter, the United States would like to underscore the importance that complainants
state clearly the provisions of the Agreement they contend have been breached.  For example,
although section IV-H of Turkey's First Submission (pp. 69-70) refers to Article 2.4 and paragraph 7
of Annex II, Turkey does not clearly assert that either of those provisions has been breached.
Similarly, section IV-I (p. 72) does not assert th at any particular provision has been breached.
29. Without such clarity it is difficult for the Panel and for other parties to address the arguments.
Third parties face a particular problem when the specific claims are not clear in the first submissions,
because they may not have the opportunity to participate later in the dispute when the issues are
clarified.  Finally, given that the AD Agreement represents a series of carefully negotiated and
delineated obligations, whether a Member has breached an obligation can only be reviewed in
relationship to the text of specific provisions of the Agreement.17
                                                     
17  Turkey cites individual members’ comments to the Committee on Anti-Dumping Practices during
the Article 18.5 review process.  See Turkey First Submission , footnote 107 (p.55).  These comments represent
solely the views of an individual Member, and are not appropriate authoritative guidance for the Panel.WT/DS211/R
Annex 12-2
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ANNEX 12-2
THIRD PARTY ORAL STATEMENT
OF THE UNITED STATES
I. INTRODUCTION
1. Thank you, Mr. Chairman, and members of the Panel.  It is our sincere pleasure to appear
before you today to present the views of the United States in this proceeding.  The purpose of this oral
statement is to highlight certain aspects of our written statement, particularly in light of issues raisedby other third parties, and briefly to present our views on certain other issues.
2. As we stated in our written submission, not being a party to the underlying administrative
proceedings, the United States’ familiarity with the facts of this case is necessarily limited to the
assertions made in the submissions of the parties.  Thus, the United States limits its arguments toissues of legal interpretation.
II. CONSIDERATION OF EXTRA-RECORD EVIDENCE
3. As a preliminary matter, we would like to highlight a dispute over certain documents cited in
Turkey’s brief.  In its submission, Egypt has argued that the documents in question were not presented
to the investigating authority in the underlying proceeding, and thus should not be considered by the
Panel.
4. The Anti-Dumping Agreement, as illuminated by past panel and Appellate Body reports, is
clear on this point: information not presented to the investigating authority is not relevant to a panel’s
consideration of whether a Member has acted in accordance with the standard set forth in Article
17.6(i).  That provision establishes the standard to be applied in the Panel’s “assessment of the facts of
the matter”.  The chapeau of Article 17.6 makes clear that the “matter” covered by that Article is the
same as the “matter” addressed in Article 17.5.
5. Article 17.5, in turn, establishes that, in exam ining a matter presented to a Panel, the facts
upon which its examination must be based are those which were presented to the investigating
authority.  Thus, Article 17.6(i) can only be understood by reference to Article 17.5(ii).  As explained
by the Appellate Body in Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of Iron or
Non-alloy Steel and H-beams from Poland :
"Article 17.6(i) must be read in conjunction with Article 17.5(ii) of the Anti-Dumping
Agreement, which requires that a panel must examine the matter based upon the
‘facts’ made available to the investigating authorities in accordance with appropriate
domestic procedures".
1
6. The issue of the range of evidence which the Panel is entitled to examine has been addressed
in prior disputes.  For example, the Panel in Mexico – Anti-Dumping Investigation of High Fructose
                                                     
1 Appellate Body Report on Thailand – Anti-dumping Duties on Angles, Shapes and Sections
of Iron or Non-alloy Steel and H-beams from Poland , WT/DS122/AB/R, adopted 5 April 2001, para.
17.WT/DS211/R
Annex 12-2
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Corn Syrup (HFCS) from the United States2 summed up this range of relevant evidence under Article
17.5(ii):
"Mindful of the standard of review and Article 17.5(ii), we note that we may consider
in our examination of this issue only what was actually available to the investigating
authority at the time of the initiation in ev aluating the consistency of the initiation
with Article 5.3, and must consider whether SECOFI's establishment of the facts was
proper and its evaluation of those facts was unbiased and objective".
7. Similarly, the panel in United States – Anti-Dumping Measures on Certain Hot-Rolled Steel
Products from Japan3 stated:
"It seems clear to us that, under this provision, a panel may not, when examining a
claim of violation of the AD Agreement in a particular determination, consider facts
or evidence presented to it by a party in an attempt to demonstrate error in the
determination concerning questions that were investigated and decided by the
authorities, unless they had been made available in conformity with the appropriatedomestic procedures to the authorities of the investigating country during the
investigation. . .
That Article 17.5(ii) and the DSU provisions are complementary does not diminish
the importance of Article 17.5(ii) in guiding our decisions in this regard.  It is a
specific provision directing a panel's decision as to what evidence it will consider inexamining a claim under the AD Agreement. Moreover, it effectuates the general
principle that panels reviewing the determinations of investigating authorities in
anti-dumping cases are not to engage in de novo  review".
8. Thus, Article 17.5(ii) is fully applicable, and the Panel should disregard information which
was not presented to the Egyptian authorities.
9. Finally, the EC imagines a situation in which information was improperly rejected by the
authority, and argues that the Panel may be required to review the information itself in that situation.
While the United States does not necessarily agree with this assertion, we note that the EC admits that
improper rejection of the information Turkey has presented is not an issue in this case, and thus the
Panel need not address this issue.
III. INJURY ISSUES
10. The United States will now turn to the injury is sues arising in this dispute.  The United States
will address the following subjects: (1) the obligation to examine the impact of the dumped imports
under Article 3.4, (2) the obligation to examine price undercutting under Article 3.2, (3) theexamination of causal link between imports and injury under Article 3.5, and (4) the determination of
the period of investigation for injury analysis.
                                                     
2 Panel Report on Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the
United States , WT/DS132/R, adopted 24 February 2000, para. 7.105.
3 Panel Report on United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from
Japan , WT/DS184/R, adopted 23 August 2001, para. 7.6.WT/DS211/R
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A. THE REQUIREMENTS OF ARTICLE 3.4 TO CONSIDER ALL RELEVANT ECONOMIC
FACTORS SHOULD NOT BE CONFUSED WITH THE SEPARATE OBLIGATION CONTAINEDIN ARTICLE 3.5 OF THE AGREEMENT
11. Turning first to the obligation under Article 3.4, Turkey argues that the Egyptian authorities
failed properly to consider the factors listed in Articles 3.4 and 3.5 of the Anti-Dumping Agreement.4
The United States agrees that an investigating auth ority must evaluate the critical factors listed in
Article 3.4  (or other relevant economic factors, not listed) in its consideration of the impact of dumped
imports on the domestic industry, so that it may be discerned how imports affect, inter alia , the
industry’s sales, prices, its share of total domestic production, its profitability, financial performance,
or the overall condition of the industry.  Without such an analysis, the investigating authority would
fail to comply with Article 3.4 of the Anti-Dumping Agreement.  This issue is well settled by now,
having been addressed by  panels in the High Fructose Corn Syrup  and Bed Linens  disputes and by
the Appellate Body.
12. The United States disagrees, however, with Turkey’s assertion that investigating authorities
are required to identify specific lost sales.  In evaluating Article 3.4 factors, the investigating authority
is required by the Anti-Dumping Agreement to examine any actual and potential decline in sales, butthe authority is not required to investigate whether specific sales were lost by the domestic industry to
unfairly traded imports.  While there may be certain  types of investigations involving large capital
goods or custom-made goods ordered under contract in which the loss of a single sale or a few
specific sales could prove indicative of injury, there is nothing in Article 3.4 of the Agreement that
specifically obligates a Member to investigate specif ic lost sales in determining the impact of dumped
imports on the domestic industry.
B. THE DETERMINATION OF PRICE UNDERCUTTING UNDER ARTICLE 3.2 NEED NOT
ALWAYS BE MADE ON A DELIVERED-PRICE BASIS
13. Turning to the issue of price undercutting under Article 3.2, the United States agrees that
injury determinations under Article 3 must be based on positive evidence and must involve an
objective examination of not simply the volume of dumped imports but also the effect of those
imports on prices in the domestic market. Article 3.2 provides that, in determining the effect ofdumped imports on prices, the investigating authorities shall consider whether there has been
significant price undercutting by the dumped imports as compared with the price of a like product of
the importing Member, or whether the effect of such imports is otherwise to depress prices to a
significant degree or prevent price increases, which otherwise would have occurred, to a significant
degree.  Turkey argues (at 3 and 20-21) that by not ensuring that the comparison of domestic andimported prices was conducted on a comparable, delivered basis, the Egyptian authority’s finding of
price undercutting was based on a flawed price comparison.  However, there is no legal requirement
under the Anti-Dumping Agreement that an authority make its price comparison only on a delivered
price basis.  In fact, in many instances sales ar e made on an FOB basis and converting them to a
delivered basis is both unnecessary to obtain comparable prices and potentially distorting tocommercial realities.
C. THE ARTICLE 3.5 OBLIGATION
14. With respect to Turkey’s argument about Article 3.5, it appears that none of the partiesdispute that the Anti-Dumping Agreement does not prescribe a specific methodology to be used byMembers to establish the requisite causal link between subject imports and the injury suffered by a
domestic industry.  The Appellate Body confirmed in Hot-rolled Steel  that Article 3.5 leaves open to
Members the means employed to fulfill the non-attribution requirement.
                                                     
4  First Written Submission of Turkey at 3 and 8-19.WT/DS211/R
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15. Although the United States agrees with Turkey’s assertion that consideration of the Article
3.4 factors is mandatory, we do not agree with the implication that consideration of the factors listed
in Article 3.5 is also mandatory.  By failing to differentiate between the analysis required underArticles 3.4 and 3.5, Turkey has left the erroneous impression that the factors referenced in paragraph
5 of Article 3 must be examined and considered in  every determination.  The plain language of that
provision makes clear that is not the case.
16. Although Article 3.5 directs Members to “examine any known factors other than the dumped
imports which at the same time are injuring the domestic industry . . .”, the nature of this obligation is
different from the requirement in Article 3.4 that all relevant economic factors be examined.  Inparticular, Article 3.5 states that the authorities’ demonstration of the causal relationship between
dumped imports and injury shall be based on an examination of all relevant evidence before them.
The specific factors that are listed in Article 3.5 are not mandatory, but simply illustrate the type of
factors which may  be examined by the investigating authority.  Article 3.5 specifically refers to
causal factors which “may  be relevant”  in this respect.
5   Moreover, the scope of an investigating
authority’s obligation under Article 3.5 extends only to “known” factors.
17. More fundamentally, Article 3.5 does not require investigating authorities to demonstrate that
there are no other factors also causing the domestic industry’s injury or to investigate any factors
other than those which are known to the investigating authority.  Accordingly, a complainant does notsatisfy its prima facie case requirement simply by suggesting that there may be other unidentified
factors contributing to the injury.
D. THE PERIODS OF INVESTIGATION FOR DUMPING AND INJURY ANALYSES
18. With respect to the proper period(s) of investigation for determining dumping and injury, the
Anti-Dumping Agreement does not prescribe any specific time period(s) for the purpose of data
collection.  In light of the requirement in Article 3.5 that it “be demonstrated that the dumped imports
are, through the effects of dumping . . . causing injury”, the United States submits that both the
dumping and injury components of the investigations must be contemporaneous such that an
investigating authority can substantiate the requisite causal link, or lack thereof, between the allegedly
dumped imports and any alleged injury, or threat of in jury.  This is not to state, however, that the two
periods must be exactly the same.  In fact, the injury investigation may reasonably include a
substantial period of time either prior to or subsequent to (or both prior to and subsequent to) the
dumping investigation, and be of sufficient length  to allow investigating authorities to examine
various industry and import trends.
IV. THE DUMPING DETERMINATION
19. The United States would now like to address certain of the legal issues presented to the Panel
in connection with Egypt’s determination of dumping.   As stated, the United States will confine its
comments to issues of legal interpretation and procedure.
20. First, as mentioned in our submission, in reviewing the amount of time to respond to a request
for further information made after the initial questionnaire, the deadlines established in Article 6.1.1
are simply not relevant.  Such supplemental requests for information are not “questionnaires” withinthe meaning of that term as used in Article 6.1.1.  As the EC points out in its submission, several
provisions of the Agreement provide for requests for information other than questionnaires.  Most
                                                     
5 Panel and Appellate Body Reports on Thailand -- Anti-Dumping Duties on Angles, Shapes
and Sections of Iron or Non-Alloy Steel and H-Beams from Poland , WT/DS122/R, WT/DS122/AB/R,
adopted 5 April 2001).WT/DS211/R
Annex 12-2
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importantly, where an investigating authority does not believe evidence or information is acceptable,
it must request further explanation, and provide a “reasonable” period to respond to such request, “due
account being taken of the time-limits of the investigation”.
21. However, while the United States does not believe that the time limit established in Article
6.1.1 is relevant to subsequent requests for information, we agree with Japan that the Panel may
review the period to ensure that the party has had “ample opportunity” to present its evidence, as
required by Article 6.1, and has had a full opportunity for defense of its interests, as required by
Article 6.2.  However, the Panel must bear in mind, in determining whether the investigating authority
has acted reasonably, that the needs and circumstances of the responding party are not the only
relevant consideration.  Authorities must weigh those needs and circumstances against the deadlinesfor investigations established in Article 5.10, and the time needed by the investigating authority to
make an accurate, well-reasoned and well-explained analysis.
22. The United States would also like to clarify one point about collection of information after the
verification – not only is collection of further information after verification permitted under theagreement, the right of investigating authorities to do so is also highly desirable as it fosters more
accurate determinations.  To the extent authorities realize that they need clarification on some point
after verification is conducted, it is in the interest of accuracy that they be permitted to request such
clarification, provided that they establish a reasonable deadline.
23. Paragraph 7 of Annex I in no way limits the authority of Members to collect further
information after verification.  As noted in our written submission, that provision applies only to
questionnaires, and not to supplemental requests for information.  That provision is aimed against the
abusive practice of conducting an on-the-spot investigation of a respondent’s business practices
before the respondent has even been informed of the information required, and before it has had anopportunity to formulate its response.  Thus, paragraph 7 relates to the timing of verifications, rather
than the timing of requests for information.
24. In this regard, the United States would also li ke to point out the potential for confusion in the
way some parties have used the term “verification”.  Turkey has objected to what it terms “mail
order” verification by Egypt.  Japan has picked up this term, and argued that because on-the-spot
verifications are provided for, any other type of “verification” is prohibited.  This mis-use of the term“verification” could be highly misleading.  Verification is not required under Article 6.7.  Rather, on-
the-spot verification may be conducted by the investigating Member if it perceives some benefit from
doing so, and the exporting Member permits it.  Responding parties do not have a right to rely on a
verification being conducted in order to provide necessary information.  Whether a verification is
conducted or not does not alter the obligation of responding parties to provide requested informationand support the claims they make.  Requests for such support are not “verification”.
25. The anti-dumping investigation process is a demanding process, both for the investigating
authority, and for the responding party.  Making the required determinations, while meeting the
obligation to ensure accuracy under Article 6.6 and at the same time meeting the deadlines underArticle 5.10, requires a large amount of information in a short amount of time.  In determining
whether an investigation has been conducted in accordance with the Agreement, the Panel must bear
in mind one important fact: the necessary information is in the possession of the responding party.
Although investigating authorities must provide a full opportunity for interested parties to defend their
interests, ultimately there is a burden on responding parties.  The quality of the determination isdirectly related to the extent to which responding parties have been promptly forthcoming.  Insistence
that those parties provide requested information should not be dismissed as “mail order” verification.
There is nothing improper about asking responding parties to provide documentary evidence to
establish the accuracy of claims they have made.  Indeed, the Agreement requires it.WT/DS211/R
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26. The United States appreciates this opportunity to address the Panel on these points, and would
welcome any questions.WT/DS211/R
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ANNEX 12-3
THIRD PARTY RESPONSES OF THE UNITED STATES
TO QUESTIONS FROM THE PANEL
Q1. What role does the US foresee for an investigating authority in an anti-dumping
investigation establishing the existence of “other known factors” under Article 3.5, and what is
the legal basis for its position?
Reply
1. Article 3.5 of the Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade 1994 (“Anti-Dumping Agreement”) directs Members to “examine any known
factors other than the dumped imports which at the same time are injuring the domestic industry. . .”.
The use of the word “known” is significant as it is not used anywhere else in the text of Article 3 todescribe factors relevant either to injury or cau sation. In fact, the inclusion of the term “known” in
Article 3.5 is one of the principal changes regarding causation made between the text of the Tokyo
Round Anti-Dumping Agreement and the WTO Anti-Dumping Agreement.  Its use exclusively in
connection with factors other than dumped imports that may be causing injury unmistakably
distinguishes the investigative authorities’ responsibi lities associated with such factors from the other
factors referenced in Article 3.  The ordinary meaning of the term “known” makes clear that the
investigating authorities’ responsibility in this re gard extends only to the examination of factors of
which the investigating authorities possess knowledge or with which they are made familiar or
become acquainted.
1
2. There is no textual requirement, express or  implied, that the investigating authorities
affirmatively seek out information about other possible alternative factors that are not “known” to
them that may be causing injury.  Thus, factors will be known to the investigating authorities by virtue
of any relevant information already in their possession in the applicable record or by reason of
information provided by the participants in the investigation.  In this connection, we agree with theEuropean Communities’ observation
2 regarding the pertinence of the findings by the Panel in
Thailand - H Beam s that
"We consider that other “known” factors would include those causal factors that are
clearly raised before the investigating authorities by interested parties in the course of
an investigation.  We are of the view that there is no express requirement in
Article 3.5 that investigating authorities seek out and examine in each case on theirown initiative the effects of all possible factors other than imports that may be
causing injury to the domestic industry under investigation".
3
3. The factors identified in the last sentence of Article 3.5, moreover, are merely illustrative ofthe factors that, if known to the investigating authorities, are to be examined in ensuring that no injury
caused by factors other than subject imports is attributed to such imports.  That this list is illustrativeonly is indicated by the introductory language, which states that the factors may be relevant.
Therefore, the factors set forth in Article 3.5 do not constitute a mandatory list of matters that the
                                                     
1 The Shorter Oxford English Dictionary, 1993 ed.
2 Third party Oral Statement of the European Communities, 27 November 2001, para. 4.
3 Panel Report in Thailand - Anti-Dumping Duties on Angles, Shapes and Sections of Iron or Non-Alloy
Steel and H-Beams from Poland , WT/DS/122/R, adopted 5 April 2001, as modified by the Appellate Body
Report, WT/DS122/AB/R, para. 7.273.WT/DS211/R
Annex 12-3
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investigating authorities must in each investigat ion examine. Investigating authorities may rely on
interested parties to bring relevant “known” factors to the authorities’ attention.
Q2. Is there a different obligation borne by an investigating authority in an anti-dumping
investigation with regard to establishing “other known factors” in terms of Article 3.5 of the
Anti-Dumping Agreement, compared with the establishment of “all relevant factors” in terms of
Article 4.2(b) of the Safeguards Agreement and, if so, what are the different obligations and the
legal bases for these obligations?
Reply
4. The United States submits that quite different investigative obligations are established by the
text of the Anti-Dumping Agreement and the Safeguards Agreement, as befits the distinct objectives
of those agreements, the particular rights and obligations contained, respectively, in them, and the
significant textual differences in the language of the two Agreements.  By virtue of the use of the term
“known factors” in Article 3.5 of the Anti-Dumping Agreement investigating authorities have noobligation under Article 3.5 to seek out causes of injury other than dumped imports.  Given, in
particular the absence of the same term “known factors” from the text of Article 4.2 of the Safeguards
Agreement, that Article is not useful to inform th e nature of the responsibilities of the investigating
authorities under the Anti-Dumping Agreement, the pertinent issue before this Panel.
5. Further, the Safeguards Agreement’s specific reference to a competent authority’s
consideration of “all relevant factors” of an objective and quantifiable nature having a bearing on the
situation of that industry appears in Article 4.2(a), which concerns the determination of serious injury,
rather than in Article 4.2(b), which concerns causation.  The provision in the Anti-Dumping
Agreement most directly comparable to, but not identical with, Article 4.2(a) of the SafeguardsAgreement, is not Article 3.5, but Article 3.4.
Q3 The US view seems to be that the reference in Article 17.5(ii) to facts “made available”
during an investigation means facts “presented” to the Investigating Authority.  In the US view,
by whom, how and when would such information be presented?
Reply
6. In the view of the United States, Article 17.5(i i) limits the review of the panel to facts that
were presented to the investigating authority, either through submission by some person, as discussed
below, or through its own investigative activities.  The reference to facts “made available” is
significant in that it eliminates from consideration facts which, although theoretically “available,”
were not actually presented to the authority.
7. The Panel’s question is answered in a general way by the language of Article 17.5(ii) itself,
which states that, even if facts were “made available,” they are only relevant to the Panel’s
consideration if they were made available “in conformity with appropriate domestic procedures”.This phrase reserves to each member the authority to determine by whom, how and when information
may be presented during an investigation.
8. This is not to say that such authority is unfettered.  For example, although domestic
procedures may specify who has a right to present information, such procedure must meet therequirement of Article 6.11 which defines interested parties as including:
(i) an exporter or foreign producer or the importer of a product subject to investigation,
or a trade or business association a majority of the members of which are producers,
exporters or importers of such product;WT/DS211/R
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(ii) the government of the exporting country;  and
(iii) a producer of the like product in the importing country or a trade and business
association a majority of the members of which produce the like product in the
importing country.
9. Similarly, Article 6.12 requires investigating authorities to permit industrial users and
representative consumer organizations to provide information which is relevant to the investigation
regarding dumping, injury and causality.
10. Although the question of who may provide information is subject to fairly clear guidelines,
the question of when  is more vague under the Agreement.  Members have the authority to establish
deadlines.  One clear limit on that authority, however, is the requirement under Article 6.1.1 that
authorities allow at least 37 days for questionnaire responses.  Deadlines for submission ofinformation may also be reviewed for consistency w ith Article 6.1, to ensure that interested parties
have been provided ample opportunity to present in writing all evidence which they consider relevant.
Finally, to the extent the investigating author ity does not intend to accept information submitted,
under Annex II, paragraph 6 authorities must provide a “reasonable period, due account being taken
of the time limits of the investigation”, for parties to provide further explanations.  However,Article 6.14 counters these limitations on deadlines by making clear that a member is free to proceed
expeditiously.  This concept is reinforced by the relatively short deadlines of Article 5.10.
11. Finally, on the question of how information is to be provided, the Agreement is largely silent.
Information must be provided in writing, or otherwise reduced to a form which can bee seen underArticle 6.4.  There must be an opportunity for a hearing under Article 6.2.  Additionally, a party who
has provided confidential information must furnish a non-confidential summary.  Apart from those
requirements, the authority is free to establish appropriate procedures for parties to submit
information.
***
12. The United States would also like to take this opportunity briefly to present its views on one
of the questions presented to Japan.
Questions to Japan
Q3 How does Japan interpret Article 2.4, in its context?
Reply
13. It is the view of the United States that the first sentence of Article 2.4 cannot be divorced
from the context of the remainder of Article 2.4.  While the first sentence of Article 2.4 establishes the
requirement to make a “fair comparison”, the remainder of Article 2.4 defines  how “this comparison”
is made.
14. The predecessor to Article 2.4, Article 2.6 of the Antidumping Code, also defined what was
required " [i]n order to effect  a fair comparison" (emphasis added).  The “in order to effect” language
of this provision was ambiguous.  One possible readin g of this language was that the fair comparison
was not required, but if a Member wished to make one, it should do so as instructed in Article 2.6.
Thus, all of Article 2.6 could have been read as non-mandatory. In other words, Article 2.6 clearly
mandated how to make a fair comparison, but the fair comparison itself was not clearly mandated.WT/DS211/R
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15. That ambiguity was eliminated in the current Agreement by adding the first sentence of
Article 2.4, which makes explicit the requirement to make a fair comparison.  However, the remainder
of Article 2.4, like its predecessor, defines the comparison.  Thus, Article 2.4 of the currentAgreement is clearly mandatory – it requires members to make the fair comparison, and instructs
them how to do it.  This interpretation of Article 2.4 is also consistent with its drafting history.  In
what is known as the “Dunkel Draft”, Article 2.4 read:
“A fair comparison shall be made between the export price and the normal value.
The two prices shall be compared  at the same level of trade. . . .” (Emphasis added).
16. Arguably, that formulation was ambiguous as to whether the requirement to make a fair
comparison was free standing.  In the final draft, however, the language was amended to read:
“A fair comparison shall be made between the export price and the normal value.
This comparison  shall be made  at the same level of trade. . . .”  (Emphasis added).
17. Substitution of the phrase “this comparison” establishes a reference back to the subject of the
prior sentence, i.e., a fair comparison, which is what is being defined.
18. Further support for this reading of Article 2.4 is found in the first sentence of Article 2.4.2
which refers to “the provisions governing fair comparison in paragraph 4”.  The plural term
“provisions,” as well as the reference to “paragraph 4,” rather than “the first sentence of paragraph 4”,make clear that this clause refers to the entirety of Article 2.4.  Further, this clause clarifies that the
entirety of Article 2.4, and not just the first sentence, constitutes the provisions which “govern fair
comparison”.
19. In light of the object and purpose of the AD Agreement, there is no basis for an interpretation
of Article 2.4 that divorces the obligation in Article 2.4 to make a fair comparison from the
allowances required to establish price comparability.  In accordance with Article 2.1, a dumping
analysis is based on a comparison of prices for sales in the export market to prices for sales in the
home market.  By requiring due allowance for all factors affecting price comparability, Article 2.4
assures that the prices used to establish dumping in Article 2.1 are “comparable,” i.e. a comparison of
such prices is fair.  There is simply no logic in asserting that even where transactions in the two
markets are rendered comparable in all respects affecting price, comparing them in a dumpinganalysis could be unfair.
4  The concept of fairness and the concept of comparability are inseparable.
                                                     
4 Similarly, holding the requirement of a fair comparison separate from the requirement of
comparability implies that a comparison of two prices which are not comparable could be fair, clearly an absurdresult.WT/DS211/R
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ANNEX 13
SUPPLEMENTAL WORKING PROCEDURES OF THE
PANEL CONCERNING CERTAIN BUSINESS
CONFIDENTIAL INFORMATION
1. Egypt shall submit to the Panel six copies and to Turkey one copy of the Confidential Injury
Analysis,  as referred to in its written response to Question 5 of the Panel, dated 7 December 2001.
2. Egypt shall mark the cover and/or first page of the document containing business confidential
information, and each page containing such informa tion to indicate the presence of such information.
Specifically, the information in question shall be  placed between double brackets, as follows:
[[xx,xxx.xx]].  The first page or cover of the document shall state "Contains business confidential
information on pages xxxxxx", and each page of the document shall contain the same notice at the top
of the page.
3. As required by Article 18.2 of the DSU, Turkey shall treat as confidential the information in
the Confidential Injury Analysis  that has been designated as business confidential under these
procedures; i.e., Turkey shall not disclose the information contained therein without the formal
authorization of Egypt.  Turkey shall have the responsibility for all members of its delegation, which,
for the purposes of these supplemental procedures only, shall not include any employee of any private
entity that was an interested party in the anti-dumping investigation.  In particular, no member of
Turkey's delegation shall disclose to any person ou tside the delegation any information designated as
business confidential under these procedures, and any such information must only be used for the
purposes of submissions and argumentation in this dispute and for no other purpose.
4. Any party referring in its written submissions or oral statements to any information that has
been designated as business confidential under these procedures, shall clearly identify all suchinformation in those submissions and statements.  All such written submissions shall be marked as
described in paragraph 2, above.  A non-confidential version, clearly marked as such, of any written
submission containing business confidential information shall be submitted to the Panel
simultaneously with the confidential version.  In the case of an oral statement containing business
confidential information, a written non-confidential version shall be submitted within a day after thestatement has been made.  Non-confidential versions shall be redacted in such a manner as to convey
a reasonable understanding of the substance of the business confidential information deleted
therefrom.
5. The Panel engages not to disclose, in its re port, or in any other way, any information
designated as business confidential under these procedures.  The Panel may, however, make
statements of conclusion drawn from such information.
6. Submissions containing information designated as business confidential under these
procedures will, however, be included in the record forwarded to the Appellate Body in the event of
any appeal of the Panel's Report.
__________