WT/DS437/ARB/Add.1  
 
26 January 2022  
(22-0554) Page: 1/63 
  Original: English  
 
  
UNITED STATES – COUNTERVAILING DUTY MEASURES ON CERTAIN PRODUCTS 
FROM CHINA  
DECISION BY THE ARBITRATOR  
Addendum  
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This addendum  contains Annexes A to C to the Decision of the Arbitrator to be found in document 
WT/DS437/ARB.  
 
 
_______________  WT/DS437/ARB/Add.1  
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LIST OF ANNEXES  
ANNEX  A 
WORKING PROCEDURES OF THE ARBITRATOR  
Contents  Page  
Annex  A-1 Working Procedures of the Arbitrator  4 
Annex  A-2 Additional Working Procedures of the Arbitrator Concerning Business 
Confidential Information  9 
Annex A -3 Additional Working Procedures of the Arbitrator Concerning Meetings with 
Remote Participation  10 
ANNEX B  
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Executive summary of the arguments of the United States  13 
Annex  B-2 Executive summary of the arguments of China  21 
ANNEX  C 
DATA INPUTS AND CALCULATIONS OF THE ARBITRATOR  
Contents  Page 
Annex  C-1 Data inputs for US market values in the years -prior 32 
Annex C-2 Data inputs for elasticities  34 
Annex C-3 Data inputs for the WTO -inconsistent and the WTO -consistent CVD rates  36 
Annex C -4 Data inputs for US market values in 2017  40 
Annex C -5 Primary NAICS  codes for Pressure Pipe, Kitchen Shelving, Seamless Pipe, and 
Print Graphics  43 
Annex C -6 Scaling index for domestic varieties of  Pressure Pipe, Kitchen Shelving, 
Seamless Pipe, and Print Graphics  49 
Annex C -7 Scope adjustments for  selected varieties of  Kitchen Shelving and Print 
Graphics  51 
Annex C -8 Remedy year figures for selected varieties of Pressure Pipe, Kitchen Shelving, 
Seamless Pipe, and Print Graphics  54 
Annex C -9 GAMS code  of the two -step Armington model  57 
Annex C -10 Data inputs used to implement the Armington model under the two steps  61 
Annex C -11 Results of implementing the  first step of the two -step A rmington model  63 
 
 
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  ANNEX  A 
WORKING PROCEDURES OF THE ARBITRATOR  
Contents  Page  
Annex  A-1 Working Procedures of the Arbitrator  4 
Annex  A-2 Additional Working Procedures of the Arbitrator Concerning Business 
Confidential Information  9 
Annex A -3 Additional Working Procedures of the Arbitrator Concerning Meetings with 
Remote Participation  10 
 
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  ANNEX  A-1 
WORKING PROCEDURES OF THE ARBITRATOR  
Adopted on 8 January 2020  
General  
 
1. (1) In this proceeding, the Arbitrator shall follow the relevant provisions of the 
Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"). 
In addition, the following Working Proce dures apply.  
(2) The Arbitrator reserves the right to modify these procedures as necessary, after 
consultation with the parties.  
Confidentiality  
2. (1) The deliberations of the Arbitrator and the documents submitted to it shall be kept 
confidential. Member s shall treat as confidential information that is submitted to the Arbitrator 
by another Member which the submitting Member has designated as confidential.  
(2) In accordance with the DSU, nothing in these Working Procedures shall preclude a party 
from dis closing statements of its own positions to the public.  
(3) If a party submits a confidential version of its written submissions to the Arbitrator, 
it shall also, upon request of a Member, provide a non -confidential summary of the information 
contained in its submissions that could be disclosed to the public. A par ty should endeavour 
to promptly provide a non -confidential summary to any Member requesting it, and if possible 
within 10 days of receiving the request.  
(4) Upon request, the Arbitrator may adopt appropriate additional procedures for the 
treatment and hand ling of confidential information after consultation with the parties.  
Submissions  
 
3. (1) Before the substantive meeting of the Arbitrator with the parties, China shall transmit 
to the Arbitrator and to the United States a communication explaining the bas is for its request, 
including the methodology and data supporting it, in accordance with the timetable adopted 
by the Arbitrator.  
(2) Each party to the dispute shall also transmit to the Arbitrator a written submission in 
which it presents the facts of the  case and its arguments, in accordance with the timetable 
adopted by the Arbitrator.  
(3) The Arbitrator may invite the parties to make  additional submissions during the 
proceeding, including with respect to requests for preliminary rulings in accor dance with 
paragraph 4 below.  
Preliminary rulings  
4. (1) If the United States considers that the Arbitrator should make a ruling before the 
issuance of the Decision that certain measures, claims or issues are not properly before the 
Arbitrator, the followi ng procedure applies. Exceptions to this procedure shall be granted upon 
a showing of good cause.    WT/DS437/ARB/Add.1  
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  a. The United States shall submit any such request for a preliminary ruling at the earliest 
possible opportunity. China shall submit its response to the reque st at a time to be 
determined by the Arbitrator in light of the request.  
b. The Arbitrator may issue a preliminary ruling on the issues raised in such a preliminary 
ruling request before, during or after the substantive meeting, or the Arbitrator may defer  
a ruling on the issues raised by a preliminary ruling until it issues its Decision to the parties.  
c. If the Arbitrator finds it appropriate to issue a preliminary ruling before the issuance of its 
Decision, the Arbitrator may provide reasons for the ruli ng at the time that the ruling is 
made, or subsequently in its Decision.  
(2) This procedure is without prejudice to the parties' right to request other types of 
preliminary or procedural rulings during the proceeding, and to the procedures that the 
Arbitrator may follow with respect to such requests.  
Evidence  
5. (1) Each party shall submit all evidence to the Arbitrator no later than its written submission 
under paragraph 3(2) above, except evidence necessary for purposes of rebuttal, or evidence 
necessary for answers to questions or comments on answers provided by the other party. 
Additional  exceptions may be granted upon a showing of good cause.  
(2) If any new evidence has been admitted upon a showing of good cause, the Arbitrator 
shall accord the o ther party an appropriate period of time to comment on the new evidence 
submitted.  
6. (1) If the original language of an exhibit or portion thereof is not a WTO working language, 
the submitting party shall simultaneously submit a translation of the exhibit  or relevant portion 
into the WTO working language of the submission. The Arbitrator may grant reasonable 
extensions of time for the translation of exhibits upon a showing of good cause.  
(2) Any objection as to the accuracy of a translation should be raise d promptly in writing, 
preferably no later than the next filing or the meeting (whichever occurs earlier) following the 
submission which contains the translation in question. Any objection shall be accompanied by 
an explanation of the grounds for the objec tion and an alternative translation.  
7. (1) To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submissions, each party shall sequentially number its exhibits throughout the course of the 
dispute, indicating the submittin g Member and the number of each exhibit on its cover page. 
Exhibits submitted by China should be numbered CHN -1, CHN -2, etc. Exhibits submitted by 
the United States should be numbered USA -1, USA -2, etc. If the last exhibit in connection 
with a submission w as numbered CHN -5, the first exhibit in connection with the next 
submission thus would be numbered CHN -6. If a party withdraws an exhibit or leaves one or 
more exhibits intentionally blank, it should indicate this on the cover page that provides the 
number  of the blank exhibit.  
(2) Each party shall provide an updated list of exhibits (in Word or Excel format) together 
with each of its submissions, oral statements, and responses to questions.  
(3) If a party submits a document that has already been submitted as an exhibit by the 
other party, it should explain why it is submitting that document again.  
(4) Insofar as a party considers that the Arbitrator should take into account a document 
already submitted as an exhibit in the prior panel proceedings, it should  resubmit that 
document as an exhibit for the purpose of this proceeding. In its list of exhibits, it should refer 
to the number of the original exhibit in the original panel proceeding (OP) and Article 21.5 
panel proceedings (CP), if applicable (example: CHN-1 (CHN -21-OP), USA -2 (USA -11-CP)).  WT/DS437/ARB/Add.1  
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  (5) If a party includes a hyperlink to the content of a website in a submission, and intends 
that the cited content form part of the official record, the cited content of the website shall be 
provided in the form of an exhibit along with an indication of the date that it was accessed.  
Editorial Guide  
8. In order to facilitate the work of the Arbitrator, each party is invited to make its submissions 
in accordance with the WTO Editorial Guide for Submissions (electronic  copy provided).  
Questions  
 
9. The Arbitrator may pose questions to the parties at any time, including:  
a. Before the meeting, the Arbitrator may send written questions, or a list of topics it 
intends to pursue in questioning orally during the meeting. The  Arbitrator may ask different 
or additional questions at the meeting.  
b. The Arbitrator may put questions to the parties orally during the meeting, and in writing 
following the meeting, as provided for in paragraph 16 below.  
Substantive meeting  
 
10. The Arbitrator shall meet in closed session.  
11. The parties shall be present at the meetings only when invited by the Arbitrator to appear 
before it.  
12. (1) Each party has the right to determine the composition of its own delegation when 
meeting with the  Arbitrator.  
(2) Each party shall have the responsibility for all members of its delegation and shall 
ensure that each member of its delegation acts in accordance with the DSU and these Working 
Procedures, particularly with regard to the confidentiality of  the proceeding and the 
submissions of the parties.  
13. Each party shall provide to the Arbitrator the list of members of its delegation no later than 
5.00 p.m. (Geneva time) three working days before the first day of the meeting with the Arbitrator.  
14. A request for interpretation by any party should be made to the Arbitrator as early as possible, 
preferably at the organizational stage, to allow sufficient time to ensure availability of interpreters.  
15. There shall be one substantive meeting with the par ties. 
16. The substantive meeting of the Arbitrator with the parties shall be conducted as follows:  
a. The Arbitrator shall invite the United States to make an opening statement to present 
its case first. Subsequently, the Arbitrator shall invite China to present its point of view. 
Before  each party takes the floor, it shall provide the Arbitrator with a provisional written 
version of its statement. If interpretation is needed, each party shall provide additional copies 
for the interpreters.  
b. Each party s hould avoid lengthy repetition of the arguments in its submissions. 
Each party is invited to limit the duration of its opening statement to not more than 
60 minutes. If either party considers that it requires more time for its opening statement, 
it should inform the Arbitrator and the other party at least 10 days prior to the meeting, 
together with an estimate of the expected duration of its statement. The Arbitrator will accord 
equal time to the other party.  
c. After the conclusion of the opening statement s, the Arbitrator shall give each party the 
opportunity to make comments or ask the other party questions.  WT/DS437/ARB/Add.1  
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  d. The Arbitrator may subsequently pose questions to the parties.  
e. Once the questioning has concluded, the Arbitrator shall afford each party an 
opportunity to present a brief closing statement, with the United States presenting its 
statement first. Before each party takes the floor, it shall provide the Arbitrator and other 
participants at the meeting with a provisional written version of its closin g statement, if 
available.  
f. Following the meeting:  
i. Each party shall submit a final written version of its opening statement no later than 
5.00 p.m. (Geneva time) on the first working day following the meeting. At the same 
time, each party should also submit a final written version of any prepared closing 
statement that it delivered at the meeting.  
ii. Each party shall send in writing, within the timeframe established by the Arbitrator 
before the end of the meeting, any questions to the other party to w hich it wishes to 
receive a response in writing.  
iii. The Arbitrator shall send in writing, within the timeframe established by the Arbitrator, 
any questions to the parties to which it wishes to receive a response in writing.  
iv. Each party shall respond i n writing to the questions from the Arbitrator, and to any 
questions posed by the other party, within the time -frame established by the 
Arbitrator.  
Descriptive part and executive summaries  
 
17. The description of the arguments of the parties in the Decision of the Arbitrator shall consist 
of executive summaries provided by the parties, which shall be annexed as addenda to the Decision. 
These executive summaries shall not in any way serve as a substitute for the submissions of the 
parties in the Arbit rator's examination of the case.  
18. Each party shall submit one integrated executive summary, which shall summarize the facts 
and arguments as presented to the Arbitrator in the party's submissions and statements, and may 
also include a summary of its responses to questions and comments thereon  following the 
substantive meeting.  
19. Each integrated executive summary shall be limited to 15 pages.  
20. The Arbitrator may request the parties to provide executive summaries of facts and arguments 
presented in  any other submissions to the Arbitrator for which a deadline may not be specified in 
the timetable.  
Service of documents  
 
21. The following procedures regarding service of documents apply to all documents submitted by 
parties during the proceeding:  
a. Each party shall submit all documents to the Arbitrator by submitting them with the 
DS Registry (office No. 2047).  
b. Each party shall submit 2 paper copies of its submissions and 2 paper copies of its Exhibits 
to the Arbitrator by 5.00 p.m. (Geneva time) on the due dates established by the 
Arbitrator. The DS  Registrar shall stamp the documents with the date and time of 
submission. The paper version submitted to the DS Registry shall constitute the official 
version for the purposes of submission deadlines and the record of the dispute. If an 
exhibit is in a format that is impractical to submit as a paper copy, then the party may 
submit such exhibit in electronic format (by email or on a CD -ROM, DVD or USB key). In 
this case, the cover page of the exhibit should  indicate that the exhibit is only available in 
electronic format.  WT/DS437/ARB/Add.1  
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  c. Each party shall also send an email to the DS Registry, at the same time that it submits 
the paper versions, attaching an electronic copy of all documents that it submits to the 
Arbitrat or, preferably in both Microsoft Word and PDF format. All such emails to the 
Arbitrator shall be addressed to DSRegistry@wto.org, and copied to other WTO Secretariat 
staff whose email addresses have been provided to the parties during the proceeding. If  it 
is not possible to attach all the Exhibits to one email, the submitting party shall provide 
the DS Registry with four copies of the Exhibits in electronic form on USB keys, CD -ROMs 
or DVDs.  
d. In addition, each party is invited to submit all documents thr ough the WTO e -filing system 
within 24 hours following the deadline for the submission of the paper versions. If the 
parties have any questions or technical difficulties relating to the WTO e -filing system, 
they are invited to contact the DS Registry at DS Registry@wto.org.  
e. Each party shall serve any document submitted to the Arbitrator directly on the other 
party. A party may submit its documents to another party by email or other electronic 
format acceptable to the recipient without having to serve a pa per copy, unless the 
recipient party has requested a paper copy at least five working days before the filing. 
Each party shall confirm, in writing, that copies have been served on the parties, 
as appropriate, at the time it provides each document to the Ar bitrator.  
f. Each party shall submit its documents with the DS Registry and serve copies on the other 
party by 5.00  p.m. (Geneva time) on the due dates established by the Arbitrator.  
g. All communications from the Arbitrator to the parties will be via emai l. 
Correction of clerical errors in submissions  
22. The Arbitrator may grant leave to a party to correct clerical errors in any of its submissions 
(including paragraph numbering and typographical mistakes). Any such request should identify the 
nature of t he errors to be corrected, and should be made promptly following the filing of the 
submission in question.  
 
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  ANNEX A -2 
ADDITIO NAL WORKING PROCEDURES OF THE ARBITRATOR CONCERNING  
BUSINESS CONFIDENTIAL INFORMATION  
 
Adopted on 8 January 2020  
 
1. These procedures apply to any business confidential information (BCI) that a party wishes to 
submit to the Arbitrator, including BCI that was previously treated by the U.S. Department of 
Commerce as confidential or proprietary information protected by Administrative Protective Order in 
the course of the countervailing duty proceedings relevant to this dispute. However, these 
procedures do not apply to information that is available in the public domain. In addition, these 
procedures do not apply to any BCI if the person who provided the information in the course of the 
relevant proceedings agrees in writing to make the information publicl y available.  
2. The first time that a party submits to the Arbitrator BCI, as defined above, from an entity that 
submitted that information in one of the relevant proceedings, the party shall also provide, with a 
copy to the other party, an authorizing let ter from the entity. That letter shall authorize both China 
and the United States to submit in this dispute, in accordance with these procedures, any confidential 
information submitted by that entity in the course of those proceedings.  
3. If an entity refu ses to grant the authorization letter, a party may bring the situation to the 
attention of the Arbitrator. The Arbitrator shall consider what steps to take, which may include 
requesting information pursuant to Article 13 of the DSU.  
4. No person may have a ccess to BCI except a member of the Secretariat or the Arbitrator, an 
employee of a party, and an outside advisor for the purposes of this dispute to a party. An outside 
advisor may include a person providing to a party advice on any matter related to the dispute. 
However, an outside advisor is not permitted access to BCI if that advisor is an officer or employee 
of an enterprise engaged in the production, export, or import of the products that were the subject 
of the proceedings relevant to this dispute.  
5. A party having access to BCI shall treat it as confidential, i.e., shall not disclose that 
information other than to those persons authorized to receive it pursuant to these procedures. Each 
party shall have responsibility in this regard for its employee s as well as any outside advisors used 
for the purposes of this dispute. BCI obtained under these procedures may be used only for the 
purpose of providing information and argumentation in this arbitration and for no other purpose.  
6. The party submitting B CI shall mark the cover and/or first page of the document containing 
BCI, and each page of the document, to indicate the presence of such information. The specific 
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 notice "Contains Business Confidential 
Information" at the top of the page.  
7. Where a party s ubmits a document containing BCI to the Arbitrator, the other party referring 
to that BCI in its documents, including written submissions and oral statements, shall clearly identify 
all such information in those documents. All such documents shall be marke d as described in 
paragraph  6. In the case of an oral statement containing BCI, the party making such a statement 
shall inform the Arbitrator before making it that the statement will contain BCI, and the Arbitrator 
will ensure that only persons authorized to have access to BCI pursuant to these procedures are in 
the room to hear that statement.  
8. The Arbitrator will not disclose BCI, in its decision or in any other way, to persons not 
authorized under these procedures to have access to BCI. The Arbitrator may, however, make 
statements of conclusion drawn from such information. Before the Arbitrator circulates its final 
decision to the Members, the Arbitrator will give each party an opportunity to review the decision to 
ensure that it does not con tain any information that the party has designated as BCI.  WT/DS437/ARB/Add.1  
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  ANNEX A -3 
ADDITIONAL WORKING PROCEDURES OF THE ARBITRATOR  
CONCERNING MEETINGS WITH REMOTE PARTICIPATION  
Adopted on 20 October 2020  
General  
1. These Additional Working Procedures set out terms for holding meetings with the Arbitrator 
which some participants may attend by remote means.  
Definitions  
2. For the purposes of these Additional Working Procedures:  
"Remote participant"  means any registered person attending the meeting with the Arbitrator 
by remote means.  
"Platform"  means the software or system through which remote participants attend the 
meeting with the Arbitrator.  
"Host"  means the designated person within the WTO Secretariat responsible for the 
management of the platform.  
Equipment and technical requirements  
3. Each party shall ensure that all remote participants of its delegation join the meeting using the 
designated platform, and meet the minimum equipment and technical requirements set out by 
the platform provider for t he effective conduct of the meeting.  
Technical support  
4. (1) Each party is responsible for providing technical support to the remote participants of its 
delegation.  
(2) The host will assist remote participants in accessing and using the platform in prepa ration 
of, and during, the meeting with the Arbitrator.  
Pre-meeting  
Registration  
5. Each party shall provide  to the Arbitrator the list of the members of its delegation, on a dedicated 
form to be provided by the WTO Secretariat, no later than 5:00 p.m. (Ge neva time) two weeks 
before the first day of the meeting with the Arbitrator. Such list shall include all members of the 
party's delegation, regardless of whether they participate in person or by remote means.  
Advance testing  
6. Before the meeting with the Arbitrator, the WTO Secretariat will hold two testing sessions with 
all remote participants of each party: (i) a separate one for each party's remote participants, 
and (ii) a joint session with all participants in the meeting, i ncluding all remote participants of 
the parties and the arbitrators joining remotely. Such sessions will seek to reflect, as far as 
possible, the conditions of the meeting.  WT/DS437/ARB/Add.1  
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  Confidentiality and security  
7. All remote participants shall follow the Additiona l Working Procedures of the Arbitrator  
concerning Business Confidential Information and the security rules contained in these Additional 
Working Procedures as well as any additional security guidance that may be provided by the 
host. 
Conduct of the meeting  
Access to the virtual meeting room  
8. (1) The host will invite remote participants via email to join the virtual meeting room on the 
platform.  
(2) For security reasons, access to the virtual meeting room will be password -protected and 
limited to registered participants. Remote participants shall not forward or share the meeting 
link or password.  
(3) Each party shall ensure that only registered participants from its delegation join the virtual 
meeting room.  
Advance log -on 
9. (1) The virtual meeti ng room will be accessible 60 minutes in advance of the scheduled start 
time of each session of the meeting with the Arbitrator.  
(2) All remote participants shall log on to the platform at least 30 minutes in advance of the 
scheduled start time of each se ssion of the meeting with the Arbitrator.  
Document sharing  
10. (1) Each party shall provide the Arbitrator and other participants with a provisional written 
version of its opening statement and, if available, of its closing statement, before delivery at t he 
meeting.  
(2) Any participant wishing to share a document with the Arbitrator and other participants during 
the meeting shall do so before first referring to such document at the meeting.  
Communication breakdown  
11. (1) Each party shall designate a conta ct person who can liaise with the host during the course 
of the meeting to report any technical issues that arise with respect to the platform. The host 
can be contacted via the platform, by sending an email to remotemeeting03@wto.org, or by 
calling +41 (0 )22 739 6148.  
(2) After consulting the parties, the Arbitrator may pause the session until the technical issue is 
resolved or may continue the proceedings with those participants that continue to be connected 
or are physically present in the meeting room a t the WTO.  
Relation with the Working Procedures of the Arbitrator  
12. These Additional Working Procedures complement the Working Procedures of the Arbitrator 
and prevail over the latter to the extent of any conflict.  
 
 
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  ANNEX  B 
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Executive summary of the arguments of the United States  13 
Annex  B-2 Executive summary of the arguments of China  21 
 
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ANNEX  B-1 
EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE UNITED STATES  
I. INTRODUCTION  
1. Contrary to the requirements of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes  ("DSU"), the level of suspension of concessions that China has requested is 
not equivalent to the level of nullification or impairment.    
2. Pursuant to Article 22.7 of the DSU, the task of an arbitrator is to determine whether the 
requested level of suspension of concessions or other obligations is equivalent to the level of 
nullification or impairment of benefits accruing to the complaining party under the relevant covered 
agreement(s), as required under Article 22.4.  China, in its DSU Article 22.2 r equest, has proposed 
to suspend concessions at a level of $2.4 billion annually; the United States has objected to that 
level, referring the matter to arbitration; and the United States has made a prima facie case 
(including through China 's concession that  $2.4 billion exceeds the level of nullification or impairment 
and by demonstrating fundamental defects in China 's methodology and data) that China 's requested 
level of suspension is inconsistent with Article 22.4 of the DSU.   
3. Thus, it is appropriate fo r the Arbitrator to reject China 's requested level of nullification or 
impairment and continue the analysis, pursuant to Article 22.7, to determine the level of suspension 
that it considers to be equivalent to the level of nullification or impairment, as o ther arbitrators have 
done in prior Article 22.6 proceedings.  The United States has provided the Arbitrator ample evidence 
to sustain its factual assertions in order to assist the Arbitrator in determining the correct 
methodology (including correct underly ing assumptions) and the correct data that can be used to 
accurately estimate a level of suspension that is equivalent to the level of nullification or impairment.  
4. The level of nullification or impairment should be determined by estimating the trade eff ects 
of removing the WTO -inconsistent aspects of the U.S. countervailing duty ( "CVD") measures 
following the expiration of the reasonable period of time ( "RPT"), through a counterfactual of 
reducing the CVD rate by the relevant WTO -inconsistent Less -Than-Adequate -Remuneration 
("LTAR") rate.  China agrees with this approach, but has incorrectly identified the WTO -inconsistent 
CVD rates to use to calculate the counterfactual WTO -consistent CVD rates.  The United States has 
shown that the rates from the final de terminations of the section 129 proceedings ( "section 129 
rates"), which were the compliance measures reviewed in the Article 21.5 proceedings in this 
dispute, are the correct WTO -inconsistent CVD rates, and the counterfactual WTO -consistent CVD 
rate for e ach product should be calculated by reducing the section 129 CVD rate by the relevant 
WTO-inconsistent LTAR rate.  
5. With respect to the methodology to simulate the counterfactual, a two -step Armington -based 
imperfect substitutes partial equilibrium model is appropriate for the purpose of this proceeding, but 
only with certain necessary adjustments to be able to accurately estimate the level of nullification 
or impairment caused by the WTO -inconsistent CVD measures at issue –and not caused by any other 
factors. While China 's methodology uses a two -step Armington -based model, it fails to apply the 
necessary adjustments, consequently generating distorted counterfactual market shares and grossly 
overestimating the trade effects of the CVD measures at issue.  
6. The two necessary adjustments identified by the United States are:  (1) controlling for the 
trade effects of the antidumping ( "AD") duties that also were imposed on the same products; and 
(2) controlling for the trade effects of the positive supply shocks f or imports of the same products 
from third countries, making them more competitive in the U.S. market.  These adjustments are 
necessary to generate a counterfactual market representation which accurately estimates how the 
U.S. market would be different if t he CVD rates were made WTO -consistent at the expiration of the 
RPT ( i.e., in 2017), and thus properly isolate the trade effects of the CVD measures at issue.  WT/DS437/ARB/Add.1  
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  7. Finally, contrary to the incorrect data used by China, the United States has proposed to use 
the same data and data estimation methods chosen by the arbitrator in DS471 – save for certain 
instances where data -based adjustments were necessary.  In estimating the counterfactual value of 
imports from China, the United States has provided the Arbitrator data that accurately reflect imports 
from China that are subject to the CVD measures at issue in this proceeding.  This contrasts with 
China 's reliance on basket tariff categories and blanket use of an economy -wide GDP deflator to 
estimate the market size f or each discrete product.   
8. As the United States has demonstrated, when proper analysis is employed and correct data 
are used, the actual level of nullification or impairment is no more than $105.77 million  annually.  
II. APPROPRIATE CALCULATION OF THE LEVEL OF NULLIFICATION OR 
 IMPAIRMENT FOR THE COUNTERVAILING DUTY MEASURES AT ISSUE  
A. Article 22 of the DSU Requires that the Proposed Level of Suspension Be 
Equivalent to the Level of Nullification or Impairment  
9. Pursuant to Article 22.4 of the DSU, the DSB is not to authorize the suspension of concessions 
or other obligations unless "the level " of suspension is "equivalent " to the level of nullification or 
impairment.  Article 22 .7 of the DSU further provides that where a matter is referred to arbitration, 
the arbitrator "shall determine whether the level of . . . suspension is equivalent to the level of 
nullification or impairment. " The starting point in the analysis of a suspens ion request is to determine 
the extent to which any WTO -inconsistent measure maintained following  the expiration of the RPT 
nullifies or impairs benefits accruing to the complaining Member under the relevant covered 
agreement(s).  
10. Thus, an analysis of the level of nullification or impairment must focus on the "benefit " 
accruing to the complaining party under a covered agreement that is allegedly nullified or impaired 
as a result of the breach found by the DSB.  Arbitrators in past proceedings have unifor mly based 
their determinations on hard evidence and have refused to "accept claims that are 'too remote ', 'too 
speculative ', or 'not meaningfully quantified. '" As the arbitrators in EC – Hormones (US) (Article 22.6 
– EC) and EC – Hormones (Canada) (Article  22.6 – EC) found , "we need to guard against claims of 
lost opportunities where the causal link with the [WTO -] inconsistent [measure] is less than 
apparent, i.e., where exports are allegedly foregone not because of the [WTO -inconsistent measure] 
but due t o other circumstances. "  
11. In previous Article 22.6 proceedings, the arbitrators compared the level of trade for the 
complaining party under the WTO -inconsistent measure to what the complaining party 's level of 
trade would be expected to be had the Member concerned brought the WTO -inconsistent measure 
into conformity following the expiration of the RPT.  The situation in which the Member concerned 
has removed the WTO inconsistency is referred to as the "counterfactual. " The difference in the level 
of trade under these two situations typically represents the level of nullification or impairment.  Other 
Article 22.6 arbitrators have recognized that a counterfactual was an appropriate method in those 
proceedings to calculate a level of nullification or imp airment.   
12. Similarly, in this proceeding, both the United States and China have proposed a counterfactual 
in which the WTO -inconsistent aspect of each of the CVD measures at issue ( i.e., the WTO -
inconsistent LTAR rate) is removed following the expiratio n of the RPT.  China, however, has proposed 
to use incorrect rates as the WTO -inconsistent CVD rates, which also results in incorrect 
counterfactual WTO -consistent CVD rates.  The appropriate analysis requires a comparison between 
the baseline value of impor ts of each product from China to the United States and the value of 
imports from China to the United States that would have been expected had the CVD rates been 
WTO-consistent following the expiration of the RPT (the counterfactual).  As described below, Ch ina's 
incorrect WTO -inconsistent rates and incorrect counterfactual WTO -consistent rates result in an 
incorrect outcome of the counterfactual analysis.  
B. The Correct Counterfactual is Reduction of the Section 129 CVD Rate by the 
Relevant WTO -Inconsistent LTAR Rate  
13. In this proceeding, the correct counterfactual is the estimated value of imports of relevant 
products from China to the United States if the WTO -inconsistent CVD measures were modified, WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 15 - 
 
  following the expiration of the RPT, to comply with the DSB recommendations, holding all other 
factors constant.  China, in its methodology paper, acknowledges that the Article 21.5 compliance 
panel in this dispute reviewed and found to be WTO -inconsistent the section 129 determinations, 
which are the basis of t he WTO -inconsistent CVD rates used by the United States.  Yet, China has 
disregarded this fact and has used the rates from the CVD orders, rather than the section 129 rates, 
as the baseline rates for the counterfactual analysis.    
14. The relevant rates to be used as the WTO -inconsistent CVD rates are the section 129 rates 
because the section 129 determinations were the measures that were actually "found to be WTO -
inconsistent " in this dispute.  
C. The Correct Methodology for Determining the Level of Nullifi cation or 
Impairment Must Incorporate Other Relevant Factors and Rely on a Correct 
Assumption Regarding Elasticities of Substitution  
15. As explained above, the key issue in this proceeding is the impact on trade flows of the 
maintenance of the WTO-inconsistent CVD measures following the expiration of the RPT.  The United 
States and China generally agree that a version of the two -step Armington approach used by the 
arbitrators in DS464 and DS471 is appropriate.  However, the United States disagrees  with China 's 
proposed version of the two -step Armington approach because it not only fails to address the 
fundamental deficiencies of the unadjusted two -step Armington approach but also further distorts 
the model by relying on a flawed assumption about el asticities of substitution.   
16. In contrast, the U.S. methodology corrects the fundamental deficiencies of the two -step 
Armington approach used in DS464 and DS471 by implementing two necessary adjustments.  These 
adjustments are necessary to capture China 's true relative competitiveness and correctly estimate 
the level of nullification or impairment attributable to the CVD measures at issue.  Moreover, the U.S. 
methodology is based on a correct assumption about elasticities of substitution.  
The Correct Me thodology Properly Isolates the Trade Effects of the 
WTO -Inconsistent CVD Measures by Adjusting for Other Factors that 
Demonstrably Affected the Evolution of Market Shares Between the 
Time of Imposition of the Relevant CVD Measure and Remedy Year  
17. The two-step Armington approach, as applied by the arbitrators in DS464 and DS471, begins 
by calibrating a standard partial equilibrium Armington model using market share data from the year 
prior to the imposition of the CVD measure ( "the year -prior") for three  entities: U.S. domestic 
producers, China, and the rest of the world ( "ROW"). In this type of model, market shares observed 
in the year -prior data are assumed to capture relative competitiveness in the U.S. market in that 
year. The year -prior data in this proceeding, however, do not reflect an accurate picture of China 's 
underlying competitiveness because the U.S. market was distorted by subsidies and dumping, prior 
to the imposition of the relevant CVD and AD measures.  
18. Using the year -prior data and cal ibrated parameters, step one of the two -step Armington 
approach, as applied by the arbitrators in DS464 and DS471, simulates the application of WTO -
inconsistent CVD measures on imports from China.  The counterfactual market shares resulting from 
step one ar e ostensibly assumed to represent the relative competitiveness of each entity ( i.e., 
domestic shipments, imports from China, and imports from ROW) after the expiration of the RPT, 
that is, in 2017.  
19. In step two of the two -step Armington approach, the co unterfactual market shares generated 
in step one are used to calibrate a new benchmark model.  The market shares are used to divide up 
the total value of the U.S. market in 2017, as observed in the data, constructing an alternative 2017 
market in which no f actors other than the CVD measures on imports from China have affected 
relative competitiveness among the entities between the date of imposition of the CVD measure and 
the remedy year (2017).  This constructed market is assumed to be representative of the market in 
2017.  This new benchmark model is then used to simulate the trade effects of modifying the WTO -
inconsistent CVD rates to be WTO -consistent in 2017, including estimating each entity 's market 
share under the counterfactual WTO -consistent CVD rates.  The level of nullification or impairment is 
the difference between the simulated value of 2017 U.S. imports from China under the WTO -WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 16 - 
 
  inconsistent rates and the simulated value of 2017 U.S. imports from China under the modified, 
counterfactual WTO -consiste nt rates.  
20. As recognized by the authors of a recent paper discussing the DS471 arbitration, the two -step 
Armington approach used in that arbitration had a fundamental deficiency:  it incorrectly attributed 
trade damage solely to the AD duties at issue in that proceeding by failing to account for other 
factors that affected the evolution of relative competitiveness in the U.S. market ( i.e., market 
shares) between the date of imposition of the duties and the remedy year.  The CVD duties at issue 
in this proceeding were among those factors.  China, in DS471, appears to have anticipated this 
problem when it proposed to "tak[e] into account the impact of CVD measures " in its alternative 
methodology for estimating the level of nullification or impairment c aused by the AD measures that 
were at issue in that proceeding.  
21. The U.S. methodology in this proceeding offers a solution that corrects this deficiency by 
incorporating two adjustments.  These adjustments ensure that the model controls for economic 
forces other than the CVD measures at issue and properly isolates the trade effects of the CVD 
measures.  In contrast, the unadjusted two -step Armington model that fails to account for other 
relevant factors would essentially estimate trade damage based on an incorrect counterfactual 
market, in which factors observed to have affected the actual 2017 market shares are absent, thus 
overestimating the level of nullification or impairment.  
a.  First, the Two -Step Armington Approach Must Account for the 
Effect of D umping and the Corresponding Antidumping Duties 
on China 's U.S. Market Share  
22. An unadjusted two -step Armington approach fails to account for the parallel AD measures that 
applied to the products at issue in this proceeding – meaning the model essentiall y asks how the 
market would be different if CVD rates were WTO -consistent at the expiration of the RPT and if AD 
duties were never imposed in the first place.  But there is no question that the AD measures were 
imposed simultaneously or almost simultaneousl y with the CVD measures at issue, and that China 's 
actual relative competitiveness in 2017 was directly affected by these AD measures.  Thus, it would 
not be proper under the correct counterfactual to assume that AD duties never existed or affected 
relative  competitiveness in the U.S. market.  
23. Accordingly, the model in step one of the two -step Armington approach must account for the 
parallel AD duties to be able to estimate China 's actual relative competitiveness and generate an 
adequate representation of  the counterfactual 2017 market.  Otherwise, the step two model 
calibrated with incorrect counterfactual 2017 market shares would, in turn, overestimate China 's 
relative competitiveness in 2017 because it would not account for the correction for dumping – the 
AD duties – that was in effect at the end of the RPT.  Therefore, only a two -step approach that 
properly accounts for the parallel AD measures can accurately simulate the 2017 market shares and 
thus accurately estimate the level of nullification or impai rment.  
24. The U.S. methodology takes the AD duty rates as they are and incorporates them with the 
WTO-inconsistent CVD rates in step one and the counterfactual WTO -consistent CVD rates in step 
two. This prevents the two -step Armington model from simulating an incorrect counterfactual 2017 
market in which the parallel AD duties were never imposed, thereby properly controlling for the 
effects of the AD duties.  
b.  Second, the Two -Step Armington Approa ch Must Account for 
Third -Country Supply Shock, i.e., Factors Other than Trade 
Remedy Measures that Influenced the Evolution of Market 
Shares in the Interim Period Between Imposition of the 
Relevant CVD Measure and Remedy Year  
25. As explained above, the u nadjusted two -step model used by the DS471 arbitrator ignores the 
trade effects of other factors on the evolution of relative competitiveness during the interim period 
between the imposition of the CVD measures and 2017.  In reality, however, entry of new m arket 
participants and increased capacity of countries other than China to supply the U.S. market 
influenced China 's (and other suppliers ') relative competitiveness.  In several of the product markets 
at issue in this proceeding, investments of private firm s or changes in government policy allowed WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 17 - 
 
  certain third country suppliers to improve their relative competitiveness in the U.S. market during 
the interim period.   
26. A model that fails to account for such third -country supply shocks fails to answer the re levant 
question; rather, it assesses how the market would be different if CVD rates were WTO -consistent 
and if third -country market shares were held proportionally constant.  Such a model cannot 
accurately estimate the nullification or impairment caused by the WTO -inconsistent CVD measures 
at issue in this proceeding.  The resulting estimate of nullification or impairment would either 
understate or overstate the actual level of nullification or impairment, depending on the underlying 
circumstances.  
27. The United States has provided evidence for five of the products (Aluminum Extrusions, OCTG, 
Solar Panels, Line Pipe, Pressure Pipe) that investments of private firms or changes in government 
policy boosted the supply potential of certain third countries and r esulted in imports from those 
countries gaining U.S. market share at China 's expense.  In other words, these positive supply shocks 
improved the relative competitiveness of those third countries and led to the relative deterioration 
of China 's competitive p osition in the U.S. market during the interim period.  Such changes during 
the interim period should be reflected in the step one counterfactual market that is used to calibrate 
the step two model.  Otherwise, the step one counterfactual market would not rep resent China 's 
actual relative competitiveness in 2017, and in turn, cannot be used to correctly estimate the level 
of nullification or impairment.  Accordingly, t he United States has quantified and incorporated those 
supply shocks into its model using a hi storical simulation approach based on the economics 
literature.  
28. In principle, the two -step Armington approach should incorporate a supply shock adjustment 
for every product for which the relative competitiveness of third -country suppliers has changed 
between the date of imposition of the CVD measures and 2017.  However, it is not possible to directly 
observe supply shocks and their magnitude by country.  As the best alternative, the United States 
has relied on two types of information to make the best eff ort to identify the relevant supply shocks:  
(1) trade data showing trends of disproportionate increases in certain third countries ' market shares 
relative to other exporting countries between the year in which the CVD measure was imposed and 
2017, and (2) analyses documented in relevant U.S. International Trade Commission ( "USITC ") 
investigations of any industry investment or government policy changes in those third countries 
during the same period.   
29. Using this evidence -based method, the United States h as identified the "Rising Supplier " 
countries for Aluminum Extrusions, OCTG, Solar Panels, Line Pipe, and Pressure Pipe, and has 
detailed the government policies or industry investments that are linked to the expansion of their 
supply potential.  Based on e vidence, the adjustment also includes a net decline in relative 
competitiveness of India, Malaysia, Thailand, and Vietnam in the U.S. Pressure Pipe market due to 
U.S. trade remedies against Pressure Pipe from those countries in 2014 and 2016, which ultimat ely 
boosted China 's relative competitiveness.  The United States has not found sufficient evidence to 
recommend implementing the supply shock adjustment for the remaining five products.  
30. Both the AD adjustment and the third -country supply shock adjustmen t stem from the fact 
that the correct methodology for this proceeding should control for any other factors that affected 
the evolution of relative competitiveness in the U.S. market for the products at issue between the 
imposition of the measure at issue a nd the remedy year, as long as there is evidence to support 
those effects and sufficient quantitative information to incorporate them into the model.  The United 
States has controlled for these two factors because there is sufficient evidence to demonstrate  their 
effects on the evolution of relative competitiveness between the imposition of the relevant CVD 
measures and 2017.  On the other hand, the United States has not adjusted for any other factors 
due to lack of sufficient evidence that any other factors (including any other duties or non -tariff 
actions) meaningfully affected the evolution of relative competitiveness during the interim period.  
31. China falsely argues that incorporating the necessary adjustments proposed in the U.S. 
methodology would be e quivalent to adopting a one -step Armington model.  However, the step one 
counterfactual market shares generated by the U.S. methodology are consistently and significantly 
greater than China 's actual 2017 market shares that would be used in a one -step Arming ton model.  
The U.S. methodology corrects the critical deficiency in the unadjusted two -step Armington model 
so that the model can generate accurate counterfactual 2017 market shares and thus estimate the WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 18 - 
 
  level of nullification and impairment that is proper ly attributable to the CVD measures at issue – the 
very purpose of adopting a two -step Armington model.  
The Correct Methodology Relies on the Correct Assumption that the 
Elasticity of Substitution across Imported Varieties is Same as the 
Elasticity of Substitution Between Imported Goods and Domestic 
Goods  
32. Contrary to China 's argument, the so -called "Rule of Two " is not the correct assumption for 
the methodology in this proceeding.  The Rule of Two is an ad hoc assumption that the elasticity of 
substitution across imported varieties ( "micro -elasticity ") is two times the elasticity of substitution 
between imported goods and domestic goods ( "macro -elasticity "). This proposition has serious 
implications, as it would result in a significantly higher estimate of the level of nullification or 
impairment.  However, China has not sufficiently demonstrated why the Arbitrator should deviate 
from the more reasonable assumption that the micro -elasticity and the macro -elasticity are constant 
(i.e., the Rule of One), which is the standard in Armington partial equilibrium modeling in the 
academic literature and which has been used in previous WTO arbitrations, including DS471.  
33. While China has frequently referenced Feenstra et al. , there simply is no evidence in the paper 
to conclude that the micro -elasticity is double the macro -elasticity for the products at issue in this 
proceeding.  Rather, China has misinterpreted the statistical data presented in the paper.  The 
corrected outcome provided by the United State s is, in fact, evidence in favor of the null hypothesis 
that the macro -elasticity and micro -elasticity are equal.  
34. Moreover, the results of Feenstra et al. do not support China 's position because they do not 
apply to the products at issue here and canno t be generalized.  The sample examined in Feenstra et 
al. only covers 0.5 percent of all Harmonized Tariff Schedule of the United States ( "HTSUS ") 
categories at the 10 -digit level.  In addition, it appears that the only overlap between the sample in 
Feenstra  et al. and the products at issue in this proceeding is a limited subset of the products subject 
to the OCTG CVD measure.  From a statistical perspective, it is unreasonable to generalize the weak 
results of Feenstra et al . The small sample in Feenstra et a l. is not randomly sampled from the 
population of all products, and there is no evidence that it is a representative sample.  In fact, the 
authors of Feenstra et al. themselves do not assert that the paper 's results are generalizable outside 
of the specific  sample, contrary to China 's argument.  The weak evidence in Feenstra et al.  that the 
micro -elasticities may be higher than the macro -elasticities for the products sampled in the paper 
does not support the application of the Rule of Two for the specific pro ducts at issue in this 
proceeding that are largely from different industries.  
35. Further, a nested approach – which encompasses the Rule of Two and other model 
arrangements in which the elasticity of substitution is not assumed to be constant across all s ources 
of supply – is not appropriate in this proceeding because trade diversion is not expected for the 
products at issue.  A nested approach could be used where there is evidence that buyers are more 
likely to substitute one source of supply over another in response to a change in the price of the 
subject variety.  However, product -specific evidence reported by the USITC shows that the domestic 
variety, imports from China, and imports from ROW are not systematically differentiated, but rather 
are comparable  and interchangeable in terms of product quality, terms of sale, and use.  That is, 
there is no basis to assume that an increase in the price of imports from China would lead U.S. 
buyers to systematically and disproportionately substitute toward imports fro m ROW, over U.S. 
domestic products.  And there is certainly no evidence that buyers are likely to substitute toward 
imports from ROW at double the rate of substitution toward U.S. domestic products.  
36. Accordingly, the correct methodology should rely on t he standard Rule of One and thus use 
the substitution elasticity estimates reported by the USITC for both micro - and macro -elasticities.  
These USITC elasticities (which were developed under the implicit assumption that the micro -
elasticity and macro -elasti city are equal) are tailored to the specific products subject to the duties 
and are based on analysis of responses from purchasers, producers, and importers to questionnaires 
concerning the pertinent market, as well as arguments made by interested parties.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 19 - 
 
  D. The Correct Data Inputs that Would Be Used in Applying the Two -Step 
Armington -Based Partial Equilibrium Model  
37. In an effort to identify the best data available for this proceeding, the United States has 
maintained a reasoned and consistent approach of using the same year -prior and 2017 U.S. market 
data that the arbitrator in DS471 chose to use for the seven products for which AD measures were 
at issue in the DS471 arbitration proceeding (Aluminum Extrusions, Line Pipe, OCTG, Print Graphics, 
Seamless Pipe, Solar Panels, and Steel Cylinders).  For the other three products that were not at 
issue in DS471 (Kitchen Shelving, Pressure Pipe, and Wire Strand), the United States has estimated 
the U.S. market data by applying estimation methods that are  similar to those applied by the DS471 
arbitrator.  In contrast, China has unnecessarily deviated from the data and data estimation methods 
used by the DS471 arbitrator and has proposed data that are not suitable for accurately estimating 
the level of nulli fication or impairment.  
Year-Prior U.S. Market Data  
38. China has chosen the wrong year -prior for three of the products (OCTG, Line Pipe, and 
Pressure Pipe).  Since step one of the two -step Armington approach uses the year -prior data to 
generate market shares that reflect relative competitiveness in the U.S. market in 2017, it is 
necessary to ensure that the two -step approach uses the correct year -prior – that is, the year prior 
to the imposition of the final CVD measure.  However, China has attempted to deviate from the 
approach taken by the arbitrators in DS471 and DS464 by arguing that the year -prior should be 
based on the date of imposition of the preliminary CVD measure.   
39. However, the imposition of a CVD measure is not made final until both the U. S. Department 
of Commerce and the USITC make affirmative final determinations.  Any cash deposits collected 
following an affirmative preliminary CVD determination are merely provisional and subject to refund 
depending on the outcome of the final determinati on. Moreover, for all of the products at issue, no 
provisional CVD duties were collected for a "gap period " of several months between the expiration 
of the preliminary CVD measure and the publication of the final CVD measure.  China has not 
explained how, or why, any changes in trade flows during the gap period should be attributed to 
CVD duties when there were no CVD duties in place.  Therefore, the United States has maintained 
the use of the year prior to the imposition of the final CVD meas ure, rather than a temporary 
preliminary CVD measure.  
40. In addition to misidentifying the relevant year -prior and thus using incorrect year -prior data, 
China has also misidentified the relevant domestic shipments or imports values for three other 
product s (Print Graphics, Steel Cylinders, and Solar Panels).  For Kitchen Shelving, China 's estimated 
imports values improperly rely on "basket " HTSUS categories that broadly include a number of 
products that fall outside the scope of the Kitchen Shelving CVD mea sure. 
41. In contrast, the United States has correctly identified the year -prior for each product in a 
manner that is consistent with the year -prior identified by the arbitrator in DS471, and has used the 
domestic shipments and imports values that were eit her used by the DS471 arbitrator, or calculated 
those values using sources and methods similar to those relied on by the DS471 arbitrator.  There 
are only two exceptions.  First, for the domestic shipments value for Steel Cylinders, whereas the 
DS471 arbitra tor relied on an estimate based on industry data, the United States has replaced the 
estimate with actual data, which became available after the release of the DS471 decision.  Second, 
for Kitchen Shelving, the United States has corrected for the overinclus ion problem of relying on 
basket tariff categories by incorporating industry data -based adjustments to data collected in the 
relevant USITC investigations.  
2017 U.S. Market Data  
42. With respect to the 2017 data, the United States has generally used the data already reported 
by the DS471 arbitrator for the seven products that were also at issue in that arbitration.  Where the 
United States has adjusted data used by the DS471 arbitrator due to an overinclusion issue (Print 
Graphics and Seamless Pipe imp orts from ROW) or due to the availability of more recent or better 
data (OCTG and Steel Cylinders domestic shipments), ample evidence and explanations have been 
submitted for the application of those adjustments.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 20 - 
 
  43. As for the three products that were not  at issue in DS471, the United States has calculated an 
estimate using industry -specific data to estimate each component of the U.S. market for each 
product ( i.e., domestic shipments, imports from China, and imports from ROW).  This is the method 
that the D S471 arbitrator used and also the method that the USITC uses in its investigations.  
44. While the United States has used HTSUS -based data for the year -prior data due to lack of a 
better alternative, the United States has used, for 2017 imports from China, USCBP data reporting 
company -specific imports of subject merchandise that are subject to the CVD measures at issue.  
USCBP data, which are collected by the U.S. federal agency that enforces CVD measures at the time 
of importation, provide the most accurate estimates of the imports from China that were subject to 
the CVD measures at issue in this proceeding.  
45. In contrast, China has abandoned the reasoned approach of estimating each component of 
the U.S. market using industry -specific data, and has instead  resorted to a novel approach of 
applying a GDP deflator to the reported value of the U.S. market for a specific product in an earlier 
year and extrapolating the value of the 2017 U.S. market for that product.  This is not supported by 
economic theory.  A GDP deflator is based on the entire U.S. economy and is not tailored to specific 
products.  A GDP deflator, which is nominal GDP divided by real GDP, is a measurement of inflation.  
Accordingly, the outcome of China 's GDP deflator approach merely states the value of the earlier 
U.S. market in terms of 2017 dollars – it does not estimate the size of the 2017 U.S. market.  By 
attempting to project a future market size using a GDP deflator, China improperly assumes that the 
U.S. market for each individual product  grew in line with the prices of all final goods and services 
produced in the United States between the earlier data year and the remedy year.  Furthermore, 
regardless of the number of years over which a GDP deflator is applied, the deflator 's estimate for 
the 2017 market size would vary depending on the year that the deflator happens to extrapolate 
from – which demonstrates that the GDP deflator method is not a reliable proxy for projecting a 
future market size.  
46. While China has suggested the Producer P rice Index (PPI) as an alternative, applying the PPIs 
would also merely state the value of an earlier U.S. market in terms of 2017 dollars, similar to the 
GDP deflator approach.  Moreover, the PPIs, while narrower in product coverage than the economy -
wide G DP deflator, are not tailored to the specific products at issue in this proceeding and are 
unsuitable for estimating the market size for these products.  Generally, applying the PPIs would 
include the price effects of many other, non -subject products that a re often produced by different 
manufacturers or distributed through different channels.  
E. The Level of Nullification or Impairment that Would Result from the 
Application of an Appropriate Armington -Based Partial Equilibrium Model  
47. As a result of apply ing the two -step Armington -based approach that incorporates the two 
necessary adjustments proposed by the United States, the level of nullification or impairment from 
the maintenance following the expiration of the RPT of the U.S. WTO -inconsistent CVD meas ures on 
Aluminum Extrusions, Print Graphics, OCTG, Solar Panels, Steel Cylinders, Line Pipe, Seamless Pipe, 
Kitchen Shelving, Pressure Pipe, and Wire Strand from China is no more than $105.77 million  per 
year.  
II. CONCLUSION  
48. For the reasons given thro ughout this proceeding, the United States respectfully requests that 
the Arbitrator find that the level of suspension of concessions or other obligations requested by China 
is not "equivalent " to the level of nullification or impairment.  The United States requests that the 
Arbitrator find that the level of nullification or impairment is no more than $105.77 million  annually.  
 
 WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 21 - 
 
  ANNEX B -2 
EXECUTIVE SUMMARY OF THE ARGUMENTS OF CHINA  
I. INTRODUCTION  
1. This proceeding under Article  22.6 of the Dispute Settlement Understanding ("DSU") 
commenced because of the United States' continued refusal to comply with the recommendations 
and rulings of the  Dispute Settlement Body ("DSB") in United States – Countervailing Measures 
(China)  ("DS437").  
2. On 15 August 2019, the DSB adopted the compliance panel's report in DS437, as modified by 
the Appellate Body Report.  In that report, the Appellate Body upheld  the compliance panel's findings 
that the United States had acted inconsistently with Articles 1.1(b) and 14(d) of the Agreement on 
Subsidies and Countervailing Measures ("SCM Agreement") in four countervailing duty ("CVD") 
investigations.  The Appellate Bo dy also upheld the compliance panel's findings that the United States 
had acted inconsistently with Article  2.1(c) of the SCM Agreement in those same four investigations 
and in an additional seven countervailing duty investigations.  
3. The DSB ruled that t he U.S. measures at issue are inconsistent with the relevant provisions 
of the SCM Agreement and recommended that the United States bring its measures into conformity 
with its obligations under that agreement.  Despite these findings, the United States has refused to 
bring its measures into compliance with the recommendations and rulings of the DSB.  
4. Because the United States has refused to bring its unlawful measures into compliance with its 
WTO obligations, China is seeking authorization to suspend conce ssions or other obligations under 
the covered agreements in the amount of USD  788.75 million . For the reasons set out in China's 
methodology paper, written submission, oral statements, responses to questions from the Arbitrator, 
and comments on the United States' responses to questions from the Arbitrator, China submits that 
the United States has failed to demonstrate that China's proposed level of suspension is not 
equivalent to the level of nullification and impairment suffered by China as a result of the  U.S. failure 
to bring its measures into conformity with the recommendations and rulings of the DSB.  
II. CHINA'S PROPOSED COUNTERFACTUAL SCENARIO IS PLAUSIBLE AND 
REASONABLE  
5. Pursuant to Article  22.4 of the DSU, "[t]he level of the suspension of concessi ons or other 
obligations authorized by the DSB shall be equivalent to the level of the nullification or impairment."  
Pursuant to Article  22.7 of the DSU, it is the Arbitrator's task to "determine whether the level of 
such suspension is equivalent to the level of nullification or impairment."  Specifically, it is the 
Arbitrator's task to determine whether the level of suspension proposed by China is equivalent to 
the level of nullification and impairment caused by the United States' continued non -compliance  with 
the recommendations and rulings of the DSB concerning the measures at issue.  
6. WTO arbitrators have consistently adopted the approach of examining the relevant 
"counterfactual" scenario, i.e. a hypothetical scenario that describes what would have ha ppened in 
terms of trade flows had the responding party implemented the DSB recommendations and rulings.1 
7. The compliance panel's findings as affirmed by the Appellate Body concern the USDOC's 
incorrect interpretation and application of Articles 14(d) a nd 2.1(c) of the SCM Agreement and its 
resulting incorrect determination that China provides inputs for less than adequate remuneration 
("LTAR").  The only reasonable inference that can be drawn in light of these findings is that had the 
USDOC sought to bri ng its measures into conformity with its obligations under the SCM Agreement 
by properly interpreting and applying Articles 14(d) and 2.1(c), it would not have identified a 
countervailable subsidy in respect of the alleged provision of inputs for LTAR.  Consequently, the 
benefit that China could have legitimately expected to receive as a result of the recommendations 
and rulings of the DSB was that any countervailing duties applied to the products at issue would be 
 
1 See China's methodology paper, para. 15.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
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  calculated so as to exclude the portion of the total CVD margin attributed to the alleged input subsidy 
programmes.  
8. Accordingly, in this proceeding China proposed a plausible and reasonable counterfactual 
scenario of modifying the relevant CVD orders to exclude the portion of the total CVD margi n 
attributable to the alleged input subsidy programmes.  The United States has agreed that the 
appropriate counterfactual analysis would entail modifying the relevant CVD rates by deducting the 
portion of the total CVD rate attributable to the input subsidy  programs.2  
III. CHINA'S PROPOSAL TO CALCULATE NULLIFICATION OR IMPAIRMENT USING THE 
TWO -STEP ARMINGTON MODEL IS REASONABLE AND CONSISTENT WITH THE 
APPROACH ADOPTED BY PRIOR ARBITRATORS  
A. Overview of China's Application of the Two -Step Armington Model  
9. China has proposed that the Arbitrator utilize a two -step Armington elasticities model 
consistent with the approach implemented in two recent Article  22.6 proceedings: US – Washing 
Machines (Korea)  ("DS464") and US – Anti-Dumping Methodo logies (China)  ("DS471").  The 
Armington elasticities model estimates the impact of the WTO -inconsistent countervailing duties on 
China's 2017 exports of the subject products to the United States.  
10. At step one, China applied the Armington model to the U. S. market as it existed prior to the 
imposition of the WTO -inconsistent CVD orders in order to simulate, for each CVD order, the impact 
of imposing the WTO -inconsistent countervailing duties on the sales of Chinese exporters, exporters 
from the rest of the  world ("ROW"), and U.S. producers.  These counterfactual sales were then used 
to compute counterfactual market shares for each supplier.  
11. At step two, China multiplied the counterfactual market shares simulated under the first step 
by the actual 2017 to tal value of the U.S. market, i.e. the total value of the U.S. market in the 
remedy year, in order to obtain a counterfactual 2017 value of U.S. imports from Chinese exporters, 
ROW exporters, and sales by U.S. producers.  China then applied the Armington mo del to these 
counterfactual 2017 sales in order to estimate, for each CVD order, the impact of changing the 
countervailing duties from WTO -inconsistent rates to WTO -consistent rates.  This second step yielded 
new counterfactual estimates of the value of U.S . imports from China, ROW exporters, and sales by 
U.S. producers.   
12. For each CVD order, China then computed the amount of nullification and impairment suffered 
by China by subtracting China's counterfactual export value with WTO -inconsistent duties (ste p one) 
from China's simulated export value with WTO -consistent duties (step two).  Adding the amount of 
nullification and impairment for each of the underlying cases yielded China's estimate of the total 
amount of nullification and impairment suffered by Ch ina.3 
13. In its submissions, China explained in detail why a two -step approach to the Armington model 
is appropriate for the purposes of calculating nullification and impairment caused by the United 
States' WTO -inconsistent CVD duties in this proceeding.  A simpler one -step approach is not 
appropriate because implicit in that approach is the assumption that the change from the WTO -
inconsistent  countervailing duty to the WTO -consistent  countervailing duty occurs quickly, i.e. it is 
essentially a short -run a nalysis.  That assumption does not hold if the WTO -inconsistent 
countervailing duties are in place for many years.4   
14. In each of the underlying cases at issue, the WTO -inconsistent countervailing duties were 
imposed between 2008 and 2012.  The remedy year is 2017.  Thus, for each of the underlying cases, 
a considerable period of time has passed since the countervailing duty was originally imposed.  It 
would therefore be inappropriate to assume either that the market share of the three types of 
suppliers in the remedy year is a reasonable benchmark from which to evaluate the trade impact of 
the long -ago imposed countervailing duties or that the size of the overall U.S. market in the year 
prior to the imposition of WTO -inconsistent duties is a reason able proxy for the size of the market 
 
2 See China's written submission, Section II.  
3 See China's methodology paper, Section III.B.  
4 See, e.g. China's methodology paper, Section III.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
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  in the remedy year.  Accordingly, step one of the two -step approach is necessary to account for the 
small market shares resulting from the trade -depressing effect of the WTO -inconsistent duties.  
15. China incorporated t wo advancements to the two -step Armington methodology applied by 
prior arbitrators.  First, China allowed the elasticity of substitution to vary by source.  China provided 
strong factual and academic support for the proposition that the Arbitrator use a nest ed approach, 
rather than the single elasticity approach used in DS464 and DS471, including the use of the 
standard "Rule of Two", i.e. setting the elasticity across different import sources at twice the 
elasticity between domestic and import varieties.5  
16. China pointed out that this "nested" approach to Armington modelling has been used by the 
WTO in its Global Trade model and the U.S. International Trade Commission ("USITC").  The practice 
of using the nested approach should carry over to partial -equili brium analyses of disaggregated 
products where significant trade diversion to other importers can be expected.  Failing to account for 
the higher rates of substitution across import varieties would lead to an understatement of 
nullification or impairment be cause the model would understate the diversion of trade to non -subject 
sources induced by the WTO -inconsistent duties.6 
17. Second, China discovered a critical programming error in the DS471 computer code.  China 
explained the nature of this error and prov ided corrected computer code to the Arbitrator.  
Specifically, the computer code includes a new variable named "NI_fixed", which calculates the 
amount of nullification or impairment net of duty payments, which is the correct approach and 
consistent with tha t reported in DS464.7 The parties agree that the Arbitrator should calculate 
nullification and impairment net of duties because duties do not accrue to the producers of the 
subject imports.8 
18. China has also proposed that the Arbitrator implement the t wo-step approach using public, 
verifiable data.  Step one of the two -step Armington model requires three sets of data: (i) actual U.S. 
market data (the sales of the domestic producers, Chinese exporters, and ROW exporters); (ii) 
Armington elasticity model p arameters; and (iii) the WTO -inconsistent CVD rate imposed in each 
case. 
19. For eight of the underlying cases, the public version of the relevant USITC investigation report 
contained all necessary market sales information.  For three other cases, some of t he necessary 
market information was not provided in the relevant final USITC report.  Accordingly, for these three 
cases, China used the HS10 tariff codes listed in the relevant USITC reports to obtain the value of 
trade for Chinese exporters and ROW export ers from USITC Dataweb.  For domestic sales value, 
China relied on public data, including 10K reports and North American Industry Classification System 
("NAICS") industry data.9 
20. With respect to Armington elasticity parameters, three elasticities are re ported in the relevant 
final USITC reports: demand elasticity, domestic supply elasticity, and the elasticity of substitution 
between domestic and imported products.  Import supply elasticities, however, are not provided in 
those reports.  China therefore fo llowed the approach adopted by the arbitrator in DS471 and 
assumed a value of 10 for each of these elasticities.  For the elasticity of substitution between the 
imported varieties, China proposed a separate elasticity: the standard "Rule of Two".10 
21. China submitted to the Arbitrator the relevant WTO -inconsistent countervailing duty rates at 
the time of the expiry of the reasonable period of time ("RPT").11 
22. Step two of the two -step Armington model requires two additional sets of data: (i) the total 
value of the U.S. market in 2017 and (ii) the WTO -consistent CVD rate for each case.  For five cases, 
China used information from either a USITC sunset review, a USITC report from a subsequent trade 
dispute involving the same product scope, or a publi cly available 10K report.  For cases where those 
 
5 See China's methodology paper, Section III.C.5.  
6 See China's writ ten submission, Section V.A.  
7 See China's methodology paper, para. 78.  
8 See China's oral statement, para. 9.  
9 See China's methodology paper, Section IV.B.  
10 See China's methodology paper, para. 96.  
11 See China's methodology paper, Section IV.B.3.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
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  subsequent reports were published prior to 2017, China scaled data from the latest year with 
reported market data to 2017 values using the GDP deflator.  For the other cases, all relevant market 
information was redacted in all subsequent USITC reports.  China therefore estimated 2017 market 
size by scaling the size of the market prior to the WTO -inconsistent duties being imposed using the 
GDP deflator.12 
23. China submitted to the Arbitrator the W TO-consistent countervailing duty rates calculated by 
deducting the inputs for LTAR subsidy rate from the total CVD rate for each of the CVD orders at 
issue.13 China has acknowledged that the USDOC's methodology for calculating the All -Others rate 
varies depending on the rates calculated for the individually -investigated respondents and accepted 
the U.S. proposal that the All -Others WTO -consistent rate for Solar Panels and Aluminum Extrusions 
be calculated using the same methodology applied by the USDOC in  the underlying proceeding, i.e. 
using a weighted average of the rates assigned to the two mandatory respondents in each case, 
rather than a  simple average.  China's estimates also reflect certain other revisions proposed by the 
United States to the relevan t CVD rates.14 
24. Thus, China has reasonably proposed that the Arbitrator implement the two -step Armington 
methodology developed and applied by prior arbitrators incorporating the "Rule of Two", correcting 
the error in the DS471 computer code, and using public, verifiable data.  
B. The Arbitrator Should Reject the U.S. Proposed "Adjustments" to the Two -
Step Armington model  
25. The United States has purportedly agreed with China that the appropriate methodology for 
estimating the level of nullification or i mpairment in this dispute is a two -step approach to the 
Armington model.  In reality, however, the United States seeks to revert to a one -step approach.  
26. The U.S. objective to revert to a one -step approach is apparent from its two proposed 
"adjustments"  to the two -step model, both of which are designed to depress China's market shares 
in the remedy year and reduce the level of nullification and impairment.  The first proposed 
adjustment is to incorporate other trade remedy measures into the two -step appro ach, in this case, 
the effects of parallel antidumping ("AD") duties on the relevant Chinese products.  The United States 
refers to this approach as the "CVD+AD model".15  
27. Parallel duties were also present in DS464 and DS471.  In both of those disputes,  the arbitrator 
correctly computed nullification and impairment by isolating the impact of the specific WTO -
inconsistent measures at issue in each dispute.  In fact, a major reason for the two -step Armington 
method implemented in DS464 and DS471 was that it  allowed the arbitrator in those cases to 
separately identify and evaluate the effect of the specific measures under scrutiny.  Within the two -
step Armington framework, there is no basis for the U.S. proposal to incorporate parallel AD duties 
into the analy sis.16 
28. The second proposed adjustment is to account for "other factors" that allegedly influenced the 
evolution of market shares.  The United States proposes, in particular, to implement a so -called 
"supply shock", based on supposed changes that contri buted to China's decline in imports separately 
from the WTO -inconsistent CVD duties.  The supply shock is a transparent attempt by the United 
States to ignore the objective of the two -step approach and use the duty -distorted trade levels of 
the remedy year as the basis for the nullification and impairment calculation.  The issue of distortion 
of trade levels in the remedy year is the primary reason why the arbitrator in DS464 developed the 
two-step approach.  Thus, there is again no basis for the U.S. proposal to incorporate "supply shocks" 
within the two -step Armington framework.17 
1. The Arbitrator Should Reject the U.S. Proposal to "Adjust" the Two -Step 
Armington Model to Account for Parallel Anti -Dumping Duties  
 
12 See China's methodology paper, Section IV.C.1.  
13 See China's methodology paper, Section IV.C.2.  
14 See, e.g. China's written submission, para. 25.  
15 China's written submission, para. 4.  
16 See China's wr itten submission, para. 4.  
17 See China's written submission, paras. 4 and 5.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
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  29. Adjusting the two -step Armington model to incorporate the parallel AD duties would prevent 
the model from accurately estimating the effect of the WTO -inconsistent CVD duties and fail to 
capture the full amount of nullification and impairment caused by those duties.  
30. The U.S. approach o f adjusting for parallel AD duties necessarily distorts the base upon which 
nullification and impairment is calculated and therefore cannot be used to calculate the level of 
suspension "equivalent" to the amount of nullification and impairment caused by th e measures at 
issue as required by Article  22.4 of the DSU.  The U.S. approach ignores the non -linear nature of 
contemporaneous duties.  China demonstrated that this non -linearity means that imposing other 
duties inevitably reduces the impact of the incremen tal measure at issue.  Consequently, the U.S. 
approach of first adjusting for any contemporaneous duties necessarily underestimates the amount 
of nullification and impairment attributable to the measures at issue.18 
31. This is true regardless of when the AD duties were imposed or their duration.  Alleged dumping 
in the year -prior, the remedy year, or the period in between is not relevant to the analysis of 
nullification and impairment caused by the WTO -inconsistent CVD measures.  In all cases, the effect 
of the WTO -inconsistent CVD duties would be distorted by adjusting for the AD duties.  The relatively 
contemporaneous nature of the specific AD duties that the United States proposes to incorporate in 
the context of this proceeding does not make it appropriate  to consider those duties as part of the 
counterfactual analysis.  Trade actions other than the measures at issue, regardless of their nature, 
timing, duration, or WTO -consistency or inconsistency, do not form part of the counterfactual 
analysis under Artic le 22.6 of the DSU.19 
32. The United States argues that because the sum of the AD and CVD nullification and impairment 
calculated separately does not equal the level of nullification and impairment when the effects of the 
two duties are modelled together , the "unadjusted" model must be attributing more than the full 
amount of nullification and impairment to the WTO -inconsistent CVD duties.20 The United States is 
mistaken.  China has shown that the U.S. assertion fails to take into account the non -linear ef fects 
of duties (or other measures) that affect trade.21 
33. The United States would have the Arbitrator arbitrarily first reduce China's market size through 
the effects of the duty not at issue in the arbitration and then calculate the level of nullifica tion and 
impairment on the basis of that already -reduced market size.  The level of nullification and 
impairment resulting from this approach will inevitably understate the true level of nullification and 
impairment associated with the measure that is the s ubject of the Article  22.6 inquiry.  The proposed 
U.S. approach therefore cannot determine the "equivalent" level of nullification and impairment in a 
manner consistent with Article  22.6 of the DSU.22 
2. The Arbitrator Should Reject the U.S. Proposal to "Adjust" the Two -Step 
Armington Model for "Supply Shocks"  
34. Consistent with the arguments it made in DS464 and DS471, the United States in this dispute 
argues that information on remedy -year shares is preferred to year -prior shares.  The U.S. argument 
and proposed procedure in this dispute is considerably less transparent, but upon close review, it is 
unmistakeable that the U.S. proposed "supply shift" procedure is designed to reduce the 
complainant's market share incorporated into the nullific ation and impairment calculation.  
35. First, the United States proposes a decomposition of ROW suppliers into a group of rising -
supplier ("RS") countries and other suppliers.  Second, the United States uses the model to find a 
set of "phantom subsidies" on  U.S. imports from these RS countries such that a remedy -year target 
is met.  According to some unexplained theory of how market competition works, the phantom 
subsidies are set to match the ratio of RS to other third -country shares in the remedy year.  Crucially, 
no evidence is given that the fast growth in market share was not a result of the trade -diverting 
effect of the WTO -inconsistent duties imposed on China.  
 
18 See China's response to Arbitrator question No. 104.  
19 See, e.g. China's response to Arbitrator question No. 72.  
20 See China's oral statement, para. 28.  
21 See China's response to Arbitrator question No. 104.  
22 See China's response to Arbitrator question No. 104.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
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  36. With these phantom subsidies in place, the market shares used to calibrate the model at the  
remedy -year benchmark are substantially consistent with the observed shares in the remedy year.  
The only reason the U.S. procedure does not fully match the remedy year observation is because 
the set of phantom subsidies is limited to the RS countries.  The United States then purports to run 
a two -step model similar to that proposed by China.  Because the United States assumes large 
phantom subsidies (whose size is dependent on trade values in the remedy year) the U.S. 
implementation effectively ties China's market share to the trade -distorted value in the remedy year.  
By using these "adjusted" step one counterfactual market shares to calibrate the model at step two, 
the United States effectively eliminates the first step of the two -step approach.23 
37. China  recognizes that adopting the U.S. approach of "adjusting" for other factors would spell 
the end of the two -step Armington model.  With each "adjustment", the model would edge closer to 
the observed remedy -year market shares that the two -step model explicit ly rejects.  In contrast to 
the United States, China has therefore refrained from proposing any such adjustments.  Rather, 
China has requested that the Arbitrator apply the two -step approach in a manner that permits the 
isolation of the effect of the WTO-inconsistent CVD duties and is consistent with the approach 
adopted by prior arbitrators, i.e. without any adjustments for the parallel AD duties or so -called 
"supply shocks".24 
IV. THE UNITED STATES HAS FAILED TO REBUT CHINA'S PROPOSED APPLICATION OF  
THE "RULE OF TWO"  
38. The U.S. criticism of China's proposed application of the "Rule of Two" is without merit.  The 
United States ignores the fact that applying the "Rule of Two" is, in fact, the norm for general 
equilibrium analyses of trade restrictions .25  
39. The primary basis for the U.S. criticism of the "Rule of Two" is based on its misinterpretation 
of the results in the Feenstra et al. paper.  This paper was submitted by China with its methodology 
paper.  Feenstra et al. estimate macro -elasticities  for broad product categories (e.g. Metal Products).  
Their analysis focuses on the relationship between the product -specific micro -elasticities and the 
broader product macro -elasticities.  
40. Feenstra et al. provide considerable evidence that the micro -elasticities exceed the macro -
elasticity and that this should be accommodated through the application of the standard "Rule of 
Two".  Exemplifying the evidence in favour of higher micro -elasticities, Feenstra et al. "find evidence 
that the former elasticity, w hich we call the micro -Armington elasticity, is larger than the latter 
elasticity, the macro -Armington elasticity".26 Feenstra et al.'s finding is inconsistent with the extreme 
assumption adopted by the United States; that is, its assumption that the micr o- and macro -
elasticities are the same.  
41. Contrary to the U.S. assertion that the Feenstra et al. study does not cover any of the products 
at issue in this proceeding, Feenstra et al. do estimate a micro -elasticity of substitution for carbon -
steel OCTG ( NAICS code 3312100130).  This directly corresponds to the carbon -steel OCTG product 
at issue in this case.  Adopting Feenstra et al .'s point estimates of the micro -elasticity would result 
in a significant increase in nullification  and impairment under the tw o-step Armington model.  China 
has reasonably  proposed only that the Arbitrator take into account this evidence in support of the 
application  of the conservative "Rule of Two".27 
42. The United States argues that the cited USITC reports for the specific pr oducts at issue support 
the restriction of equivalent micro - and macro -elasticities.  In fact, they do not.  The elasticities of 
substitution reported in these reports specifically apply to the import -domestic response —not the 
"micro" import -import response.  The United States further appeals to the USITC's discussions of 
"comparability" and  "interchangeability".  In the context of economic analysis, comparability and 
interchangeability among sources does not directly indicate high substitution elasticities.  
 
23 See China's written submission, Section IV.B.  
24 See China's oral statement, para. 36; China's respons e to Arbitrator question No. 105.  
25 See China's written submission, Section V.A.  
26 China's response to Arbitrator question No. 70, para. 3. 
27 See China's response to Arbitrator question No. 70, para. 2.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
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  Furthermore, comparability and interchangeability in no way indicate similar micro -elasticities  and 
macro -elasticities.28 
43. The United States itself has provided direct evidence that the macro - and micro -elasticities 
must be different.  For Aluminum Extrus ions, OCTG , and Solar Panels , the United States has provided 
evidence that a set of other countries were able to significantly increase import penetration into the 
U.S. market – the so -called "rising suppliers".  This pattern of third -country responses is explained 
by the fact that the elasticity among import varieties is greater than the elasticity between imports 
and domestic varieties.29  
44. To provide further direct evidence that the elasticity among imports is higher than the 
elasticity between imports and domestic varieties, such that a nested structure is appropriate, China 
reported the percentage point changes in China's market shares and the changes in China's share 
of U.S. imports across each product.  China demonstrated that the data  submitted by the United 
States shows a substantial diversion away from Chinese imports and toward other import sources.  
China further demonstrated that the United States' own data shows a systematic bias in the increase 
in ROW shares over U.S. shares at t he same time that China's market shares plummeted.30 
V. THE ARBITRATOR SHOULD REJECT THE U.S. PROPOSAL TO USE INCORRECT AND 
UNRELIABLE DATA INPUTS   
A. The Arbitrator Should Reject the U.S. Proposal to Use CVD Rates 
Implemented After the Expiry of the Reasonable Period of Time  
45. The United States has proposed incorrectly that in five cases, the Arbitrator should use the 
CVD rates promulgated pursuant to Section 129 of the Uruguay Round Agreements Act ("Section 
129 rates"), despite the fact that these rates were implemented after expiry of the RPT.  
46. It is well established that compliance measures implemented after the expiry of the RPT do 
not form part of the counterfactual analysis under Article  22.6 of the DSU.  In US – Tuna II (Mexico) 
(Article  22.6 – US), the arbitrator rejected the U.S. argument that it should consider the relevant 
measure to be the latest version of the measure rather than the version that was in force at the 
time the RPT expired.  Contrary to the U.S. contention, the decisions of  other arbitrators are 
consistent with the conclusion reached by the arbitrator in US – Tuna II (Mexico) (Article  22.6 – 
US).31 
47. At the time of the expiry of the RPT in this dispute, the applicable CVD rates for Pressure Pipe , 
Line Pipe , OCTG , Solar Pa nels, and Seamless Pipe were not the revised Section 129 rates.  The 
Section 129 rates for these five cases came into effect after the expiry of the RPT on 1 April 2016.  
The USDOC did not publish the Section  129 determinations in these cases until 9 June 20 16 and 
when it did, it explicitly stated that the effective date of the determinations was 26 May 2016, almost 
two months after the expiry of the RPT.  The USDOC revised the total CVD rates in only three of 
these five cases: Line Pipe , OCTG , and Seamless Pipe .32 
48. For this reason, China has submitted that the Arbitrator should not use the revised net subsidy 
rates from the Section 129 determinations in Line Pipe , OCTG , and Seamless Pipe . Similarly, the 
Arbitrator should not use the unrevised ne t subsidy rates from the Section 129 determinations in 
Pressure Pipe  and Solar Panels . China recognizes that in the context of this proceeding, whether the 
Arbitrator uses the Section 129 net subsidy rates or the final determination rates will have only a 
marginal effect on the amount of concessions that China is permitted to suspend.  But there is more 
at stake here than the ultimate retaliation amount.  The requirement to bring measures into 
compliance by the expiry of the RPT is a legal obligation.  The Arb itrator should not permit the United 
States as the respondent in this case to benefit from its failure to comply with that obligation.33 
 
28 See China's response to Arbitrator question No.  70; China's comment on the U.S. response to 
Arbitrator question No. 70.  
29 See China's response to Arbitrator question No. 1.  
30 China's comment on the U.S. response to Arbitrator question No. 101.  
31 See China's comment on the U.S. response to Arbitrator  question No. 113.  
32 See China's written submission, Section III.A.  
33 See China's oral statement, para. 42.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
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  B. The Arbitrator Should Reject the U.S. Proposal to Rely on the Incorrect 
Year-Prior  
49. In addition to proposing inc orrect rates for purposes of determining the counterfactual WTO -
consistent CVD rates, the United States has relied on the incorrect year -prior for evaluating 
nullification and impairment in six cases.  By definition, any year prior to the year in which duti es 
were imposed cannot include months where duties were already in place.  
50. The preliminary determinations in these particular investigations were not at issue in earlier 
stages of this dispute in respect of China's claims concerning alleged inputs for L TAR subsidies.  
However, it does not follow that the year -prior may include WTO -inconsistent preliminary duties 
imposed pursuant to those determinations.  The preliminary duties in each of these cases were 
imposed as part of the same investigation that resul ted in the imposition of final duties and both 
sets of duties suffer from the same legal flaws that the DSB identified in respect of the final 
determinations, i.e. the USDOC's findings in respect of the alleged "inputs for LTAR" subsidies.  
51. In order to accurately estimate nullification and impairment, the effects of the WTO -
inconsistent duties in the reference year must be compared to a prior year in which trade flows were 
not distorted by those duties.  Using a year -prior when the preliminary duties were  in place for any 
period of time cannot satisfy that basic requirement.  It is irrelevant that the duty liability is not final.  
From the time that an importer pays a preliminary duty, it is at risk of losing the full amount of that 
duty. This fact necessari ly affects the economic behaviour of exporters.34  
52. China has shown that distortive effects occur as a result of the preliminary liability imposed 
on importers.  Specifically, China has demonstrated that imports dropped significantly following the 
impos ition of the preliminary duties and submitted economic papers confirming the distortive effects 
of preliminary duties.  In order to ensure that these effects do not compromise the accuracy of the 
two-step approach, the year -prior must be a year in which nei ther preliminary nor final duties were 
in place.35 
C. The Arbitrator Should Reject the Incorrect and Unreliable U.S.  Proposed 
Year-Prior and Remedy -Year Data  
53. Furthermore, the United States has adopted an inconsistent, non -transparent, and 
unreasonable  approach to selecting the data for use in the two -step Armington model.  Most of the 
U.S. proposed changes to the data submitted by China are transparent attempts to distort the 
market share held by Chinese exporters.  A number of the U.S. proposals directl y contradict the 
factual record developed by the USITC and ignore the timing of when the WTO -inconsistent duties 
were levied on China.  Critically, the United States mistakenly insists that its confidential exporter -
specific data is the only basis to comput e nullification and impairment.  
54. As China has stressed, the first place the Arbitrator should look for data in this case is the 
public reports of the USITC.  Only if such data does not exist would the Arbitrator need to turn to 
verifiable outside sources.36 
55. The U.S. data is not the best data available to the Arbitrator.  The United States has submitted 
USCBP exporter -specific data for imports from China for the year -prior in four cases.  In three of 
these cases, the parties disagree on the year -prior.37 For these three cases, the U.S. estimates are 
inevitably under -inclusive because they do not account for exporters that exited the market following 
the imposition of the preliminary duties, as the USCBP does not track subject imports until the 
preliminary duties are imposed.  
56. The United States has emphasized that the arbitrator in DS471 relied on exporter -specific 
USCBP data.  This fact does not support use of that data in the present arbitration.  The WTO violations 
 
34 See China's response to Arbitrator question No. 31.  
35 See China's response to Arbitrator question No. 107.  
36 See, e.g. China's response to Arbitrator question No. 57.  
37 See China's response to Arbitrator question No. 73, para. 21 (referring to OCTG , Steel Cylinders , and 
Line Pipe ). WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
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  at issue in DS471 related to an exporter -specific duty adjustment.  In contrast to DS471, the WTO 
violation at issue in this proceeding does not vary depending on the exporter.38 
57. In addition to the year -prior issue, there are other serious problems with the exporter -specific 
USCBP  data. In the case of Solar Panels , for example, the data submitted by the United States is 
demonstrably inaccurate.  China has shown that the USCBP and U.S. Census figures submitted by 
the United States contain a significant amount  of out -of-scope merchand ise. In the case of OCTG , 
the United States proposes measuring imports by customs value.  In the case of Line Pipe , the U.S. 
data again is measured using customs value, despite the fact that the USITC deemed landed duty 
value paid the correct metric to meas ure imports.39 
58. The confidential USCBP data that the United States prefers to use for subject imports does 
not exist for imports from nonsubject suppliers.  The public HTS trade data therefore must be the 
basis for calculating the size of imports from n on-subject suppliers in the remedy year.40 
59. China's approach to scaling the data in the remedy -year is reasonable.  The GDP deflator 
approach used by China assumes that, on average, a particular product sector grows at the same 
rate as the overall economy.  This assumption does not imply that only prices grow or that only 
quantities grow.  Rather, it assumes that the value of the market (p times q) grows at the same rate 
as the overall economy.  If prices grow faster than average, quantities wi ll adjust.  This is consistent 
with the law of demand.41 
60. China would also reiterate that, in most cases, the number of years for which China applies 
the GDP deflator is small, which means that China's approach is unlikely to significantly distort the 
estimate of the total size of the market in the remedy year.42 
VI. THE UNITED STATES HAS FAILED TO SATISFY ITS BURDEN OF PROOF  
61. As China has explained, in proceedings under Article  22.6 of the DSU, the burden of proof is 
initially allocated to the respondent.  As the respondent, the United States bears the burden of 
establishing a prima facie  case that the level of suspension proposed by China is not "equivalent" to 
the level of nullification and impairment caused by the WTO -inconsistent CVD measures  at issue.43 
62. The United States is not relieved of this initial burden by the fact that China submitted a 
different nullification and impairment estimate in its methodology paper than in its request for 
authorization to suspend concessions submitted to  the DSB.  China's decision to revise its nullification 
and impairment estimate reflects its reasonable choice to adopt the same methodology as the 
arbitrators in DS464 and DS471.44 
63. China submits that the United States has not met its initial burden of  proof to establish the 
WTO-inconsistency of the level of suspension proposed by China.  The United States has not 
established a prima facie  case that the two -step Armington methodology adopted by prior arbitrators 
should be adjusted to account for AD dutie s, so-called "supply shocks", or any other tariff or non -
tariff trade action.  Nor has the United States established a prima facie  case that the extreme 
assumption of the "Rule of One" should be applied to any of the cases at issue rather than the 
standard "Rule of Two", or that any of the verifiable public data submitted by China is inaccurate.45 
64. China has submitted evidence and argument rebutting the U.S. assertions that its proposed 
adjustments to the two -step Armington methodology are necessary to c orrectly calibrate the model 
and revealing the critical flaws in the United States' year -prior and remedy -year data.  Therefore, 
even assuming, arguendo , that the United States had met its initial burden, China has satisfied its 
burden of rebutting the U.S.  prima facie case. 
 
38 See China's response to Arbitrator question No. 73, para. 23.  
39 See China's response to Arbitrator question No. 73, para. 22.  
40 See, e.g. China's response to Arbitrator question No. 24.  
41 See China's response to Arbitrator question No. 80.  
42 See, e.g. China's response to Arbitrator question No. 26.  
43 See China's oral statement , para. 11.  
44 See China's response to Arbitrator question No. 98.  
45 See, e.g. China's response to Arbitrator question No. 99.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 30 - 
 
  VII. CONCLUSION  
65. China has utilized a two -step approach to the Armington elasticities model similar to that 
implemented in DS464 and DS471 in order to estimate the amount of nullification or impairment 
caused by the U.S. failure to co mply with its WTO obligations.  China selected the two -step approach 
to the Armington model in order to accurately estimate the impact of the WTO -inconsistent 
countervailing duties at issue in this dispute on China's 2017 exports of the subject products to the 
United States.  The U.S. proposed approach to calculating nullification and impairment in this dispute 
is not reasonable or verifiable.  For the reasons set forth in its submissions, China respectfully 
requests that the Arbitrator grant China's request t o suspend the application of concessions or other 
obligations under the covered agreements in the amount of 788.75 million.  
 
_______________  
 
 WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 31 - 
 
  ANNEX  C 
DATA INPUTS AND CALCULATIONS OF THE ARBITRATOR  
Contents  Page 
Annex  C-1 Data inputs for US market values in the years -prior 32 
Annex C-2 Data inputs for elasticities  34 
Annex C-3 Data inputs for the WTO -inconsistent and the WTO -consistent CVD rates  36 
Annex C -4 Data inputs for US market values in 2017  40 
Annex C -5 Primary NAICS  codes for Pressure Pipe, Kitchen Shelving, Seamless Pipe, and 
Print Graphics  43 
Annex C -6 Scaling index for domestic varieties of  Pressure Pipe, Kitchen Shelving, 
Seamless Pipe, and Print Graphics  49 
Annex C -7 Scope adjustments for  selected varieties of  Kitchen Shelving and Print 
Graphics  51 
Annex C -8 Remedy year figures for selected varieties of Pressure Pipe, Kitchen Shelving, 
Seamless Pipe, and Print Graphics  54 
Annex C -9 GAMS code  of the two -step Armington model  57 
Annex C -10 Data inputs used to implement the Armington model under the two steps  61 
Annex C -11 Results of implementing the  first step of the two -step A rmington model  63 
 
 
  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 32 - ANNEX C -1 
DATA INPUTS FOR US MARKET VALUES IN THE YEAR S-PRIOR1 
Product  Year -prior  US 
shipments  
(1,000 USD)* US imports 
from China  
(1,000 USD)* US imports 
from the rest 
of the world  
(1,000 USD)* Data sources  
Pressure Pipe  2007 201,460 154,833 158,535 Annualized value of US shipments  based on data from 
USITC Publication 4064 (Exhibit CHN -4). Value of import 
varieties from USITC Publication 4064 (Exhibit CHN -4). 
Line Pipe  2007 757,701 153,881 315,411 Data for all three varieties from USITC Publication  4055 
(Exhibit CHN -11). 
Kitchen Shelving  2008 84,256  150,477  276,171  Data on value of US shipments provided by China based on 
US Census estimates for the primary 6 -digit NAICS code  
adjusted to correct for out-of-scope products  (Exhibit CHN -
53). Values of import varieties based on midpoint estimate s 
between the figures submitted by China (Exhibit CHN -53) 
and the figures submitted by the United States (Exhibit 
USA-61). 
OCTG  2008 6,148 ,818 2,805 ,206 2,572 ,888 Data for all three varieties from USITC Publication  4124 
(Exhibit CHN -23). 
Wire Strand  2008 333,721 194,276 21,771 Data for all three varieties from USITC Publication  4162 
(Exhibit CHN -28). 
Seamless Pipe  2009 199,357 135,240 348,609 Data for all three varieties from USITC Publication s 4190 
(Exhibit CHN -32) and 4595 (Exhibit USA -16). 
Print Graphics  2009 1,023 ,688 297,527 420,989 Data for all three varieties from USITC Publication  4192 
(Exhibit CHN -50). 
Aluminum Extrusions  2009 2,888 ,945 547,968 359,382 Data for all three varieties from USITC Publication s 4229 
(Exhibit CHN -36) and 4677  (Exhibit CHN -37). 
Steel Cylinders  2010 [[***]] 23,009 2,821 Value of US shipments based on  data from Norris Cylinders 
(Exhibit USA -116 (BCI)) provided by the United States.  
 
1 For the determination of the year -prior for each product and the relevant data, see section 3.4.1  of the Decision of the Arbitrator.  
* The values in this table have been rounded to 1,000 USD for display purposes only. The actual values were used when impl ementing the Armington model under the two 
steps to estimate the level of nullification or impairment.   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 33 - Product  Year -prior  US 
shipments  
(1,000 USD)* US imports 
from China  
(1,000 USD)* US imports 
from the rest 
of the world  
(1,000 USD)* Data sources  
Value of import varieties based on USITC 's online DataWeb 
system  provided by China ( Exhibit CHN -74). 
Solar Panels  2011 804,853 1,905,220  824,588  Value of US shipments from USITC Publication  4519 (Exhibit 
USA-21). Value of import varieties from USITC Publication 
4360 (Exhibit CHN -45).  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 34 - ANNEX C-2 
DATA INPUTS FOR ELASTICIT IES1 
Product  Total demand 
elasticity  Domestic 
supply 
elasticity  Import s upply 
elasticity  
China Import s upply 
elasticity  
RoW  Elasticity of 
substitution2 Data sources   
Pressure Pipe  -0.500  7.500  10 10 4.500  Midpoint values for the demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 4064 
(Exhibit CHN -4). Import supply elasticities 
provided by the parties.  
Line Pipe  -0.375  4.000  10 10 3.000  Midpoint values for th e demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 4055 
(Exhibit CHN -11). Import supply elasticities 
provided by the parties.  
Kitchen Shelving  -0.300  7.500  10 10 5.000  Midpoint values for the demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 4098 
(Exhibit CHN -19). Import supply elasticities 
provided by the parties.  
OCTG  -0.875  5.000  10 10 4.000  Midpoint values for the demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 5090 
(Exhibit USA -148). Import supply elasticities 
provided by the parties.  
Wire Strand  -0.750  4.000  10 10 3.000  Midpoint values for the demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 4162 
(Exhibit CHN -28). Import supply elasticities 
provided by the parties.  
Seamless Pipe  -0.750  7.500  10 10 3.000  Midpoint values for the demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 4190 
(Exhibit CHN -32). Import supply elasticities 
provided by the parties.  
Print Graphics  -1.000  4.000  10 10 3.000  Midpoint values for the demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 4656 
 
1 Exhibits CHN -120 and USA -154. See section 3.4.3  of the Decision of the Arbitrator.  
2 The E lasticity if Substitution in this column refers to the macroe lasticity  (i.e. the elasticity between the domestic and imported varieties ). For the E lasticity of Substitution 
among imported varieties, we use a value of the square root of two. See  section 3.3.1 of the Decision.   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 35 - Product  Total demand 
elasticity  Domestic 
supply 
elasticity  Import s upply 
elasticity  
China Import s upply 
elasticity  
RoW  Elasticity of 
substitution2 Data sources   
(Exhibit CHN -51). Import supply elasticities 
provided by the parties.  
Aluminum 
Extrusions  -0.375  4.000 10 10 5.000 Midpoint values for the demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 4677 
(Exhibit CHN -37). Import supply elasticities 
provided by the parties.  
Steel Cylinders  -0.500  7.500  10 10 4.000  Midpoint values for the demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 4328 
(Exhibit CHN -41). Import supply elasticities 
provided by the parties.  
Solar Panels  -0.875  5.500  10 10 4.000 Midpoint values for the demand elasticit y, 
domestic supply elasticit y and elasticit y of 
substitution from USITC Publication 4874 
(Exhibit CHN -46). Import supply elasticities 
provided by the parties.   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 36 - ANNEX C -3 
DATA INPUTS FOR THE WTO -INCONSISTENT CVD RATES AND THE WTO -CONSISTENT  
CVD RATES1 
Product  Respondents in the relevant  CVD investigations  WTO -inconsistent  
CVD rates  WTO -consistent  
CVD rates  Data sources  
Pressure 
Pipe Froch Enterprise Co. Ltd.  299.16  298.8  WTO-inconsistent CVD rates based on records of 
CVD i nvestigation on Circular  Welded Austenitic 
Stainless Pressure Pipe from the People’s Republic 
of China (Exhibits CHN -1 to 3) and on 
Implementation of Determinations Pursuant to 
Section 129 of the Uruguay Round Agreements Act, 
81 Fed. Reg. 37180 , June 9, 2016  (Exhibit USA -1). 
WTO-consistent CVD rates provided jointly by the 
parties (Exhibits CHN -100 and USA -138).  Winner Companies: Winner Stainless Tube Co., Ltd., 
Winner Steel Products (Guangzhou), and Winner 
Machinery Enterprise Company Ltd.  1.10 0.74 
All Others  1.10 0.74 
Line Pipe  Huludao Companies: Huludao Seven Star Group, 
Huludao Steel Pipe Industrial Co. Ltd., and Huludao 
Bohai Oil Pipe Industrial Co. Ltd.  32.65  1.37 WTO-inconsistent CVD rates based on 
Implementation of Determinations Pursuant to 
Section 129 of the Uruguay Round Agreements Act, 
81 Fed. Reg. 37180 , June 9, 2016  (Exhibit USA -1). 
WTO-consistent CVD rates provided by the United 
States (Exhibit USA -138).  Liaoning Northern Steel Pipe Co., Ltd.  40.05  6.35 
All Others  36.35  3.86 
Kitchen 
Shelving  Asber Enterprises  170.82  159.06  WTO-inconsistent CVD rates based on records of 
CVD Investigation on Certain Kitchen Appliance 
Shelving and Rack from the People’s Republic of 
China (Exhibits CHN-16 to 18 ) and on 
Implementation of Determinations Pursuant to 
Section 129 of the Uruguay Round Agreements Act, 
81 Fed. Reg. 37180 , June 9, 2016  (Exhibit USA -1). Guandong Wire King  13.30  1.54 
Non-cooperative companies: Changzhou Yixiong 
Metal Products; Foshan Winleader Metal Products; 149.91  138.15  
 
1 As explained in para. 3.25 of the Decis ion of the Arbitrator, these CVD rates correspond to the ones provided by the United States in Exhibit USA -138. For an explanation 
of the calculation of the WTO -consistent CVD rates see para. 3.11 of the Decision of the Arbitrator.   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 37 - Product  Respondents in the relevant  CVD investigations  WTO -inconsistent  
CVD rates  WTO -consistent  
CVD rates  Data sources  
Kingsun Enterprises Group; Yuyao Hanjun Metal; 
Zhongshan Iwatani Co.  WTO-consistent CVD rates provided jointly by the 
parties (Exhibits CHN -100 and USA -138).  
All Others  13.30  1.54 
OCTG  Jiangsu Changbao Steel Tube (Changbao)  12.46  0.78 WTO-inconsistent CVD rates based on 
Implementation of Determinations Pursuant to 
Section 129 of the Uruguay Round Agreements Act, 
81 Fed. Reg. 37180 , June 9, 2016  (Exhibit USA -1). 
WTO-consistent CVD rates provided by the United 
States (Exhibit USA -138).  Tianjin Pipe (TPCO)  7.71 3.23 
Wuxi Seamless Oil Pipe (Wuxi)  14.95  3.98 
Zhejiang Jianli (Jianli)  15.78  0.30 
All Others  12.26  2.07 
Wire 
Strand  Fasten Group  9.42 2.83 WTO-inconsistent CVD rates based on records of 
CVD Investigation on Pre-Stressed Concrete Steel 
Wire Strand from the People’s Republic of China 
(Exhibits CHN-25 to 27 ) and on Implementation of 
Determinations Pursuant to Section 129 of the 
Uruguay Round Agreements Act, 81 Fed. Reg. 
37180 , June 9, 2016  (Exhibit USA -1). 
WTO-consistent CVD rates provided jointly by the 
parties (Exhibits CHN -100 and USA -138).  Xinhua Metal Products  45.85  30.54  
All Others  27.64  16.69  
Seamless 
Pipe Hengyang Steel, Hengyang Valin Steel, Hengyang 
Valin MPM, Xigang Seamless Steel (Hengyang)  49.56  47.05  WTO-inconsistent CVD rates based on 
Implementation of Determinations Pursuant to 
Section 129 of the Uruguay Round Agreements Act, 
81 Fed. Reg. 37180 , June 9, 2016  (Exhibit USA -1). 
WTO-consistent CVD rates provided by the United 
States (Exhibit USA -138).  Tianjin Pipe (TPCO)  8.24 3.47 
All Others  28.90  25.26   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 38 - Product  Respondents in the relevant  CVD investigations  WTO -inconsistent  
CVD rates  WTO -consistent  
CVD rates  Data sources  
Print 
Graphics  Gold Companies: Gold East Paper (Jiangsu) Co., Ltd, 
Gold Huasheng Paper Co., Ltd., Gold East Trading 
(Hong Kong) Company Ltd., Ningbo Zhonghua Paper 
Co., Ltd., and Ningbo Asia Pulp & Paper Co., Ltd.  19.46  18.66  WTO-inconsistent CVD rates based on records of 
CVD Investigation on Certain  Coated Paper 
Suitable for High -Quality Print Graphics from the 
People’s Republic of China (Exhibits CHN-47 to 49 ) 
and on Implementation of Determinations Pursuant 
to Section 129 of the Uruguay Round Agreements 
Act, 81 Fed. Reg. 37180 , June 9, 2016  (Exhibi t 
USA-1). 
WTO-consistent CVD rates provided jointly by the 
parties (Exhibits CHN -100 and USA -138).  Sun Paper Companies: Shandong Sun Paper Industry 
Joint Stock Co., Ltd. and Yanzhou Tianzhang Paper 
Industry Co., Ltd.  202.84  202.04  
All Others  19.46  18.66  
Aluminum 
Extrusions  Dragonluxe Limited  374.15  371.6  WTO-inconsistent CVD rates based on records of 
CVD Investigation on Aluminum Extrusions from 
the People’s Republic of China (Exhibits CHN-33 to 
35 and USA -3 and 4) and on Implementation of 
Determinations Pursuant to Section 129 of the 
Uruguay Round Agreements Act, 81 Fed. Reg. 
37180 , June 9, 2016  (Exhibit USA -1). 
WTO-consistent CVD rates provided jointly by the 
parties (Exhibits CHN -100 and USA -138). Miland Luck Limited  374.15  371.6  
Liaoyang Zhongwang Group  374.15  371.6  
Zhongya Companies  4.89 3.27 
Guang Ya Companies  9.94 3.88 
All Others  7.37 3.57 
Steel 
Cylinders  Tianhai Industry (BTIC)  15.81  1.47 WTO-inconsistent CVD rates based on records of 
CVD Investigation on High Pressure Steel Cylinders 
from the People’s Republic of China (Exhibits CHN-
38 to 40 ) and on Implementation of 
Determinations Pursuant to Section 129 of the 
Uruguay Round Agreements Act, 81 Fed. Reg. 
37180 , June 9, 2016  (Exhibit USA -1). 
WTO-consistent CVD rates provided jointly by the 
parties (Exhibits CHN -100 and USA -138).  All Others  15.81  1.47  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 39 - Product  Respondents in the relevant  CVD investigations  WTO -inconsistent  
CVD rates  WTO -consistent  
CVD rates  Data sources  
Solar 
Panels  Trina Solar  15.97  14.83  WTO-inconsistent CVD rates based on records of 
CVD Investigation on Crystalline Silicon 
Photovoltaic Cells from the People’s Republic of 
China (Exhibits CHN-42 to 44 ) and on 
Implementation of Determinations Pursuant to 
Section 129 of the Uruguay Round Agreements Act, 
81 Fed. Reg. 37180 , June 9, 2016  (Exhibit USA -1). 
WTO-consistent CVD rates provided jointly by the 
parties (Exhibits CHN -100 and USA -138).  Wuxi Suntech  14.78  14.49  
All Others  15.24  14.62  
  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 40 - ANNEX C -4 
DATA INPUTS FOR US MARKET VALUES IN 2017  
Product  Total US 
market  
(1,000 USD)  US 
shipments  
(1,000 USD)  US imports 
from China  
(1,000 USD)  US imports 
from the rest 
of the world  
(1,000 USD)  Data sources  
Pressure Pipe  [[***]] 89,091 [[***]] 156,207  Value of US shipments estimated  by applying the growth 
rate of the primary 6 -digit NAICS industry associated with  
Pressure Pipe (Annex C -5) between 2015 and 2017 (Annex 
C-6) to the 2015 value of US shipments reported in USITC 
publication 4644 (Exhibit CHN -5 and Annex C -8). Data on 
the val ue of US imports from China provided by the United 
States from US CBP data (Exhibit USA -66(BCI)). Data on the 
value of US  imports from the rest of the world provided by 
the United States based on HTS aggregated data from the 
US Census Bureau  (Exhibit USA -65) scaled using average 
ratio of subject to total HTSUS imports over years 2007 -
2009 based on  USITC Publication 4064 (Exhibit CHN -4). 
Line Pipe  [[***]] 542,483  [[***]] 605,500  Data on v alue of US shipments provided by the United 
States estimated by multiplying the average US price by the  
2017 total production quantity of welded line pipe multiplied 
by the share of  all line pipe less than 16 inches  sales in total 
line pipe sales , based on data from Preston Pipe (Exhibits  
USA-60 and USA -136 (BCI)).  Data on v alue of US imports 
from China provided by the  United States from USCBP  data 
(Exhibit USA -64 (BCI)). Data on v alue of US imports from 
the rest of the world  provided by the United States based on 
HTSUS aggregated data from US Census (Exhibit USA -59). 
Kitchen Shelving  [[***]] 278,363 [[***]] 412,630  Value of US shipments estimated by applying the growth 
rate of the primary 5-digit NAICS industry associated with  
Kitchen Shelving (Annex C -5) between 2016 and 2017 
(Annex C -6) to 2016 sales estimates  for the primary 6 -digit 
NAICS industry associated  with Kitchen Shelving (Annex C -
5) from the US Census' Annual Survey of Manufactures 
2016 and correct ing for out -of-scope products on the basis 
of data from USITC Dataweb ( see Exhibit  CHN-43 and 
Annexes C -7 and C -8). Data on the value of US impor ts 
from China provided by the United States from USCBP data 
(Exhibit USA -66(BCI)).  Value of US imports from the rest of 
the world estimated by applying an estimate of the share of  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 41 - Product  Total US 
market  
(1,000 USD)  US 
shipments  
(1,000 USD)  US imports 
from China  
(1,000 USD)  US imports 
from the rest 
of the world  
(1,000 USD)  Data sources  
subject products within HTSUS basket categories to 
aggregate HTSUS imports u nder these categories. The 
subject product share is estimated using the year -prior 
midpoint estimate  divided by total imports from the rest of 
the world under the basket categories in the year -prior 
(Annex C -7, Exhibits CHN -120 and USA -155(BCI)).  
OCTG  6,356,019,000  3,248,604  3,107,415  Value of US shipments estimated  by adjust ing the figure on 
Table I -11/III -11 in USITC Publication 5090 (Exhibit USA -
148) to include the incremental value of heat -treating 
imported unfinished OCTG . Value of total US imports from 
USITC Publication 5090  (Exhibit USA -148).  
Wire Strand  [[***]] 201,603  [[***]] 91,619  Data on va lue of US shipments provided by the United 
States estimated by using data from the World Steel 
Association  on wire rod production, scaled by the average 
2007-2009 wire rod to wire strand production ratio based on 
data from the World Steel Association for wire rod and 
USITC Publication 4569 (Exhibit USA -25) for wire strand,  
and the trend in the unit price of im ported wire strand 
varieties taken from USITC DataWeb  (Exhibit USA -61). Data 
on the val ue of US imports from China provided by the 
United States from USCBP data (Exhibit USA -66(BCI)). Data 
on the value of US  imports from the rest of the world 
provided by the United States based on HTS aggregated 
data from the US Census Bureau  (Exhibit USA -65). 
Seamless Pipe  [[***]] 294,963  [[***]] 390,161  Value of US shipments estimated  by applying the growth 
rate of the primary 6 -digit NAICS industry associated with  
Seamless Pipe (Annex C -5) between 2009 and 2017 (see 
Annex C -6) to the 2009 value of US shipments reported in 
USITC publication 4190 (Exhibit CHN -32) and USITC 
Publication 4595  (Exhibit USA -16 and Annex C -8). Data on 
the value of US imports from China  provided by the United 
States from USCBP data (Exhibit USA -64 (BCI)). Data on 
the value of US imports from the rest of  the world provided 
by the United States  based on adjusted HTSUS aggregated 
data from US Census  Bureau  (Exhibit  USA-59) and USITC 
Publication 4595 (Exhibit USA -16).  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 42 - Product  Total US 
market  
(1,000 USD)  US 
shipments  
(1,000 USD)  US imports 
from China  
(1,000 USD)  US imports 
from the rest 
of the world  
(1,000 USD)  Data sources  
Print Graphics  [[***]] 1,100,263  [[***]] 961,770  Value of US shipments estimated by applying the growth 
rate of the primary 6 -digit NAICS industry associated with  
Print Graphics (Annex C -5 ) between 2015 and 2017 (Annex 
C-6) to the the 2015 value of US shipments reported in 
USITC Publication 4656  (Exhibit CHN -51 and Annex C -8). 
Data on the v alue of US imports from China  provided by the 
United States from USCBP data (Exhibit USA -64 (BCI)).  
Value of US imports from the rest of the  world estimated by 
using adjusted HTSUS aggregated data from US Censu s 
(Exhibit  USA-59), scaled using the average ratio over the 
years 20 11-2015 of subject to total HTSUS imports based 
on USITC Publication 4656  (Exhibit CHN -51 and Annexes C -
7 and C -8). 
Aluminum Extrusions  [[***]] 5,514,091  [[***]] 1,077,900  Value of US shipments estimated by applying annual  real 
growth rates provided by the United  States (Exhibit USA -
149 (BCI)) and a PPI -based inflation index provided by 
China (Exhibit CHN -103) to the 2015  value of US shipments 
reported in USITC Publication 4677  (Exhibit  CHN-37). Data 
on the v alue of US imports from China  provided by the 
United States from USCBP data (Exhibit USA -62 (BCI)).  
Data on the v alue of US imports from the rest of  the world 
provided by the United States  based on  HTSUS  aggregated 
data from US Census (Exhibit USA -63). 
Steel Cylinders  [[***]] [[***]] [[***]] 5,200  Value of US shipments based on data from Norris Cylinders 
(Exhibit USA -116(BCI)) provided by the United States.  Data 
on the val ue of US imports from China provided by the 
United States  from USCBP data (Exhibit USA -64(BCI)). Data 
on the value of US  imports from the rest of the world 
provided by the United States based on HTS aggregated 
data from the US Census Bureau  (Exhibit USA -59). 
Solar Panels  4,055,230,000  259,535  441,381  3,354,314  Value of US shipments estimated by calculating a 6.4% 
share of the total market relying on 2017 import varieties 
figures from USITC Publication 4874 (Exhibit CHN -46). 
Value of US imports from China from  USITC Publication 
4874 (Exhibit CHN -46). Value of US imports from the rest of 
the world from USITC Publication 4874 (Exhibit CHN -46).   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 43 - ANNEX C -5 
PRIMARY NAICS CODES FOR PRESSURE PIPE, KITCHEN SHELVING, SEAMLESS PIPE, AND PRINT GRAPHICS  
Product  HTSUS codes  Corresponding 
NAICS code  Primary NAICS 
code Data sources  
Pressure 
Pipe 7306405005  331110  
331110  HTSUS codes as reported in section "Tariff 
treatment" (p. I -8) of U.S. International Trade 
Commission, Welded Stainless Steel Pressure Pipe 
from India, USITC Publication No. 4644, November 
2016 (Exhibit CHN -5).  
HTSUS -NAICS concordance by Justin R. Pierce and 
Peter K. Schott (2012), A Concordance Between 
Ten-Digit U.S. Harmonized System Codes and 
SIC/NAICS Product Classes and Industries, Journal 
of Economic and Social Measurement 37(1 -2):61 -
96 available at 
https://sompks4.github.io/sub_data.html.  7306405040  331110  
7306405062  331110  
7306405064  331110  
7306405085  331110  
7306401010  331110  
7306401015  331110  
7306405042  331110  
7306405044  331110  
7306405080  331110  
7306405090  331110  
Kitchen 
Shelving  N/A N/A 335221  Primary NAICS code as reported by China in Exhibit 
CHN-53.  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 44 - Product  HTSUS codes  Corresponding 
NAICS code  Primary NAICS 
code Data sources  
Seamless 
Pipe 7304191020  331110  
331110  HTSUS codes as reported in section "Tariff 
treatment" (p. I -9 and I -10) of U.S. International 
Trade Commission, Certain Seamless Carbon and 
Alloy Steel Standard, Line, and Pressure Pipe from 
China, USITC Publication No. 4190, November 
2010 (Exhibit CHN -32).  
HTSUS -NAICS concordance by Justin R. Pierce and 
Peter K. Schott (2012), A Concordance Between 
Ten-Digit U.S. Harmonized System Codes and 
SIC/NAICS Product Classes and Industries, Journal 
of Economic and Social Measurement 37(1 -2):61 -
96 available at 
https://sompks4.github.io/sub_data.html.  7304191030  331110  
7304191045  331110  
7304191060  331110  
7304195020  331110  
7304195050  331110  
7304313000  331110  
7304316050  331110  
7304390016  331110  
7304390020  331110  
7304390024  331110  
7304390028  331110  
7304390032  331110  
7304390036  331110   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 45 - Product  HTSUS codes  Corresponding 
NAICS code  Primary NAICS 
code Data sources  
7304390040  331110  
7304390044  331110  
7304390048  331110  
7304390052  331110  
7304390056  331110  
7304390062  331110  
7304390068  331110  
7304390072  331110  
7304515005  331110  
7304515060  331110  
7304596000  331110  
7304598010  331110  
7304598015  331110  
7304598020  331110   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 46 - Product  HTSUS codes  Corresponding 
NAICS code  Primary NAICS 
code Data sources  
7304598025  331110  
7304598030  331110  
7304598035  331110  
7304598040  331110  
7304598045  331110  
7304598050  331110  
7304598055  331110  
7304598060  331110  
7304598065  331110  
7304598070  331110  
Print 
Graphics  4810141900  322121  
322121  HTSUS codes as reported in section "Tariff 
treatment" (p. I -20) of U.S. International Trade 
Commission, Certain Coated Paper Suitable for 
High-Quality Print Graphics Using Sheet -Fed 
Presses from China and Indonesia, USITC 
Publication No. 4656, December 2016 (Exhibit 
CHN-51).  
HTSUS -NAICS concordance by Justin R. Pierce an d 
Peter K. Schott (2012), A Concordance Between 
Ten-Digit U.S. Harmonized System Codes and 
SIC/NAICS Product Classes and Industries, Journal 4810142010  322130  
4810142010  322121  
4810142090  322130   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 47 - Product  HTSUS codes  Corresponding 
NAICS code  Primary NAICS 
code Data sources  
4810142090  322121  of Economic and Social Measurement 37(1 -2):61 -
96 available at 
https://sompks4.github.io/sub_data.html . No 
concordance available for five HTSUS codes.  
Primary NAICS codes identified based on most 
common concordance.  4810145000  322299  
4810146000  322121  
4810191100  322121  
4810191900  322121  
4810192010  322121  
4810192010  322130  
4810192090  322121  
4810192090  322130  
4810221000  322121  
4810226000  322121  
4810291000  322121  
4810295000  322299  
4810296000  322121   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 48 - Product  HTSUS codes  Corresponding 
NAICS code  Primary NAICS 
code Data sources  
4810921200  322121  
4810921200  322130  
4810921400  322121  
4810921400  322130  
 
 
  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 49 - ANNEX C -6 
SCALING INDEX FOR DOMESTIC VARIETIES OF PRESSURE PIPE, KITCHEN SHELVING, SEAMLESS PIPE, AND PRINT GRAPHICS  
 
1 Figures rounded to the second decimal for representation only.  
2 Data for Kitchen Shelving only available at 5 -digit NAICS level in Economic Census 2017.  
3 5-digit NAICS level sales generated by summing across 6 -digit NAICS level codes pertaining to 5 -digit NAICS code 33522 (335221, 335222, 335224, 335228).  Product  Primary 
NAICS 
code  Latest year 
with 
product -
level data 
availability  Sales in 
latest year 
(in '000 
USD)  
(A) Exports in 
latest year 
(in '000 
USD)  
(B) Domestic 
shipments 
in latest 
year (in 
'000 USD)  
(C=A -B) Sales 2017 
(in '000 
USD)  
(D) Exports 
2017 (in 
'000 USD)  
(E) Domestic 
shipments 
2017 (in 
'000 USD)  
(F=D -E) Scaling Index1 
(G=F/C)  
Data sources  
Pressure 
Pipe 331110  2015 84,342,031  12,806,457  71,535,573  87,557,262  13,052,125  74,505,137  1.04 Primary NAICS code based on Annex 
C-5. 
NAICS -level sales estimates from US 
Census' Annual Survey of 
Manufactures 2016 and Economic 
Census 2017 available at  
https://www.census.gov/data/tables/
time-series/econ/asm/2013 -2016-
asm.html ("2016 Value of Product 
Shipments") and 
https://www.census.gov/data/tables/
2017/econ/economic -census/naics -
sector -31-33.html  ("EC1700BASIC").  
Export data from USITC Dataweb for 
Domestic exports, FAS Value 
available at 
https://dataweb.usitc.gov/.  
Kitchen 
Shelving  335222 2016 18,014,7053 2,817,671  15,197,034  18,936,670  2,826,241  16,110,429  1.06 Primary NAICS code based on Annex 
C-5. 
NAICS -level sales estimates from US 
Census' Annual Survey of 
Manufactures 2016 and Economic 
Census 2017 available at 
https://www.census.gov/data/tables/
time-series/econ/asm/2013 -2016-
asm.html ("2016 Value of Product 
Shipments") and 
https://www.c ensus.gov/data/tables/
2017/econ/economic -census/naics -
sector -31-33.html ("EC1700BASIC").   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 50 - 
 
 
4 Under the 2007 version of NAICS which was effective in 2009, code 331110 corresponds to code 331111 (see 2007 NAICS to 2012 N AICS concordance available at 
https://www.census.gov/naics/?68967 ). In the  US Census' Annual Survey of Manufactures 2010 the relevant data is thus listed under the code 331111.  Export data from USITC Dataweb for 
Domestic exports, FAS Value 
available at 
https://dataweb.usitc.gov/.  
Seamless 
Pipe 3311104 2009 60,984,598  10,628,749  50,355,849  87,557,262  13,052,125  74,505,137  1.48 Primary NAICS code based on Annex 
C-5. 
NAICS -level sales estimates from US 
Census' Annual Survey of 
Manufactures 2010 and Economic 
Census 2017 available at 
https://www.census.gov/data/tables/
time-series/econ/asm/2008 -2011-
asm.html ("2010 Value of Product 
Shipments") and 
https://www.census.gov/data/tables/
2017/econ/economic -census/naics -
sector -31-33.html ("EC1700BASIC").  
Export data from USITC Dataweb for 
Dome stic exports, FAS Value 
available at 
https://dataweb.usitc.gov/.  
Print 
Graphics  322121  2015 40,359,975  2,456,397  37,903,578  36,968,156  2,326,820  34,641,336  0.91 Primary NAICS code based on Annex 
C-5. 
NAICS -level sales estimates from US 
Census' Annual Survey of 
Manufactures 2016 and Economic 
Census 2017 available at 
https://www.census.gov/data/tables/
time-series/econ/asm/2013 -2016-
asm.html ("2016 Value of Product 
Shipments") and 
https://www.census.gov/data/tables/
2017/econ/economic -census/naics -
sector-31-33.html ("EC1700BASIC").  
Export data from USITC Dataweb for 
Domestic exports, FAS Value 
available at 
https://dataweb.usitc.gov/.   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 51 - ANNEX C -7 
SCOPE ADJUSTMENTS FOR SELECTED VARIETIES OF KITCHEN SHELVING AND PRINT GRAPHICS  
Product  Variety  Primary 
NAICS 
code  HTSUS codes linked to 
primary NAICS code1 Imports under 
all HTSUS codes 
linked to 
primary NAICS 
code in 2017  
(A) Subject 
Imports linked 
to primary 
NAICS code in 
2017  
(B) Scope 
adjustment2 
(C=B/A)  Data sources  
Kitchen 
Shelving  Domestic  335221  7321111030 , 7321111060 , 
7321113010 , 7321113020 , 
7321113050 , 7321116000 , 
7321120000 , 7321190020 , 
7321190040 , 7321190060 , 
7321190080 , 7321901000 , 
7321902000 , 7321904000 , 
7321905000 , 7321906040 , 
7321906060 , 7418100021  
7418100051 , 8516500030 , 
8516500060 , 8516500090 , 
8516604060 , 8516604070 , 
8516604074 , 8516604078 , 
8516604082 , 8516604086 , 
8516903500 , 8516905000 , 
8516905500 , 8516906500 , 
8516907500 , 8516908010, 
8516908050  USD 
5,216,804,617  USD 328,243,066  0.06 Primary NAICS code based on Annex C -5. 
Subject codes based on Exhibits CHN -53 and 
USA-61 defining the statistical reporting 
numbers under which Kitchen Shelving is 
classifiable.  
HTS codes linked to primary codes based on 
HTSUS -NAICS concor dance by Justin R. 
Pierce and Peter K. Schott (2012), A 
Concordance Between Ten -Digit U.S. 
Harmonized System Codes and SIC/NAICS 
Product Classes and Industries, Journal of 
Economic and Social Measurement 37(1 -
2):61 -96 available at 
https://sompks4.github.io /sub_data.html.  
Import data from USITC Dataweb for 
General Imports available at 
https://dataweb.usitc.gov/.  
 
 
1 Subject imports, i.e. codes referenced in Exhibit CHN -53, in bold. Codes with zero trade flows removed.  
2 Figures rounded to the second decimal for rep resentation only.   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 52 - Product  Variety  Mid-point between 
parties' estimates for 
imports from the RoW 
in the year -prior  
(A) Imports under HTSUS 
codes under which the 
product is classifiable in 
the year -prior  
(B) Scope 
adjustment 
(Share of subject 
imports in HTSUS 
codes)3 
(C=A/B)  Data sources  
Kitchen 
Shelving  Imports from 
the RoW  USD 276,170,928  USD 547,341,857 0.50 HTSUS codes under which  Kitchen Shelving is 
classifiable based on Exhibits CHN -53 and USA -61. 
Import data from USITC Dataweb for General Imports 
available at https://dataweb.usitc.gov/.  
 
 
 
Product  Variety  Imports under HTSUS codes under which the product is 
classifiable (in USD '000)4 
(A) Subject imports (in USD '000)5 
(B) Scope 
adjustment6  
(C)7 Data sources  
  2011 2012 2013 2014 2015 2011 2012 2013 2014 2015   
Print 
Graphics  Imports 
from the 
RoW 1,690,265  1,154,087  1,139,722  1,100,101  1,180,584  1,196,763  1,136,151  1,139,356  1,094,453  1,066,559  0.92 HTSUS codes under which  
Print Graphics is classifiable 
as reported in section "Tariff 
treatment" (p. I -20) of U.S. 
International Trade 
Commission, Certain Coated 
Paper Suitable for High -
Quality Print Graphics Using 
Sheet -Fed Presses from 
China and Indonesia, USITC 
Publication No. 4656, 
December 2016 (Exhibit 
CHN-51). 
Subject imports as reported 
in Table I -9  
 
3 Figures rounded to the second decimal for representation only.  
4 Figures rounded for representation only.  
5 Figures rounded for representation only.  
6 Figures rounded to the second decimal for representation only.  
7 The scope adjustment  is obtained by taking the 2011 -2015 average across the share of subject imports in total  imports under the HTSUS codes under which Print Graphics  
is classifiable  (C=(B2011/A2011+B2012/A2012+B2013/A2013+B2014/A2014+B2015/A2015)/5 ).  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 53 - Product  Variety  Imports under HTSUS codes under which the product is 
classifiable (in USD '000)4 
(A) Subject imports (in USD '000)5 
(B) Scope 
adjustment6  
(C)7 Data sources  
  2011 2012 2013 2014 2015 2011 2012 2013 2014 2015   
(p. I-36) of U.S. 
International Trade 
Commission, Certain Coated 
Paper Suitable for Hi gh-
Quality Print Graphics Using 
Sheet -Fed Presses from 
China and Indonesia, USITC 
Publication No. 4656, 
December 2016 (Exhibit 
CHN-51). 
HTSUS Import data from 
USITC Dataweb  for General 
Imports  available at 
https://dataweb.usitc.gov/.  
 
  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 54 - ANNEX C -8 
REMEDY YEAR FIGURES FOR SELECTED VARIETIES OF PRESSURE PIPE, KITCHEN SHELVING, SEAMLESS PIPE, AND PRINT GRAPHICS  
Product  Variety  Latest year with 
product -level 
data availability1 Latest available 
estimate  
(A) Scaling index2  
(B) Scope 
adjustment3 
(C) Remedy year 
figure4 
(D=A*B*C)  Data sources  
Pressure 
Pipe Domestic  2015 USD 85,540,000  1.04 N/A USD 89,090,911  Latest available estimate from Table IV -3 
(p. IV -8) in U.S. International Trade 
Commission, Welded Stainless Steel 
Pressure Pipe from India , USITC 
Publication No. 4644, November 2016 
(Exhibit CHN -5). 
Scaling index based on Annex C -6. 
Kitchen 
Shelving  Domestic  2016 USD 4,173,231,241  1.06 0.06 USD 278,363,000  Latest available estimate from US Census' 
Annual Survey of Manufactures 2016 
available at 
https: //www.census.gov/data/tables/time -
series/econ/asm/2013 -2016-asm.html 
("2016  Value of Product Shipments") for  
Primary NAICS code 335221 (see Annex 
C-5). 
Scaling index based on Annex C -6. 
Scope Adjustment based on Annex C -7. 
 
1 In the case of the dom estic variety of Kitchen Shelving, we rely on industry -level data since no product -level data is available.  
2 Figures rounded to the second decimal for representation only.  
3 Figures rounded to the second decimal for representation only.  
4 Figures rounded to closest USD '000 for reasons of consistency across products.   
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 55 - Product  Variety  Latest year with 
product -level 
data availability1 Latest available 
estimate  
(A) Scaling index2  
(B) Scope 
adjustment3 
(C) Remedy year 
figure4 
(D=A*B*C)  Data sources  
Kitchen 
Shelving  Imports 
from RoW  2017 USD 817,790,284  N/A 0.50 USD 412,630,000  Latest available estimate based on HTSUS 
import data from USITC Dataweb for 
General Imports available at 
https://dataweb.usitc.gov/  for HTSUS 
codes under which  Kitchen Shelving is 
classifiable based on Exhibits CHN -53 and 
USA-61. 
Scope Adjustment based on Annex C -7. 
Seamless 
Pipe Domestic  2009 USD 199,357,000  1.48 N/A USD 294,963, 000 Latest available estimate from Table C-4 
(p. C-6) in U.S. International Trade 
Commission, Certain Seamless Carbon and 
Alloy Steel Standard, Line, and Pressure 
Pipe from China , USITC Publication No. 
4190, November 201 0 (Exhibit CHN -32). 
Scaling index based on Annex C -6. 
Print 
Graphics  Domestic  2015 USD 1,203,877,000  0.91 N/A USD 1,100,263,085  Latest available estimate from Table I-9 
(p. I-36) in U.S. International Trade 
Commission, Certain Coated Paper 
Suitable for High -Quality Print Graphics 
Using Sheet -Fed Presses from China and 
Indonesia , USITC Publication No. 4 656, 
December 201 6 (Exhibit CHN -51). 
Scaling index based on Annex C -6.  
  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 56 - Product  Variety  Latest year with 
product -level 
data availability1 Latest available 
estimate  
(A) Scaling index2  
(B) Scope 
adjustment3 
(C) Remedy year 
figure4 
(D=A*B*C)  Data sources  
Print 
Graphics  Imports 
from RoW  2017 USD 1,047,576,114  N/A 0.92 USD 961,7 70,000  Latest available estimate based on HTSUS 
import data from USITC Dataweb for 
General Imports available at 
https://dataweb.usitc.gov/  for HTSUS 
codes under which  Print Graphics is 
classifiable as reported in section  "Tariff 
treatment" (p. I -20) of U.S. International 
Trade Commission, Certain Coated Paper 
Suitable for High -Quality Print Graphics 
Using Sheet -Fed Presses from China and 
Indonesia, USITC Publication No. 4656, 
December 2016 (Exhibit CHN -51). 
Scope Adjustment based on Annex C -7. 
 
 WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 57 - 
 
  ANNEX C -9 
GAMS CODE OF  THE TWO -STEP ARMINGTON MODEL1 
$Title partial equilibrium Armington trade model for DS437  
 
*Specify the default case  (i.e. product subject to CVD order)  
$if not set case $set case 9 31 
 
Set case cases /  
931 "C -570-931 Pressure Pipe",  
936 "C -570-936 Line Pipe",  
942 "C -570-942 Kitchen Shelving",  
944 "C -570-944 OCTG",  
946 "C -570-946 Wire Strand",  
957 "C -570-957 Seamless Pip e", 
959 "C -570-959 Print Graphics",  
968 "C -570-968 Aluminum Extrusions",  
978 "C -570-978 Steel Cylinders",  
980 "C -570-980 Solar Panels"  
/, 
 
item data items /  
USA "USA shipments year prior ", 
CHN "CHN shipments year prior ", 
ROW "ROW shipments year prior ", 
IMP "Total imports year prior ", 
MKT "Total market year prior ", 
theta_lo "Demand elasticity lower bound",  
theta_up "Demand elasticity upper bound",  
eps_usa_lo "Supply elasticity USA lower bound",  
eps_usa_up "Supply elasticity  USA upper bound",  
sig_lo "Substitution elasticity lower bound",  
sig_up "Substitution elasticity upper bound",  
eps_sub "Supply elasticity subject imports",  
eps_chn "Supply elasticity Chinese imports",  
eps_row "Supply elasticity Other imports",  
MKT2017 "Tot al market size remedy year",  
tau_ocvd "Original CVD rate",  
tau_LTAR "LTAR rate",  
tau_cons "WTO Consistent CVD rate"  
/; 
 
Parameter raw(case,item);  
$gdxin data2 
$loaddc raw  
 
Scalar scale "Rescale the value data from $ to $M" /1e -6/; 
 
Set r(*) supply regions /USA,CHN,ROW/  
usa(r) usa region /usa/;  
 
Parameter  
psi(r) supply quantity for calibration  
phi total quantity demanded for calibration  
theta demand elasticity  
epsilon(r) supply elasticity for region r  
sigma_1 elasticity of substitution dm  
sigma_2 elasticity of substitution mm (import nest)  
; 
 
* Initial calibration is to the year -prior data. Quantity units  
* are chosen such that year -prior prices are one.  
psi("USA")= raw("%case%","USA") *scale;  
psi("CHN")= raw("%case%","CHN") *scale;  
psi("RO W")= raw("%case%","ROW") *scale;  
 
1 The code is based on Exhibit CHN -54 
2 See Annex C -10 for the data inputs to the model.  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 58 - 
 
  phi = raw("%case%","MKT") *scale;  
 
display psi,phi;  
 
 
* Elasticities: Ranges converted to averages by default  
theta = -(raw("%case%","theta_lo")+raw("%case%","theta_up"))/2;  
*theta = -1; 
* [NB] minus sign in front of theta added since theta is positive in data file  
sigma_1 =(raw("%case%","sig_lo")+raw("%case%","sig_up"))/2;  
* Elasticity of substitution among imports  (sigm a_2) set to sqrt(2)*sigma_1 (see section 3.3.1)  
sigma_2 = sqrt(2) * sigma_1;  
epsilon("USA") =(raw("%case%","eps_usa_lo")+raw("%case%","eps_usa_up"))/2;  
epsilon("CHN") =raw("%case%","eps_chn");  
epsilon("ROW") =raw("%case%","eps_row");  
 
*NB: The data include a supply elasticity for subject imports, "eps_sub", but  
* these are Chinese imports for our purposes. Regardless, the values of  
* these elasticities are all the same -- 10. 
 
 
 
* These are data used to setup the counterfactuals  
Parameter  
a1 total quantity demanded in 2017  
t_ocvd Original CVD rate,  
t_LTAR LTAR rate (WTO inconsistent duty),  
t_cons WTO Consistent CVD rate;  
 
a1 = raw("%case%","MKT2017" )*scale;  
t_ocvd = raw("%case%","tau_ocvd")/100;  
t_LTAR = raw(" %case%","tau_LTAR")/100;  
t_cons = raw("%case%","tau_cons")/100;  
 
Parameter  
tau(r) duty rate on goods from region r  
alpha(*) calibrated share of region r variety  
beta(r) share of region r variety in imports;  
 
tau(r) = 0;  
alpha(r)=psi(r)/phi;  
alpha("M")=(1 -alpha("USA"));  
beta(r)$(not usa(r)) = (alpha(r)/sum(r.local$(not usa(r)),alpha(r)));  
 
*Perform some data checks  
Abort$(round(sum(r,alpha(r)),7) ne 1) "Market shares do not sum to one";  
Abort$(round(sum(r,beta(r)),7) ne 1) "Import market shares do not sum to one";  
Abort$(round(sum(r,psi(r)) -phi,7) ne 0) "Total value of supply not equal to demand";  
Abort$(round(sum(r,psi(r)) -psi("USA") -raw("%case%","IMP")*scale,7) ne 0) "Component supplies  inconsistent 
with imports";  
 
 
* Setup the model  (see China 's Methodology Paper, Section III.C.1, for the model in text form ) 
 
Positive Variables  
 
A Armington activity index  
P Price index  
PX(r) Net -of-tariff price of variety from region r  
X(r) Index on sup ply quan tity; 
 
Equations  
Eq_1 Aggregate demand  
Eq_2 Armington technology (dual representation)  
Eq_3(r) Market clearance for regional varieties  
Eq_4(r) Supply functions;  
 
*Clean up the equations by using a macro for the import price index.  
$macro PMM ((sum( r.local$(not usa(r)),beta(r)*((1+tau(r))*PX(r))**(1 -sigma_2)))**(1/(1 -sigma_2)))  
 WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 59 - 
 
  * Equation (1 ) 
Eq_1.. A - phi*P**theta =g= 0 ;  
 
* Equation (2) (oriented properly for MCP: MargCost -MargBenefit ge 0)  
Eq_2.. (alpha("usa")*PX("usa")**(1 -sigma_1) + alpha("M")*PMM**(1 -sigma_1))**(1/(1 -sigma_1)) -  P =g= 
0; 
 
 
* Equations (3), (4), and (5)  
Eq_3(r).. X(r)  
- (alpha("M")*beta(r) * A * (P/PMM)**sigma_1 *(PMM/((1+tau(r))*PX(r)))**sigma_2)$(not usa(r))  
- (alpha(r)* A * (  P/((1+tau(r))*PX(r)))**sigma_1 )$(usa(r))  
=g= 0;  
 
* Equations (6), (7), and (8) (oriented properly for MCP: Supply -Demand ge 0)  
Eq_4(r).. psi(r)*PX(r)**epsilon(r) - X(r) =g= 0;  
 
 
Model PEARM /Eq_1.P,Eq_2.A,Eq_3.PX,Eq_4.X/;  
 
 
* Set the initial level values  and check the benchmark:  
A.l =phi;  
X.l(r) =psi(r);  
P.l =1;  
PX.l(r) =1;  
 
PEARM.iterlim=0;  
Solve PEARM using mcp;  
Abort$(PEARM.objval gt 1e -6) "Initial year -prior calibration failed";  
 
 
 
* Generate intermediate  reports  
* Domain sets for report indexing  
Set equ equilibrium /  
pybmk " year prior  benchmark",  
pyscn " year prior  scenario (duties imposed)",  
rybmk "remedy year benchmark",  
ryscn "remedy year scenario (duties removed)"/  
acct Account /  
revenue "revenue by market",  
duty_pmt "duty payments",  
share "gross of duty share",  
totalmkt "total market size (value gross of duties)"  
"NI_$M" "Nullification or Impairment"/  
; 
 
 
 
Parameter report(case,*,equ,acct,*) summary report  
vchk value check;  
 
 
 
* Write the actual reporting assignments out to a file tha t can be  
* recalled for different solutions  
$onechov > rpt.gms  
report("%case%","no","%1","revenue" ,r) = X.l(r)*PX.l(r);  
report("%case%","no","%1","duty_pmt",r) = tau(r)*X.l(r)*PX.l(r);  
report("%case%","no","%1","revenue","Total_gross_of_duty") = sum(r,(1+ tau(r))*X.l(r)*PX.l(r));  
report("%case%","no","%1","share",r) = (1+tau(r))*X.l(r)*PX.l(r)/(P.l*A.l);  
vchk = P.l*A.l - report("%case%","no","%1","revenue","Total_gross_of_duty");  
Abort$(round(vchk,5)) "Value check failed: equilibrium=%1";  
Abort$(round(sum(r,report("%case%","no","%1","share",r)),5) ne 1) "Report shares do not sum to one";  
$offecho  
 
* Report the year -prior benchmark (in parameter report)  
$batinclude rpt pybmk  
 WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 60 - 
 
  *--------------------  
* Equilibrium = pyscn  
* Impose the duties to  generate the year -prior counterfactual  
 
tau("chn") = t_ocvd;  
 
PEARM.iterlim=1000;  
Solve PEARM using mcp;  
 
* Report the year -prior counterfactual (in parameter report)  
$batinclude rpt pyscn  
 
*--------------------  
*--------------------  
 
* Equilibrium = rybm k (remedy year hypothetical benchmark)  
* Now recalibrate the model to this solution applied to the 2017 market size  
 
alpha(r)=(1+tau(r))*PX.l(r)*X.l(r)/(P.l*A.l);  
alpha("M")=1 -alpha("usa");  
beta(r)$(not usa(r)) = (1+tau(r))**(sigma_2 - 1) * alpha(r)/sum(r.local$(not usa(r)),alpha(r));  
psi(r)=alpha(r)*a1/(1+tau(r));  
phi = a1;  
 
Abort$(round(sum(r,alpha(r)),7) ne 1) "Hypothetical 2017 market shares do not sum to one";  
 
* Set the level values and check the Hypothetical 2017 benchmark 222  
A.l =phi;  
X.l(r) =psi(r);  
P.l =1;  
PX.l(r) =1;  
 
PEARM.iterlim=0;  
Solve PEARM using mcp;  
Abort$(PEARM.objval gt 1e -6) "Hypothetical 2017 benchmark replication fails";  
 
* Report the remedy year benchmark  
$batinclude rpt rybmk  
*--------------------  
*-------------- ------  
* Equilibrium = ryscn  
* Remove the WTO inconsistent duties  
 
tau("chn") = t_cons;  
 
 
PEARM.iterlim=1000;  
Solve PEARM using mcp;  
 
* Report the remedy year counterfactual  
$batinclude rpt ryscn  
 
* Calculation of NI:  
report("%case%","no","ryscn","NI_$M","CHN")=  
report("%case%","no","ryscn","revenue","CHN")  
-report("%case%","no","rybmk","revenue","CHN");  
 
*--------------------  
display report;  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 61 - 
 
  ANNEX C -10 
DATA INPUTS USED TO IMPLEMENT THE ARMINGTON MODEL UNDER THE TWO STEPS1,2 
 
 
 
 
 
1 The code of the software GAMS  in Annex C-9 refers to this input table . 
2 The names used in the table refer to the following; 931: Pressure Pipe; 936: Line Pipe; 942: Kitchen 
Shelving; 944: OCTG; 946: Wire Strand; 957: Seamless Pipe, 959: Print Graphics; 968: Aluminum Extrusions; 
978: Steel Cylinders; 980: Solar Panels; USA: year -prior sales US domestic va riety; CHN: year -prior sales of 
imports from China; ROW: year_prior sales of imports from the RoW; theta: demand elasticity; up: maximum 
value of range; lo: minimum value of range; eps_usa: domestic supply elasticity; eps_sub: import supply 
elasticity; eps _chn: supply elasticity of imports from China; eps_row: supply elasticity of imports from RoW; 
sig: elasticity of substitution; MKT2017: total US market value in USD in 2017; tau_ocvd: WTO -inconsistent 
CVD rate; tau_LTAR: LTAR rate; tau_cons: WTO -consisten t CVD rate.  Product  
USA 
CHN 
ROW  
IMP 
MKT 
theta_lo  
theta_up  
eps_usa_
lo 
eps_usa_
up 
sig_lo  
sig_up  
eps_sub  
eps_chn  
eps_row  
MKT2017  
tau_ocvd  
tau_LTAR  
tau_cons  931 
201,460,000  
154,833,000  
158,535,000  
313,368,000  
514,828,000  
0.3 
0.7 
5 
10 
3 
6 
10 
10 
10 
[[***]] 
1.1 
0.36 
0.74 936 
757,701,000  
153,881,000  
315,411,000  
469,292,000  
1,226,993,000  
0.25 
0.5 
3 
5 
2 
4 
10 
10 
10 
[[***]] 
36.35  
32.49  
3.86 942 
84,256,000  
150,477,000  
276,171,000  
426,648,000  
510,904,000  
0.1 
0.5 
5 
10 
4 
6 
10 
10 
10 
[[***]] 
13.3 
11.76  
1.54 944 
6,184,818,000  
2,805,206,000  
2,572,888,000  
5,378,094,000  
11,562,912,000  
0.75 
1 
4 
6 
3 
5 
10 
10 
10 
6,356,019,000  
12.26  
10.19  
2.07 946 
333,721,000  
194,276,000  
21,771,000  
216,047,000  
549,768,000  
0.5 
1 
3 
5 
2 
4 
10 
10 
10 
[[***]] 
27.64  
10.95  
16.69  957 
199,357,000  
135,240,000  
348,609,000  
483,849,000  
683,206,000  
0.5 
1 
5 
10 
2 
4 
10 
10 
10 
[[***]] 
28.9 
3.64 
25.26  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 62 - 
 
   
Product  
USA  
CHN  
ROW  
IMP 
MKT  
theta_lo  
theta_up  
eps_usa_lo  
eps_usa_up  
sig_lo  
sig_up  
eps_sub  
eps_chn  
eps_row  
MKT2017  
tau_ocvd  
tau_LTAR  
tau_cons  959 
1,023,688,000  
297,527,000  
420,989,000  
718,516,000  
1,742,204,000  
0.75 
1.25 
3 
5 
2 
4 
10 
10 
10 
[[***]] 
19.46  
0.8 
18.66  968 
2,888,945,000  
547,968,000  
359,382,000  
907,350,000  
3,796,295,000  
0.25 
0.5 
3 
5 
4 
6 
10 
10 
10 
[[***]] 
7.37 
3.8 
3.57 978 
[[***]] 
23,009,000  
2,821,000  
25,830,000  
41,967,000  
0.25 
0.75 
5 
10 
3 
5 
10 
10 
10 
[[***]] 
15.81  
14.34  
1.47 980 
804,853,000  
1,905,220,000  
824,588,000  
2,729,808,000  
3,534,661,000  
0.75 
1 
4 
7 
3 
5 
10 
10 
10 
4,055,230,000  
15.24  
0.715  
14.62  WT/DS437/ARB/Add.1  
BCI omitted, as indicated [[***]]  
- 63 - 
 
  ANNEX  C-11 
RESULTS OF IMPLEMENTING THE  FIRST STEP OF THE TWO -STEP ARMINGTON MODEL1 
 
 
 
__________  
 
 
1 Figures rounded to third decimal for representation only.  Product  Simulated market share of 
US domestic producers  Simulated market share of 
Chinese exporters  Simulated market share of 
exporters from the rest of 
the world  
 WTO -
inconsistent 
CVD rate  WTO -
consistent 
CVD rate  WTO -
inconsistent 
CVD rate  WTO -
consistent 
CVD rate  WTO -
inconsistent 
CVD rate  WTO -
consistent 
CVD rate  
Pressure 
Pipe 0.394  0.393  0.294  0.296  0.312  0.311  
Line Pipe  0.643  0.621  0.069  0.117  0.287  0.261  
Kitchen 
Shelving  0.178  0.167  0.213  0.284  0.609  0.550  
OCTG  0.562  0.540  0.191  0.233  0.247  0.227  
Wire 
Strand  0.677  0.652  0.271  0.300  0.053  0.048  
Seamless 
Pipe 0.310  0.308  0.123  0.130  0.567  0.561  
Print 
Graphics  0.610  0.609  0.125  0.126  0.265  0.264  
Aluminum 
Extrusions  0.779  0.770  0.120  0.132  0.101  0.098  
Steel 
Cylinders  [[***]] [[***]] [[***]] [[***]] [[***]] [[***]] 
Solar 
Panels  0.260  0.259  0.446  0.449  0.294  0.292