WT/DS546/R  
 
8 February  2022 
(22-0946) Page: 1/85 
  Original: English  
 
  
 
UNITED  STATES  – SAFEGUARD  MEASURE  ON IMPORTS  OF 
LARGE  RESIDENTIAL  WASHERS  
REPORT OF THE PANEL  
 
 
 
  WT/DS546/ R 
 
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  TABLE  OF CONTENTS  
1   INTRODUCTION  ................................ ................................ ................................ ..........  9 
1.1   Complaint by Korea  ................................ ................................ ................................ ..... 9 
1.2   Panel establishment and composition  ................................ ................................ .............  9 
1.3   Panel proceedings  ................................ ................................ ................................ ........  9 
1.3.1    General  ................................ ................................ ................................ ...................  9 
2   FACTUAL ASPECTS ................................ ................................ ................................ ..... 10 
2.1   The measure at issue  ................................ ................................ ................................ ..10 
3   PARTIES'  REQUESTS FOR FINDINGS  ................................ ................................ .........  10 
4   ARGUMENTS OF THE  PARTIES  ................................ ................................ ...................  11 
5   ARGUMENTS OF THE THIRD PARTIES  ................................ ................................ ........  11 
6   INTERIM REVIEW  ................................ ................................ ................................ ...... 11 
7   FINDINGS  ................................ ................................ ................................ .................  12 
7.1   General principles regarding standard of review, treaty interpretation, and burden of  
proof ................................ ................................ ................................ ................................ 12 
7.1.1    Standard of review ................................ ................................ ................................ ...12 
7.1.2    Treaty interpretation  ................................ ................................ ................................ 12 
7.1.3    Burden of proof  ................................ ................................ ................................ .......12 
7.2   "Unforeseen developments" and "the effect of obligations incurred" under  
the GATT  1994 ................................ ................................ ................................ .................. 13 
7.2.1    Demonstration of factual circumstances set out in Article  XIX:1(a) of the  GATT  1994 .......14 
7.2.2    Unforeseen developments  ................................ ................................ ......................... 16 
7.2.3   Effect of the obligations incurred under the  GATT  1994 ................................ ................ 17 
7.2.4    Conclusion  ................................ ................................ ................................ .............. 19 
7.3   The USITC's  definition of the domestic industry  ................................ .............................. 19 
7.3.1    Inclusion of belt -driven washers within the scope of the domestically produced good  .......21 
7.3.2    Likeness of domestically produced parts and imported parts of LRWs  ............................. 23 
7.3.3    Product line approach  ................................ ................................ ............................... 27 
7.3.3.1    Whether the USITC applied the product line approach to define the  
domestic industry  ................................ ................................ ................................ .............. 28 
7.3.3.2    Whether the USITC acted inconsistently with Article  4.1(c) in applying  
the product line approach  ................................ ................................ ................................ ...29 
7.3.4    Conclusion  ................................ ................................ ................................ .............. 29 
7.4   The USITC's  determination of increased imports  ................................ ............................. 30 
7.4.1    The USITC's  cumulation of LRW parts and LRWs in its increased imports analysis  ............ 31 
7.4.2    The significance of the increase in imports relative to domestic consumption ................... 32 
7.4.3    The USITC's  explanation regarding its determination on increased imports  ..................... 33 
7.4.4    Conclusion  ................................ ................................ ................................ .............. 35 
7.5   The USITC's  serious injury determination  ................................ ................................ ......36 
7.5.1    Evaluation of all the injury factors set out in Article  4.2(a) as part of  
the serious injury finding  ................................ ................................ ................................ ....37 
7.5.2    The USITC's  alleged failure to objectively examine profits and losses  ............................. 39 WT/DS546/ R 
 
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  7.5.3    The USITC's  alleged failure to obj ectively examine the share of domestic market  
taken by increased imports  ................................ ................................ ................................ .41 
7.5.4    The effect of the USITC's  domestic industry definition on its serious injury findings  .......... 42 
7.5.5    The USITC's  alleged failure to undertake an objective examination of the significant  
overall impairment of the domestic industry and its decision to base its serious injury 
determination on declining profitability alone  ................................ ................................ ......... 45 
7.5.6    Conclusion  ................................ ................................ ................................ .............. 45 
7.6   The USITC's  causation determination  ................................ ................................ ............ 46 
7.6.1    First stage of the USITC's  causation determination  ................................ ....................... 47 
7.6.1.1    The USITC's  price effects analysis  ................................ ................................ ........... 47 
7.6.1.1.1    The USITC's  findings regarding the costs i ncurred by the domestic industry  .............. 49 
7.6.1.1.2    The USITC's  finding regarding the depressive and suppressive effects of imports  
on prices of domestically produced goods ................................ ................................ .............. 50 
7.6.1.2    The USITC's  analysis on coincidence in trends  ................................ .......................... 55 
7.6.1.3    The USITC's  analysis of non -price related aspects of competition  ................................ 56 
7.6.1.3.1    Differences in the product mix between imported and domestic LRWs  ....................... 56 
7.6.1.3.2    Competition between imported and domestic parts  ................................ ................. 56 
7.6.1.4    Conclusion regar ding the first stage of the USITC's  causation determination  ................. 57 
7.6.2    Second stage of the USITC's  causation determination  ................................ .................. 57 
7.6.2.1    The USITC's  rejection of the Korean respondents'  joint-pricing theory  ......................... 59 
7.6.2.1.1    Whether the USITC found joint pricing to be a factor causing injury to the  
domestic industry  ................................ ................................ ................................ .............. 59 
7.6.2.1.2    Whether the USITC  provided a reasoned and adequate explanation that  
joint pricing was not causing any injury to the domestic industry  ................................ ............. 59 
7.6.2.2    The USITC's  rejection of the "deterioration of US  brands" theory  ................................ 62 
7.6.2.2.1    Whether the USITC found deterioration of US  brands to be a factor causing injury  
to the domestic industry  ................................ ................................ ................................ .....62 
7.6.2.2.2    Whether the USITC  provided a reasoned and adequate explanation that  
deterioration of US  brands was not a factor causing any injury to the domestic industry  ............. 62 
7.6.2.3    Substantial cause test  ................................ ................................ ........................... 65 
7.6.2.4    Conclusion regarding the second stage of the USITC's  causation determination  ............ 66 
7.6.3    Consequential claims on causation  ................................ ................................ ............. 66 
7.7   Claims under Articles  5.1 and 7.1 of the  Agreement on Safeguards ................................ ...66 
7.7.1    Korea's  claims regarding the United  States'  alleged failure to limit the application of  
the safeguard measure to the alleged serious injury caused by increased imports  ...................... 67 
7.7.2    Korea's  claims concerning the form and level of the safeguard measure  ......................... 67 
7.7.2.1    Safeguard measure on LRW parts  ................................ ................................ ........... 67 
7.7.2.2    Level of the safeguard measure  ................................ ................................ .............. 68 
7.7.3    Korea's  claim regarding the United  States'  alleged failure to take into account existing 
import restrictions from anti -dumping and countervailing duty measures  ................................ ..69 
7.7.4    Korea's  claim that the safeguard measure went beyond what was necessary to  
facilitate adjustment of the domestic industry  ................................ ................................ ........ 70 
7.7.5    Conclusion  ................................ ................................ ................................ .............. 71 
7.8   Claims under Articles  12.1 and 12.2 of the  Agreement on Safeguards  ............................... 71 WT/DS546/ R 
 
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  7.8.1    Initiation notification  ................................ ................................ ................................ 72 
7.8.2    Serious injury notification  ................................ ................................ ......................... 73 
7.8.2.1    Providing all pertinent information  ................................ ................................ .......... 74 
7.8.2.2    Immediacy of notification  ................................ ................................ ....................... 75 
7.8.3    Decision notification  ................................ ................................ ................................ .76 
7.8.3.1    Providing all pertinent information  ................................ ................................ .......... 76 
7.8.3.2    Immediacy of notification  ................................ ................................ ....................... 77 
7.8.4    Conclusion  ................................ ................................ ................................ .............. 78 
7.9   Claims u nder Articles  8.1 and 12.3 of the  Agreement on Safeguards  ................................ .78 
7.10   Claim under Article  11.1(a)  of the  Agreement on Safeguards  ................................ ......... 81 
7.11   Claim under Article  II:1 of the  GATT  1994 ................................ ................................ ...81 
8   CONCLUSIONS AND RECOMMENDATION  ................................ ................................ ... 82 
 
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  LIST OF ANNEXES  
ANNEX  A 
PANEL DOCUMENTS  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  4 
Annex  A-2 Additional Working Procedures of the Panel concerning Business Confidential 
Information  11 
Annex  A-3 Additional Working Procedures of the Panel concerning holding a substantive 
meeting conducted via Cisco WebEx 13 
Annex  A-4 Interim Review  18 
ANNEX  B 
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of the Republic of  Korea  28 
Annex  B-2 Integrated executive summary of the arguments of the United  States   47 
ANNEX  C 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of the European  Union  61 
Annex  C-2 Integrated executive summary of the arguments of  Japan  65 
Annex  C-3 Integrated executive summary of the arguments of Mexico  70 
 
 
 
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  CASES  CITED  IN THIS  REPORT  
Short Title  Full Case Title and Citation  
Argentina – Footwear (EC)  Appellate Body Report, Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/AB/R , adopted 12  January  2000, DSR 2000:I, p. 515  
Argentina – Footwear (EC)  Panel Report, Argentina – Safeguard Measures on Imports of Footwear , 
WT/DS121/R , adopted 12  January  2000, as modified by Appellate Body 
Report WT/D S121/AB/R, DSR 2000:II, p. 575  
China – GOES (Article  21.5 – 
US) Panel Report, China – Countervailing and Anti -Dumping Duties on Grain 
Oriented Flat -Rolled Electrical Steel from the United States – Recourse to 
Article  21.5 of the DSU by the United States , WT/DS414/RW  and Add.1, 
adopted 31  August  2015, DSR 2015:VII, p. 38 65 
Dominican Republic – 
Safeguard Measures  Panel Report, Dominican Republic – Safeguard Measures on Imports of 
Polypropylene Bags and Tubular Fabric , WT/DS415/R , WT/DS416/R , 
WT/DS417/R , WT/DS418/R , and Add.1, adopted 22  February  2012, DSR 
2012:XIII, p. 6775  
EC – Asbestos  Appellate Body Report, European Communities – Measures Affecting 
Asbestos and Asbestos -Containing Products , WT/DS135/AB/R , adopted 
5 April 2001, DSR 2001:VII, p. 3243  
EC – Fasteners (China)  Appellate Body Report, European Communities – Definitive Anti -Dumping 
Measures on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R , 
adopted 28  July 2011, DSR 2011:VII, p.  3995 
EC – Hormones  Appellate Body Report, European Communities – Measures Concerning 
Meat and Meat Products (Hormones) , WT/DS26/AB/R , WT/DS48/AB/R , 
adopted 13  February  1998, DSR 1998:I, p.  135 
EC – Salmon (Norway)  Panel Report, European Communities – Anti-Dumping Measure on Farmed 
Salmon from Norway , WT/DS337/R , adopted 15  January  2008, and Corr.1, 
DSR 2008:I, p.  3 
EC – Seal Products  Appellate Body Reports, European Communities – Measures Prohibiting the 
Importation and Marketing of Seal Products , WT/DS400/AB/R  / 
WT/DS401/AB/R , adopted 18  June 2014, DSR 2014:I, p.  7 
Japan – Alcoholic Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R , WT/DS10/AB/R , WT/DS11/AB/R , adopted 
1 November  1996, DSR 1996:I, p.  97 
Korea – Certain Paper  Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper 
from Indonesia , WT/DS312/R , adopted 28  November  2005, DSR 
2005:XXII, p.  10637  
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports 
of Certain Dairy Products , WT/DS98/AB/R , adopted 12  January  2000, DSR 
2000:I, p.  3 
Korea – Dairy Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain 
Dairy Products , WT/DS98/R  and Corr.1, adopted 12  January  2000, as 
modified by Appellate Body Report WT/DS98/AB/R, DSR 2000 :I, p. 49 
Korea – Pneumatic Valves 
(Japan)  Panel Report, Korea – Anti-Dumping Duties on Pneumatic Valves from 
Japan , WT/DS504/R  and Add.1, adopted 30  September  2019, as modified 
by Appellate Body Report WT/DS504/AB/R , DSR 2019:XI, p. 5935  
Mexico – Anti-Dumping 
Measures on Rice  Panel Report, Mexico – Definitive Anti-Dumping Measures on Beef and 
Rice, Complaint with Respect to Rice , WT/DS295/R , adopted 
20 December  2005, as modified by Appellate Body Report 
WT/DS295/AB/R, DSR 2005:XXIII, p.  11007  
Philippines – Distilled Spirits  Appellate Body Reports, Philippines – Taxes on Distilled Spirits , 
WT/DS396/AB/R  / WT/DS403/AB/R , adopted 20  January  2012, DSR 
2012:VIII, p.  4163 
Ukraine – Passenger Cars  Panel Report, Ukraine – Definitive Safeguard Measures on Certain 
Passenger Cars , WT/DS468/R  and Add.1, adopted 20  July 2015, DSR 
2015:VI, p.  3117 
US – Cotton Yarn  Appellate Body Report, United States – Transitional Safeguard Measure  on 
Combed Cotton Yarn from Pakistan , WT/DS192/AB/R , adopted 
5 November  2001, DSR 2001:XII, p.  6027 WT/DS546/ R 
 
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  Short Title  Full Case Title and Citation  
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R , adopted 20  May 1996, DSR 1996:I, 
p. 3 
US – Lamb  Appellate Body Report, United States – Safeguard Measures on Imports of 
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia , 
WT/DS177/AB/R , WT/DS17 8/AB/R , adopted 16  May 2001, DSR 2001:IX, 
p. 4051 
US – Lamb  Panel Report, United States – Safeguard Measures on Imports of Fresh, 
Chilled or Frozen Lamb Meat from New Zealand and Australia , 
WT/DS177/R , WT/DS178/R , adopted 16  May 2001, as modified by 
Appellate Body Report WT/DS177/AB/R, WT/DS178/AB/R, DSR 2001:IX, 
p. 4107 
US – Line Pipe  Appellate Body Report, United States – Definitive Safeguard Measures  on 
Imports of Circular Welded Carbon Quality Line Pipe from Korea , 
WT/DS202/AB/R , adopted 8  March  2002, DSR 2002:IV, p.  1403 
US – Steel Safeguards  Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Certain Steel Products , WT/DS248/AB/R , WT/DS249/AB/R , 
WT/DS251/AB/R , WT/DS252/AB/R , WT/DS253/AB/R , WT/DS254/AB/R , 
WT/DS258/AB/R , WT/DS259/AB/R , adopted 10  December  2003, DSR 
2003:VII, p.  3117 
US – Steel Safeguards  Panel Reports, United  States – Definitive Safeguard Measures on Imports 
of Certain Steel Products , WT/DS248/R  and Corr.1 / WT/DS249/R  and 
Corr.1 / WT/DS251/R  and Corr.1 / WT/DS252/R  and Corr.1 / WT/DS253/R  
and Corr.1 / WT/DS254/R  and Corr.1 / WT/DS258/R  and Corr.1 / 
WT/DS259/R  and Corr.1, adopted 10  December  2003, as modified by 
Appellate Body Report WT/DS248/AB/R, WT/DS249/AB/R, 
WT/DS251/AB /R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, 
WT/DS258/AB/R, WT/DS259/AB/R, DSR 2003:VIII, p.  3273 
US – Wheat Gluten  Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Wheat Gluten from the European Communities , 
WT/DS166/AB/R , adopted 19  January  2001, DSR 2001:II, p.  717 
US – Wheat Gluten  Panel Report, United States – Definitive Safeguard Measures on Imports of 
Wheat Gluten from the European Communities , WT/DS166/R , adopted 
19 January  2001, as modified by Appellate Body Report WT/DS166/AB/R, 
DSR 2001:III, p.  779 
US – Wool Shirts and Blouses  Appellate Body Report, United States – Measure Affecting Imports of 
Woven Wo ol Shirts and Blouses from India , WT/DS33/AB/R , adopted 
23 May 1997, and Corr.1, DSR 1997:I, p.  323 
 
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  ABBREVIATIONS  USED  IN THIS  REPORT  
Abbreviation  Description  
Alliance  Alliance Laundry Systems  
AUV average unit value  
BCI Business Confidential Information  
CIM controlled -induction motor  
COGS  cost of goods sold  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of  
Disputes  
FL LRW  front loading large residential washers  
GATT 1994  General  Agreement  on Tariffs and Trade 1994  
GE GE Appliances  
LRW large residential washer  
MFN most favoured nation  
POI period of investigation  
PSC permanent split -capacitor  
PUC product under consideration  
SG&A  sales, general, and administrative  
TL LRW  top loading large residential washers  
USITC  United  States  International Trade Commission  
USTR  United  States  Trade Representative  
Whirlpool  Whirlpool Corporation  
WTO World Trade Organization  
 WT/DS546/ R 
 
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  1  INTRODUCTION  
1.1  Complaint  by Korea  
1.1.  On 14 May 2018, the Republic of Korea (Korea ) requested consultations with the United  States  
pursuant to Articles  1 and 4 of the Understanding on Rules and Procedures Governing the Settlement 
of Disputes (DSU) , Article  XXII:1 of the General  Agreement  on Tariffs and Trade 1994 (GATT 1994), 
and Article  14 of the  Agreement  on Safeguards  with respect to the measures and claims set out 
below.1 
1.2.  Consultations were held on 26 June 2018 but failed to resolve this dispute . 
1.2  Panel  establishment  and composition  
1.3.  On 14 August  2018, Korea  requested the establishment of a panel pursuant to Article  6 of the 
DSU, Article  XXIII of the  GATT  1994, and Article  14 of the  Agreement  on Safeguards with standard 
terms of reference.2 At its meeting on 26 September  2018, the Dispute Settlement Body 
(DSB) established a panel pursuant to the request of Korea  in document WT/DS 546/4 , in accordance 
with Article  6 of the DSU.3 
1.4.  The Panel 's terms of reference are the following:  
To examine, in the light of the relevant provisions of the covered agreements cited  by 
the parties to the dispute, the matter referred to the DSB by the Republic of Korea  in 
document WT/DS 546/4  and to make such findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements.4 
1.5.  On 20 June 2019, Korea  requested the Director -General to determine the composition of the 
panel, pursuant to Article  8.7 of the DSU . On 1 July 2019, the Director -General accordingly 
composed the Panel as follows:  
Chairperson:  Mr Alexander Hugh Mc Phail 
 
Members:   Mr Welber Oliveira Barral  
   Ms Stephanie Sin Far Lee  
 
1.6.  Brazil, China, Egypt, the European  Union , India, Japan, Kazakhstan, Mexico, Norway,  
the Russian Federation, Thailand, and Viet Nam  notified their interest in participating in the Panel 
procee dings as third parties.  
1.3  Panel  proceedings  
1.3.1   General  
1.7.  After consultation with the parties, we adopted the timetable , Working Procedures5 and 
Additional Working Procedures on Business Confidential Information  (BCI)6 on 9 October  2019.7 
1.8.  In view of the various restrictions imposed on gatherings and international travel in relation to 
the COVID -19 pandemic, it was not possible to hold  the Panel 's first and second substantive 
meetings with the parties in  person . We continued to consult the parties  througho ut 2020  on the 
 
1 Request for consultations by Korea, WT/DS546/1 (Korea's  consultations request).  
2 Request for establishment of a panel by Korea, WT/DS546/4 (Korea's  panel request).  
3 DSB, Minutes of Meeting held on 26 September  2018, WT/DSB/M/419 , para.  7.4. 
4 Constituti on note of the Panel, WT/DS 546/5 , para. 2. 
5 Working Procedures of the Panel (Annex  A-1). 
6 Additional Working Procedures of the Panel on Business Confidential Information ( Annex  A-2). 
7 We revised these Additional Working Procedures on BCI on 18 October  2019 and on 31  October  2019. 
We also revised the timetable over the course of the proceedings in consultation with the parties.  WT/DS546/ R 
 
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  possibility of adopting alternative methods to an in -person meeting .8 However, taking into account 
the views expressed by Korea and the United  States  in this regard, and considering in -person 
meetings were not possible in 2020 due to the aforementioned restrictions caused by the COVID -19 
pandemic, we decided not to hold these meetings in 2020 . 
1.9.  Following additional consultation with the parties, we adopted on 29  January  2021 
Additional  Working Procedures that set out the procedures for holding the Panel 's substantive 
meeting through a virtual format.9 After further consulting the parties, we held the first substantive 
meeting with the parties on 23 and 26  February  2021 through a partially virtual format. The session 
with the third parties took place on 24  February  2021. We held the second substantive meeting on 
14, 15 , and 18  June 2021, also through a partially virtual format.  
1.10.   We issued the descriptive part of its Report to the parties  on 20 August  2021. We issued our 
Interim Report  and Final Report to the parties on 25 October  2021 and 15 December  2021 
respectively . 
2  FACTUAL  ASPECTS  
2.1  The measure  at issue  
2.1.  The dispute concerns  the definitive safeguard measure imposed by the United  States  on 
imports of large residential washers (LRWs). The United  States  imposed this measure pursuant to 
Proclamation 9694  issued by the US President  on 23 January  2018.10 The measure was imposed 
following an investigation conducted by the United  States  International Trade Commission 
(USITC).11 
3  PARTIES ' REQUESTS  FOR FINDINGS  
3.1.  Korea  requests that the Panel find that the United  States ' definitive safeguard measure on 
LRWs  is inconsistent with the United  States ' obligations under the Agreement  on Safeguards and 
the GATT  1994. Specifically, Korea con tends that the United  States  acted inconsistently with12: 
a. Article  XIX:1(a ) of the  GATT  1994 and Articles  1 and 3.1  of the  Agreement  on Safeguards, 
by failing  to provide a reasoned and adequate explanation of the "unforeseen 
developments " and the "obligations incurred " by the United  States , which would have 
resulted in the alleged increased imports of LRWs causing serious injury ; 
b. Articles  2.1, 3.1, 4.1(c), 4.2( a), and 4.2(b ) of the  Agreement  on Safeguards, by failing  to 
properly define the domestic industry ;  
c. Articles  2.1 and 3.1 of the  Agreement  on Safeguards, by failing  to properly determine that 
LRWs were imported in "such increased quantities, absolute or re lative to domestic 
production, and under such conditions " to cause serious injury to the domestic industry ; 
 
8 In particular, we explored the possibility of (a)  replacing the first substantive meeting of the Panel with 
a written procedure, or (b)  holding the substantive meetings through a fully virtual format, wherein all 
participants would participate in the meeting by logging into a virtual platform such as Cisco WebEx, o r a 
partially virtual format, where a limited number of participants could be present at the designated room at the 
WTO (taking into account the local restrictions on in -person meetings)  whereas other participants, including 
the panellists, would participa te through the Cisco WebEx platform.  
9 Additional Working Procedures of the Panel concerning holding  a substantive meeting conducted via 
Cisco WebEx adopted on 29  January  2021 (Annex  A-3). We revised these Additional Working Procedures on 
21 April 2021.  
10 Presidential Documents, Proclamation 9694 of January  23, 2018 – To Facilitate Positive Adjustment to 
Competition from Imports of Large Residential Washers, 83 FR 3553 (25  January  2018), (Exhibit  KOR-3). 
11 USITC, Public Report, Large Residential Washers, Inv. No. TA 201 076, USITC Pub. 4745 
(December  2017) (USITC report ), (Exhibit  KOR-1). We note that in its comments to the Descriptive Part of the 
Panel Report,  Korea noted that the safeguard measure at issue  was extended on 14  January  2021 for  
two additional years , through 7  February  2023. (Korea's  comments to the Descriptive Part of the Panel Report 
(referring to US  notification to the WTO, G/SG/N/10/USA/8/Suppl.7 )). 
12 Korea's  first written submission, para.  573. See also Korea's  second written submission, para.  333. WT/DS546/ R 
 
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  d. Articles  2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c ) of the Agreement  on Safeguards, by failing to 
provide a reasoned and adequate explanation of the exist ence of a significant overall 
impairment in the position of the domestic industry based on all relevant factors to support 
its conclusion that the domestic industry was suffering "serious injury or threat thereof "; 
e. Articles  2.1, 3.1, 4.2(b), and 4.2(c ) of the Agreement  on Safeguards, by failing to provide 
a reasoned and adequate explanation of the "causal link" between the alleged increased 
imports of LRWs and serious injury or threat thereof , and fail ing to ensure that injury 
caused by other factors was no t attributed to the increased imports;  
f. Articles  5.1 and 7.1 of the  Agreement  on Safeguards, by failing to apply the safeguard 
measure "only to the extent necessary to prevent or remedy serious injury and to facilitate 
adjustment";  
g. Articles  12.1 and 12.2 of the  Agreement  on Safeguards, by (i ) failing to provide immediate 
notifications of the different decisions; and (ii ) failing to provide all pertinent information 
in its notifications, including evidence of serious injury or threat thereof caused by 
increased imports,  among others,  as a result of the undue redaction of allegedly 
confidential information and failing  to provide adequate non -confidential summaries ; 
h. Articles  8.1 and 12.3 of the  Agreement on Safeguards, by failing to endeavour to maintain 
a substantially equivalent level of concessions and other obligations under the  GATT  1994 
between the United  States and Korea in accordance with Article  12.3 of the  Agreement on 
Safeguards;  
i. Article  11.1(a ) of the  Agreement  on Safeguards as a consequence of  the inconsistencies 
identified in paragraphs  (a)-(h) above; and  
j. Article  II:1 of the  GATT  1994, because the safeguard measure amounts to a withdrawal 
or modification of the United  States ' concessions without a justification under Article  XIX 
of the  GATT  1994, the  Agreement  on Safeguards or any other provisions of the 
WTO Agreemen t. 
3.2.  The United  States  requests that the Panel reject Korea 's claims in this dispute in their entirety.  
4  ARGUMENTS  OF THE PARTIES  
4.1.  The arguments of the parties are reflected in their executive summaries, provided to the Panel 
in accordance with paragraph  23 of the Working Procedures adopted by the Pan el (see Annexes  B-1 
and B -2). 
5  ARGUMENTS  OF THE THIRD PARTIES  
5.1.  The arguments of the European  Union , Japan , and Mexico  are reflected in their executive 
summaries, provided in accordance with paragraph  26 of the Working Procedures adopted by the 
Panel (see Annexes  C-1, C-2, and C-3). Brazil, China, Egypt, India, Kazakhs tan, Norway,  
the Russian  Federation, Thailand, and Viet Nam  did not submit third-party written submission s or 
make  third-party oral statement s to the Panel.  
6  INTERIM  REVIEW  
6.1.  On 25  October  2021, we issued our Interim Report to the parties. On 8  November  2021, 
Korea  submitted a written request asking us to review precise aspects of the Interim Report. The 
United States did not submit such a request, but on 17  November  2021 submitted comments on 
Korea's request for review.  
6.2.  The request and comments made at the interim review stage as well as our discussion and 
disposition of Korea's  request are set out in Annex A-4. WT/DS546/ R 
 
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  7  FINDINGS  
7.1  General  principles  regarding  standard  of review,  treaty  interpretation,  and burden  of 
proof  
7.1.1   Standard  of review  
7.1.  Article  11 of the DSU sets out a general standard of review for WTO panels, and provides as 
follows:  
The function of panels is to assist the DSB in discharging its responsibilities under this 
Understanding and the covered agreements. Accordingly, a panel should make an 
objective assessment of the matter before it, including an objective assessment of the 
facts of the case and the applicability of and conformity with the relevant covered 
agreements, and make such other findings as will assist the DSB in making the 
recommend ations or in giving the rulings provided  for in the covered agreements. 
Panels should consult regularly with the parties to the dispute and give them adequate 
opportunity to develop a mutually satisfactory solution.  
7.2.  Dispute settlement reports previously ad opted by the Dispute Settlement Body (previous 
DSB reports ) have established that the general standard of review contained in Article  11 of the DSU 
is applicable to disputes involving claims of violation of the  Agreement  on Safeguards and Article  XIX 
of the  GATT  1994.13 We agree with previous DSB reports that, p ursuant to this standard of review, 
a panel is required to assess whether the competent  authority has examined all pertinent facts and 
provided an adequate explana tion as to how those facts support the determination.14 However, in 
conducting such a review, a panel must neither conduct a de novo review of the evidence nor 
substitute its judgement for that of the competent authority.15 
7.3.  Moreover, Article  3.1 of the  Agreement  on Safeguards , last sentence, requires competent 
authorities to publish a report setting forth their findings and reasoned conclusions reached on all 
pertinent issues of fact and law. We agree with previous DSB reports that, based on this requiremen t, 
the competent authorities ' published report must contain the reasoned and adequate explanation 
that demonstrates compliance with the relevant obligations.16 
7.1.2   Treaty  interpretation  
7.4.  Article  3.2 of the DSU provides that the WTO dispute settlement system serves to clarify the 
existing provisions of the covered agreements "in accordance with customary rules of interpretation 
of public international law". The principles codified in Articles  31 an d 32 of the Vienna Convention 
on the Law of Treaties are generally accepted as such customary rules.17 
7.1.3   Burden  of proof  
7.5.  The general principles applicable to the allocation of the burden of proof in WTO dispute 
settlement require that a party claiming a violation of a provision of a WTO  Agreement  must assert 
and prove its claim.18 Therefore, as the complaining party, Korea  bears the burden of demonstrating 
that the challenged measures are inconsistent with the  Agreement  on Safeguards and 
the GATT 1994. A complaining party will satisfy its burden when it establishes a prima  facie case, 
namely a case that, without  effective refutation by the defending party, requires a panel, as a matter 
 
13 See, e.g. Appellate  Body Reports, Argentina  – Footwear  (EC), para. 120; and US – Lamb , 
paras.  100-102; and Panel Report, Dominican  Republic  – Safeguard  Measures , para. 7.4. 
14 Appellate  Body Report, US – Cotton  Yarn, para. 74. 
15 Appellate  Body Report, US – Cotton  Yarn, para. 74. See also ibid.  paras.  71-73 (referring to 
Appellate  Body Reports, Argentina  – Footwear  (EC), para. 121; US – Lamb , para. 103; and US – Wheat  Gluten , 
para. 55). 
16 Appellate  Body Report,  US – Steel Safeguards , paras. 296-297. 
17 Appellate  Body Reports, US – Gasoline , DSR 1996:1, p.  15; Japan  – Alcoholic  Beverages  II, 
DSR 1996:1, p. 104, section  D. 
18 Appellate  Body Report, US – Wool Shirts  and Blouses , DSR 1197:1,  p. 337. WT/DS546/ R 
 
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  of law, to rule in favour of the complaining party.19 Genera lly, each party asserting a fact  shall 
provide proof thereof.20 
7.2  "Unforeseen  developments " and "the effect  of obligations  incurred " under  
the GATT  1994  
7.6.  Korea makes two sets of claims under Article  XIX:1(a)  of the  GATT  1994 as well as Articles  1 
and 3.1 of the Agreement on Safeguards.  
a. First, Korea claims that the USITC acted inconsistently with these provisions because it 
failed to provide  a reasoned and adequate explanation regarding the existence of 
unforeseen developments, which would have resulted in the  alleged increased imports of 
LRWs causing serious injury to the US  domestic industry.21 
b. Second, Korea claims that the USITC acted inconsistently with these provisions because it 
failed to provide a reasoned and adequate explanation regarding the obligatio ns incurred 
by the United  States , which would have resulted in the alleged increased imports of LRWs 
causing serious injury to the US  domestic industry.22 
7.7.  The United  States  asks us to reject Korea's  claims.  
7.8.  We note that Article  XIX:1(a)  of the  GATT  1994 pr ovides as follows:  
If, as a result  of unforeseen  developments  and of the effect  of the obligations  incurred  
by a contracting  party under  this Agreement,  including  tariff concessions,  any product  
is being  imported  into the territory  of that contracting  party in such increased  quantities  
and under  such conditions  as to cause  or threaten  serious  injury  to domestic  producers  
in that territory  of like or directly  competitive  products , the contracting party shall be 
free, in respect of such produc t, and to the extent and for such time as may be necessary 
to prevent or remedy such injury, to suspend the obligation in whole or in part or to 
withdraw or modify the concession.23 
7.9.  Article  3.1 of the  Agreement on Safeguards states as follows:  
A Member may  apply a safeguard measure only following an investigation by the 
competent authorities of that Member pursuant to procedures previously established 
and made public in consonance with Article  X of GATT  1994. This investigation shall 
include reasonable publ ic notice to all interested parties and public hearings or other 
appropriate means in which importers, exporters and other interested parties could 
present evidence and their views, including the opportunity to respond to the 
presentations of other parties  and to submit their views, inter alia , as to whether or not 
the application of a safeguard measure would be in the public interest. The competent 
authorities shall publish a report setting forth their findings and reasoned conclusions 
reached on all perti nent issues of fact and law.  
7.10.   Article  1 of the  Agreement  on Safeguards  "establishes rules for the application of safeguard 
measures which shall be understood to mean those measures provided for in Article  XIX 
of GATT  1994" whereas Article  11.1(a)  of this  agreement provides that "[a] Member shall not take 
or seek any emergency action on imports of particular products as set forth in Article  XIX 
of GATT  1994 unless such action conforms with the provisions of that Article  applied in ac cordance 
with this  Agreement".  
7.11.   In resolving Korea's  claims, like previous DSB reports, we understand the references in 
Article  XIX:1(a)  to "a result of unforeseen developments" and "the effect of obligations incurred" to 
be references to "circumstances whi ch must be demonstrated as a matter of fact" in order for a 
 
19 Appellate  Body Report, EC – Hormones , para. 104. 
20 Appellate  Body Report, US – Wool Shirts  and Blouses , DSR 1197:1,  p. 335. 
21 Korea's  first written submission , paras.  59 and 85; second written submission, paras.  47 and 72.  
22 Korea's  first written submission, paras.  59 and 80; second written submission, para. 51. 
23 Emphasis added.  WT/DS546/ R 
 
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  safeguard measure to be applied consistently with Article  XIX:1(a)  of the  GATT  1994.24 We note that 
the United  States  does not dispute that Article  XIX:1(a)  obligates a Member to demonstrate these  
circumstances. However, while Korea takes the view that the competent authorities  must make this 
demonstration in their published report, the United  States  contends that no such demonstration 
needs to be included in the published report since neither Article XIX:1(a) nor the  Agreement  on 
Safeguards require s the competent  authorities to make any findings regarding these  
two circumstances.25 Therefore, we will proceed as follows:  
a. We will first determine whether the two factual circumstances set out in Articl e XIX:1(a)  
need to be demonstrated as a matter of fact in the report of the competent authorities.  
b. If yes, we will examine whether the USITC made such a demonstration in its published 
report.  In doing so, as discussed in more detail in paragraph  7.24 below, we note that the 
United  States  acknowledges that the USITC made no finding on "unforeseen 
developments" within  the meaning of Article  XIX:1(a) of the  GATT  1994. With respect to 
the "effect of  GATT  obligations", the United  States  submits that the USITC report 
demonstrates that the United States  undertook tariff obligations with respect to the 
products at issue and thus complies with Article  XIX:1(a)  of the  GATT  1994.26 
7.2.1   Demonstration  of factual  circumstances  set out in Article  XIX:1(a) of 
the GATT  1994  
7.12.   Korea contends that competent authorities must affirmatively find in their report that imports 
were the result of the two factual circumstances set out in the first clause of Article  XIX:1(a)  of 
the GATT  1994, i.e.  "unforeseen developments" and the " effect of obligations incu rred 
under  GATT  1994".27 Noting in this regard that "unforeseen developments" and "effect of 
obligations" are circumstances which must be demonstrated as a matter of fact, Korea contends that 
they are therefore "pertinent issues of fact and law" under Arti cle 3.1 of the  Agreement on 
Safeguards.28 In Korea 's view, c onsidering that Article  3.1 requires competent authorities to publish 
a report setting forth their findings and reasoned conclusions reached on all pertinent issues of fact 
and law, the USITC repo rt was required to contain reasoned and adequate explanations with respect 
to these two factual circumstances.29 
7.13.   The United  States  contends that neither Article  XIX:1(a)  of the  GATT  1994 nor Article  3.1 of 
the Agreement on Safeguards require s competent authorities to make findings in their report on 
"unforeseen developments" within the meaning of Article  XIX:1(a)  or to identify in the report the 
relevant tariff concessions or obligations incurred under the GATT.30 Instead, in the 
United  States ' view, it is sufficient to demonstrate the existence of "unforeseen developments" and 
the "effect of obligations incurred" upon challenge before a WTO panel.31 
7.14.   The United  States  notes in this regard that previous DSB reports have found that unforeseen 
developments  as well as the effect of  GATT  obligations are pertinent issue s of fact and law under 
Article  3.1 that must be reflected in the published report of the competent authorities.32 The 
United  States  disagrees with the interpretation of Article  XIX:1(a ) set out in those reports. In this 
regard, the United  States  distinguishes between the two clauses of Article  XIX:1(a), stating that the 
first clause reflects "circumstances" that must be shown (namely, "unforeseen developments" and 
the "effect of  GATT  1994 obligations")  and the second clause reflects "conditions" that must be met 
to undertake a WTO -consistent safeguard measure (namely, imports in such increased quantities 
 
24 Appellate  Body Report, Korea  – Dairy, para.  85. We note that the United  States also refer s to "the 
unforeseen developments" and "the effect of obligations incurred" as "factual circumstances". 
(United  States'  opening statement at the first meeting of the Panel, para.  8). 
25 Korea's  first written submission, paras.  76 and 84; second written submission, para.  48; 
United  States'  response s to Panel question No.  50, para.  90; and No.  52, para.  93. 
26 United  States'  first written submission, paras.  54-55. 
27 Korea's  second written s ubmission, para.  48. 
28 Korea's  first written submission, paras.  76 and 84; second written submission, para.  69. 
29 Korea's  first written submission, paras.  84-85. 
30 United  States'  first written submission, para.  20; response to Panel question No.  52, para.  93. 
31 United  States'  first written submission, para.  46; response to Panel question No.  52, para.  93. 
32 United  States'  first written submission, para.  48 (referring to Appellate  Body Report,  US – Lamb , 
para. 76); response to Panel question No.  47, paras.  86-87 (quoting Panel Report, Dominican  Republic  – 
Safeguard  Measures , paras.  7.145 -7.146).  WT/DS546/ R 
 
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  and under such conditions as to cause serious injury to the domestic industry).33 The United  States  
argues that while the "conditions" for the imposition of a safeguard measure are clarified in 
Articles  2, 3, and 4 of the  Agreement on Safeguards, the  Agreement on Safeguards does not refer 
to the "circumstances" set forth in the first clau se of Article  XIX(1)(a).34 Thus, according to the 
United  States , the "pertinent issues of fact and law" for purposes of Article  3.1 are the "conditions" 
that Articles  2.1 and 3.1 charge the competent authorities to investigate (whether goods are 
imported i n such quantities as to cause serious injury ).35 
7.15.   The United  States  further argues that findings and reasoned conclusions can only be 
understood as relating to the investigation and determination, which according to the United  States  
only cover whether increased imports have caused or are threatening to cause serious inju ry, and 
not issues that may be pertinent to the application of the measure.36 In support of this argument, 
the United  States  draws a parallel between the first clause of Article  XIX:1(a)  of the  GATT  1994 and 
Article  5.1 of the  Agreement on Safeguards, noti ng that previous DSB reports have found that 
competent authorities are not obligated to make findings and reasoned conclusions under Article  3.1 
on whether a measure was necessary to prevent or remedy serious injury and facilitate adjustment 
(in the sense of Article  5.1).37 Thus, the United  States  takes the view that just like compliance with 
Article  5.1 need not be demonstrated in the competent authority's  report, compliance with the 
circumstances set out in the first clause of Article  XIX:1(a)  need not be  set out in that report.38 
7.16.   The United  States  concludes on this basis that unforeseen developments are  not one of the 
"pertinent issues of fact and law " under Article  3.1 that must be set forth in the report of the 
competent  authorities, and the absence of a finding on that issue in the USITC report does not show 
that the USITC acted inconsistently with  Article  XIX of  GATT  1994 or Articles  1 and 3.1  of 
the Agreement on Safeguards .39 Instead, according to the United  States , WTO panels may evaluate 
whether an increase in imports was a result of unforeseen developments based on arguments and 
evidence presented exclusively in dispute settlement.40 The United  States  similarly submits with 
respect to the "effect of  GATT  1994 obligations" that nothing in Article  XIX:1(a) of the  GATT  1994 
or the  Agreement on Safeguards requires the competent authorities to identify the relevant tariff 
concessions in their report.41 
7.17.   In making our determination, we note that Article  XIX:1(a)  contains two clauses. The  
first clause refers  to unforeseen developments and obligations incurred. The second clause refers to 
imports entering in such increased quantities and under such conditions as to cause or threaten 
serious injury to domestic producers of like or directly competitive products . We agree in this regard 
with previous DSB reports, which note that while the second clause of Article  XIX:1(a)  sets out 
conditions for the application of safeguard measures, which are reiterated in Article  2.1 of 
the Agreement on Safeguards, "unforeseen developments" and "effect of obligations" are certain 
circumstances which must be demonstrated as a matter of fact in order for a safeguard measure to 
be applied consistently with Article  XIX.42 We also note that there is no dispute between the parties 
that, to comply with Article  XIX:1(a)  of the  GATT  1994, it must be demonstrated that increased 
imports were the result of unforeseen developments and obligations incurred within the meaning of 
this first clause. The United  States  does not dispute that such a demonstration needs to be made, 
and itself notes that Article  XIX:1(a)  of the  GATT  1994 provides for a safeguard measure when 
increased imports are "as a result of" unforeseen developments and the effect of the obligations 
incurred.43 
 
33 United  States'  first written submission, para.  41; second written submission, para.  12. 
34 United  States'  first written submission, para.  20; second written submissi on, para.  12. 
35 United  States'  first written submission, para.  20; second written submission, para.  12. 
36 United  States'  first written submission, para.  50. 
37 United  States'  first written submission, para.  50 (referring to Appellate  Body Reports, Korea  – Dairy , 
para. 99; and US – Line Pipe, para.  236).  
38 United  States'  first written submission, para.  50. 
39 United  States'  first written submission, para.  20. 
40 United States'  first written submission, para.  46. 
41 United  States'  response to Panel question No.  52, para.  93. 
42 Appellate  Body Reports, Korea  – Dairy , para.  85; Argentina  – Footwear  (EC), para.  92. 
43 See e.g. United  States'  response to Panel question No.  46, paras.  83-84; and opening statement at 
second meeting of the Panel, para.  4. WT/DS546/ R 
 
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  7.18.   However, the question  before us is whether findings and reasoned conclusions demonstrating 
the factual circumstances in the first clause of Article  XIX:1(a)  need to be set out in the report of 
the competent authorities, i.e. the USITC.  
7.19.   Like previous DSB reports, we consider th at the obligation under Article  3.1 to provide findings 
and reasoned conclusions on all pertinent issues of fact and law requires findings and reasoned 
conclusions reached on the factual circumstances set out in the first clause of Article  XIX:1(a)  of 
the GATT  1994.44 In particular, because  unforeseen developments and the effect of obligations 
incurred are circumstances that must be demonstrated as a matter  of fact in order  for a safeguard  
measure  to apply , we consider them to be "pertinent issues" under Ar ticle 3.1. 
7.20.   In this regard, we also disagree with the United  States ' argument on the distinction between 
the first and second clauses of Article  XIX:1(a). Specifically, we disagree with its argument that the 
"pertinent issues of fact or law" for purposes of Article  3.1 are the "conditions" set out in Article  2.1 
(and the second clause of Article  XIX:1(a)), meaning that competent authorities must address these 
conditions as part of their Article  3.1 obligations, and not the "circumstances" set out in the 
first clause of Article  XIX:1(a). We do not see anything in the text of Article  3.1 that would suggest 
that the phrase "pertinent issues of fact or law" should be read narrowly to exclude the circumstances 
set out in the first clause of Article  XIX:1(a). In particular, while the United  States  argues that 
the Agreement on Safeguards does not refer to these circumstances (unlike the conditions in the 
second clause of Article  XIX:1(a), which are clarified in Articles  2, 3, and 4 of this  agreement ), we 
do not consider such an omission to be dispositive or relevant to our determination. We note that 
Article  XIX:1(a)  and the  Agreement on Safeguards apply cumulatively when a Member applies a 
safeguard measure.45 Since they apply cumulatively, they both could  give rise to "pertinent issues 
of fact and law" in equal measure.  
7.21.   We are also not persuaded by the parallel the United  States  draws between Article  5.1 of 
the Agreement on Safeguards and the first clause of Article  XIX:1(a)  of the  GATT  1994. 
Article  XIX:1 (a) provides for a safeguard measure when increased imports are "as a result of" 
unforeseen developments and the effect of the obligations incurred. Indeed, unless these 
circumstances are demonstrated as a matter of fact, the right to apply a safeguard mea sure does 
not arise. However, Article  5.1 concerns the application of the safeguard measure.46 A 
Member's  application of a measure will follow, not precede, an assessment of whether it has a right 
to apply a safeguard measure in the first place. Therefore,  we are not persuaded by the 
United  States ' argument based on the parallel between Article  5.1 of the  Agreement on Safeguards 
and the first clause of Article  XIX:1(a)  of the  GATT  1994.  
7.22.   Therefore, we find that "unforeseen developments" and the "effect of  GATT 1994 obligations" 
within the meaning of the first clause of Article  XIX:1(a)  of the  GATT  1994 are "pertinent issues of 
fact or law" under Article  3.1 of the  Agreement on Safeguards. Accordingly, competent authorities 
must set out in their published repo rt their findings and reasoned conclusion on "unforeseen 
developments" and the "effect of  GATT  1994 obligations". We consider below whether the USITC did 
so in its published report.  
7.2.2   Unforeseen  developments  
7.23.   In presenting its claim, Korea asserts that the US ITC (a) did not demonstrate in its published 
report the existence of "unforeseen developments" ; and (b ) did not establish a link between those 
"unforeseen developments" and the increase in imports causing or threatening to cause serious 
injury to the domes tic industry.47 
 
44 Appellate  Body Report, US – Lamb , para. 76; Panel Report, Ukraine  – Passenger  Cars, para. 7.56. 
45 Appellate  Body Reports, Argentina  – Footwear  (EC), para.  89; Korea  – Dairy , paras.  74-75 and 77 . 
46 We note in this regard that while the United  States'  Article  5.1 argument is based on the report of the 
Appellate  Body in US – Line Pipe, the Appellate  Body noted in that case that there are two basic enquiries that 
an interpr eter faces under the  Agreement on Safeguards. First, whether there is a right to apply a safeguard 
measure and second, whether that measure has been applied, in the words of Article  5.1, "only to the extent 
necessary to prevent or remedy serious injury and  to facilitate adjustment". The Appellate  Body noted that it is 
this second enquiry that is addressed in the first sentence of Article  5.1. (Appellate  Body Report, US – Line 
Pipe, para.  225).  
47 Korea's  first written submission, para.  85; second written sub mission, paras.  47 and 72.  WT/DS546/ R 
 
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  7.24.   We found above that findings and reasoned conclusions on "unforeseen developments" must 
be set forth in the report of the competent authorities. The USITC report does not contain a finding 
on "unforeseen developments" within the meaning of Article  XIX:1(a)  of the  GATT  1994, as the 
United  States  confirms.48 However, the United  States  submits that the USITC report provides 
explanations of circumstances that qualify as "unforeseen developments".49 The United  States  
specifically refers to the fo llowing statement in the USITC report:  
Whirlpool and GE state that they did not foresee that LG and Samsung would move their 
production of LRWs for the U.S. market first from Korea and Mexico to China, and then 
from China to Thailand and Vietnam, and escap e the disciplining effect of the resulting 
antidumping and countervailing duty orders, moves that in Whirlpool 's view would have 
cost hundreds of millions of dollars.50 
7.25.   In the United  States ' view these observations demonstrate the existence of "unforeseen 
developments" because, if knowledgeable industry participants (i.e.  Whirlpool  Corporation 
(Whirlpool ) and GE  Appliances (GE) ) did not foresee such rapid shifts in production in the 
2012-2016 period, it follows that the Uruguay Round negotiators  did not foresee such events 
18 years earlier.51 We do not consider these references to be  sufficient to meet the 
United  States ' obligation under Article  XIX:1(a)  of the  GATT  1994 and Article  3.1 of the  Agreement  
on Safeguards.  
7.26.   We note that the part of the  report referred to by the United  States  describes a statement by 
the domestic producers. The USITC did not make this statement or endorse it in any way. Nor does 
this reference suggest that the USITC understood the scenario described in the domestic 
produ cers' statement to be an unforeseen development within the meaning of Article  XIX:1(a)  of 
the GATT  1994. Indeed, as noted above, the United  States  confirms that the USITC report does not 
contain a finding on "unforeseen developments" within the meaning of Article  XIX:1(a)  of 
the GATT  1994. In the absence of such a finding in the USITC report, we conclude that the USITC 
has not demonstrated the existence of unforeseen developments under Article  XIX:1(a)  of 
the GATT  1994.  Having reached  this conclusion, we do  not find it necessary to address 
Korea's  additional argument that the USITC did not establish a link between those 
"unforeseen  developments" and the increase in imports causing or threatening to cause serious 
injury to the domestic industry.  
7.27.   Based on the foregoing, we find that the USITC acted inconsistently with Article  XIX:1(a)  of 
the GATT  1994 and Article  3.1 of the  Agreement on Safeguards. Considering our findings on these 
provisions, we do not find it necessary to address Korea's  consequential cla im under Article  1. 
7.2.3   Effect  of the obligations  incurred  under  the GATT  1994  
7.28.   We found above that findings and reasoned conclusions on the "effect of  GATT  1994 
obligations" must be set forth in the report of the competent authorities. Unlike  the situation on 
unforeseen developments, where the United  States  acknowledged that the USITC report did not 
contain any finding  within the meaning of Article  XIX:1(a)  of the  GATT  1994, the United  States  
contends that the USITC report explicitly demonstrates that the United States  incurred obligations, 
in the form of tariff concessions, with respect to the products at issue in this proceeding.52 The 
United  States  asserts that these tariff concessions prevented the United  States  from increasing 
applied tariffs so as to modul ate the increase in imports.53 
7.29.   Korea argues in this regard that the USITC report failed to identify the relevant obligations 
incurred under the  GATT  1994, and to establish a link between the effect of those obligations and 
the increase in imports causing o r threatening to cause serious injury to the domestic industry.54 In 
Korea's  view, a Member imposing a safeguard measure must demonstrate not only the existence of 
the obligations incurred under the  GATT  1994 per se, but also the effects that such obligati ons have 
 
48 United  States'  response to Panel question No.  51, para.  91. 
49 United  States'  response to Panel question No.  51, para.  91. 
50 USITC report, (Exhibit  KOR-1), p.  36 and fn  219. 
51 United  States'  response to Panel question No.  51, para.  92. 
52 United  States'  first written submission, para.  54. 
53 United  States'  first written submission, para.  54. 
54 Korea's  first written submission, paras.  59 and 80; second written submission, para. 51. WT/DS546/ R 
 
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  produced.55 Korea contends that a competent authority must explain how the effects of the 
obligations under the  GATT  1994 have resulted in the increase in imports causing or threatening to 
cause serious injury to the domestic industry, i.e. that t here must be a "logical connection" between 
the effects of the  GATT  1994 obligation and the increased imports.56 Korea notes that the USITC 
report contains a description of the tariff lines at issue, including the applicable most favoured nation 
(MFN) rates.57 However, according to Korea, the description of the applicable tariff lines is 
"out-of-context" because there is neither a discus sion of whether the applied rates are equal to the 
bound rates nor a reference to WTO tariff commitments or any other  GATT  1994 obligations.58 
7.30.   The United  States  responds that the tariff concessions speak for themselves, because they 
reflect WTO bound rates that limit the United  States ' ability to reduce imports by raising tariffs.59 
According to the United  States , no additional context is needed in the identifica tion of such tariff 
concessions because the Schedules  of Concessions  annexed to the  GATT  1994 are made an integral 
part of Part I of that  Agreement pursuant to paragraph  7 of Article  II of the  GATT  1994.60 
7.31.   We begin our analysis with Korea's  argument that t he USITC report failed to identify the 
relevant obligations incurred by the United  States  under the  GATT  1994 with respect to the products 
at issue.  
7.32.   The relevant passage in the USITC report, to which both parties refer, provides as follows:  
U.S. tariff tre atment  
Finished LRWs are classifiable in subheading 8450.20.0063 of the Harmonized Tariff 
Schedule of the United  States  ("HTS"), which has a general tariff duty rate of 1 percent 
ad valorem . Parts and subassemblies covered by the scope of the investigation  are 
classified under HTS subheading 8450.90.20, which provides for tubs and tub 
assemblies, and HTS subheading 8450.90.60, which provides for other parts. These 
two subheadings … each have a general duty rate of 2.6 percent ad valorem .[65] 
Decisions on th e tariff classification and treatment of imported goods are within the 
authority of U.S.  Customs and Border Protection.  
[65] Harmonized Tariff Schedule of the United  States  (2017). Under the U .S.-Israel FTA, the 
Caribbean Basin Economic Recovery Act ("CBERA" ) or the Generalized System of Preferences 
("GSP" ) program, the rate of duty is 0 percent.61 
7.33.   We note that the USITC identified the subheadings of LRWs and LRW parts and their applicable 
tariff rates under the Harmonized Tariff Schedule of the United States . There is no dispute between 
the parties in this regard.62 However, the passage does not  refer to the United  States'  bound tariff 
rate under its WTO Schedule  XX or any other obligations under  the GATT  1994. In particular , we 
note that the United  States asserts that the tariff rates under the Harmonized Tariff Schedule of the 
United  States  are the tariff concessions that the United  States  made, which prevented it from 
increasing applied tariffs so as to modulate the increase in imports . However,  the USITC report does 
not identify them as the tariff concessions undertaken under the  GATT  1994, which prevented it 
from increasing applied tarif fs so as to modulate the increase in imports. Consequently, there is no 
basis for us to conclude that the USITC report contains a reasoned and adequate explanation of the 
obligations incurred by the United  States  under the  GATT  1994 with respect to LRWs an d LRW parts, 
within the meaning of Article  XIX:1(a)  of the  GATT  1994.  In light of this finding, we do not consider 
it necessary to address Korea's  additional argument that the USITC did not establish a link between 
 
55 Korea 's response to Panel question No. 46, paras.  214-218 (quoting Panel Reports, Dominican  
Republic  – Safeguard  Measures , para.  7.146; and Ukraine  – Passenger  Cars, para.  7.96).  
56 Korea 's first written sub mission, para.  73; second written submission, para.  77; and response to 
Panel question No. 46, para. 214. 
57 Korea's  response to Panel question No.  49, para.  221; second written submission, para.  73. 
58 Korea's  response to Panel question No.  49, para.  221; s econd written submission, paras.  74-76. 
59 United  States'  second written submission, para.  20. 
60 United  States'  second written submission, para.  21 (referring to Appellate  Body Report, Korea  – 
Dairy , para.  84). 
61 USITC report, (Exhibit  KOR-1), p.  I-24. (fn  omitted)  
62 Korea's  response to Panel question No.  49, para.  221; second written submission, para.  74; 
United  States'  response to Panel question No.  45, para.  81; and second written submission, para.  19. WT/DS546/ R 
 
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  the effect of those obligations and the i ncrease in imports causing or threatening to cause serious  
injury to the domestic industry . 
7.34.   Based on the foregoing, we find that the USITC acted inconsistently with Article  XIX:1(a)  of 
the GATT  1994 and Article  3.1 of the  Agreement on Safeguards. Consideri ng our findings on these 
provisions, we do not find it necessary to address Korea's  consequential claim under Article  1. 
7.2.4   Conclusion  
7.35.   In light of the above, we find that the USITC acted inconsistently with Article  XIX:1(a ) of 
the GATT  1994 and Article  3.1 of  the Agreement  on Safeguards because its report does not contain 
a reasoned and adequate explanation on "unforeseen developments" and the "obligations incurred" 
by the United  States , within the meaning of Article  XIX:1(a ) of the  GATT  1994. We do not find i t 
necessary to address whether the USITC also acted inconsistently with Article  1 of 
the Agreement  on Safeguards for these same reasons.  
7.3  The USITC 's definition  of the domestic  industry  
7.36.   In the underlying safeguard investigation, the USITC defined the product under consideration 
(PUC)  as LRWs and certain parts of LRWs (covered parts).63 It specifically excluded  belt-driven 
washers from the PUC .64 Based on an analysis of physical properties, customs treatment, 
manufacturing process, uses , and marketing c hannels, the USITC concluded that the belt -driven 
washers produced by the domestic industry were like the LRWs that were included within the PUC.65 
Therefore, the USITC included the producers of belt -driven washers within the domestic industry 
producing th e like product, even though it had specifically excluded imported belt -driven washers 
from the scope of the PUC.  
7.37.   With respect to covered parts, the USITC noted that the petitioner acknowledged that 
imported covered parts did not compete with domestically p roduced covered parts because they 
may only be installed in specific LRW models for purposes of repairing them.66 The USITC however 
determined that domestic covered parts were "like" imported covered parts based on an assessment 
of their physical propertie s, customs treatment, manufacturing process, uses67, and marketing 
channels.68 The USITC then stated that "[e]ven if domestically produced parts were not like imported 
parts … [it] would  still define the domestic industry to include domestic production of such parts 
pursuant to the 'product line ' approach".69 In referring to this product line approach, the USITC 
stated that it also included covered parts in its definition of the domestic industry based on the 
vertically integrated nature of domestic parts and LRW production.70 
7.38.   Having defined the domestic like or directly competitive domestic product as LRWs, PSC/belt 
drive TL LRWs , CIM/belt drive FL LRWs and covered parts, the USITC defined the domestic industry 
as "all domestic producers of LRWs, PSC/belt drive TL washers, CIM/belt drive FL washers, and 
covered parts".71 
7.39.   Korea challenges the USITC 's definition of the domestic industry on the grounds that : 
a. first, the USITC acted inconsistently with Articles  2.1, 3.1, and 4.1(c ) of 
the Agreement  on Safeguards by including producers of belt -driven washers in  the 
 
63 The covered LRW parts included the three largest co mponents of a washer, i.e. "(1) [a]ll cabinets, or 
portions thereof, designed for use in [LRWs]; (2 ) all assembled tubs designed for use in [LRWs] which 
incorporate, at a minimum : (a) [a] tub; and (b ) a seal; (3 ) all assembled baskets designed for use in [LRWs] 
which incorporate, at a minimum : (a) [a] side wrapper; (b ) a base; and (c ) a drive hub; and (4 ) any 
combination of the foregoing parts or subassemblies" . (USITC report, (Exhibit  KOR-1), pp. 7 and I-7). 
64 USITC report, (Exhibit  KOR-1), pp. 8 and I-8-I-9. 
65 USITC report, (Exhibit  KOR-1), pp. 15-16. 
66 USITC report , (Exhibit  KOR-1), p.  16. 
67 The USITC stated that "[d]omestically produced and imported covered parts share the same gener al 
functionality when  installed  in LRWs ". (USITC report , (Exhibit  KOR-1), p. 17 (emphasis  added)).  
68 USITC report , (Exhibit  KOR-1), pp.  16-17. The USITC considered that like products need not be 
directly competitive. (Ibid. fn  78 and p.  16). 
69 USITC report , (Exhibit  KOR-1), p.  17. See also, ibid. p.  19. 
70 USITC report , (Exhibit  KOR-1), p.  19. 
71 USITC report , (Exhibit  KOR-1), p.  19. WT/DS546/ R 
 
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  domestic industry while excluding such washers from the PUC  without providing a 
reasoned and adequate explanation in support of this decision ; 
b. second , the USITC acted inconsistently with Articles  2.1 and 4.1(c ) in finding that 
domestically produced co vered parts were "like" imported covered parts, even though 
those parts did not compete72;  and 
c. third, the USITC acted inconsistently with Article  4.1(c) by applying the "product line 
approach" to define the domestic industry.73 
7.40.   In reviewing Korea 's claims , we note that Article  4.1(c)  of the  Agreement on Safeguards reads 
as follows:  
For the purposes of this  Agreement:  
… 
(c) [I]n determining injury or threat thereof, a "domestic industry" shall be understood 
to mean the producers as a whole of the like or di rectly competitive products operating 
within the territory of a Member, or those whose collective output of the like or directly 
competitive products constitutes a major proportion of the total domestic production of 
those products.  
7.41.   The text of Article  4.1(c) envisages that in defining the "domestic industry", the first step is 
to identify the products that are "like or directly competitive" with the PUC.74 The text of 
Article  4.1(c) also suggests that an investigating authority must include in its consi deration all 
products that are like or directly competitive with the PUC, and may not exclude certain like or 
directly competitive products, and ultimately their producers from the domestic industry.75 
7.42.   Article  2.1 of the  Agreement on Safeguards reads:  
A Me mber may apply a safeguard measure to a product only if that Member has 
determined, pursuant to the provisions set out below, that such product is being 
imported into its territory in such increased quantities, absolute or relative to domestic 
 
72 In response to our questions, Korea clarified that it challenges the USITC 's inclusion of parts within 
the domestic industry because such parts were not like or directly competitive with the  PUC (neither imported 
LRWs nor imported LRW parts). (Korea's  response s to Panel question No.  5, paras.  28-29 and 32-34; and 
No. 6, paras.  37-40; opening statement at the second meeting  of the Panel, para. 33). The USITC did not find 
that domestic LRW part s were "like or directly competitive" with LRW units, and neither party disputes this 
fact. Therefore, this part of Korea's  claim hinges on whether the USITC properly determined that 
domestic  covered parts were "like or directly competitive" with imported covered parts . The USITC found that 
domestic covered parts were like (but not directly competitive with) imported covered parts. We address 
Korea's  challenge against this finding  in section  7.3.2 below.  
73 Korea also claims that as a consequence of the improper definition of the domestic industry, the 
USITC's  determination of serious injury and causation is equally flawed and was inconsistent with 
Articles  4.2(a)  and 4. 2(b) of the  Agreement on Safeguards . (Korea's  first written submission, paras.  231-233). 
Korea repeats these claims in the sections of its submissions challenging the USITC's  findings on serious injury 
and causation. (Korea's  first written submission, para s. 321-327 and 457 -461). We address these 
consequential claims in sections  7.5.4 and 7.6.3 below, and do not find it necessary to separately address 
them in this section of the Report.  
74 The parties agree with this approach, which has been adopted in previous DSB reports. (See, 
e.g. Appellate  Body Report, US – Lamb , paras.  84 and 87; and Panel Report, Dominican  Republic  – Safeguard  
Measures , para.  7.174; see also Korea's  first written sub mission, para.  169; and United  States'  first written 
submission, para.  124).  We use the term "domestically produced good" to refer to "like or directly competitive" 
goods.  
75 This was the approach taken in Panel Report, Dominican  Republic  – Safeguard  Measur es, 
paras.  7.191  and 7.199. The parties agree that an investigating authority may not exclude domestic goods that 
are like or directly competitive with the PUC . (Korea's  first written submission, paras.  172-174; second written 
submission, para. 132; response to Panel question No.  2, para.  13; United  States'  first written submission, 
paras.  127, 163 , and 165 ; and second written submission, para.  34). WT/DS546/ R 
 
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  production, and under such conditions as to cause or threaten to cause serious injury 
to the domestic industry that produces like or directly competitive products.76 
7.43.   Article  3.1 of the  Agreement on Safeguards , set out in paragraph  7.9 above , requires that 
investigating authorities publish a report setting forth their findings and reasoned conclusi ons 
reached on all pertinent issues of fact and law.  
7.44.   Article  4.2(a)  of the  Agreement  on Safeguards reads:  
In the investigation to determine whether increased imports have caused or threatening 
to cause serious injury to a domestic industry under the terms of this  Agreement, the 
competent authorities shall evaluate all relevant factors of an objective and quantifiable 
nature having a bearing on the situation of that industry, in particular, the rate and 
amount of the increase in imports of the product concerned in absolute and relative 
terms, the share of the domestic market taken by increa sed imports, changes in the 
level of sales, production, productivity, capacity utilization, profits and losses, and 
employment.  
7.45.   Finally, Article  4.2(b)  of the  Agreement on Safeguards reads:  
The determination referred to in subparagraph  (a) shall not be mad e unless this 
investigation demonstrates, on the basis of objective evidence, the existence of the 
causal link between increased imports of the product concerned and serious injury or 
threat thereof. When factors other than increased imports are causing in jury to the 
domestic industry at the same time, such injury shall not be attributed to increased 
imports.  
7.3.1   Inclusion  of belt-driven  washers  within  the scope  of the domestically  produced  
good  
7.46.   In the underlying investigation the USITC excluded belt -driven washers from the PUC. Korea 
does not challenge the USITC's  definition of the PUC.77 The USITC determined that domestically 
produced LRWs (including belt -driven washers)  were "like" the LRWs included in the PUC.78 Korea 
also does not challenge the USITC's  likeness determination in this regard. Having found belt -driven 
washers to be "like" the PUC, the USITC included such washers within the scope of the 
domestic  industry.  
7.47.   While Korea does not challenge either the US ITC's PUC definition, or its determination that 
belt-driven washers were "like" the LRWs included in the PUC, Korea claims that the USITC acted 
inconsistently with Article  4.1(c)  of the  Agreement on Safeguards by including belt -driven washers 
in the scope of the domestic industry, while expressly excluding them from the PUC  without providing 
a reasoned and adequate explanation in support of this decision .79 The United  States  rejects 
Korea's  arguments in this regard.80 
7.48.   The question that we must resolve is wh ether the USITC acted inconsistently with 
Article  4.1(c)  by including belt -driven washers within the scope of the domestic industry on the basis 
of its finding that such washers were "like" LRWs included in the PUC, even though such washers 
were expressly excluded from the PUC.  
 
76 Fn omitted.  
77 Korea acknowledges that the  Agreement on Safeguards does not impose discipli nes on how an 
investigating authority may define the PUC.  (Korea's  response to Panel question No.  2, para.  12). 
78 The USITC stated that domestically produced belt -driven washers were "like, or at least directly 
competitive with" imported LRWs. ( USITC repor t, (Exhibit  KOR-1), p.  15). During these Panel proceedings , the 
United  States  clarifie d that despite the reference to "like, or at least directly competitive",  the USITC did not 
evaluate whether belt -driven washers and imported LRWs were "directly competit ive". ( United  States'  response 
to Panel question No. 4, para.  1). 
79 Korea also makes an additional  claim under Article  2.1. Considering that the factual basis of 
Korea's  claim under Article  2.1 is the same as its claim s under Articles  3.1 and 4.1(c), we focus the present 
analysis on Korea's  claims under Articles  3.1 and 4.1(c).  
80 United  States'  first written submission, paras.  159-169; second written submission, paras.  31-35. WT/DS546/ R 
 
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  7.49.   Article  4.1(c)  defines a "domestic industry" as "producers … of the like or directly competitive 
products". As noted above, the starting point in defining the domestic industry is the identification 
of products that are "like or dire ctly competitive" with the PUC.81 Having identified the domestically 
produced product that is "like or directly competitive" with the PUC, Article  4.1 then requires 
investigating authorities to define the domestic industry as "producers as a whole" of that  product, 
or "those whose collective output of the like or directly competitive products constitutes a major 
proportion of the total domestic production of those products".  
7.50.   In the underlying investigation, as noted above, having found domestically produced  
belt-driven washers to be "like" the PUC, the USITC included them within the scope of the 
domestically produced good. Korea contends that the USITC thereby acted inconsistently with 
Article  4.1(c)  because the USITC created a deliberate mismatch between th e PUC and the 
domestically produced good by excluding belt -driven washers from the PUC and including them in 
the domestically produced good.82 Korea also notes in this regard that the lack of parallelism between 
the PUC and the domestically produced good c reated a material risk of distortion in the serious injury 
and causation determinations.83 In response to our  questions, where we sought to understand the 
textual basis of Korea's  claim under Article  4.1(c), Korea acknowledged that the domestic industry 
must include all producers of products that are like or directly competitive with the PUC.84 However, 
Korea maintains that where an investigating authority excludes certain models from the PUC and 
includes producers of those models in the domestic industry, such investigation would not be 
objective.85 This is because, according to Korea, each successive stage of a safeguard investigation 
is related to, and often dependent on, the outcomes of preceding stages, which must inform the 
interpretation of the provis ions relating to each stage.86 Korea points to the requirement to 
undertake an investigation that is not biased but "systematic" and "careful" under Article  3.1 to 
support its assertion.87 
7.51.   We agree with Korea that the definition of the domestic industry af fects subsequent stages of 
an investigating authority's  determination (such as the serious injury and causation determinations). 
However, the  Agreement on Safeguards provides a specific definition of the domestic industry in 
Article  4.1(c),  and requires th at the subsequent stages of the investigation be conducted based on 
a domestic industry defined in accordance with this provision. Neither Article  4.1(c)  nor any other 
provision of the  Agreement on Safeguards (including the provisions governing the subsequ ent 
 
81 See para. 7.41 above. See also Appellate  Body Report, US – Lamb , paras.  84 and 87; and 
Panel  Report, Dominican  Republic  – Safeguard  Measures , para.  7.174.  
82 Korea's  first written submission, paras.  197-201 ( referring to Appellate  Body Report, EC – Fasteners  
(China) , para.  416); response to Panel question No.  2, para.  15. In our view, the findings of the Appellate  Body 
report that Korea relies on do not apply to this case. The issue before the Appellate  Body w as whether 
excluding otherwise eligible domestic producers from the scope of the domestic industry was inconsistent with 
Article  4.1 of the Anti -Dumping  Agreement . The Appellate  Body found that such exclusion was inconsistent and 
stated that an investigating authority bears the obligation to ensure the way in which it defines the 
domestic  industry does not introduce a material risk of skewing the economic data and consequently distorting 
its analysis of the state of the industry. (Appellate  Body Report,  EC – Fasteners  (China) , paras.  414-416 and 
427-430). However, the issue here is whether, having determined that belt -driven washers were "like" 
imported LRWs, the US ITC erred by including producers of belt -driven washers in the domestic industry , 
having excluded them from the PUC . Further, Korea submits that the USITC failed to define the like domestic 
product as that "identical"  to the PUC. (Korea's  second written su bmission, para . 133 (referring to 
Panel  Report, Korea  – Certain  Paper , paras.  7.219 -7.220 )). However, the  Agreement on Safeguards does not 
require that the domestic product be identical  to the PUC; rather, the requirement is that the domestic product 
be "like or directly competitive" with the PUC.  
83 Korea's  first written submission, paras.  202-205 (referring to Appellate  Body Report, US – Steel 
Safeguards , paras.  440-444 and 466 -468). We note that the concept of "parallelism" as applied in the 
Appellate  Body reports that Korea cites was developed in the context of whether investigating authorities that 
have conducted investigations considering imports from all sources  may exclude imports from certain sources 
from application of a safeguard measure. The Appellate  Body found that investigating authorities would have to 
establish that the imports covered by the safeguard measures satisfy, in and of themselves, conditions for 
application of th e measures (such as increased imports). (Appellate  Body Reports, US – Steel Safeguards , 
paras.  439-444; US – Wheat  Gluten , paras.  95-96). The facts  in this dispute, and indeed the issue at hand , are 
different from that addressed in those Appellate  Body rep orts. 
84 Korea's  response to Panel question No.  2, paras.  10 and 13 (referring to Panel Reports, 
Dominican  Republic  – Safeguard  Measures , para. 7.191; and EC – Salmon  (Norway) , para. 7.115).  
85 Korea's  response to Panel question No.  2, para.  14. 
86 Korea's  response to Panel question No.  2, para.  5. 
87 Korea's  response to Panel question No.  2, para.  14 (referring to Appellate  Body Report, US – Wheat  
Gluten , paras.  53-54, in turn cited in Panel Repo rt, Mexico  – Anti-Dumping  Measures  on Rice, para. 7.185 ). WT/DS546/ R 
 
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  conduct of the investigation, such as Article s 4.2(b)  and 4.2(c)),  impose any additional requirements 
precluding what Korea describes as a "mismatch" between the PUC and the domestically produced 
good. Article  4.1(c)  requires that the domestic industry  be defined on the basis of producers of goods 
that are "like or directly competitive" with the PUC. To the extent the domestic industry is defined 
based on the producers of like or directly competitive products, there is no additional requirement 
under Ar ticle 4.1(c)  for a "match" between the PUC and the domestically produced good. Indeed, 
accepting Korea's  position  would mean that the investigating authority would have to exclude a 
producer of like or directly competitive goods from the scope of the domes tic industry because the 
domestic product, while like or directly competitive, is essentially not the same as (or to use 
Korea's  words, does not "match")  the goods included in the PUC. This is at odds with the text of 
Article  4.1(c). We consider that if Ar ticle 4.1(c)  were intended to preclude investigating authorities 
from defining the domestic industry on the basis of goods that are like or directly competitive but 
not a "match", the provision would have been drafted  differently.  
7.52.   We also note Korea's  reliance on Article  3.1 of the  Agreement, which provides that authorities 
shall publish a report setting forth their findings and reasoned conclusions reached on all pertinent 
issues of fact and law. Korea argues that this provision requires an inv estigating authority to make 
an objective examination and to provide reasoned and adequate explanations in support of its 
determination.88 However, in our view, Article  3.1 does not provide any basis to impose substantive 
obligations on Members that are no t provided under the  Agreement on Safeguards.89 Korea has not 
shown how the USITC's  inclusion of belt -driven washers, which the USITC found to be like or directly 
competitive (a finding that Korea does not challenge)  with the PUC, was inconsistent with 
Article 4.1(c)  or any other substantive provision of the  Agreement on Safeguards.  
7.53.   Based on the foregoing, we reject  Korea 's claim s alleging  that the USITC acted inconsistently 
with Article s 3.1 and 4.1(c)  of the  Agreement on Safeguards by including belt -driven washers in the 
scope of the domestically produced good. Considering that the factual basis of Korea 's claim under 
Article  2.1 is the same as its claim under Articles  3.1 and 4.1(c), we also reject Korea's  claim under 
this provision . 
7.3.2   Likeness  of domestica lly produced  parts  and imported  parts  of LRWs  
7.54.   In the underlying investigation, the USITC defined the PUC to include LRWs as well as certain 
covered parts of LRWs. The USITC defined the domestic industry based on producers of LRWs and 
certain covered parts of LRWs. The USITC included such domestically produced parts in the scope 
of the domestic industry based on its finding that such domestically produced parts of LRWs were 
like imported parts. However, the USITC also noted that, as the domestic industry pet itioner 
acknowledged, imported LRW parts did not compete with domestically produced parts because they 
could only be installed in specific imported LRW models, for purposes of repairing them.90 The parties 
disagree on whether the USITC properly found impor ted and domestically produced parts to be 
 
88 Korea's  response to Panel question No.  3, paras.  20 and 23.  
89 Indeed, Korea appears to base its arguments on a general standard of "objectivity"  that it seeks to 
derive from Article  3.1 of the  Agreement on Safeguards, rather than on the text of Article  4.1(c) of 
the Agreement on Safeguards. In particular, Korea contends that it does not  preclude  that in certain situations 
there could be a good reason for having a domestic industry that includes cer tain product types that are not 
part of the covered imported product. However, per Korea when the mismatch is deliberate and when it is clear 
that this mismatch affected both the analysis of increased imports and the analysis of injury and causation, 
and w hen no plausible explanation of any kind is offered for this mismatch, a violation exists. (Korea's  second 
written submission, para.  133). Korea does not refer to anything in the text of Article  4.1(c) that would support 
its view that even in scenarios where an investigating authority defines the domestic industry on the basis of 
domestically produced goods that are like or directly competitive with the PUC, we  can find a violation under 
Article  4.1(c)  because the mismatch between the PUC and t he domestically produced good is "deliberate" and 
the mismatch affects the injury analysis and causation. Indeed, considering that determinations regarding the 
domestic industry obviously affect an investigating authority's  injury and causation determinati ons, and that a 
decision regarding the PUC and the domestic industry is part of an active and deliberate decision -making 
process, the distinction drawn by Korea between a situation where there is a deliberate mismatch, which 
affects the injury and causatio n determination, and another situation that does not, is unclear. If the drafters 
of the  Agreement on Safeguards intended WTO panels to distinguish between such situations, notwithstanding 
the text of Article  4.1(c), one would have expected additional rule s in the  Agreement on Safeguards to this 
effect.  
90 USITC report, (Exhibit  KOR-1), p. 16. WT/DS546/ R 
 
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  like products, notwithstanding its finding that imported parts and domestically produced parts did 
not compete.  
7.55.   Korea contends that the USITC acted inconsistently with Articles  2.1 and 4.1(c)  by finding 
such domestically produced parts to be "like" imported parts , even though they did not compete.91 
Korea notes in this regard that the USITC did not explain in its report how two groups of products 
that are not in a competitive relationship could nonetheless be considered "like".92 In particular, 
Korea asserts that the USITC failed to address the abund ant information on the record concerning 
the lack of competition between imported  parts and domestic parts .93 According to Korea, likeness 
is a subset of the concept of directly competitive products, and the determination of whether 
products are "like" is fundamentally "a determination about the nature and extent of a competitive 
relationship between and among products".94 Korea argues that the conjunction "or" in the phrase 
"like or directly competitive products" indicates that the domestic industry may co nsist of producers 
of products in a "very close" or at least a "direct" competitive relationship with the PUC.95 Thus, 
according to Korea, whereas "likeness" implies close to perfect substitutability ("a degree of 
competition that is higher than merely sig nificant"), "directly competitive or substitutable" products 
would be those that compete to a lesser degree.96 
7.56.   The United  States  rejects Korea's  arguments. The United  States  contends that the text of 
the Agreement  on Safeguards makes clear that a domestic article "like" an imported article subject 
to investigation need not be "directly competitive" with the imported article. The United  States  
observes in this regard that Articles  2.1 and 4.1(c ) of the  Agreement  on Safeguards define 
"domestic  industry" in th e disjunctive as the producers of like " or" directly competitive products. 
Pointing to this use of the disjunctive "or", the United  States  maintains that investigating authorities 
may define the domestic industry to include producers of like products, or p roducers of directly 
competitive products.97 For the United  States , this means that not every domestically produced 
product that is "like" an imported product subject to investigation will be "directly competitive" with 
that imported product. According to the United  States , Korea's  construction of the word "like" to 
mean "close to perfect a substitute", "perfectly competitive", or "in intense competition" would mean 
that all domestic producers of "like" products would necessarily also produce "directly competitive" 
products, which would read the term "like" out of Article  4.1(c)  of the  Agreement on Safeguards.98 
7.57.   The question we must resolve is whether the USITC provided a reasoned and adequate 
explanation to support its determination that impor ted and domestically produced parts were like, 
notwithstanding its finding that they did not compete. In doing so, we (a)  first consider the legal 
obligations imposed under Article  4.1(c), which requires an investigating authority to define the 
domestic in dustry based on the producers of "like or directly competitive" products, and specifically 
the nature of obligations imposed in relation to a likeness assessment; and (b)  then evaluate, based 
on the explanations provided by the USITC in its report, whether  the USITC complied with such 
obligations.  
7.58.   We note in this regard that Article  4.1 defines the domestic industry as producers of "like or 
directly competitive" products. The parties disagree on the meaning of the conjunction "or" in this 
phrase. In our vie w, it is possible that the use of the conjunction "or" in Article  4.1(c)  indicates that 
 
91 Korea's  first written submission, paras.  217-230. 
92 Korea's  first written submission, para.  222. 
93 Korea's  first written submission, paras.  218-224 (referring to Large Residential Washers, Joint 
Prehearing Brief on Behalf of Respondents Regarding Injury (30  August  2017) (excerpts ) (Excerpt from LG and 
Samsung's  prehearing injury brief ), (Exhibit  KOR-11), pp.  32-36; and USITC report, (Exhibit  KOR-1), p.  16). 
94 Korea's  first written submission, paras.  225-226 (quoting Appellate  Body Reports, EC – Asbestos , 
para. 99; and Philippines  – Distilled  Spirits , para. 170; and EC – Seal Products , para. 5.82). 
95 Korea's  opening statement at the second meeting of the Panel, paras.  43-44; see also closing 
statement at the first meeting of the Panel, para.  26. 
96 Korea 's second written submission, para. 139; response to Panel question No.  5, para.  30. See also 
Korea' s opening statement at the second meeting of the Panel, para.  37. Korea subsequently clarified that it is 
challenging the USITC's  definition of the domestic industry because " no competitive overlap whatsoever existed 
between the imported and domestic parts ", and not because the imported and domestic parts are not "close to 
perfect substitutes". (Korea's  opening statement at the second meeting of the Panel, para.  42). 
97 United  States'  first written submission, paras.  176-178; response to Panel question No.  10, para.  8; 
and second written submission, paras.  40 and 47.  
98 United  States'  second written submission, paras.  47 and 50; opening statement at the second 
meeting of the Panel, para.  11; closing statement at the second meeting of the Panel, para.  8; and 
response to Panel question No.  67(b), para.  4. WT/DS546/ R 
 
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  the concept of likeness is distinct from the concept of direct competitiveness, as the United  States  
submits. However, that term might also indicate, as Korea argues, t hat an investigating authority is 
permitted to include products (for the purpose of defining the domestic industry)  that, even though 
they are not like imported products (because for instance they have different physical 
characteristics), are nevertheless directly competitive with imported products. Therefore, the use of 
the conjunction "or" does not dispositively answer the question before us, which is whether 
two products that have been found to not compete may nonetheless be considered "like". Instead, 
the answer to that question depends on how the term "like" is to be understood in the context of 
Article  4.1(c).  Consistent with the rule of interpretation set out under Article  31 of the 
Vienna  Convention, we interpret Article  4.1(c)  in accordance with the  ordinary meaning to be given 
to the terms of the treaty in their context and in the light of the treaty object and purpose.  
7.59.   The Agreement  on Safeguards does not define the term "like". The Oxford English Dictionary 
defines "like" as " [o]f similar or ident ical shape, size, colour, character, etc., to something else; 
having the same or comparable characteristics or qualities as some other person or thing; similar; 
resembling; analogous".99 The United  States  also refers to the Webster Dictionary definition of  "like", 
which is "the same or nearly the same (as in nature, appearance, or quantity)".100 We also note that 
the Anti -Dumping  Agreement  and the SCM  Agreement , which require investigating authorities in 
anti-dumping and countervailing duty investigations re spectively to define the domestic industry 
based on producers of like products, define like product as a product (a ) which is identical, i.e. alike 
in all respects to the PUC; or (b) in the absence of such a product, another product which, although 
not ali ke in all respects, has characteristics closely resembling those of the PUC. These definitions 
do not resolve the issue of whether, and if so how and to what extent, competitive relations between 
imported and domestic products need to be considered as part  of a likeness determination.101 
However, when we interpret Article  4.1(c) in the context of Article  4 of the  Agreement  on Safeguards 
as a whole, and specifically Article s 4.2(a ) and 4.2(b), the meaning of likeness in Article  4.1(c) 
becomes clearer.  
7.60.   Article  4 of the  Agreement  on Safeguards is titled "[d]etermination of serious injury or threat 
thereof", and sets out the negotiated rules governing such determination. In particular, Article  4.1(a ) 
defines "serious injury" as a significant overall impair ment in the position of the domestic industry. 
Article  4.2(a), in turn, provides that in "the investigation to determine whether increased imports 
have caused or are threatening to cause serious injury to a domestic industry" the investigating 
authorities shall evaluate relevant factors of an objective and quantifiable nature having a bearing 
on the situation of the domestic industry. Article  4.2(b ) then requires demonstration of a causal link 
between increased imports and serious injury to the domestic ind ustry. These provisions show that 
the domestic industry must be defined in a manner that would allow the investigating authority to 
subsequently determine whether there is a causal link between increased imports and serious injury 
to the domestic industry.  Indeed, it is clear from the text of Article  4.1(c) ("in determining injury or 
threat thereof" ) that the domestic industry is defined for purposes of determining injury or threat to 
it from increased imports.102 
7.61.   Korea argues in this regard that the demonst ration of a causal link required under 
Article  4.2(b ) between increased imports and serious injury to the domestic industry cannot be made 
if imported and domestically produced goods are not in competition with one another.103 Japan and 
 
99 Oxford English Dictionary online, definition of "like", meaning A.1.a 
https://oed.com/view/Entry/108302?rskey=BJNhyu&result=3#ei d (accessed 16 August  2021). 
100 United  States'  first written submission, para.  126; second written submission, para.  39 (both quoting 
Webster's  Third New International  Dictionary  Unabridged  (1981), p. 1310). 
101 We note that the definition of "like" in Article  2.6 of the Anti -Dumping  Agreement  suggested to the 
panel in Korea  – Pneumatic  Valves  that it would be expected that allegedly dumped imports compete with the 
domestic like product. In that panel 's view, if t hey did not, it would be "difficult to imagine on what basis a 
domestic industry could properly allege that dumped imports were causing injury to the domestic industry 
producing the like product, so as to justify the initiation of an investigation". (Panel  Report, Korea  – Pneumatic  
Valves  (Japan) , para. 7.275).  
102 We also note that Article  2.1 requires a Member to determine that a product that is subject to a 
safeguard measure is imported under such conditions as to cause or threaten to cause serious injury to the 
domestic industry that produces like or directly competitive products. This provision links the increased imports 
under consideration to their ability to cause or threaten to cause serious injury , an analysis undertaken under 
Article  4. Article  2.1, read together with Article  4 as a whole, therefore supports our understanding that the 
domestic industry must be defined in a manner that would permit the subsequent determination of serious 
injury or threat.  
103 Korea's  response to Panel question No.  10, para. 51. WT/DS546/ R 
 
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  the European  Union  as third parties take the view that causation of injury requires that a competitive 
relationship exist between the imported and the domestically produced goods.104 
7.62.   The United  States  contends in this regard that the  Agreement  on Safeguards requires a 
determination of the effect of the imported product as a whole on the domestic producers as a whole, 
and does not require separate analyses or determinations of each discernible subset of the imported 
product and the domestically produced good.105 The United  States  also submits that where the PUC 
comprises a range of products, an investigating authority could determine that increased imports 
are causing serious injury even though a subset of imported products  do not compete with a s ubset 
of products produced by the domestic industry.106 In particular, per the United  States , when certain 
types of subject imports within the PUC increase while other types do not, a n investigating  authority 
must consider the pertinent conditions of compet ition in assessing whether increased imports 
seriously injured the domestic industry.107 In the United  States ' view, such conditions of competition 
might include the degree of substitutability between each type of imported and domestically 
produced good, th e product mix of imported and domestically produced goods, and the effects of 
any indirect competition between increased subject imports and domestically produced goods that 
are not otherwise directly competitive with the imports.108 The United  States  illustrates that such 
type of indirect competition could exist where imports of LRW parts that do not directly compete 
with either domestic parts or finished products may nevertheless have an indirect impact on 
domestic producers of parts and finished products if they are assembled into finished products in 
domestic screwdriver operations that do not change the fundamental character of the parts.109 
7.63.   In resolving Korea 's claim, we note that the USITC did not find LRW s and LRW parts to be 
part of the same  domestic like product.  Instead, the USITC included LRW parts in the definition of 
the domestic industry based on  its finding that imported LRW parts were like domestically produced 
parts. Therefore, we determine whether the USITC 's finding that domestically produce d parts were 
"like" imported parts was consistent with Article  4.1(c) of the  Agreement  on Safeguards.110 
7.64.   In making that determination, we do not need to exhaustively define what "like" under 
Article  4.1(c) could or could not mean, especially considering the drafters chose to not define the 
term in the  Agreement  on Safeguards. Instead, we need to determine whe ther Article  4.1(c) 
precluded the USITC from finding that imported and domestic parts were like products, given its 
finding that the two did not compete. Interpreting Article  4.1(c) in the context of Article  4 as a whole 
suggests to us that products that a re not in any type of competitive relation with each other could 
not cause serious injury or threat thereof to one other. In particular, we note that Article  4.1(c) 
opens with the phrase "in determining injury or threat thereof", which, along with overall context 
provided by Article  4, specifically Article s 4.2(a ) and 4.2(b), suggests that the domestic industry 
must be defined in a manner that allows the investigating authority to determine whether increased 
imports have caused or are threatening to cause s erious injury to that industry. To the extent an 
investigating authority finds that two products are not in any competitive relation, we do not see 
how a domestic industry that is defined in a manner that excludes the possibility of subsequently 
determinin g that increased imports have caused or threatened to cause serious injury to that 
 
104 Japan's  third-party response to Panel question No.  1, paras.  1-3; European  Union's  third-party 
response to Panel question No.  1, paras.  3-4. 
105 United  States'  response to Panel question No.  10, para.  9. 
106 United  States'  response to Panel question No.  11, para.  14. 
107 United  States'  response to Panel question No.  11, para.  14. 
108 United  States'  response to Panel question No.  11, para.  14. 
109 United  States'  response to Panel question No.  11, para.  14. 
110 We note  that in its third -party statement, the European  Union argued that because LRW parts are 
used to repair the respective LRW units, the market for LRW parts may constitute an "aftermarket", while the 
market for LRW units would be the "primary market". The European  Union  considered  that it is possible that 
the interaction between the primary market (LRW units ) and the aftermarket (LRW parts ) form one "system 
market", so that competition would take place between LRW systems. In its view, if one single domestic 
market exists for LRW units and parts, within that market, imported and domestic LRW parts would be "directly 
competitive" with each other because competition would follow from the competition at the system level . 
(European  Union's  third-party submission, paras.  34-40). We note that the USITC did not take such "system 
market" approach in the underlying investigation. Therefore, whether such approach would be consistent with 
Article  4.1(c) is not an issue in the matter before us.  WT/DS546/ R 
 
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  domestic industry (defined on the basis of producers of the like product, which here is covered parts ) 
would be consistent with Article  4.1(c).111 
7.65.   That being said, we recogni ze that competition in a market  can manifest itself in various ways. 
Indeed, competition is not limited to situations where imported and domestic products are close to 
perfectly substitutable. Thus, to the extent Korea takes the view that "like" under Article 4.1(c) 
requires close to perfect substitutability between imported and domestic products, we disagree. We 
see no textual basis for such a view. To the extent an imported product that is not perfectly 
substitu table with the domestically produced good ha s the capacity to cause serious injury to that 
good through some form of competitive impact, we do not see any basis to interpret "like" in 
Article  4.1(c) to exclude such goods. Instead, an investigating authority is entitled as part of its 
causation deter mination to examine whether that imported product did cause injury to the 
domestic  industry through that competitive effect. We do not consider that the drafters of 
the Agreement  on Safeguards would have intended the domestic industry to be defined in a wa y 
that would preclude the investigating authority from making such a causation determination. 
However, while we recognize that competition can manifest itself in various ways, we do not consider 
that "like" under Article  4.1(c), interpreted in the context of Article  4 as a whole and Article  2.1, 
covers products that have been found not to have any competitive relation with imported products.  
7.66.   In the underlying investigation, the USITC specifically found that imported and domestically 
produced parts did not compete. We note that the United  States  alludes to different ways in which 
conditions of competition could manifest in the market, including  situations where imports of 
LRW parts that do not directly compete with either domestic parts or finished products may 
nevertheless have an indirect impact on domestic producers of parts and finished products if they 
are assembled into finished products i n domestic screwdriver operations that do not change the 
fundamental character of the parts.  However, the USITC did not undertake any such analysis alluded 
by the United  States  as part of its likeness analysis.112 
7.67.   Based on the foregoing, we find that the US ITC did not find imported covered parts to be 
like domestically produced covered parts in a manner consistent with Article  4.1(c) of 
the Agreement  on Safeguards in defining  the domestic industry. Having reached this finding, we do 
not consider it necessary to make additional findings under Article  2.1 of the  Agreement  on 
Safeguards.  
7.3.3   Product  line approach  
7.68.   Korea contends that the USITC's  decision to include parts in its definition of the 
domestic  industry was partly based on the "product line approach".113 Korea further contends that 
the USITC's  application of the product line approach to define the domestic industry was inconsistent 
 
111 We also note as stated abo ve, that  in Korea  – Pneumatic  Valves , the panel considered that with 
respect to Article  2.6 of the Anti -Dumping  Agreement, if allegedly dumped imports did not compete with the 
domestic like product, it would be "difficult to imagine on what basis a domesti c industry could properly allege 
that dumped imports were causing injury to the domestic industry producing the like product, so as to justify 
the initiation of an investigation". (Panel Report, Korea  – Pneumatic  Valves  (Japan) , para.  7.275).  
112 See e.g.  United States'  response to Panel question No.  67(a), paras.  1-2. The United  States clarified 
that the USITC did not undertake an analysis of any indirect competition between domestically produced and 
imported parts as part of its likeness analysis because LG  and Samsung, the two Korean producers, had not 
yet commenced production of LRWs at their planned US  LRW production facilities as of the date of the 
USITC's  vote on injury. The United  States explains that the USITC reasonably considered the likelihood of 
indirect competition from imports of covered parts in recommending safeguard remedy be imposed on parts. 
We also note that the United  States  suggests that the USITC found that domestic and imported covered parts 
competed  as the y "offer[ed] alternative ways of satisfying the same consumer demand in the marketplace". 
(United  States'  comments on Korea 's response to question No. 67, fn 12 (referring to USITC report, 
(Exhibit  KOR-1), p. 17)). However, we recall that the USITC stated that covered parts did not com pete. 
Moreover, at the cited section of the USITC report, the USITC stated that "[d]omestically produced and 
imported covered parts share the same general functionality when  installed  in LRWs " (emphasis  added ). This 
statement does not imply that covered parts competed in the market. As the USITC noted, covered parts may 
only be installed in specific LRW models. (USITC report, ( Exhibit  KOR-1), p. 16). 
113 Korea's  first written submission, para.  213; second written submission, para. 144; and response to 
Panel question No. 7, para. 44 (quoting USITC report, (Exhibit  KOR-1), p.  19). WT/DS546/ R 
 
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  with Article  4.1(c).114 According to Korea, inputs may not be included  in the definition of the 
domestic  industry unless they themselves constitute "like or directly competitive" products.115 
7.69.   The United  States  rejects Korea 's contentions . First, the United  States  argues that  the USITC 
did not apply the product line approach t o define the domestic industry. Instead, the USITC defined 
the domestic industry based on producers of the like products alone, and only after doing so did the 
USITC explain that the product line approach supported its definition of the domestic industry.116 
Second, the United  States  maintains that the product line approach was consistent with Article  4.1(c)  
of the  Agreement on Safeguards.117 
7.70.    In resolving this aspect of Korea 's claim, we first determine whether the USITC applied the 
product line approach to define the domestic industry in the underlying investigation; and then, 
consider whether the USITC's  application of the product line approach in the underlying investigation 
was consistent with the  Agreement on Safeguards.  
7.3.3.1   Whether  the USITC  applied the product  line approach  to define  the 
domestic  industry  
7.71.   In determining whether the USITC applied the product line approach to define the 
domestic  industry in the underlying investigation , we note that the USITC  found domestically 
produced parts to b e like imported parts . The  USITC then stated that "[e]ven if domestically 
produced parts were not like imported parts within the scope of the investigation, [it] would still 
define the domestic industry to include domestic production of such parts pursuant  to the 'product 
line' approach discussed in the following section".118 The USITC described the "product line 
approach" as the approach through  which it included in the domestic industry all domestic facilities 
and workers involved in the production of a pr oduct like or directly competitive with the imported 
article, "including the various stages that might be involved in such production".119 The USITC also 
provided the following explanation in relation to the product line approach:  
In addition  to finding  that domestic  covered  parts are like imported  covered  parts,  we 
include  domestic  covered  parts production  in our definition  of the domestic  industry  
based  on the vertically  integrated  nature  of domestic  parts and LRW production . … In 
this investiga tion, virtually all domestically produced LRWs are assembled from covered 
parts produced domestically in the same facilities as the LRWs. Accordingly, the 
production facilities producing assembled LRWs necessarily include the facilities for 
producing cover ed parts. For this reason  also, we include  all domestic  producers  of 
covered  parts in our definition  of the domestic  industry .120 
7.72.   From the excerpts from the USITC report quoted above, we note that:  first, the USITC stated 
that even if domestic and imported parts were not like, it would still define the domestic industry to 
include domestic production of parts pursuant to the product line approach.121 Second, the USITC 
stated that "[i]n addition to finding that domestic covered parts are like imported  covered parts, 
[the USITC] include[d] domestic covered parts production in [the] definition of the domestic industry 
based  on the vertically  integrated  nature  of domestic  parts and LRW production ".122 The USITC then 
explained that in the LRW investigation,  "virtually all domestically produced LRWs are assembled 
from covered parts produced domestically in the same facilities as the LRWs", and that "production 
facilities producing assembled LRWs necessarily include the facilities for producing covered parts".  
It added that "[f]or this reason also", the USITC included all domestic producers of covered parts in 
its definition of the domestic industry.123 These statements indicate, as Korea argues, that the USITC 
 
114 Korea's  first written submission, paras.  213-215; second written submission, paras.  145-146 
(referring to Appellate  Body Report, US – Lamb , paras.  77 and 9 0). 
115 Korea's  first written submission, para.  214 (referring to Appellate  Body Report, US – Lamb , paras.  77 
and 9 0). 
116 United  States'  responses to Panel question No.  8, para.  3; No. 9(a), paras.  4-5; and No.  9(b), 
para. 7. 
117 United  States'  first written submission, paras.  182-183; response to Panel question No.  9(a), para. 6. 
118 USITC report , (Exhibit  KOR-1), p.  17. 
119 USITC report , (Exhibit  KOR-1), p.  19. 
120 USITC report , (Exhibit  KOR-1), p.  19. (fn  omitted; emphasis  added) 
121 USITC report , (Exhibit  KOR-1), p. 17. 
122 USITC report , (Exhibit  KOR-1), p.  19. (emphasis  added)  
123 USITC report , (Exhibit  KOR-1), p.  19. WT/DS546/ R 
 
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  did indeed apply the product line approach as one o f the bases for its decision to include domestically 
produced parts in the scope of the domestic industry. Therefore, we now turn to examine whether 
the USITC acted inconsistently with Article  4.1(c)  in applying the product line approach in the 
underlying investigation.  
7.3.3.2   Whether  the USITC  acted  inconsistently  with Article  4.1(c ) in applying  the 
product  line approach  
7.73.   Korea argues that the USITC 's application of the product line approach was inconsistent with 
Article  4.1(c). Relying on previous DSB reports, Korea argues that inputs cannot be included in the 
definition of the domestic industry unless they themselves constitute "like or directly compe titive 
products".124 The United  States  argues that the USITC's  product line analysis was justified under 
Article  4.1(c)  because in its view, Article  4.1(c)  requires investigating authorities to define a 
domestic industry as "producers as a whole  of the like  or directly competitive products".125 According 
to the United  States , where the domestic producers of a product manufactures various components 
internally for assembly into the article, nothing in the  Agreement  on Safeguards requires 
investigating authorit ies to limit their definition of the domestic industry to only the final assembly 
operations of those producers.126 
7.74.   The question before us is whether the USITC 's application of its product line approach in the 
underlying investigation was inconsistent with the United  States ' obligations under Article  4.1(c), 
which requires the domestic industry to be defined based on domestic producers of "like or directly 
competitive" products.  
7.75.   We note in this regard that Article  4.1(c) states that the domestic industry sha ll be understood 
to mean "producers as a whole" of such like or directly competitive products. However, unlike the 
United  States , we do not consider that the term "producers as a whole" permits investigating 
authorities to define the domestic industry on t he basis of producers of intermediate products that 
are not "like or directly competitive" with the PUC. The term "producers as a whole" is followed by 
the phrase "or those whose collective output of the like or directly competitive products constitutes 
a major proportion of the total domestic production of those products". Read together with that 
subsequent phrase, we understand the term "producers as a whole" to address the number and the 
representative nature of producers making up the domestic industry.  That is, an investigating 
authority may define the domestic industry based on, either (a ) producers as a whole of the like or 
directly competitive products, or (b ) producers whose collective output of the like or directly 
competitive products constitutes a major proportion of the total domestic production of those 
products. Our views in this regard are consistent with previous DSB reports that also considered that 
the phrase "as a whole" does not imply that producers of other products, which are not themse lves 
like or directly competitive with the imported product, may be included in the definition of the 
domestic industry.127 Unless the input products are "like or directly competitive" with the imported 
PUC, we find no textual basis under Article  4.1(c)  to include the producers of such inputs within the 
scope of the domestic industry. This is because, as we have explained, according to Article  4.1(c), 
the only textual basis for defining the domestic industry is on the basis of producers of like or directly 
competitive products.  
7.76.   Based on the foregoing, we  find that the USITC 's application of the product line approach was 
inconsistent with Article  4.1(c) of the  Agreement  on Safeguards.  
7.3.4   Conclusion  
7.77.   In light of the above, with respect to Korea 's claims under Articles  2.1, 3.1, 4.1(c), 4.2(a), 
and 4.2(b)  of the  Agreement on Safeguards challenging the USITC 's definition of the 
domestic  industry:  
 
124 Korea's  first written submission, paras.  214-215 (referring to Appellate  Body Report, US – Lamb , 
paras.  77 and 90).  
125 United  States'  response to Panel  question No. 9(a), para.  6 (emphasis  added); second written 
submission, para.  54. 
126 United  States'  response to Panel question No.  9(a), para.  6. 
127 Appellate  Body Report, US – Lamb , paras.  90-91. See also ibid. paras.  86-87. WT/DS546/ R 
 
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  a. We find  that the USITC acted inconsistently with Article  4.1(c) of the  Agreement on 
Safeguards because it included LRW parts in the definition of the domestic industry based 
on (i) its finding of likeness between imported and domestically produced LRW parts , and 
(ii) its application of the product line approach. We do not find it necessary to address 
whether the USITC also acted inconsistently with Article  2.1 for these same reasons.  
b. We reject Korea 's claim under Article  4.1(c) of the  Agreement on Safeguards, as w ell as 
Articles  2.1 and 3.1 of the  Agreement on Safeguards challenging the USITC 's inclusion of 
belt-driven washers in the definition of the domestic industry.  
c. We do not find it necessary to address here Korea 's claim s that as a consequence of the 
improper  definition of the domestic industry, the USITC's  determination of serious injury 
and causation was also inconsistent with Articles  2.1, 3.1, 4.1(c), 4.2(a), and 4.2(b ) of 
the Agreement on Safeguards.  
7.4  The USITC 's determination  of increased  imports  
7.78.   Korea claims that the USITC 's examination of the increase in imports is inconsistent with 
Article  2.1 as well as Article  3.1 of the  Agreement  on Safeguards.128 Specifically, Korea submits129 
that the USITC (a ) erred in cumulatively assessing imports of LRWs and imports of LRW parts in its 
increased imports analysis130; (b) failed to consider the increase in imports relative to domestic 
consumption ( i.e. the market share of subject imports ) as part of its increased imports 
assessment131; and ( c) failed to provid e a reasoned and adequate explanation in support of its 
determination of increased imports.132 
 
128 In paragraph  164 of its first written submission, which summarizes Korea's  claims challenging the 
USITC's  increased imports analysis, Korea contends that the USITC's  increased imports analysis was 
inconsistent  with Article  XIX:1(a ) of the GATT  1994. Howev er, Korea did not make a claim under Article  XIX in 
its panel request or the "request for findings" section of its first written submission. ( Korea 's panel request , 
pp. 2-5). In response to our questions, Korea clarifies that is not making a separate claim  under 
Article  XIX:1(a ) of the  GATT  1994 when it challenges the USITC 's determination on increased imports.  
(Korea's  response to Panel question No.  13, para.  67). 
129 Korea also submits that the USITC failed to account for  the price - and non -price-based aspe cts of the 
conditions of competition in the market into its increased imports analysis  (although the United  States rejects 
that submission by noting that the USITC did, in fact, thoroughly examine how the conditions  of competition  
supported its conclusion regarding increased imports ). (Korea's  first written submission, para.  157; 
United  States'  first written submission, paras.  216-220). We note that in support of its submission, Korea 
makes the same type of arguments that it does in the context of causation . For instance, in support of its 
submission, Korea contends that the USITC ignored the fact that imported LRWs included washers with 
distinctive features for which there was no domestic competitor. Thus, according to Korea, increased imports 
did not displ ace US  domestic products, but only expanded demand in new product categories. (Korea's  first 
written submission, para.  157). Korea makes the same type of arguments while challenging the USITC 's failure 
to conduct a non -attribution analysis with respect to the deterioration of US brands, which we address below. 
We also address Korea 's arguments in relation to price -based aspects of competition when addressing 
Korea 's argument s challenging the price analysis that the USITC conducted as part of its causation 
determination. However, Korea does not show how the alleged failure to incorporate the price and non -price 
based aspects of competition into the increased imports analysis re sults in a violation of Article  2.1 or 
Article  3.1 of the  Agreement  on Safeguards. Therefore, to the extent Korea contends that the USITC failed to 
incorporate price and non -price-based aspects  of the conditions of competition in its increased imports anal ysis 
or to analyse the conditions of competition as part of its increased imports analysis, Korea has not made its 
case under Articles  2.1 and 3.1.  
130 Korea's  first written submission, para.  131; second written submission, para.  116. 
131 Korea's  first written  submission, paras.  135-137. 
132 Korea's  first written submission, para.  150; second written submission, para.  118. We note a degree 
of overlap in arguments made by Korea in sections  V.3.2, V.3.3, and V.3.4 of its first written submission. For 
example, V.3.3  of the first written submission is titled "[t]he USITC failed to evaluate the trends in imports 
over the period of investigation". However, Korea also makes arguments in relation to the USITC's  trends 
analysis in section  V.3.2 of its first written submiss ion. (Korea's  first written submission, para.  138). Similarly, 
while section  V.3.4. is specifically titled "[t]he USITC failed to provide a reasoned and adequate explanation in 
support of its determination", Korea's  argument in other sections  also focus on  the USITC's  alleged failure to 
provide a reasoned and adequate explanation in support of its determination. (See, e.g. Korea's  first written 
submission, paras.  138 and 141). We address Korea's  arguments collectively as part of our assessment of 
whether th e USITC provided a reasoned and adequate explanation to support its increased imports 
determination.  WT/DS546/ R 
 
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  7.79.   The United  States  asks us to reject Korea 's claims.  
7.80.   In reviewing Korea 's claims, we note that Article  2.1 of the  Agreement on Safeguards reads 
as follows:  
A Membe r may apply a safeguard measure to a product only if that Member has 
determined, pursuant to the provisions set out below, that such product is being 
imported into its territory in such increased quantities, absolute or relative to domestic 
production, and  under such conditions as to cause or threaten to cause serious injury 
to the domestic industry that produces like or directly competitive products.133 
7.81.   Article  2.1 of the  Agreement  on Safeguards thus sets out the conditions for the application of 
safeguard measures. In particular, a Member applying a safeguard measure must determine that 
the product "is being imported into its territory in such increased quantities, absolute or relative to 
domestic production, and under such conditions" as to cause or threaten to cause serious injury to 
the domestic industry. We also recall  that pursuant to Article  3.1 of the  Agreement on Safeguards 
investigating authorities are required to publish a report that sets forth findings and reasoned 
conclusions reached on all pertinent issues of fact and law. Accordingly, the investigating authorities 
are required to set out their findings and reasoned conclusions on increased imports in their 
published reports.  
7.4.1   The USITC's  cumulation  of LRW parts and LRWs  in its increased  imports  analysis  
7.82.   Korea contends that the USITC acted inconsistently with Article  2.1 by cumulating imports of 
LRWs and LRW parts for the purpose of its increased imports analysis.134 Korea acknowledges that 
the Agreement on Safeguards does not impose disciplines on the definition of the PUC.135 However, 
Korea argues that the absence of such disciplines does not mean that an investigating authority may 
group together different products without examining whether, given the co nditions of competition, 
any increase in imports of these products can cause serious injury to the domestic like products.136 
In particular, relying on the phrase "under such conditions" in Article  2.1, Korea contends that if an 
imported product (i.e. LRW p arts) does not compet e directly  with a domestic product  (i.e. domestic 
LRW parts or domestic LRWs) , any increase in imports m ay not be regarded as occurring  "under 
such conditions " as to cause or threaten to cause serious injury to the domestic industry.137 For 
Korea, "[i]t follows" from this understanding of the phrase "under such conditions" that investigating 
authorities are not allowed to cumulate two different products in assessing the increase in imports, 
if only one of these two different products is in a competitive relationship with the 
domestic  product.138 The United  States a grees that the USITC relied on import data that included 
both LRWs and covered LRW parts .139 However, the United  States asserts  that the USITC 
appropriately considered  LRWs and covered parts in the aggregate because the PUC included both 
LRWs and covered parts .140 
7.83.   The question before us is whether the USITC acted inconsistently with Article  2.1 by 
cumulatively assessing imports of LRWs and LRW parts. We note in this rega rd that the USITC 
defined the PUC to cover LRWs and LRW parts. While Korea argues that the USITC was not permitted 
to cumulate imports of LRWs and LRW parts in its increased imports analysis because imported 
LRW parts did not compete with domestic LRWs and  LRW parts, and thus could not have injured the 
domestic industry, it does not challenge the USITC's  definition of the PUC to cover LRWs and 
 
133 Fn omitted . 
134 Korea 's first written submission, paras.  131-132. 
135 Korea's  second written submission, para.  117. 
136 Korea's  second written submission, para . 117. 
137 Korea's  first written submission, para.  117; opening statement at the first meeting of the Panel, 
para. 33; and second written submission, para.  117. 
138 Korea's  first written submission, para.  117; opening statement at the first meeting of the Pane l, 
para. 33; and second written submission, para.  117. 
139 United  States'  first written submission, para.  199 and fn  405; opening statement at the first meeting 
of the Panel, para.  16. 
140 United  States'  first written submission, para.  199. The United  States r elies on the text of Article  2.1 
as well as the DSB report in Dominican  Republic  – Safeguard  Measures  in arguing that having defined the PUC 
as LRWs and LRW parts, the USITC was entitled to use a data set for the PUC (overall), rather than for 
separate products (such as LRWs and LRW parts ) within the overall PUC . (United  States'  first written 
submission, para.  199 (referring to Panel Report, Dominican  Republic  – Safeguard  Measures , para. 7.236)).  WT/DS546/ R 
 
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  LRW parts.141 Because  the USITC defined the PUC to include LRWs and LRW parts, we do not consider 
that the USITC was  precluded under Article  2.1 of the  Agreement on Safeguards from cumulatively 
assessing imports of LRWs and LRW parts.  
7.84.   To the extent Korea's  claim is premised on its view that imports of LRW parts did not occur 
"under such conditions" to cause serious inju ry to the domestic industry because imported LRW parts 
did not compete with domestic LRWs or LRW parts, and thus could not have caused injury to the 
domestic industry, in our view Korea's  argument goes to the question of causation, rather than of 
increased  imports. We note that previous DSB reports have understood the phrase "under such 
conditions" to refer to the substance of the causation analysis, and specifically,  to the type of analysis 
an investigating authority would conduct under Article  4.2 of the  Agreement on Safeguards.142 
Previous DSB reports have also considered that  the conditions under which imports occur have no 
bearing on whether there have been increased quantities of imports, and thus an analysis of the 
conditions under which imports occur does not form an integral part of the analysis of the quantities 
in which imports occur.143 We agree with these reports, which reflect our own understanding of 
Article  2.1. 
7.85.   Based on the foregoing, we reject Korea's  claim that the USITC acted inconsistently with 
Articles  2.1 and 3.1 by cumulating imports of LRWs and LRW parts as part of its increased imports 
analysis.  
7.4.2   The significance  of the increase  in imports  relative  to domestic  consumption  
7.86.   Korea contends that the USITC failed to properly examine whether the increase in imports 
was qualitatively significant because it did not assess the significance of the increase in imports 
relative to domestic consumption, i.e.  in terms of market share.144 In response, the United  States 
argues that Article  2.1 re fers to an increase in the import volume absolute or relative to 
domestic  production, and does not require investigating authorities to also find an increase in the 
market share of subject imports.145 
7.87.   We note that Article  2.1 provides that "a  Member may app ly a safeguard measure to a product 
only if that Member has determined  … that such product is being imported into its territory in such 
increased quantities, absolute or relative to domestic  production ".146 Article  2.1 does not  provide 
that an investigating  authority must assess the market share, i.e. the share of imports relative to  
total domestic  consumption , as part of an increased imports analysis.  Thus, the requirement of 
increased imports under Article  2.1 is satisfied if the increase is either in abso lute terms or relative 
to domestic production.147 
7.88.   Based on the foregoing , we reject Korea 's claim that the USITC acted inconsistently with 
Articles  2.1 and 3.1  by failing to examine the significance of the increase in imports relative to 
domestic consumptio n, i.e.  in terms of market share.  
 
141 Indeed, Korea acknowledges that the  Agreement o n Safeguards does not impose specific disciplines 
governing how an investigating authority should define the PUC. (Korea's  second written submission, 
para. 117).  
142 Panel Report, Argentina  – Footwear  (EC), para.  8.250; Appellate  Body Report, US – Wheat  Gluten, 
paras.  76-78. See also Panel Report, Ukraine  – Passenger  Cars, para.  7.190.  
143 Panel Report,  Ukraine  – Passenger  Cars, para. 7.190.  
144 Korea's  first written submission, paras.  135-137 and 150; opening statement at the first meeting of 
the Panel, para.  28. 
145 United  States'  first written submission, para.  204; second written submission, para.  66. The 
United  States also disputes Korea's  assertions that the market share of the subject impo rts remained the same 
throughout the POI as consumption increased, including in interim 2017 compared with interim 2016 . 
(United  States'  first written submission, paras.  205-206; response to Panel question No.  14(a), paras.  22-25). 
146 Fn omitted; emphasis  added.  
147 We note that market share must be assessed as part of the investigating authority's  analysis of 
serious injury under Article  4.2(a), which explicitly lists "the share of the domestic market taken by increased 
imports" ( i.e. in terms of consumption)  as one of the mandatory injury factors that investigating authorities  
must evaluate. Indeed, in previous DSB reports, market share assessments have not been considered relevant 
to an enquiry on whether a product is being imported in such increased quantit ies absolute or relative to 
domestic production. (Appellate  Body Report, US – Steel Safeguards , para.  382; Panel Report, Ukraine  – 
Passenger  Cars, para. 7.190). WT/DS546/ R 
 
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  7.4.3   The USITC 's explanation  regarding  its determination  on increased  imports  
7.89.   Korea contends, relying on previous DSB reports, that in determining whether imports 
have increased in such increased quantities as to cause or threaten to cause serious injury to the 
domestic industry within the meaning of Article  2.1, an investigating authority must consider 
(a) whether the increase in imports was recent enough, sudden enough, sharp enough, and 
significant enough; and (b)  the tr ends in imports or changes in imports over the entire period of 
investigation  (POI) .148 Korea asserts that it is not sufficient under Article  2.1 to compare the changes 
in imports from the start point of the POI to the end point of the POI, and that an investigating 
authority must consider the intervening trends over the POI.149 However, per Korea  the USITC failed 
to (a) evaluate and explain the trends in import volumes over the POI, including the rate and 
significance of the increase150; and (b)  account for the most recent trends in imports, which 
according to Korea included a deceleration of the rate of increase in imports since 2015 and decline 
in imports in interim 2017 relative to interim 2016.151 
7.90.   The United  States asserts that the USITC provided a reasoned and adequate explanation 
consistent with Article s 2.1 and  3.1 of how the facts suppor ted its finding that imports increased in 
absolute terms and relative to domestic production. The United  States submits in this regard that 
the USITC examined trends in each year of the POI, as well as the rate and amount of increase in 
imports over this p eriod.152 In particular, t he United  States explains that the USITC considered the 
year-on-year increase in the volume of subject imports (from 2012 -2013, 2013 -2014, 2014 -2015, 
and 2015 -2016), found that subject imports doubled during the POI, and characteri zed the rate of 
increase in subject import volume as "steady ".153 The United  States does not dispute that there was 
a deceleration of the rate of increase in imports since 2015 and a decline in imports in interim 2017 
relative to interim 2016.154 With respect to the deceleration of the rate of increase in imports  
between 2015 and 2016, the United  States responds that the USITC addressed this trend in the 
serious injury section  of its report. Specifically, the United  States alleges that the USITC f ound that 
the level of imports in 2016 was restrained by the imposition of provisional anti -dumping duties on 
LRWs from China.155 With respect to the decline in imports towards the end of the POI, the 
United  States responds that the USITC explained that the  absolute volume of imports remained 
substantial in interim 2017 and was only down from interim 2016 due to supply disruptions related 
to LG's  and Samsung 's transfer of production from China to Thailand and Viet Nam and 
Samsung's  recall of 2.8 million unit s.156 
7.91.   In assessing whether the USITC's  increased imports determination complied with the 
obligation under Article  2.1 to determine that the product is being imported in "such increased 
quantities", we note that Article  2.1 provides that a Member may apply a  safeguard measure to a 
product only if that Member has determined that such product is being imported  into its territory in 
such increased quantities  (absolute or relative to domestic production ) and under such conditions 
as to cause or threaten to cause  serious injury to the domestic industry. Like previous DSB reports,  
we understand the  use of  the present tense in the phrase  "is being imported" in Article  2.1 to mean 
that the increase in imports  within the meaning of Article  2.1 must be sudden and recent .157 
Interpreting Article  2.1 in the context of Article  4.2(a)  of the  Agreement on Safeguards suggests to 
 
148 Korea's first written submission, paras.  125-126. 
149 Korea's  second written submission, para.  88. 
150 Korea's  first written submission, para.  144; second written submission, para.  90. See also, 
Korea's  opening statement at the first meeting of the Panel, para.  32; response  to Panel question  No. 73, 
para. 37; and comments on the United  States'  response to Panel question No.  72(c), para.  59. 
151 Korea's  first written submission, paras.  138 and 141; second written submission, para.  90. See also, 
Korea's  opening statement at the first meeting of the Panel, para.  32; opening statement at the second 
meeting of the Panel, para.  26; response to Panel question  No. 73, paras.  38-39; and comments on the 
United  States'  response to Panel question No.  72(c), para.  63. 
152 United  States'  first written submission, paras.  193 and 2 07. 
153 United  States'  first written submission, para.  207 and fn  435; second written submission, para.  68. 
See also, United  States'  opening statement at the first meeting of the Panel, para.  17; and response to Panel 
question No.  72(c), para.  17. 
154 United  States'  first written submission, para.  201; second written submission, para.  58; and 
responses to Panel question No.  72(a), para.  15; and No.  72(c), para.  19. 
155 United  States'  response to Panel question No.  72(c), para.  19.  
156 United  States'  first written submission, para.  193 (referring to USITC report, (Exhibit  KOR-1), pp.  30 
and 3 8); second written submission, para.  63. See also, United  States'  opening stateme nt at the first meeting 
of the Panel, para.  17. 
157 Appellate  Body Report, Argentina  – Footwear  (EC), para.  130. WT/DS546/ R 
 
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  us that an assessment of increased imports must evaluate the rate and amount of the increase in 
imports based on intervening trends during the POI (as opposed to only comparing the end 
points).158 However, the use of the phrase "is being imported" does not suggest to us that an 
investigating authority cannot find increased imports within the meaning of Article  2.1 when imports 
decline in the most recent p eriod.159 Instead, we agree with a previous DSB report that whether a 
decrease in imports at the end of the POI prevents a finding of increased imports will depend on 
whether, despite the later decrease, a previous increase results in the product (still ) "being imported 
in (such ) increased quantities".160 Factors that an investigating authority must take into account are 
the duration and the degree of the decrease at the end of the relevant POI, as well as the nature, 
for instance the sharpness and the extent , of the increase that occurred beforehand.161 However, 
ultimately a determination of increased imports is not a mathematical or technical determination, 
but rather a determination that must be made on a case -by-case basis.162 In reviewing such 
determination, we must, consistent with our standard of review, examine whether the 
USITC's  explanation was reasoned and adequate in light of the record evidence before the USITC.  
7.92.   We note in this regard that in the underlying investigation the USITC found as follows:  
In absolute terms, imports of LRWs increased steadily from *** units in 2012 to *** 
units in 2013, *** units in 2014, *** units in 2015, and *** units in 2016, a level *** 
percent higher than in 2012. Imports of LRWs were *** units in interim 2 017, as 
compared to *** units in interim 2016.  At the same time, imports increased steadily 
relative to the domestic industry's  production from *** percent in 2012 to *** percent 
in 2013, *** percent in 2014, *** percent in 2015, and *** percent in 2016. I mports 
relative to the domestic industry's  production were *** percent in interim 2017, as 
compared to *** percent in interim 2016.163 
7.93.   The changes in the volume of imports as well as the percentage changes in imports have been 
redacted  from this extract . These redactions were made by the USITC.  The United  States  declined 
to provide to us, on the grounds of business confidentiality, an unredacted version of these findings 
or an indexed version that at least identified the percentage changes in imports over th e POI.164 
7.94.   From the redacted version of the USITC finding we note that the  USITC found that  imports 
doubled during the POI, and that imports of  LRWs "remained a substantial  *** units in interim 2017, 
though down from *** units in interim 2016 due to the afor ementioned supply disruptions related 
to LG and Samsung's  transfer of production from China to Thailand and Vietnam and 
Samsung's  recall".165 Thus, the USITC found that imports declined in interim 2017 relative to 
interim  2016.  
7.95.   We begin our analysis by noti ng that it is Korea's  burden as the complainant to make a 
prima  facie case of violation of Article s 2.1 and 3.1, although each party bears the burden of proving 
their factual assertions. In our view, Korea has made a prima  facie case in this regard. We not e 
Korea's  argument that the USITC did not evaluate and explain the trends in import volumes over 
the POI, including the rate and significance of the increase. Indeed, while the USITC found that 
imports doubled over the POI and characterized the year -on-year increase in imports over the POI 
as "steady", the USITC does not indicate how the USITC evaluated the trends in imports over the 
 
158 Appellate  Body Report, Argentina  – Footwear  (EC), para.  129. 
159 Appellate  Body Report, US – Steel Safeguards , para.  367. 
160 Panel Report s, US – Steel Safeguards , para.  10.163.  
161 Panel Report s, US – Steel Safeguards , para.  10.163.  
162 See, e.g. Appellate  Body Report, Argentina  – Footwear  (EC), para.  131. 
163 USITC report, (Exhibit  KOR-1), p.  20. (fn omitted; redac ted original)  
164 In Panel question No.  70, we asked the United  States to provide the percentage year -on-year 
increase in imports over the entire POI. We informed the United  States that in answering that question it could 
treat import volumes in 2012 (the first year of the  POI) as 100 (indexed) and map the percentage changes in 
imports over the result of the POI. We also asked the United  States to comment on what sort of additional 
procedures, beyond the BCI procedures that we had already adopted in these proceedings, it co nsidered 
necessary to provide use with this information while safeguarding its confidentiality. The United  States declined 
to provide us with the information requested in question No.  70 on grounds of business confidentiality. 
(United  States'  response to P anel question No.  70, para.  8). The United  States also informed us that it was 
unable to offer alternative procedures that would adequately preserve the USITC's  institutional ability to collect 
business confidential information in its investigations. (Unit ed States'  response to Panel question No.  71, 
para. 10). 
165 USITC report, (Exhibit  KOR-1), p.  38. (redacted original)  WT/DS546/ R 
 
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  POI, including the rate and significance of the increase. In determining whether the United  States 
has rebutted Korea's  prima  facie case, we note the United  States'  assertion that the USITC provided 
a reasoned and adequate explanation of the development of imports trends, including the rate and 
amount of increase.166 In particular, the United  States submits that the percentage ye ar-on-year 
changes were provided in table C-2 of the staff report and thus considered by the USITC.167 The 
United  States also submits that the USITC considered the absolute volume of subject imports in each 
year of the POI and found that imports of LRWs had increased steadily during the POI.168 In our 
view, however, the United  States has not proved its factual assertions.  
7.96.   In particular, the  United  States did not provide us with an unredacted version of table C-2 or 
point to specific parts of the unredacted version of the USITC report that expla in how the USITC 
considered the percentage year -on-year changes over the POI.169 Therefore, while the United  States 
asserts that the USITC found imports to increase steadily over the POI based on its consideration of 
the absolute volume of subject imports i n each year of the POI , the United  States did not provide us 
with the USITC's  record evidence to support this assertion.170 In addition, as we noted in 
paragraph  7.91 above,  an evaluation of  whether a decrease in imports at the end of the POI prevents 
a finding of increased imports will depend on whether, despite the later decrease, a previous increase 
results in the product still being imported in such  increased quanti ties. Factors that an investigating 
authority must take into account in this evaluation  are, inter alia, the degree of the decrease at the 
end of the relevant POI, as well as the nature, for instance the sharpness and the extent, of the 
increase that occur red beforehand. We do not see from the narrative description in the USITC report 
how the USITC took into account the degree of the decrease at the end of the relevant POI 
considering the increase beforehand.  Consequently, we consider that the United  States  has not 
proved its factual assertions and not rebutted a prima  facie case of violation, which Korea has 
established.  
7.97.   Based on the foregoing, we find that the USITC failed to provide a reasoned and adequate 
explanation in support of its finding on increased imports and thus acted inconsistently with 
Article  2.1 as well as Article  3.1 of the  Agreement on Safeguards.  
7.4.4   Conclusion  
7.98.   In light of the abov e: 
 
166 United  States'  first written submission, section D.3.c and para.  207. 
167 United  States'  first written submission, fn  435. See also United  States'  response to Panel question 
No. 72(c), para.  17. 
168 United  States'  response to Panel question No.  72(c), para.  17. 
169 Instead, in response to our questions, the United  States provided us with a "directional version" of 
table C-2. That version of table  C-2 does not contain any figures (percentage or absolute) but only shows 
whether imports decreased or increases in a particular year of the POI. We do not consider that the 
"directional  version" of table  C-2 proves the factual assertions made by the Unite d States set out above. 
(United  States'  response to Panel question No.  16, para.  27). 
170 We note in this regard that Korea and the United  States referred to two separate annexes 
(annexes  2A and 2D) in the petition filed by Whirlpool . In response to Korea's  reliance on the data set out in 
annex 2D, the United  States presents arguments on why we should not rely on that data. 
(United  States'  second written submission, paras.  59-60). In response to the United  States'  statement that we 
could consider the public d ata in annex 2A, which reflected Whirlpool's  best estimate of subject import 
volumes, and which showed similar trends to that used by the USITC, Korea contests the reliability of the data 
in annex 2A. (Korea's  comments to United  States'  response to Panel q uestion No.  70, paras.  38-40; see also 
United  States'  response to Panel question No.  70, para.  9). Therefore, the reliability of the data in annexes 2D 
and 2A is contested. In any case, we do not consider it appropriate to rely on this data because the 
United States confirms that the USITC did not rely on the data provided in annex 2A, and instead relied on 
import data reported by LG, Samsung, and other importers. (United  States'  second written submission, 
para. 61). We also note the United  States'  argument  that because US  importers LG and Samsung accounted 
for the vast majority of US  imports of LRWs, Korea is in a position to provide information regarding the imports 
made by these two companies. (United  States'  comments on Korea's  response to Panel question  No. 69, 
para. 11). However, we do not consider that it would be appropriate for us to rely on a data set provided by LG 
and Samsung as a proxy for the import volume data considered by the USITC, especially because the USITC 
relied on import volume data no t just from LG and Samsung but also from other importers. 
(United  States'  second written submission, para.  61). WT/DS546/ R 
 
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  a. We find that the USITC acted inconsistently with Articles  2.1 and 3.1 of the  Agreement on 
Safeguards because it failed to provide a reasoned and adequate explanation in support 
of its finding on increased imports.  
b. We reject Korea's  claim that the USITC acted i nconsistently with Articles  2.1 and 3.1 of 
the Agreement on Safeguards by ( i) cumulating imports of LRWs and LRW parts as part 
of its increased imports analysis ; (ii) failing to examine the significance of the increase in 
imports relative to domestic consu mption ; and ( iii) failing to account for the price and 
non-price based aspects of the conditions of competition in the market in its increased 
imports analysis.  
7.5  The USITC 's serious  injury  determination  
7.99.   Korea challenges the USITC 's determination regarding s erious injury to the domestic industry 
under Articles  2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c), and, consequently, Article  11.1(a)  of 
the Agreement on Safeguards. In particular, Korea submits as follows : 
a. The USITC failed to evaluate all the injury factors set out in Article  4.2(a)  as part of its 
serious injury finding, specifically171: 
i. the rate and amount of increase  in imports in absolute and relative terms ; and 
ii. the share of the domestic market taken by increased imports.  
b. The USITC failed to make an objective assessment of profits.172 
c. The USITC failed to make an objective assessment of the share of the domestic market 
taken by increased imports.173 
d. The USITC's  serious injury finding was vitiated  by its flawed definition of the 
domestic  industry on two g rounds:  
i. As a consequence of Korea's  claims concerning  the USITC's  definition of the 
domestic  industry, the USITC's  serious injury finding is also flawed.174 
ii. When examining profitability, the USITC excluded financial data relating to a producer 
whom it had i ncluded in its scope of the domestic industry .175 
e. The USITC failed to undertake an objective examination of the significant overall 
impairment of the domestic industry and based its serious injury determination on 
declining profitability alone .176 
7.100.   The United  States  asks us to reject Korea 's claims.  
7.101.   We note  that Article  4.1(a)  of the Agreement on Safeguards defines "serious injury" as 
"a significant overall impairment in the position of a domestic industry". Article  4.2(a), in turn, 
provides that in the investigation to determine whether increased imports ha ve caused serious injury 
to the domestic industry, the investigating  authorities shall evaluate all relevant  factors  of an 
objective and quantifiable nature having a bearing on the situation of that industry, in particular , 
 
171 Korea's  first written submission, paras.  260-269. 
172 Korea's  first written submission, paras.  278-298. 
173 Korea's  first written submission, para s. 307-319. 
174 Korea's  first written submission, paras.  321-327.  
175 Korea's  first written submission, paras.  328-330. 
176 Korea's  first written submission, paras.  270-277. See also ibid. paras.  299-306. In section  VII.3.4 of 
its first written submission, Kore a claims that the USITC failed to provide a compelling explanation of how and 
why the domestic industry suffered serious injury despite the positive trends. In that section, Korea presents 
arguments similar to those in section  VII.3.2 of the same submissio n, where Korea claims that the USITC failed 
to undertake an objective examination of the "significant overall impairment" of the domestic industry and 
based its serious injury finding on declining profitability alone. Therefore, we address both sets of arg uments in 
section  7.5.5 of this Report.  WT/DS546/ R 
 
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  the rate and amount of the incre ase in imports of the product concerned in absolute and relative 
terms, the share of the domestic market taken by increased imports, changes in the level of sales, 
production, productivity, capacity utilization, profits and losses, and employment. The use of the 
word "all" suggests therefore that an investigating authority must, at a minimum, evaluate each of 
the factors listed in Article  4.2(a).177 Moreover, the use of the phrase "in particular" indicates that 
an investigating authority must also evaluate f actors not listed in Article  4.2(a)  that are nonetheless 
relevant to the state of the domestic industry.178 
7.102.   While an investigating authority must evaluate all relevant factors having a bearing on the 
situation of the domestic industry, neither Article  4.2(a)  nor any other provision of 
the Agreement  on Safeguards requires that all the relevant factors need to show negative trends. 
Therefore, an authority may find that the domestic industry has been seriously injured where some, 
or even the majori ty of the factors do not, by themselves, trend negatively.179 Where some of the 
factors trend positively while others trend negatively, it is for the investigating authority to assess 
and weigh the evidence before it, and reasonably and adequately explain h ow the facts on record 
support its determination.180 
7.103.   In reviewing the adequacy of such an explanation, we note that Article  4.2(c)  of 
the Agreement on Safeguards requires investigating authorities to publish promptly, and in 
accordance with Article  3 of the  Agreement on Safeguards, a detailed analysis of the case under 
investigation as well as a demonstration of the relevance of the factors examined. Article  3.1, in 
turn, requires authorities to publish a report setting forth their findings and reasoned conc lusions 
reached on all pertinent issues of fact and law. We shall therefore base our evaluation of 
Korea 's claims on the report published by the USITC.  
7.5.1   Evaluation  of all the injury  factors  set out in Article  4.2(a)  as part of the serious  
injury  finding  
7.104.   Korea contends that the USITC acted inconsistently with Articles  3.1, 4.1(a), 4.2(a), and 
4.2(c), because it  failed to evaluate the following two factors set out in Article  4.2(a)  as part of its 
injury analysis:  (i) the rate and amount of the increase in imp orts, and (ii) the share of the domestic 
market taken by increased imports.181 
7.105.   Korea acknowledges that the two factors were reflected in the USITC report. However, 
Korea  maintains that the USITC noted the developments in these factors in quantitative terms in the 
context of its analysis of increased imports and causation, but did not "evaluate" them as part of the 
serious injury analysis (i.e.  in section  IV.D of the USITC report).182 Korea maintains that the 
USITC's  failure to "evaluate" the two factors reflects a failure to examine the "explanatory force" of 
the increased imports as part of the serious injury determination. Korea also asserts that the USITC 
merely described  the increase in imports  as "steady" , noted that imports nearly doubled  over the 
POI, and increased their penetration of the US  market.183 According to Korea, by doing so, the USITC 
failed to satisfy the required standard of evaluation.184 Korea contends tha t an "evaluation" of the 
relevant factors includes an examination of how imports interrelate with the various injury factors 
 
177 The parties to this dispute agree with this understanding. (Korea's  first written submission, 
para. 243; United  States ' first written submission, para.  225). See also  Appellate  Body Report, Argentina  – 
Footwear  (EC), para.  136. 
178 We agree in this regard w ith Panel Report, US – Lamb , para.  7.139.  
179 The parties agree with this understanding. (Korea's  response to Panel question No.  22, para.  117; 
United  States ' first written submission, para.  246). We note that this understanding is also consistent with 
Appel late Body Report, Argentina  – Footwear  (EC), para.  139. 
180 We agree in this regard with Panel Report, US – Wheat  Gluten , para.  8.85. 
181 Korea's  first written submission, paras.  260, 262, and  269. 
182 Korea's  first written submission, paras.  260 and 262 (referring to USITC report, (Exhibit  KOR-1), 
pp. 38-40); opening statement at the first meeting of the Panel, paras.  53-54. See also Korea's  response to 
Panel question No.  24(a), paras.  134-135; and second written submission, paras.  154-156. Korea states that it 
does not make a "formalistic complaint about the specific section  of the USITC Report in which these factors 
were examined". However, it also submits that contrary to the United  States ' assertion  that the USITC 
"incorporat[ed] its evaluation" of the two factors in its serious injury determination, "the page numbers 
referred to do not concern the serious injury examination, but relate to the 'increased imports'  and 'substantial 
cause'  sections. The re was no 'incorporation'  of these factors into the relevant serious injury examination". 
(Korea's  second written submission, paras.  155-156).  
183 Korea's  response to Panel question No.  24(a), para.  143. 
184 Korea's  response to Panel question No.  24(a), paras.  141 and 143.  WT/DS546/ R 
 
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  so as to understand whether the imports have an "explanatory force" for the occurrence of the 
serious injury.185 Further, Korea argu es that as part of the "evaluation", an investigating authority 
must assess the relevance and weight of each of the relevant factors with a view of assessing the 
overall impairment in the position of the domestic industry.186, 187 
7.106.   The United  States  argues th at Korea's  submissions are incorrect. In the United  States ' view, 
Korea assumes that an evaluation of all the factors listed in Article  4.2(a)  must appear together in 
a section  of the investigating authority's  report devoted to serious injury.188 The United  States  
maintains that contrary to Korea's  arguments, Articles  3.1 and 4.2(c)  do not specify a particular 
structure or order of analysis for the reports published by investigating authorities, and the USITC 
satisfied its obligations by examining the two fa ctors in the sections  of its report addressing increased 
imports and causation.189 With regard to the rate and amount  of increase  in imports , the 
United  States  maintains that the USITC considered the evolution of the absolute volume of 
subject  imports and found that imports of LRWs had increased steadily during the POI  (in each year 
of the 2012 -2016 period ), and overall, had nearly doubled during the POI.190 The United  States  also 
argues that the USITC examined the share  of the domestic  market  taken  by increased  imports  during 
the POI, and found that subject imports significantly increased their penetration of the US  market 
during the POI.191 
7.107.   The question before us  is whether the USITC "evaluated"  (a) the rate and amount of increase 
in imports, and (b)  the share of the domestic market taken by increased imports during the POI. We 
note that Korea acknowledges that these two factors were reflected in the USITC report.192 However, 
Korea contends that the USITC's  discussion regarding these two factors did not amount to an 
"evaluation" within the meaning of Article  4.2(a). Korea submits in this regard that when evaluating 
the injury factors in Article  4.2(a), an investigat ing authority may not limit itself to setting out the 
trends, but must also consider the relationship between imports and injury factors as well as show 
that imports had explanatory force for the development of these factors.193 In response to our 
question on how such an analysis of explanatory force, which Korea argues is required as part of a 
serious injury analysis under Article  4.2(a) , differs from a causation analysis under Article  4.2(b), 
Korea contends that an explanatory force analysis requi res investigating authorities to examine 
whether there is a relationship between imports and serious injury, with a focus on the coincidence 
in the trends between imports and the examined injury factors.194 
7.108.   As we discuss in the context of our analysis of Ko rea's causation claims, we note that the 
USITC conducted its causation analysis  in two stages. Under the first stage, the USITC conducted, 
inter alia, an analysis of the coincidence in trends between subject imports and injury factors. Korea 
challenges the  USITC's  coincidence in trends analysis as part of its causation claims. Since Korea 
explains that its claim under Article  4.2(a)  similarly concerns the alleged failure of the USITC to 
consider the coincidence in trends between imports and the examined inj ury factors, we consider it 
 
185 Korea's  response to Panel question No.  24(a), paras.  138 and 145; second written submission, 
para. 159. 
186 Korea's  first written submission, paras.  266-268; response to Panel question No.  24(a), para.  142. 
187 We also note that in section  VII.3.5 of its first written submission, Korea claims that the USITC failed 
to objectively evaluate the "share of domestic market taken by increased imports" because in its view the 
USITC failed to consider arguments the respondents made during the domestic proceedings. In this section of 
the Report we address Korea's  claim based on its argument that the USITC failed to evaluate the "explanatory 
force" of the share of domestic market taken by increased import s alone. Thereafter, we address Korea 's claim 
that the USITC failed to objectively evaluate the "share of domestic market  taken by increased imports" (as  
presented in section  VII.3.5 of its first written submission ) at section  7.5.3 below.  
188 United  States ' first written submission, para.  232. 
189 United  States ' first written submission, paras.  232-235; opening statement at the first meeting of the 
Panel, para.  21. 
190 United States ' first written submission, para.  229; opening statement at the first meeting of the 
Panel, para.  21 (referring to USITC report, (Exhibit  KOR-1), pp.  20 and 39).  
191 United  States ' first written submission, para.  230; opening statement at the first  meeting of the 
Panel, para.  21 (referring to USITC report, (Exhibit  KOR-1), pp.  38-39). 
192 Korea's  first written submission, para.  260. In particular, Korea states that "[w]hile [the] USITC 
simply notes these developments in quantitative terms in the conte xt of its analysis of increased imports and 
causation – these factors were not examined at all as part of the serious injury analysis".  
193 Korea's  response to Panel question No.  24(b), para.  148. See also Korea's  response to Panel 
question No.  24(a), paras.  138 and 145.  
194 Korea's  response to Panel question No.  21(b), paras.  110-111; second written submission, 
para. 159. The European  Union agrees. (European  Union third -party response to Panel question No.  3(b), 
para. 15). WT/DS546/ R 
 
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  appropriate to review Korea's  arguments in the context of its causation claim. It is not necessary for 
us to review those same arguments in the context of Korea 's Article  4.2(a ) claim.  
7.109.   Based on the foregoing, we do not separately address Korea's  claim under Article  4.2(a ) 
challenging the USITC 's alleged failure to evaluate all injury factors set out in this provision.  We also 
do not address Korea's  claim under  Articles  3.1, 4.1(a ), and 4.2(c) for the same reasons.  
7.5.2   The USITC's  alleged  failure  to objective ly examin e profits  and losses  
7.110.   Korea contends that the USITC failed to undertake an objective examination of the factor 
"profits and losses", and to support its finding by a reasoned and ad equate explanation, therefore 
acting inconsistently with Articles  3.1, 4.1(a) , 4.2(a ), and 4.2( c).195 Korea alleges that the USITC 
failed to : (i) account for record evidence of joint -selling practices over washers and dryers and 
related overall profits in t he laundry segment196; and ( ii) engage with evidence that 
Whirlpool's  reported operating losses were inconsistent with its profit margin for its overall 
North  American operations.197 We address these arguments separately.  
Joint-pricing  theory  
 
7.111.   Korea argues that the USITC had received evidence from Korean respondents that dryers 
and LRWs collectively form the laundry segment of the US  market, and that the US  industry prices, 
markets, a nd sells these two products jointly (a practice Korea refers to as "joint  pricing").198 
Korea  submits that dryers cost less to make, and are therefore more profi table than LRWs. 
Korea  contends that because LRWs and dryers were priced at the same level, they  were jointly 
profitable, and therefore, to the extent the domestic industry's  profitability of LRW sales were low, 
the domestic industry obtained significant profits from its sales of dryers.199 Korea argues that the 
USITC dismissed the arguments  made  by Korean respondents (a) simply because  dryers are not a 
like or directly competitive product  to the PUC , and (b) based on testimony by the petitioner.200 
Korea  maintains that by doing so, the USITC did not adequately engage with the evidence presented 
by the respondents, or provide a reasoned and adequate explanation addressing this  "plausible  
alternative" presented by the respondents.201 
7.112.   Rejecting Korea 's arguments, the United  States  submits that the USITC explained that the 
focus of its analysis was the domestic producers of the like or directly competitive product, and that 
dryers were not "like or directly competitive" with the PUC.202 The United  States  argues that in 
rejecting the respondents'  arguments, the USITC evaluated all the record evidence concerning 
whether Whirlpool and GE sold matching LRWs and dryers at the same net wholesale prices, and 
found that the evidence did not support, as a factual matter, the Korean respondents ' view that 
US producers offset losses on washers with profits on matching dryers.203 The United  States  
maintains that there was evidence both for and against the Korean respondents'  theory of 
joint pricing, and the USITC found the evidence against that the ory more compelling.204 The 
United  States  also submits that the USITC found that even if the joint -pricing theory were true, the 
greater profitability of dryers could not explain the domestic industry's  worsening operating and net 
losses on sales of LRWs du ring the POI.205 
7.113.   The parties'  arguments raise two issues that we must consider in resolving this claim:  
(a) whether the USITC was required to evaluate "profitability" with regard to products (dryers)  that 
were not "like or directly competitive" with the PUC ; and, if so, (b) whether Korea has demonstrated 
 
195 Korea's  first written submission, para s. 278 and 298 . 
196 Korea's  first written submission, paras.  279-291. 
197 Korea's  first written submission, para.  292. 
198 Korea's  first written submission, paras.  280-284. 
199 Korea's  second written submission, para.  178. 
200 Korea 's first written submission, paras.  287 and 290; second written submission, para. 176. 
201 Korea's  first written submission, paras.  287-291; opening statement at the first meeting of the 
Panel, paras.  61-64; and second written submission, paras.  176-186. 
202 United  States ' first written submission, para.  254. 
203 United  States ' first written submission, para.  255; opening statement at the first meeting of the 
Panel, para.  24. 
204 United  States ' first written submission, para.  257. 
205 United  States ' first writte n submission, para.  259. WT/DS546/ R 
 
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  that the USITC failed to provide a reasoned and adequate explanation for rejecting the arguments 
and evidence presented by Korea n respondents . 
7.114.   We note that Article  4.1(c)  defines the domestic industry on the  basis of producers as a 
whole of the like or directly competitive products operating within the territory of a Member, or those 
whose collective output of the like or directly competitive products constitutes a major proportion of 
the total domestic produ ction of those products. This definition of the domestic industry applies for 
the purposes of the  Agreement on Safeguards, including when the investigating authority 
determines whether the domestic industry, as defined under Article  4.1(c), has suffered se rious 
injury. It follows that, in undertaking that analysis, investigating authorities are required to evaluate 
the injury factors having a bearing on the domestic industry by reviewing data relating specifically 
to those "like or directly competitive prod ucts" that comprise the domestic industry.  
7.115.   Korea does not argue that dryers are like or directly competitive with the PUC (which 
comprised LRWs and not dryers). We also note that the USITC did not define the domestic industry 
to include producers of dryers . Therefore, in determining whether the domestic industry, comprising 
producers of the like product at issue (i.e. LRWs ), was suffering serious injury, the USITC was not 
required to analyse performance indicators (including profitability)  for the dryer seg ment, which was 
not a like product within the meaning of Article  4.1(c) (or a "directly competitive" product). That the 
producers forming part of the domestic industry also produced other products that were profitable  
is irrelevant to the situation of the domestic industry.206 Therefore, we are not persuaded by 
Korea 's argument that the USITC was required to consider profitability of the laundry segment as a 
whole (including dryers).  
The profit  data relied  upon by the USITC  
 
7.116.   Korea contends that the USITC failed to meaningfully assess  the respondents'  arguments 
and evidence that Whirlpool's  reported operating losses were inconsistent with the profit margin for 
Whirlpool 's overall North American operations, and therefore contradicted the USITC 's finding that 
the domestic industry suffered significant operating losses.207 According to Korea, the USITC did not 
meaningfully explain how Whirlpool's  geographically segmented data, including sales, general, and 
administrative ( SG&A ) expenses, were appropriately allocated to the production of LRWs.208 
7.117.   The United  States  responds that the USITC provided a reasoned and adequate explanation 
for rejecting the respondents'  argument.209 In rejecting the respondents ' argument, the USITC 
stated that the fo cus of its analysis was the producers of products that were like or directly 
competitive with the PUC. Therefore, because Whirlpool's  financial results for its North America 
segment were primarily based on sales of products other than LRWs (with LRWs accou nting for only 
13.1% to 13.5% of the North America segment's  total revenue during the 2012 ‐2016 period)  the 
USITC did not find those results informative.210 Moreover, the United  States  notes that the USITC 
verified, using appropriate methodologies from a pr evious investigation, that the financial data 
reported by Whirlpool was reasonable and complied with applicable guidelines.211 
7.118.   The issue before us in this regard is whether the USITC properly assessed the evidence 
submitted by the Korean respondents contest ing Whirlpool's  profit data. In its report, the USITC 
noted that the focus of its analysis was the domestic industry producing the domestic like product. 
It is therefore reasonable that the USITC found Whirlpool 's financial results for North America 
uninfo rmative, given that LRWs (the like product at issue), only accounted for 13.1% to 13.5% of 
the North America segment's  total revenue. Korea does not explain why this explanation provided 
 
206 In this regard, we note Korea does not argue that profits made on washers were allocated to dryers. 
Instead, Korea 's argument is that the USITC should have examined the profitability for dryers and washers as 
a whole because they  were complementary goods.  (See e.g.  Korea 's first written submission, paras.  290-291). 
207 Korea's  first written submission, paras.  292-295 and 297 (referring to Excerpt from LG and 
Samsung's  prehearing injury brief, (Exhibit  KOR-11), p.  71; and Large Resid ential Washers, Pre hearing Brief of 
the Government of the Republic of Korea (29  August  2017), (Exhibit  KOR-9), p.  11). 
208 Korea's  first written submission, para.  294; second written submission, paras.  187-188. 
209 United  States ' first written submission, para . 260. 
210 United  States'  first written submission, paras.  260-261 (referring to USITC report, ( Exhibit  KOR-1), 
fn 210).  
211 United  States ' first written submission, para.  262; second written submission, fn  169 (referring to 
USITC report, (Exhibit  KOR-1), fn  210). See also United  States ' opening statement at the first meeting of the 
Panel, para.  25. WT/DS546/ R 
 
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  by the USITC was not adequate. Korea also asserts that the USITC did not meaningfully explain how 
Whirlpool's  geographically segmented financial data, including its SG&A expenses, were 
appropriately allocated to the production of LRWs.212 Korea appears to take issue with the 
USITC's  explanation that it had verified Whirlpool 's financial results, including SG&A expenses using 
appropriate methodologies in a previous investigation, arguing that the USITC "merely applied 'the 
same methodology'" in the underlying investigation.213 However, Korea does not explain why, 
specifically, the USITC's  verification of Whirlpool 's financial results and its explanation for rejecting 
Korean respondents ' arguments were inadequate.  
7.119.   Therefore, we reject Korea 's argument  that the USITC failed to ac count for record evidence 
of joint -selling practices over washers and dryers and related overall profits in the laundry segment, 
or to engage with evidence that Whirlpool's  reported operating losses were inconsistent with its 
profit margin for Whirlpool 's overall North American operations . Based on the foregoing , we  reject  
Korea 's claim s under Articles  3.1 and  4.2(a ) of the  Agreement  on Safeguards that the 
USITC  allegedly failed to objectively examine "profit and loss ". Considering that the factual basis of  
Korea 's claim under Articles  4.1(a ) and 4.2(c ) is the same as its claim under Articles  3.1 and  4.2(a) , 
we also reject Korea's  claims under Articles  4.1(a ) and 4.2(c ) of the  Agreement  on Safeguards.  
7.5.3   The USITC's  alleged  failure  to objectively  examine  the share  of domestic  market  
taken  by increased  imports  
7.120.   Korea submits that the USITC acted inconsistently with Article  4.2(a ) because it failed to 
objectively evaluate the factor "share of domestic market taken by increased imports" because it 
failed to consid er that the domestic industry was unable to serve a newly emerging market segment 
due to  its inferior innovation.214 According to Korea, the US  LRW market is based on two types of 
demand:  (a) replacement demand, which accounted for two -thirds of total deman d; and 
(b) non-replacement demand, which accounted for one -third of total demand, and that is triggered 
by consumers'  demand for new and more innovative LRWs.215 Korea maintains that 
Korean  respondents'  LRWs had unique brands, innovation , and design, which enabled them to serve 
demands that the domestic LRWs could not serve effectively.216 Korea argues that this issue was 
particularly important because the domestic industry's  overall market share did not shrink during 
the POI.217 Korea maint ains that the USITC should have done "more evaluation" to address 
arguments made by the Korean respondents that the US  LRW market was segregated based on 
differences in consumer demand.218 
7.121.   The United  States  responds that the USITC considered and properly re jected the 
respondents'  arguments on innovation. Pointing to the USITC report, the United  States  asserts that 
the USITC explained that other record evidence undermined the respondents'  argument.219 
7.122.   We note that the USITC found that the record as whole did n ot support the 
respondents'  argument that consumers increasingly favoured imported LRWs over domestic LRWs 
because of non -price factors.220 The USITC relied on certain data to conclude that there was a 
moderate to high degree of substitutability between imp orted LRWs and domestic LRWs. The USITC 
observed that  (a) all responding purchasers (which accounted for nearly all of the purchases of LRWs 
during the POI)  reported that the subject imports were either always or usually interchangeable with 
domestically p roduced LRWs221; and (b)  most responding purchasers reported that domestic LRWs 
were either comparable or superior to imported LRWs in terms of most non -price factors, including 
 
212 Korea's  second written submission, para.  188.  
213 Korea's  second written submission, para. 188; response to Panel question No.  29, para.  170. 
214 Korea's  first written submission, para s. 307 and 319 . 
215 Korea's  first written submission, paras.  310 and 314; second written submission, para.  201. 
216 Korea's first written submission, paras.  314-316 and 318.  
217 Korea's  first written submission, para.  317. 
218 Korea's  first written submission, para.  309. 
219 United  States ' first written submission, paras.  264-265 (referring to USITC report, (Exhibit  KOR-1), 
pp. 27 and 29 -30). See also United  States ' first written submission, para.  267 (referring to USITC report, 
(Exhibit  KOR-1), p.  42 and fn  261);  and opening statement at the first meeting of the Panel, para.  26. 
220 USITC report, (Exhibit  KOR-1), pp. 29-30. 
221 USITC report, (Exhibit  KOR-1), pp. 27 and  29. WT/DS546/ R 
 
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  whether quality met or exceeded industry standards.222 The USITC also noted that  both the domestic 
producers (Whirlpool and GE)  and Korean exporters (Samsung and LG)  reported introducing 
numerous innovative features in their LRWs during the POI, and  that both domestic and imported 
LRWs were rated highly in publications and surveys dur ing this period.223 The USITC concluded that, 
based on the evidence it evaluated, the US  LRW market encompassed a broad range of brands and 
models offering diverse features and innovations, with no LRW supplier possessing a clear edge over 
other LRW supplie rs in terms of brand, design, performance, features, innovations, and other 
non-price factors.224 The USITC also explained that the respondents'  argument that sales of LRWs 
were driven by features and innovations favoured by customers was undermined by the extent to 
which imported LRWs were priced lower than domestically produced LRWs, and the declining prices 
of the imported LRWs that respondents identified as innovative.225 
7.123.   Korea maintains that the USITC failed to examine whether there was a new market segment 
stemming from different consumer demands, which could only be served by imported LRWs.226 
According to Korea, imported  LRWs had specific attributes which distinguished those products from 
other LRWs, and the USITC's  only rationale for rejecti ng the respondents'  arguments was that the 
domestic industry also produced LRWs with innovations that were exclusive to those producers.227 
However, we note that Korean respondents had made arguments before the USITC based on such 
distinctions between impor ted and domestically produced LRWs. The USITC, as we have noted in 
paragraph  7.122  above , rejected these arguments based on its conclusion that  imported and 
domestic LRWs were substitutable . Moreover, while Korea  asserts that "more evaluation was 
required", it does not engag e with the USITC's  explanation, or demonstrate that the 
USITC's  explanation was not reasoned and adequate in light of the evidence on its record. Therefore, 
we reject  Korea 's argument  that the USITC's  finding was not one that an unbiased and objective 
investigating authority could have reached on the basis of the record evidence.  
7.124.   Based on the foregoing, we reject Korea 's claim under Article  4.2(a ) that the USITC failed 
to objective ly examin e the share of the domestic market taken by increased imports.  
7.5.4   The effect of the USITC's  domestic  industry  definition  on its serious  injury  findings  
7.125.   Korea claims that the USITC's  definition of the domestic industry vitiated its serious injury 
finding based on two grounds228: 
a. First, Korea contends that because the USITC's  serious injury finding was based on an 
improperly defined domestic industry, this serious injury finding was inconsistent with 
Articles  2.1, 3.1, 4.1(a), 4.2(a) , and 4.2(c)  of the  Agreement on Safeguards.229 
b. Second, Korea argues that the USITC's  serious injury assessment was not objective 
because, when examining the profitability of the domestic industry, the USITC excluded 
the financial data of Alliance  Laundry Systems (Alliance) , the only domestic producer of 
belt-driven washers (which was part of the domestic industry), thereby relying on 
 
222 USITC report, (Exhibit  KOR-1), pp.  27 and 29-30. The USITC also observed that consumer reports 
ranked domestic LRWs among three of the top five and four of the top ten recommended FL LRW models, and 
six of the to p ten recommended impeller -based TL LRW models. Reviewed.com ranked domestic LRWs among 
six of the top ten TL LRW models and among four of the top ten FL LRW models. Further, the USITC found that 
the respondents'  own customer survey data showed that a high er percentage of consumers identified 
domestically produced LRWs (Maytag and Whirlpool)  as "good brand names" for washers than imported LRWs 
(LG and Samsung)  in 2016, and that a higher percentage of consumers also identified domestically produced 
LRWs (Ama na and GE)  as "good brand names" for LRWs than LG that year. (USITC report, (Exhibit  KOR-1), 
p. 30 (referring to Excerpt from LG and Samsung 's prehearing injury brief , (Exhibit  KOR-11), p.  101).  
223 USITC report, (Exhibit  KOR-1), pp.  29-30. 
224 USITC report, ( Exhibit  KOR-1), p.  30. 
225 USITC report, (Exhibit  KOR-1), p.  42. See also United  States ' first written submission, para. 267; and 
opening statement at the first meeting of the Panel, para.  26. 
226 Korea's  first written submission, paras.  309-316; second written submission, paras.  202-203 and 
208-209. 
227 Korea's  second written submission, para.  203 (referring to USITC report, (Exhibit  KOR-1), 
pp. 76-77). 
228 Korea also invokes Article  4.1(b) of the  Agreement on Safeguards in making its submissions here. 
However, Korea does not specifically request a finding under Article  4.1(b). (Korea's  first written submission, 
para. 573; second written submission, para.  333). We thus do not make separate findings und er Article  4.1(b).  
229 Korea 's first written submission, paras.  321-327. WT/DS546/ R 
 
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  unrepresentative financial data; while including data pertaining to producers of belt-driven 
washers in examining other injury factors, such as the market share of the 
domestic  industry.230 Korea claims that by doi ng so, the USITC acted inconsistently with 
Articles  2.1, 3.1, 4.1(a), 4.2(a ), and 4.2(c) of the  Agreement  on Safeguards .231 
7.126.   With respect to the first set of Korea's  claims , the United  States  contends that because in its 
view the USITC properly defined the d omestic industry, Korea's  claims  should fail.232 We recall that 
in paragraph  7.77 above  we have found that the USITC acted inconsistently with Article  4.1(c) 
of the Agreement  on Safeguards by including producers of domestic covered parts in the 
domestic  industry. Accordingly , we do not consider  it necessary to make additional findings on 
whether, because of the US ITC's definition of the domestic industry, the seri ous injury determination 
was also inconsistent with Articles  2.1, 3.1, 4.1(a), 4.2(a) , and 4.2(c ) of the Agreement on 
Safeguards.  
7.127.   Regarding Korea 's second set of claims , the United  States  argues that the USITC was 
justified in excluding financial data of t he US  producer of belt -driven washers (Alliance ) when 
examining the "profits and losses" of the domestic industry because (a)  Alliance submitted its 
questionnaire response late in the investigation, rendering the USITC unable to ensure its financial 
data w ere reliable233; and (b)  the financial data used by the USITC covered almost all of the 
domestic  industry's  operations and were therefore sufficiently representative.234 The United  States  
submits that having defined the domestic industry to include domestic producers of belt -driven 
washers, the USITC was required to consider data relating to these producers as part of its serious 
injury analysis, to the extent that those data were found to be reliable. According to the 
United  States , an investigating authorit y that uses unreliable financial data to analyse serious injury 
cannot make reasoned conclusions on pertinent issues of law and fact (as required under Article  3.1), 
and unreliable data is not an objective measure of the industry's  financial performance (a s required 
under Article  4.2(a)).235 The United  States  asserts that when a domestic producer reports unreliable 
financial data, the investigating authority may make inferences based on the available information 
on the domestic industry's  financial performance, which in this case consisted of financial data 
reported by other domestic producers, that accounted for the majority of domestic sales of the like 
product.236, 237 
7.128.   We note that Article  4.2(a)  requires an evaluation of all relevant factors of an objective and 
quantifiable nature having a bearing on the situ ation of the domestic industry, which includes the 
profits and losses by the domestic industry. Therefore, having defined the domestic industry to 
include belt -driven washers, the USITC was required to consider the profit and loss data of producers 
of belt -driven washers as part of its evaluation under Article  4.2(a). However, an investigating 
authority must also satisfy itself that the data that form the basis for its findings are reliable.238 
 
230 Korea's  first written submission, para.  330; second written submission, para.  215; and response to 
Panel question No. 74, paras.  51-52. 
231 Korea's  first written submission, para.  332. 
232 United  States ' first written submission, para.  269. 
233 United  States ' first written submission, para.  272; response s to Panel question No.  28(a), 
paras.  43-45; and No.  75(a), paras.  22-25. 
234 United  States ' first written submission, para.  273; response s to Panel question  Nos. 27-28, 
paras.  42-47; No. 75(a), para. 27; and No. 75(b), para.  31; and comments on Korea 's response to Panel 
question No. 74, paras.  18 and 22.  
235 United  States ' response to Panel question No.  28(a), paras.  43-44. 
236 United  States ' response s to Panel question No.  28(a), para.  45; and No. 75(a), para. 27. 
237 In its third -party statement, the European  Union  takes the view that while, in principle, the USITC 
was required to consider data pertaining to producers of belt -driven washers in its injury analysis (having 
included them in the scope of the domestic industry), if an investigating authority does not have reliable data 
from the producer of such washers, it can comply with the obligations of Articles  4.1(a)  and 3.1 if t he available 
data are sufficiently representative of the domestic industry. According to the European  Union, the 
investigating authority would need to provide a reasoned and adequate explanation why it did not consider 
data relating to those producers, and  the Panel would have to consider whether the data without belt -driven 
washers were sufficiently representative to give a true picture of the domestic industry. 
(European  Union's  third-party response to Panel question No.  4, paras.  17-18). 
238 We note that in US – Lamb , the Appellate  Body considered that, while the text of Article  4.2(a)  (that 
investigating  authorities  evaluate all relevant factors of an objective  and quantifiable  nature ) refers to the 
factors to be evaluated and not the underl ying data, those factors can only be of an "objective and quantifiable 
 WT/DS546/ R 
 
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  7.129.   In our view, when an investigating authority finds data provided  by one of the 
domestic  producers with respect to one or more of the factors having a bearing on the situation of 
the domestic industry is unreliable, the investigating authority may well make its evaluation based 
on the available facts, which would includ e replacing the unreliable information with other verifiable 
information available.  The investigation is not paralysed simply because certain information proves 
unreliable.  However, as part of its obligation to provide reasoned conclusions on pertinent iss ues of 
law and fact (including the evaluation of the factors set out in Article  4.2(a) ), the investigating 
authority would be required to explain in its published report (a)  the reason why the data in relation 
to those factors was considered unreliable (an d thus unusable); (b)  how the investigating authority 
conducted its evaluation under Article  4.2(a)  despite the unreliability of the data (for instance, 
whether it replaced the missing information, and if yes, with what); and (c) whether the available 
data based on which the investigating authority made its examination under Article  4.2(a)  was 
sufficiently representative (and thus provided the investigating authority with a sufficient factual 
basis)  to draw reasoned conclusions concerning the situation of t he "domestic industry". In reviewing 
Korea 's claim, consistent  with our standard of review, we examine whether the USITC provided 
reasoned and adequate explanations with respect to the parameters set out in points (a) -(c) above.  
7.130.   We note that the USITC stat ed that it excluded Alliance 's financial data because Alliance  "was 
unable to provide usable financial results".239 The United  States  submits that the USITC  provided 
the specific reasons why it was unable to use Alliance 's financial data in footnote  12 to p age III-8 of 
the USITC report.240 However, we note that those reasons are redacted from the USITC  report , and 
that the United  States  has failed to provide an unredacted version .241 The United  States  also asserts 
that the USITC was not able to ensure that Alliance 's data were reliable because Alliance submitted 
its questionnaire response late in the investigation.242 However, the United  States  does not 
substantiate its factual assertions by pointing to  relevant parts of the USITC report and thus does 
not show the USITC 's reasoning for excluding Alliance 's financial data from its profitability analysis. 
Therefore, we find that the USITC failed to provide a reasoned and adequate explanation for not 
using Alliance 's financial data in evaluating the profitability of the domestic industry. Having reached 
this finding, we do not consider it necessary to evaluate whether the USITC based its findings on 
data that were representative of the "domestic industry".  
7.131.   Based on the foregoing, we find that the USITC acted inconsistently with Article s 4.2(a ) 
and 3.1 of the  Agreement  on Safeguards  by excluding the profit and loss data of the producer of 
belt-driven washers  from the profit data used to determine the profitabi lity of the domestic industry . 
Having reached this finding, we do not consider it necessary to make additional findings under 
Articles  2.1, 4.1 (a), and 4.2(c) of the  Agreement  on Safeguards . 
 
nature" if they allow a determination to be made on the basis of "objective evidence", as required by 
Article  4.2(b). Therefore, per the Appellate  Body, the words "factors of an objecti ve and quantifiable nature" 
imply an evaluation of objective data that enables the measurement and quantification of those factors. 
(Appellate  Body Report, US – Lamb , para.  130).  
239 United  States'  response to Panel question No.  75(b), para.  29; USITC report , (Exhibit  KOR-1), fn  205 
to p. 33. 
240 United  States'  response to Panel question No.  75(b), para.  30; USITC report, (Exhibit  KOR-1), fn  12 
to p. III-8. 
241 We note in this regard that we specifically asked the United  States  to "provide the unredacted 
version of the USITC 's report where the USITC provides all of its reasons regarding why it did not use the 
financial data in this regard, including that set out in footnote 205 of page 33 of the USITC 's report , 
(Exhibit  KOR-1)". (Panel question No. 27). We also as ked the United  States  to point to the relevant parts of the 
USITC report where the USITC found Alliance 's financial to be flawed and therefore unusable. (Panel question 
No. 75(a)). However, the United  States  declined to provide the requested information, on the ground that the 
specific reasons why the USITC found this data to be unusable are confidential. The United  States  maintains 
that disclosing the specific reasons is not permitted under its domestic law.  (United  States'  response to 
Panel  question No. 75(b), para. 30). We recall that we adopted rules for protection of BCI in these 
proceedings. We also asked the United  States  what additional procedures, beyond those we adopted, it 
considered necessary to pr ovide the information we sought, while safeguarding the confidentiality of that 
information. ( Panel question Nos.  71 and 75(b)). The United  States  did not propose any such alternative 
procedures. ( United  States'  response to Panel question No. 71, para. 10). 
242 United  States'  response to Panel question No. 75(a), paras.  22-26. WT/DS546/ R 
 
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  7.5.5   The USITC's  alleged  failure  to undertake  an objective  examination  of the significant  
overall  impairment  of the domestic  industry  and its decision  to base its serious  injury  
determination  on declining  profitability  alone  
7.132.   Korea contends that the USITC  acted inconsistently with Articles  3.1, 4.1(a), 4.2(a), and 
4.2(c) because it failed to undertake an objective examination of the significant overall impairment 
of the domestic industry  and based its serious injury determination on declining profitability alone .243 
According to Korea, the USITC determined that the domestic industry had suffered serious injury 
based on only one of the eight factors listed in Article  4.2(a), namely profits and losses.244 Korea 
does not exclude the possibility that there could be situat ions where one injury factor trends 
negatively and supports a determination of serious injury.245 However, Korea contends that in the 
underlying investigation the USITC accorded decisive importance to the factor profits and los ses and 
failed to provide any reasoned and adequate explanation of why, despite the overwhelming majority 
of factors trending positively, the position of the domestic industry was nonetheless impaired as a 
whole.246 
7.133.   The United  States  rejects Korea's  contention that the USITC based its s erious injury finding 
on only one negatively trending factor, i.e.  profits and losses. Rather, the United  States  maintains 
that the USITC found that six factors exhibited trends indicative of injury, including three of the  
eight factors listed in Article  4.2(a).247 The United  States  also argues that the USITC explained how 
its evaluation of all relevant factors supported its determination, including why the relevant factors 
showing seemingly positive or neutral trends did not detract from its determination t hat the 
domestic  industry had suffered serious injury.248 
7.134.   We recall that at paragraph  7.131  above, we have found that the USITC 's exclusion of the 
financial data of t he producers of belt -driven washers when evaluating the profit and loss of the 
domestic industry was inconsistent with Article  4.2(a).  Consequently, in making its overall finding 
of serious injury, the USITC relied on an intermediate finding (of profitabil ity), which was inconsistent 
with Article  4.2(a). We therefore do not consider it necessary to address Korea 's claim that the 
USITC failed to undertake an objective examination of the significant overall impairment of the 
domestic industry.  
7.135.   Based on the fo regoing, we do not find it necessary to evaluate Korea 's claim under 
Article  4.2(a ) that the USITC failed to undertake an objective examination of the significant overall 
impairment of the domestic industry  and based its overall finding of serious injury on one factor 
alone . We also do not address Korea's  claim under  Articles  3.1, 4.1(a), and 4.2(c ) for the same 
reasons.  
7.5.6   Conclusion  
7.136.   With respect to Korea 's claims under Articles  2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c)  of 
the Agreement on Safeguards chall enging the USITC 's findings on serious injury suffered by the 
domestic industry:  
a. We find that the USITC acted inconsistently with Articles  4.2(a ) and 3.1 of 
the Agreement  on Safeguards  by excluding the profit and loss data of the producer of 
belt-driven wa shers from the profit data used to determine the profitability of the 
domestic  industry. We do not find it necessary to separately address whether the USITC  
also acted  inconsistently with Articles  2.1, 4.1(a), and 4.2(c)  for these same reasons.  
 
243 Korea's  first written submission, paras.  270 and 306.  
244 Korea's  first written submission, paras.  270 and 273.  
245 Korea 's response to Panel question No. 22, para. 117. 
246 Korea's  first w ritten submission, para.  273. 
247 The United  States  argues that the following six factors were indicative of injury : (a) import volume 
doubled during the POI; (b)  the penetration of subject imports in the US  market significantly increased; (c)  the 
financial performance of the domestic industry "precipitously" declined; (d ) the domestic industry's  sales prices 
declined; (e)  the cost of goods sold (COGS) to net sales ratio increased; and (f)  the capital and R&D 
expenditures of the domestic industry declined. ( United States ' first written submission, para.  247 (referring to 
USITC report, (Exhibit  KOR-1), pp. 33, 36 -37, 39, 42 -43, and V -28)). 
248 United  States ' first written submission, paras.  237, 241 -243, 246, and 249-251. WT/DS546/ R 
 
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  b. We reject, for the reasons set out in paragraph  7.119  above, Korea 's claims under 
Article  4.2(a), as well as Articles  3.1, 4.1(a), and 4.2(c ) of the  Agreement on Safeguards  
that the USITC allegedly failed to objectively examine "profit and loss".  
c. We reject Korea 's claims under Article  4.2(a ) of the  Agreement on Safeguards  that the 
USITC allegedly failed to objectively examine the share of the domestic market taken by 
increased i mports.  
d. We do not find it necessary to address Korea 's claims under Article  4.2(a), as well as 
Articles  3.1, 4.1(a), and 4.2(c ) of the  Agreement on Safeguards  that the USITC failed to 
evaluate all injury factors set out in Article  4.2(a).  
e. We do not find it necessary to address Korea 's claims under Article  4.2(a), as well as 
Articles  2.1, 3.1, 4.1(a), and 4.2(c)  of the  Agreement on Safeguards that are 
consequential to Korea 's claims challenging the USITC 's definition of the 
domestic  industry.  
f. We do not find it necessary to address Korea's  claims under Article  4.2(a), as well as 
Articles  3.1, 4.1(a), and 4.2(c)  of the  Agreement on Saf eguards that the USITC failed to 
undertake an objective examination of the significant overall impairment of the 
domestic  industry  and based its overall finding of serious injury on one factor alone.   
7.6  The USITC 's causation  determination  
7.137.   In the underlying i nvestigation the USITC conducted  a two -stage analysis as part of its 
causation determination.249 Under the first stage,  the USITC  assessed whether there was a 
causal  link between the increased imports and the serious injury suffered by the 
domestic  industry .250 Under the second stage, the USITC examined whether factors other than 
increased imports might have explained th at serious injury .251 Korea makes arguments challenging 
both stages of the USITC's  determination under  Articles  2.1, 3.1, 4.2( b), and 4.2( c) of 
the Agreement  on Safeguards . In addition, Korea makes consequential claims contending that 
because the USITC 's analysis of increased imports and its definition of the domestic industry  were 
inconsistent with the  Agreement  on Safeguards, the USITC 's causation determination, which relied 
on these two  separate analyses, was also inconsistent with the  Agreement  on Safeguards.252 
7.138.   We review Korea's  causation claims under Article  4.2(b ) of the  Agreement  on Safeguards.253 
We note in this regard that Ar ticle 4.2(a)  of the  Agreement on Safeguards provides that in an 
investigation to determine whether increased imports have caused or are threatening to cause 
serious injury to a domestic industry under the terms of this agreement, investigating authorities 
shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the 
situation of that industry, including in particular those set out in Article  4.2(a). Article  4.2(b), in turn, 
provides that the determination referred to in  Article  4.2(a)  shall not be made unless the 
investigation demonstrates, on the basis of objective evidence, the existence of the causal link 
between increased imports of the product concerned and serious injury or threat thereof. 
Article  4.2(b)  also states that when factors other than increased imports are causing injury to the 
domestic industry at the same time, such injury shall not be attributed to increased imports. To  
ensure that injury caused by such factors is not attributed  to increased imports, investigating 
authorities conduct what is commonly referred to as the non -attribution analysis.  
 
249 Korea's  first written submission, paras.  356-357; United  States'  first written submission, 
paras.  275-276. 
250 USITC report, ( Exhibit  KOR-1), pp. 38-44. United  States'  first written submission, para.  275; 
Korea's  first written submission, paras.  352-356. 
251 USITC report, ( Exhibit  KOR-1), pp. 45-51. United  States'  first written submission, para.  276; 
Korea's  first written submission, paras.  357-361. 
252 Korea 's first written submission, paras.  455-461. 
253 In reviewing Korea's  claims with respect to causation, we examine whether the USITC acted 
inconsistently with Articles  3.1 and 4.2(b) of the  Agreement  on Safeguards . If we find a violation under these 
provisions, we will not separately address Korea's  claims under Articles  2.1 and 4.2( c) because Korea has not 
presented a separate factual basis for these claims. For the same reasons, if we find no violation under 
Articles  3.1 and 4.2(b), we will reject the claims under Articles  2.1 and 4.2( c). WT/DS546/ R 
 
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  7.139.   In reviewing Korea's  claims, we shall examine whether the USITC examined all pertinent 
facts and provided a reasoned and adequate explana tion of how those facts supported its 
determination. If we find that the USITC did not do so, we will find that the USITC acted 
inconsistently with Article  4.2(b). However, in making that determination we will not review the 
evidence  de novo, nor substitut e our judg ement for that of the USITC.  
7.140.   In section  7.6.1, we discuss the first stage of the USITC's  causation determination. In 
section  7.6.2, we discuss the second stage of the USITC's  causation determination.  
7.6.1   First stage  of the USITC 's causation  determination  
7.141.   Under the first stage, the USITC concluded that subject imports caused  serious injury to the 
domestic industry. In reaching this conclusion, the USITC conducted a coincidence in trends analysis, 
wherein it noted the correspondence between the increased volume of imports and the decreasing 
performance of the domestic industry .254 The USITC also conducted a price analysis and assessed 
the competitive relation between subject imports and domestically produced goods. Korea 
challenges the following aspects of the USITC's  determination under the first stage:  
a. the USITC's  finding on p rice effects, which Korea considers to be flawed and incomplete;  
b. the USITC's  findings on coincidence in trends between imports and injury factors, which, 
for the reasons set out below, we find are interlinked with the USITC's  price analysis; and  
c. the USITC' s failure to address certain conditions of competition in the domestic market, 
which per Korea negated the USITC's  finding on causation.  
7.142.   The United  States rejects Korea's  arguments in this regard.  
7.6.1.1   The USITC 's price  effects  analysis  
7.143.   In the underlying invest igation, the USITC made the following finding regarding the adverse 
price effects of subject imports255: 
We find that the significant  and growing  quantity  of low‐priced  imports  depressed  and 
suppressed  prices  for the domestic  like product . Given the moderate to high degree of 
substitutability between subject imports and the domestic like product, and the 
importance of price to purchasing decisions, the pervasively lower  prices on imported 
LRWs would have forced domestic producers to either r educe their own prices or lose 
retailer floor spots and sales.  Between the first and last quarters for which pricing data 
are available, the domestic industry 's prices declined *** percent on sales of product  1, 
*** percent in sales of product 2, *** perce nt on sales of product 3, *** percent on 
sales of product 4, *** percent on sales of product 5, and *** percent on sales of 
product 6.  Demand trends cannot explain these price declines because apparent U.S. 
consumption of LRWs increased throughout the peri od of investigation, by *** percent 
between 2012 and 2016 and another *** percent between the interim periods.  Nor can 
trends in the domestic industry 's production costs explain declining domestic like 
product prices.  The industry 's average unit COGS and i ts ratio of COGS to net sales 
generally increased during the period of investigation, placing the industry in a cost ‐
price squeeze.  Given  this, we find that the large and increasing  volume  of low‐priced  
imported  LRWs , at prices  that undercut  domestic  like product  prices  to a significant  
degree,  depressed  and suppressed  prices  for the domestic  like product  during  the period  
of investigation.  
Our finding that imported LRWs depressed and suppressed domestic like product prices 
is also supported by evidence that low‐priced  import  competition  forced Whirlpool to cut 
 
254 United  States'  first written submission, para. 275 (referring to USITC  report, ( Exhibit  KOR-1), 
pp. 38-39); Korea's  first written submission, para.  352. 
255 USITC report, ( Exhibit  KOR-1), pp. 42-43. (fns omitted;  emphasis  added ; redacted original ) WT/DS546/ R 
 
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  prices on *** sales to *** in 2014 and to retract announced price increases in 201 2 
and 2014, despite strong demand growth and rising costs.  
7.144.   The USITC relied on these findings to conclude as follows256: 
We find that imports are a substantial cause of serious injury to the domestic industry. 
The domestic industry 's operating and net losse s increased during the period of 
investigation as a direct consequence of the declining prices on sales of domestically 
produced LRWs. Between the first and last quarters for which data are available, the 
domestic industry 's average prices on sales of all six pricing products declined by 
between *** and *** percent, or a weighted -average of *** percent. These price 
declines, coupled with increasing costs, caused the domestic industry 's ratio of cost of 
goods sold ("COGS" ) to net sales to increase from *** p ercent in 2012 to *** percent 
in 2016, placing the industry in a cost price squeeze. Given strong demand growth, 
rising costs, and the competitiveness of the domestic industry 's LRWs, we find that the 
only explanation for the domestic industry 's declining prices and increasing COGS to net 
sales ratio is the significant increase in low  priced imports of LRWs during the period of 
investigation . 
… 
In sum, despite strong demand growth and the competitiveness of domestically 
produced LRWs, the domestic industry experienced increasing operating and net losses 
during the period of investigation as its sales prices declined while its costs generally 
increased.  The record shows that the domestic industry 's declining sales prices during 
the period of investigation res ulted from low ‐priced import competition, as increasing 
quantities of low ‐priced imports depressed and suppressed prices for the domestic like 
product.  We therefore conclude that imports were a substantial cause of serious injury 
to the domestic industry . 
7.145.   We note in this regard that the price data that the USITC used to make its finding on 
price suppression and depression were based on six product categories that covered various types 
of LRWs , but not agitator -based TL LRWs, which accounted for half of domestic sales but relatively 
few imports.257 The United  States confirms in this regard that the USITC did not ask 
domestic  producers to provide price data on agitator -based TL LRWs.258 In the section  of its report 
where the USITC exami ned the degree of substitutability between imports and domestically 
produced LRWs, the USITC acknowledged that agitator -based TL LRWs accounted for half of 
domestic shipments and few import shipments , but stated that differences in the product mix of 
impor ts did not attenuate import competition to a significant degree.259 In particular, the 
USITC  stated as follows260: 
We also find that imported LRWs competed with domestically produced LRWs in all 
segments of the U.S. market.  In making this finding, we recogni ze that FL LRWs 
accounted for a higher proportion of import shipments (*** percent in 2016 ) than 
domestic industry shipments (*** percent in 2016 ) and that agitator ‐based TL LRWs  
accounted for around half  of domestic industry shipments (*** percent in 2016 ) but 
few import shipments (*** percent in 2016). These differences in product mix did not 
attenuate import competition to a significant degree for several reasons.  First, imports 
of FL LRWs and impeller ‐based TL LRWs , which accounted for nearly all import s, 
competed directly with domestically produced FL LRWs  and impeller ‐based LRWs , 
respectively, which accounted for around half of domestic industry shipments in 2016. 
 
256 USITC report, ( Exhibit  KOR-1), pp. 38 and 44.  (redacted original)  
257 United  States'  response to Panel question No.  32, para.  49. We note that in the underlying 
investigation Korean respondents requested the USITC to collect model -specific price information, and , if the 
USITC were to reject that reques t, to make two changes in the product category definition. First, to revise the 
definition of two of the product categories that were defined on the basis of "impeller or infusor s" TL LRWs to 
"impeller" TL LRWs. Second, to collect price data for at least o ne TL LRW with agitator. (Korea 's second written 
submission, para. 256 (referring to  LG's comments on draft questionnaires  (12 June 2017), ( Exhibit  KOR-35), 
pp. 24-25)). 
258 United  States'  response to Panel question No.  76(e), para.  45. 
259 USITC report, ( Exhibit KOR-1), p. 32. 
260 USITC report, ( Exhibit  KOR-1), p. 32. (redacted original)  WT/DS546/ R 
 
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  Imports of FL LRWs also competed with domestically produced TL LRWs to the extent 
that consumers cross ‐shopped FL and TL LRW models,  and all responding purchasers 
reported that consumers are sometimes or frequently willing to switch between TL and 
FL LRWs based on relative pricing.  Finally, pricing product data show that imported 
LRWs competed at nearly all price points  in the U.S. market, including those of 
domestically produced agitator ‐based TL LRWs . 
7.146.   Korea challenges under Article  4.2(b ) the USITC 's price effects findings on which the 
USITC  based its causation determination. In this regard, Korea makes arguments challenging the 
USITC 's findings regarding the  increase in costs incurred by the domestic industry , as well as the  
adverse effect of subject impo rts on domestic prices. In addressing these arguments, we  note that 
the Agreement  on Safeguards does not specifically require a price analysis. However, where, as in 
the case of the underlying investigation, the investigating authority 's finding on causati on is based 
on a finding of adverse price effects, we must examine , as part of our review of the causation 
determination,  whether the investigating authority examined all pertinent facts, and provided a 
reasoned and adequate explanation as to how those fac ts supported its finding of 
adverse  price effects.  
7.6.1.1.1   The USITC 's findings  regarding  the costs  incurred  by the domestic  industry  
7.147.   In the underlying investigation, as we noted above, the USITC found that the 
domestic  industry's  average cost of goods sold (COGS)  and its ratio of COGS to net sales generally 
increased during the POI, placing the industry in a cost -price squeeze.261 Regarding average COGS, 
the USITC  noted that the average COGS increased between 2012 -2013 and 2013 -2014 before 
declining in 2015  and 2016 to a level certain percentage higher than in 2012.262 The USITC noted 
that this average COGS was higher in interim 2017 than in interim 2016.263 The USITC found that 
the ratio of COGS to net sales increased steadily from 2012 -2013, 2013 -2014, 2015 -2016, and again 
from interim 2016 to interim 2017.264 
7.148.   Korea contends that the USITC's  findings that "costs generally increased", and that the ratio 
of COGS to net sales was increasing over the POI, were either not supported by, or actually 
contradicted by, th e record.265 In particular, Korea states that rising costs of the domestic industry 
and the alleged cost -price squeeze was not supported by the facts on the record.266 In support of its 
statement, Korea notes the following:  
a. costs were actually declining in 2 015 and 2016267; 
b. average unit COGS  declined in 2014 -2015 and 2015 -2016268; and  
c. the domestic industry's  raw material costs were at their lowest at the end of the POI, 
and there was no overall substantial change in the cost share of essential inputs during 
the examined period.269 
7.149.   In response, the United  States clarified that the COGS -to-net-sales ratio was increasing in 
every year of the 2012 -2016 period as well as in interim 2017 (compared to interim 2016).270 The 
United  States acknowledged that costs were decre asing in 2015 and 2016, but noted that the 
USITC  found that the average unit COGS remained higher in 2016 than in 2012, and increased in 
most of the periods examined by the USITC.271 The United  States also explained that the fact that 
raw material costs did not increase as a share of total COGS does not contradict the USITC's  finding 
that raw material costs increased on a per unit basis.272 Instead, per the United  States, it only shows  
 
261 USITC report, (Exhibit  KOR-1), p.  43. 
262 USITC report, (Exhibit  KOR-1), fn  264. 
263 USITC report, (Exhibit  KOR-1), fn  264. 
264 USITC report, (Exhibit  KOR-1), fn  264. 
265 Korea's  first written submission, paras.  377-378; response to Panel question No.  31, para.  182. 
266 Korea's  first written submission, para.  378. 
267 Korea's  first written submission, para.  378. 
268 Korea's  first written submission, para.  378. 
269 Korea's  first wr itten submission, para.  378. 
270 United  States'  first written submission, para.  290. 
271 United  States'  first written submission, para.  288. 
272 United  States'  first written submission, para.  289. WT/DS546/ R 
 
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  that the increase in raw material costs coincided with an increase in other costs making up the 
total COGS.273 
7.150.   We note that the degree of cost -price squeeze (or the ratio of COGS to net sales)  may 
increase even in scenarios (a)  where the cost goes down, su ch as when the decrease in costs is 
accompanied by a more significant decrease in price ; or (b)  where the price goes up, such as where 
the increase in price is accompanied by a more significant increase in cost s. Thus, a decline in cost s 
does not necessarily exclude the possibility of a cost -price squeeze. Moreover, the cost of raw 
materials as a percentage of overall costs of goods sold may remain constant even when the costs 
of raw materials increase, such as when the raw material costs  increase, but increase as much as, 
or less than, increase in other elements that make up the overall COGS.  
7.151.   Therefore, to clarify Korea's  position on this matter , we asked Korea whether it disputed the 
USITC's  finding that the domestic industry's  ratio of COGS to net sales was increasing over the POI 
(Panel question No. 31). In its response, Korea repeated its arguments on why a finding of cost -price 
squeeze was contradicted by (a)  decline in costs and COGS in 2015 and 2016 , and (b)  cost of raw 
materials an d essential inputs at the end of the POI.274 Korea did not engage with the 
United  States'  arguments on why these other findings did not contradict a finding on cost -price 
squeeze. Therefore, taking into account the explanations provided by the United  States  set out in 
paragraph  7.149  above and the arguments made by Korea, we reject  Korea 's argument  that the 
USITC's  finding that the domestic industry's  ratio of COGS to n et sales increased over the POI was 
not supported by the record evidence.  
7.6.1.1.2   The USITC's  finding  regarding  the depressive  and suppressive  effects  of 
imports  on prices  of domestically  produced  goods  
7.152.   Korea 's arguments challenging the USITC 's finding regarding t he depressive and 
suppressive effect of subject  imports  on domestic like product prices raise issues regarding the 
six product categories that the USITC used to compare the prices of subject imports and the 
domestic like product, as well as the asserted exclusion of agitator -based TL LRWs from the 
USITC 's price analysis.  
Issues  raised  by Korea  regarding  the six product  categories  
 
7.153.   Korea raises the following issues regarding the six product categories used by the USITC275: 
a. The six product categories  included multiple models with different price ranges.  
b. The price data were unrepresentative because they were adopted from an earlier 
anti-dump ing investigation on LRWs from China  and not updated : 
i. Many large -capacity  options were not included in the LRW price data.  
ii. Product category  1 covered models that were no longer being sold by the 
domestic industry during the end of the POI, and neither were  they among 
LG's top-volume FL LRWs.  
c. The USITC  did not provide information on how it made its price comparisons, including 
whether it made adjustments for any differences between products in the same product 
category.  
7.154.   With regard to the six product categor ies adopted by the USITC , which according to Korea 
includ ed multiple models with a range of features and consequent wide variations in price in any 
specific quarter, Korea submits that the price data was too broad and that the USITC should have 
required pr ice data for each model within each product category.276 The United  States submits that 
by obtaining sales prices on six strictly defined pricing products, the USITC ensured that it compared 
 
273 United  States'  first written submission, para.  289. 
274 Korea's  response to Panel question No.  31, paras.  180-182; second written submission, 
paras.  240-241. 
275 Korea's  first written submission, paras.  399-404. 
276 Korea's  first written submission, para.  399. WT/DS546/ R 
 
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  prices of domestic and imported LRWs possessing similar capacities  and the same configuration, 
lid material , and colour.277 
7.155.   We note that the USITC specifically considered and rejected the 
Korean  respondents'  argument on this point as follows278: 
We are unpersuaded by respondents'  argument that the pricing product definitions are 
overbroad because each definition encompasses many different models with different 
features at different points in their life cycles, resulting in pricing data that is all egedly 
unrepresentative of the model -specific prices considered by purchasers. … In defining  
pricing products, the Commission must strike a balance between product definitions 
that are narrow enough to permit apples -to-apples comparisons of directly competitive 
products but broad enough to  yield reasonable coverage of domestic producer and 
import er shipments. Even if the factors cited by respondents served to reduce somewhat 
the similarity of the domestically produced and subject imported LRWs on which pricing 
data were reported, they also increased pricing product coverage without reducing the 
similarity of the compared LRWs to an unacceptable  level.  
7.156.   Korea recalls the  arguments made by the Korean respondents in the USITC 's investigation 
regarding the use of broad comparison baskets (reflected in the six product categories). However, 
Korea does not  adequately engage with the reasons that the USITC gave for rejecting those 
arguments. In particular, Korea does not show (as it would be expected to as the complainant)  why 
the USITC's  reasoning set out above was flawed. Because Korea fails to do so, it h as failed to 
establish a basis for this aspect of its claim.279 
7.157.   With regard to the representativeness of the product categories, Korea contends that these 
product categories were adopted from an earlier anti -dumping investigation on LRWs  from China , 
and not  updated to reflect the scope of products in the marketplace for the safeguard investigation. 
Korea contends in particular that (a)  product category 1 comprises a type of FL LRWs that was no 
longer offered by Whirlpool or GE, and were not among LG's  top vo lume FL LRWs; and (b)  many 
popular large -capacity options were not included in the price data.280 The United  States submits that 
the USITC collected sufficient price data from domestic producers and importers in nine quarters of 
the POI, and that these data  showed subject imports underselling domestic goods in seven of the 
nine comparisons.281 Regarding LRWs with large -capacity options, the United  States submits that 
the USITC addressed in footnote 255 of its report the respondents'  argument that many 
large-capacity options were not included in the LRW price data.282 The United  States also notes in 
this regard that the appropriate time for the respondents to propose product categories based on 
large capacities would have been in their comments on draft question naires.283 However, the 
United  States notes that the respondents did not do so.284 
7.158.   To the extent Korea submits that models covered in product category 1 were no longer being 
sold by domestic industry by the end of the POI, Korea does not demonstrate how that  distorted the 
USITC's  price effects finding. We note that while the United  States does not dispute that price data 
was not necessarily collected for models covered in this product category for the last quarter of the 
POI, the United  States submits (and Ko rea does not dispute ) that the USITC collected sufficient 
 
277 United  States'  first written submission, para.  304. 
278 USITC re port, (Exhibit  KOR-1), fn  255. 
279 In addition, in the absence of any specific rules in the  Agreement on Safeguards determining how an 
investigating authority should make price comparisons, investigating authorities have a certain degree of 
discretion in det ermining how they make such price comparisons, provided such comparisons provide a 
sufficient factual basis to make objective findings. Nothing in the  Agreement on Safeguards prohibits an 
investigating authority from making price comparisons based on produ ct categories that group products based 
on characteristics such as capacity or configuration, or requires price comparisons on a more granular, 
model -specific basis. While an investigating authority is free to make price comparisons on such a 
model -specifi c basis, absent any showing that the methodology that the USITC chose (i.e.  the adoption of the 
six product categories)  did not allow the USITC to make a proper determination of price effects with respect to 
the products covered by those product categories , Korea has not established that the USITC acted 
inconsistently with Article  4.2(b)  or any other provision of the  Agreement on Safeguards.  
280 Korea's  first written submission, para.  400. 
281 United  States'  response to Panel question No.  37(a), para.  68. 
282 United States'  response to Panel question No.  37(b), para.  69. 
283 United  States'  response to Panel question No.  37(b), paras.  70-71. 
284 United  States'  response to Panel question No.  37(b), paras.  70-71. WT/DS546/ R 
 
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  price data for this category, which allowed it to make price comparisons in nine quarters of the 
POI.285 Having defined the PUC and the domestic like product to include models of LRWs covered in 
product category 1, in our view the USITC was entitled to make its price comparisons based on the 
price data available for this product category.286 
7.159.   With regard to popular large -capacity options allegedly not being included in the price data, 
Korea has not expl ained how the non -inclusion of such large -capacity options distorted the 
price effects finding, or otherwise made the price data before the USITC unrepresentative. In this 
regard, we also note the United  States'  submission that the Korean respondents did n ot propose any 
additional product category to the USITC that corresponded to models with larger capacity options. 
The record from the underlying investigation supports the United  States'  explanation. In particular, 
the record shows that LG (supported by Sa msung)  strongly recommended that the USITC collect 
data on a model -specific basis, and submitted that if the USITC were to reject that recommendation 
it should make two changes to the pricing product definition (with none of the two changes relating 
to lar ger capacity options).287 To the extent that Korea's  arguments here challenge the alleged 
failure to consider models with larger capacity (as opposed to challenging the USITC's  decision to 
not make model -specific comparisons), we consider that the Korean re spondents'  failure during the 
USITC 's investigation to propose a pricing category with larger capacity further undermines 
Korea's  arguments in this dispute . 
7.160.   Finally, we turn to  Korea's  argument that the USITC did not provide information on how it 
made its price comparisons, including whether it made any adjustments for any differences between 
products in the same pricing product category.288 In this regard , we note that the USITC  explained 
in the underlying investigation that it made its comparisons across six pricing product categories. 
We are not persuaded that this explanation was not reasoned and adequate in light of the record 
evidence. We note that Korea  states that the evid ence on the USITC's  record included "extensive 
and reliable information" demonstrating that sales prices of imported washers were not frequently 
or consistently lower than the sales prices of US  produced washers.289 But in making this statement, 
Korea does not cite any evidence on the USITC's  record. Instead, Korea gives an "example" of the 
pricing analysis in the Ashenfelter report that Korean respondents filed before the USITC, which per 
Korea demonstrated the inadequacy of relying on the six pricing produ ct categories for price trends 
or comparisons.290 In particular, in its submission, Korea cites pages  87-91 of Exhibit  KOR-11, which 
refer to the Ashenfelter report, but does not explain what exactly in those pages supports its 
argument.291 We note that as a  complainant it is incumbent on Korea to show how relevant parts of 
the record of the USITC 's investigation support its arguments. It is not our task to review any given 
exhibit,  identify what could be potentially relevant to the complainant's  claim, and t hen make the 
case for the complainant by assessing whether the potentially relevant parts in the exhibit  support 
its claim. We therefore reject Korea's  arguments in this regard.  
Representative ness of the USITC 's price analysis  – treatment  of agitator -based  TL LRWs  
 
7.161.   Korea contends that the USITC 's price analysis was not representative of the price effects of 
imports in the US market as a whole. Korea asserts that due to the exclusion from the 
price comparison analysis of agitator -based TL LRWs which, in addition to constituting half of 
domestic sales, were sold at lower price points  than other models , the USITC 's price analysis did not 
reflect the actual picture of the US LRWs market.292 Korea asserts that having found agitator -based 
TL LRWs to be like pro ducts, which competed with imported LRWs, the USITC erred in excluding 
such type of TL LRWs from the price analysis.293 Therefore, per Korea, because the USITC excluded 
agitator -based TL LRWs from its price comparison analysis, its findings regarding the de pressive and 
 
285 United  States'  response to Panel question No.  37(a), par a. 68. 
286 Indeed, the alternative would have been to simply ignore any imports or domestic sales of this 
product type and forego collection of price data with respect to this product category.  
287 LG's comments on draft questionnaires (12  June 2017), (Exhibit  KOR-35), pp.  19 and 24.  
288 Korea's  first written submission, paras.  402-403.  
289 Korea's  first written submission, para.  403. 
290 Korea's  first written submission, para.  403. 
291 Korea's  first written submission, para.  403. See also Korea's  second written submi ssion, para.  245. 
292 Korea 's first written submission, para. 396; response to Panel question No. 77, para. 85. 
293 Korea's  response to Panel question No.  33, para.  184; second written submission, para.  238. WT/DS546/ R 
 
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  suppressive effect of subject imports on domestic like product prices were not reasoned or 
adequate.294 
7.162.   The United  States contends that the USITC based its analysis regarding the effects of subject 
imports on representative price data.295 In par ticular, the United  States  contends that the 
non-inclusion of agitator -based TL LRWs did not render the USITC 's price data unrepresentative 
given that half of domestic shipments and nearly all of subject imports comprised LRWs other than 
agitator -based TL LRWs.296 The United  States  also asserts that as part of its findings on price effects, 
the USITC reasonably concluded, relying on a wide array of objective evidence , that subject imports 
competed with domestically produced agitator -based TL LRWs , and that they adversely affected th e 
sales of agitator -based TL LRWs .297 
7.163.   The question before us is whether the USITC provided a reasoned and adequate explanation 
in support of its finding that subject imports depressed and suppressed prices of the domestic like 
product as a whole (including agitator -based TL LRWs).  
7.164.   We note that it remains undisputed that half of all sales made by the domestic industry were 
those of agitator -based TL LRWs , while the price analysis based on the six product categories covered 
other types of LRWs . Given that the agitator -based models accounted for one -half of domestic 
shipments and virtually no imports, we consider that the USITC was required to analyse the 
price effects of imports on this part of the US market and the domestic like product. In this regard, 
we note the United  States'  submission that imported LRWs were sold at nearly all price points in the 
US market "including the lower price points covering most agitator -based TL LRWs", meaning  that 
agitator -based TL LRWs competed in the "lower -priced" segment of the market.298 Given t he fact 
that agitator -based TL LRWs accounted for half of domestic sales but virtually no imports, and that 
the domestic models of this type competed at the lower end of the price spectrum for LRWs in the 
US market, we consi der the other evidence that the USITC relied on to support its findings of adverse 
price effects with respect to domestically produced agitator -based TL LRWs. In this regard, we 
consider (a ) what constituted the "wide array of evidence" on which the USITC based its conclusion, 
as part of its price effects analysis, that subject imports competed with domestically produced 
agitator -based TL LRWs ; and (b ) what was the nature of the analysis conducted by the USITC of the 
effects of such competition on the domes tic industry. Answers to these questions will be informative 
as to the representativeness of the USITC 's price analysis concerning the depressive and suppressive 
effect of imported LRWs on the domestic industry as a whole , including  agitator -based TL LRWs.  
7.165.   With respect to the "wide array" of evidence that, per the United  States , the USITC relied 
on to conclude that subject imports competed with domestically produced agitator -based TL LRWs , 
and adversely affected the sales of agitator -based TL LRWs, we do no t find in the USITC report, for 
the reasons set out below, a reasoned and adequate explanation of how such evidence supported 
the USITC 's finding that subject imports depressed and the suppressed the prices of agitator -based 
TL LRWs.  
7.166.   We note that the "wide  array of evidence" the United  States  refers to are evidence contained 
in footnotes  201 and 202 of the USITC report. The USITC cited this evidence to support its findings, 
set out in paragraph  7.145  above, that "[i]mports of FL LRWs [] competed with domestically 
produced TL LRWs to the extent that consumers cross ‐shopped FL and TL LRW models, and all 
responding purchasers reported that consumers are sometimes or frequ ently willing to switch 
between TL and FL LRWs based on relative pricing", and that "pricing product data show that 
imported LRWs competed at nearly all price points in the U.S. market, including those of domestically 
produced agitator ‐based TL LRWs". However, we do not see an adequate explanation in the 
USITC  report as to how such findings or evidence could have supported the USITC 's finding 
regarding the depressive and suppressive effect of subject imports on prices of agitator -based 
 
294 See e.g. Korea 's first written submission, paras.  376, 381, and 394 -396; response to Panel question 
No. 77, para. 85. 
295 United  States'  second written submission,  para. 100. 
296 United  States'  first written submission, para. 301. 
297 United  States'  second written submission, paras.  102-104 (referring to USITC report, 
(Exhibit  KOR-1), p.  32 and fns  201-202).  
298 United  States'  first written submission, para. 81. WT/DS546/ R 
 
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  TL LRWs.299 Indeed,  we specifically asked the United  States  whether the USITC 's findings regarding 
the depression and suppression of domestic like product prices included agitator -based TL LRWs 
(and if so, to point us to the evidence on the USITC 's record that showed  that low -priced imports 
depressed and suppressed prices of domestically produced agitator -based TL LRWs). The 
United  States  said "no".300 
7.167.   In addition, to the extent the types of evidence set out in these footnotes refer to the 
price data that the  USITC col lected in the anti -dumping investigation on LRWs from China , we do 
not consider that this price data provided the USITC with a proper basis in the context of the 
safeguard investigation to find t hat imported LRWs suppressed or depressed the prices of  
agitator-based TL  LRWs.301 First, the POI in LRWs from China  ended several months before the end 
of the POI in the underlying safeguard investigation. Second, while LRWs from China  was focused 
on injury caused by imports from one source, this was not the case in  the underlying safeguard 
investigation. Data fro m LRWs from China  thus would not have been informative  on the potential 
price effects of the much broader category of imports covered by the underlying safeguard 
investigation. Nor do we find other evidence cited in these footnotes that could have supported the 
USITC 's finding regarding the depressive and suppressive effect of subject imports on agitator -based 
TL LRWs.302 
 
299 For ins tance, in finding that subject imports depressed and suppressed prices of domestic like 
products, the USITC stated that "given the moderate to high degree of substitutability between subject imports 
and the domestic like product, and the importance of pric e to purchasing decisions, the pervasively lower 
prices on imported LRWs would have forced domestic producers to either reduce their own prices or lose 
retailer floor spots and sales". (USITC report, (Exhibit  KOR-1), pp.  42-43). To the extent the USITC's  finding of 
price depression and suppression was based on pervasively lower prices of subject imports, we note that the 
price data that showed "imported LRWs were priced lower than domestically produced LRWs in most quarterly 
comparisons" did not include agi tator-based TL LRWs, and thus, the USITC could not have concluded based on 
that evidence that prices of subject imports were pervasively lower than agitator -based TL LRWs. 
(USITC  report, (Exhibit  KOR-1), p.  42; United  States'  comments on Korea's  response t o Panel question 
No. 76(a), para.  25). In addition, while the USITC stated that its finding regarding the depressive and 
suppressive effect of subject imports was "also supported " by evidence that low -priced  import competition 
forced Whirlpool to cut price s, we do not see from the USITC report how this finding pertained to 
agitator -based TL LRWs. In particular, we recall, as set out above, that when we specifically asked the 
United  States  whether the USITC 's findings regarding the depression and suppression  of domestic like product 
prices included agitator -based TL LRWs , the United  States said no. ( United  States'  response to Panel question 
No. 35(a), para. 59). 
300 United  States'  response to Panel question No. 35(a), para. 59. 
301 United  States'  responses to Panel question No.  76(b), para.  32; and No.  34(a), paras.  51-56. In 
particular, the United  States notes that in LRWs from China, the USITC found that subject imports of pricing 
product 9, an impeller -based TL LRW, undersold dom estically produced agitator -based top load LRWs with a 
capacity of 3.6 cubic feet even though the subject imported model was more fully featured and should have 
therefore commanded a higher price , that the USITC relied on a confidential exhibit that the pe titioner provided 
to it (and that has not been provided to us in these panel proceedings) that the petitioner described as based 
on proprietary information collected in LRWs from China and the safeguard investigation. 
(United  States'  response to Panel ques tion No.  76(b), paras.  33-34 (referring to USITC report, (Exhibit  KOR-1), 
p. 32 and fn  202; and USITC hearing transcripts, (Exhibit  USA-12), p.  142)).  
302 In particular, the United  States submits that the USITC supported its finding  that subject imports 
comp eted at nearly all price points with "some evidence that that lower prices on more fully featured subject 
imports adversely affected the sales volumes and prices of less fully featured domestically produced LRWs" 
including agitator -based TL LRWs. (United  States'  response to Panel question No.  34(a), para.  55 (referring to 
USITC report, (Exhibit  KOR-1), fn  202)). The evidence appears to refer to responses from purchaser surveys 
that price reduction on imported highly featured -TL impeller LRWs, or FL LRWs aff ected the price of 
US-produced TL LRWs always, usually, or sometimes. (United  States'  response to Panel question No.  34(a), 
para. 55 and fns  93-94 (referring to USITC report, (Exhibit  KOR-1), pp.  32-33, fn  202, and p.  V-14-15)). 
However, while we would agr ee as a general matter that lower prices on more fully featured subject imports 
could shift sales away from less full featured domestically produced agitator -based TL LRWs absent price cuts 
on the less fully featured model, the USITC report does not point to any specific data or analysis to support this 
proposition. Indeed, we note that the USITC did not ask domestic producers to provide price data on 
agitator -based TL LRWs.  In addition, while the United  States  initially submitted that the USITC compared th e 
average unit values (AUVs ) of domestic industry shipments for different types of LRWs, including 
agitator -based TL LRWs, to importer sales prices based on the six product categories, the USITC declined to 
provide us the results of any such price comparis ons. ( United  States'  response to Panel question No. 76(c), 
para. 37). Instead, the United  States  later clarified that the USITC had not used the AUV data to make price 
comparisons, or to conduct a full -fledged price effects analysis. ( United  States'  commen ts on Korea 's response 
to Panel question No. 76(a), para. 25). WT/DS546/ R 
 
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  7.168.   Based on the foregoing, we do not see from the USITC report sufficient evidence and 
explanation supporting its conclusion that subject imports depressed and suppressed the prices of 
the domestic like product as a whole, including agitator -based TL LRWs.303 We thus do not consider 
that the USITC provided a reasoned and adequate basis fo r finding that subject imports depressed 
and suppressed prices of the domestic like product as a whole, specifically in relation to 
agitator -based TL LRWs.304 
7.6.1.2   The USITC 's analysis  on coincidence  in trends  
7.169.   We recall that, as part of its coincidence in trends  analysis, the USITC noted the 
correspondence between increased volume of imports and the decreasing performance of the 
domestic industry (as reflected in the injury factors, including those set out in Article  4.2(a ) of 
the Agreement  on Safeguards).  
7.170.   Korea asserts that the domestic industry showed negative trends only with respect to "profit 
and loss" (suffering operating losses), and that the USITC failed to provide a reasoned and adequate 
explanation supporting its causation determination in light of posit ive developments with respect to 
many of the injury factors set out in Article  4.2(a).305 The United  States submits that negative 
developments in any one, or any combination, of the relevant factors set out in Article  4.2(a ) 
may establish causation between increased imports and serious injury under the  Agreement  on 
Safeguards.306 Noting the importance of profitability as an indicator of the domestic industry's  overall 
situation, the United  States contends that a focus on prices and profitability does not by i tself 
establish an inconsistency with Article  4.2(a ) of the  Agreement  on Safeguards.307 The United  States 
also denies that the USITC ignored alleged positive trends, in particular relating to market share.308 
With respect to market share, the United  States n otes that the USITC found that the 
domestic  industry defended its market share by reducing prices to compete with significant and 
increased volumes of low -priced imports.309 Therefore, per the United  States, the relative stability 
of the domestic industry's  market share did not detract from the coincidence of increased imports 
and the declining financial performance of the domestic industry.310 In addition, the United  States 
submits that the USITC explained why other factors showing neutral or positive trends did not detract 
from its causal link analysis and that Korea does not explain why in its view the USITC failed to 
address those trends.311 
7.171.   We find the USITC's  finding on co incidence in trends to be directly linked to its findings on 
price effects. In this regard, we note that the USITC found coincidence in trends between increased 
 
303 See, e.g.  Panel Report, China  – GOES  (Article  21.5 – US), para.  7.111. In the context of reviewing 
the investigating authority 's price effects finding under Article  3.2 of the Anti -Dumping  Agreement and 
Article  15.2 of the SCM  Agreement, the panel expressed the view that if subject imports and domestically 
produced goods did not compete, it was unlikely that subject imports would suppress or depress domestic 
prices. However, the pane l considered that it did not necessarily follow that just because subject imports and 
domestic products did compete on price, increases in subject import volume would necessarily have a 
suppressive or depressive effect on the prices of the domestic product . Instead, according to this panel, it 
would be incumbent on an investigating authority to show how its factual findings concerning price competition 
supported its conclusions regarding the suppressive or depressive effect of subject imports on the prices of the 
domestic like product.  
304 In reaching this conclusion, we note Korea 's argument that having found agitator -based TL LRWs to 
be like products, which competed with imported LRWs, the USITC erred in excluding such type of TL LRWs 
from the price analysis . (Korea's  second written submission, para.  238). We also note in this regard that while 
the United  States  argues that price data should be collected on product definitions that are narrow enough to 
permit apples -to-apples price comparisons, it also recogn izes that in some cases it may be possible for an 
investigating authority to make representative price comparisons involving a product type that is produced 
domestically to the sales price of the imported product that competes most directly with the domest ic product, 
despite physical differences that would prevent them from satisfying the same product definition. 
(United  States'  response to Panel question No. 35 (c), para. 62). In our view, to the extent an investigating 
authority finds prices of an importe d product to be lower than the price of a domestically produced good, the 
authority must support such a finding with evidence showing that this is indeed the case, even if there are 
physical dissimilarities between them.  
305 Korea's  first written submission,  paras.  365-366. 
306 United  States'  first written submission, para.  281. 
307 United  States'  first written submission, para.  281. 
308 United  States'  first written submission, para.  282. 
309 United  States'  first written submission, para.  282. 
310 United  States'  first written submission, para.  282. 
311 United  States'  first written submission, paras.  283-284. WT/DS546/ R 
 
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  imports and losses suffered by the domestic industry. The USITC's  finding on profit and loss, i n turn, 
was linked to its price effects finding, wherein the USITC found that significant and growing quantity 
of low -priced imports depressed and suppressed prices of the domestic like product.312 In particular, 
with respect to losses suffered by the domes tic industry, the USITC noted that (a) the 
domestic  industry's  operating and net losses increased during the POI as a direct consequence of 
the declining prices on sales of domestically produced LRWs; and (b)  the domestic industry defended 
its market share , in part, by reducing its sales prices in response to competition from the increasing 
volume of low -priced imports of LRWs.313 With respect to the USITC's  explanations concerning 
market share, we again note that the explanation relies on the USITC's  conclusion that the 
domestic  industry defended its market share by reducing prices to compete with significant and 
increased volumes  of low -priced imports.  
7.172.   We have already found that the USITC acted inconsistently with Article  4.2(b ) in relation to 
its finding regarding the depressive and suppressive effect of low -priced imports on prices of the 
domestic industry. The WTO -inconsistency  of the price effects analysis vitiates the basis for the 
USITC's  finding on coincidence in trends.  
7.173.   Based on the foregoing, we find that the USITC did not make its finding on coincidence in 
trends in a manner consistent with Article  4.2(b ) of the  Agreement  on Safeguards.  
7.6.1.3   The USITC 's analysis  of non-price  related  aspects  of competition  
7.174.   Korea makes arguments challenging (a)  the differences in the product mix between imported 
and domestic LRWs in the underlying investigation, and (b ) the USITC's  analysis of th e conditions 
of competition between domestic and imported LRW parts.  
7.6.1.3.1   Differences  in the product  mix between  imported  and domestic  LRWs  
7.175.   On product mix, Korea contends that the USITC failed to acknowledge that there were 
differences in the product mix between imported and domestic LRWs during the POI .314 Korea states 
that domestic sales were comprised largely of agitator -based TL LRWs,  for which demand was 
declining,  whereas import ed LRWs comprised more distinctive and innovative FL and impeller -based 
TL LRWs , for which demand was rising .315 Per Korea, given the significance of these agitator -based 
TL LRWs in domestic sales, and their obvious decline in terms of demand during the POI, the USITC 
should have  examine d the impact that the difference in product  mix would have on the 
domestic  industry 's profitability , which it failed to do .316 The United  States  responds that  (a) the 
USITC thorough ly expla ined that differences in product mix did not attenuate import competition to 
a significant degree; and (b) the USITC provided a thorough explanation for rejecting the 
respondents ' argument that US LRW brands suffered in the eyes of consumers due to 
domestic  producers ' reliance on sales of agitator -based TL LRWs.317 
7.176.   We note in this regard that Korea 's arguments on the differences in product mix between 
imported and domestic LRWs  focus on how competition was affected by the domestic industry rel ying 
on sales of  what Korea considers to be under -performing agitator -based  TL LRWs , whereas imported 
LRWs included  other types of washers with distinctive and  innovative features. Korea makes 
essentially the same points when presenting its arguments on the second stage of the 
USITC's  causation determination with regard to the al leged deterioration of US  brands . Thus, we 
address the issues raised by Korea when reviewing the  parties ' submissions in respect of that second 
stage of the USITC's  causation determination . In this section, we focus on Korea's  arguments 
regarding competiti on between imported and domestically produced parts of LRWs.  
7.6.1.3.2   Competition  between  imported  and domestic  parts  
7.177.   In the underlying investigation, the USITC did not make any specific finding that imported 
parts of LRWs caused injury to the domestic industry pro ducing parts of LRWs. Instead, per the 
 
312 USITC report, (Exhibit  KOR-1), pp.  42-44. 
313 USITC report, (Exhibit  KOR-1), pp.  38 and 40.  
314 Korea's  first written submission, para.  412. 
315 Korea's  first written sub mission, paras.  413-414. 
316 Korea's  first written submission, para.  413. 
317 United  States'  first written submission, paras.  308-309. WT/DS546/ R 
 
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  United  States, the USITC made its causation findings with respect to LRWs and LRW parts in the 
aggregate.318 
7.178.   Korea contends that the USITC failed to demonstrate that the conditions of competition were 
such that increas ed imports of parts caused serious injury, considering that the USITC's  causal link 
analysis focused on the substitutability between imported and domestic LRWs, and it  omitted any 
analysis in respect of the fact that imported LRW parts did not compete with  domestic LRW parts.319 
The United  States submits that the USITC was required to consider the impact of increased imports 
of LRWs on producers as a whole of the like product, including parts, and not the impact of imported 
parts on producers of domestic par ts.320 The United  States takes the view that it would not have 
made any sense for the USITC to consider the impact of imports of covered parts on 
domestic  producers of covered parts in light of the USITC's  recognition that imports of covered parts 
did not c ompete with domestically produced covered parts.321 Thus, per the United  States, in 
establishing a causal link between subject imports and the domestic industry's  serious injury, the 
USITC focused its analysis on the locus of competition between subject imp orts and the 
domestic  industry, which was the US  market for LRWs.322 
7.179.   We note that the USITC found domestically produced parts to be "like" imported parts.323 
We have already concluded in paragraphs  7.67 above that the USITC acted inconsistently with 
Article  4.1(c) in finding domestically produced parts to be "like" imported parts. Considering we have 
upheld Korea's  claim under Article  4.1(c)  that the USITC acted inconsistently with this provision by 
finding domestic parts to be like imported parts notwithstanding its finding that they did not 
compete, we do not need to separately address Korea's  claim challenging the USITC's  alleged failure 
to conduct a causation determination in relation to such parts.  
7.180.   Based on the foregoing, we do not separately address this aspect of Korea's  claim under 
Article  4.2(b).  
7.6.1.4   Conclusion  regarding  the first stage  of the USITC 's causation  determinatio n 
7.181.   In light of the above, we find that the USITC acted inconsistently with Articles  4.2(b ) and 3.1 
of the Agreement on Safeguards because it ( a) did not provide a reasoned and adequate explanation 
in support of its finding that subject imports depressed and s uppressed prices of the domestic like 
product as a whole; and ( b) did not make a finding on coincidence in trends in a manner consistent 
with Article  4.2(b). We do not find it necessary to separately address whether the USITC also acted 
inconsistently with  Articles  2.1 and 4.2(c ) for these same reasons.  
7.182.   We also do not find it necessary to address Korea 's claims under Article  4.2(b), as well as 
Articles  2.1, 3.1, and  4.2(c) of the  Agreement on Safeguards regarding the USITC 's analysis of 
non-price related as pects of competition.  
7.6.2   Second  stage  of the USITC's  causation  determination  
7.183.   Having found a causal link between subject imports and the serious injury to the 
domestic  industry under the first stage of its causation determination, the USITC examined under 
the second stage whether factors other than subject imports explained the serious injury to the 
domestic industry. The respondents argued before the USITC that (a ) joint pricing of dryers and 
washers by the domestic industry; and (b ) deterioration of US brands were other factors causing 
injury to the domestic industry. In addressing the respondents'  argument, the USITC applied what 
the parties refer as the substantial cause test under US law. 
7.184.   The substantial cause test, set out in  US law 19 USC S 225 2(b)(1) (A) and (B ), 
(Exhibit  KOR-24), provides that , when certain conditions set out in US  law are met, the USITC is 
 
318 United  States'  response to Panel question No.  38, para.  72. 
319 Korea's  first written submission, para.  409. 
320 United  States'  first written submission, para.  307. 
321 United  States'  first written submission, para.  307. 
322 United  States'  first written submission, para.  307. 
323 USITC report, (Exhibit KOR -1), p.  17. The United  States confirms that the USITC's  finding was based 
on likeness between imported parts and domestic parts.  (United  States'  first written submission, para s. 149 
and 178).  WT/DS546/ R 
 
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  required  to conduct  an investigation to determine whether an article is being imported into the 
United  States  in such increased quantities as to b e a substantial  cause  of serious  injury , or the threat 
thereof, to the domestic industry producing an article like or directly competitive with the imported 
article  (19 USC S 225 2(b)(1)(A) ). Substantial cause, in turn, is de fined by 19 USC S 225 2(b)(1)(B ) 
as a cause which  is important  and not less than any other  cause . In the underlying investigation, 
applying these provisions of US law, the USITC found that neither (a ) the domestic industry's  joint 
pricing  of LRWs and dryers , nor (b ) the deterioration of US brands  was an  important cause of injury 
to the domestic industry . 
7.185.   Korea challenges the USITC's  application of the substantial cause test in the 
underlying  investigation, arguing that the substantial cause test is flawed and inadequate i n terms 
of ensuring that the injurious effect of all known factors is properly separated and distinguished from 
the injurious effects of subject imports.324 In addition, Korea challenges the USITC's  rejection of the 
respondents'  arguments concerning the inj urious effect of (a ) joint pricing of dryers and washers 
and (b ) deterioration of US brands. In doing so, Korea contends that (i ) considering the 
USITC  explained that these two factors were not "important causes of injury to the 
domestic  industry", the USI TC acknowledged that these factors were responsible for some injury to 
the domestic industry and thus should have separated and distinguished the injurious effect of these 
factors, which it did not; and (ii ) in any case, to the extent the USITC found that these factors had 
no injurious effect, the USITC's  relevant analysis and findings were flawed.325 
7.186.   The United  States rejects Korea's  claims. The United  States submits that while the 
USITC  stated that neither joint pricing nor deterioration of US brands was a n important cause of 
injury to the domestic industry, the USITC effectively found that these factors were not causing any 
injury to the domestic industry.326 The United  States refers to different parts of the USITC report in 
support of its view. The United  States also submits that the USITC reasonably and adequately 
explained that these two factors did not cause any injury to the domestic industry.  
7.187.   In reviewin g Korea's  claim, we note that the  second sentence of Article  4.2(b ) provides that 
"[w]hen factors other than increased imports are causing injury to the domestic industry at the same 
time [as increased imports], such injury shall not be attributed to incre ased imports". 
Investigating  authorities are thus required, through a non -attribution analysis, to ensure that the 
injurious effects of other factors are not attributed to  increased imports. However, Article  4.2(b ) 
only requires a non -attribution analysis "when" factors other than increased imports are causing 
injury to the domestic industry at the same time. Accordingly , investigating authorities are not 
required to conduct a non -attribution analysis when other factors are not causing injury at the same 
time as increased imports. We agree with previous DSB reports that when investigating authorities 
determine that there are no other factors causing injury at the same time as increased imports,  they 
must provide a reasoned and adequate explanation supporting  that determination .327 Therefore, we 
proceed as follows:  
a. First, we will review Korea's  claim challenging the USITC's  rejection of the 
Korean  respondents'  argument that joint pricing and deterioration of US brands were 
"other factors" causing injury to the domestic industry. In doing so, we will:  
i. examine whether, as Korea contends, the USITC acknowledged that these two factors 
were causing injury to the domestic industry; and  
ii. if we find that the USITC's  finding was that these factors were not causing any injury 
to the domestic industry, whether the USITC provided a reasoned and adequate 
explanation in support of that finding.  
b. Second, we will review Korea's  claim challenging the USITC's  application of the substantial 
cause test.  
 
324 Korea's  first written submission, section  VIII.3.3.1  and para.  425. 
325 Korea's  opening statement at the first meeting of the Panel, para.  80; second written submission, 
para. 269; and response to Panel question No.  78, para.  96. 
326 United  States'  first written submission, para.  316. 
327 See, e.g.  Panel Report, Ukraine  – Passenger  Cars, para.  7.334.  WT/DS546/ R 
 
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  7.6.2.1   The USITC 's rejection  of the Korean respondents'  joint -pricing  theory  
7.6.2.1.1   Whether  the USITC  found  joint pricing  to be a factor  causing  injury  to the 
domestic  industry  
7.188.   Korea notes th e USITC's  finding that the domestic industry's  joint pricing  of LRWs and dryers  
was not an important cause of injury to the domestic industry, much less a more important cause 
than imports.328 This statement suggests to Korea that the USITC acknowledged that joint pricing 
contributed to the injury suffered by the domestic industry, albeit in a manner not more important 
than imports. The United  States  submits  that the USITC used the language of this test to comply 
with US statutory requirements . However, according to the United  States, when providing its 
detailed analysis of this factor the USITC explained that joint pricing could not explain any of the 
serious injury sustained by the domestic industry.329 
7.189.   In assessing whether the USITC found that joint pricing was a factor causing injury  to the 
domestic industry, we review the USITC 's analysis on joint pricing as a whole, rather than focus ing 
just on those parts of the USITC 's report where it was referring to the substantial cause test. Our 
review of the USITC report shows that while the USITC framed its enquiry in terms of US  statutory 
language by noting that joint pricing was not a factor that was an important cause of injury to the 
domestic industry, the USITC found joint pricing to not be a factor causing injury to the 
domestic  industr y. For instance, the USITC stated that (a)  the record did not support the 
respondents'  assertion that Whirlpool and GE purposely priced their LRWs to sell at a loss on the 
expectation that profitable  sales of matching dryers would compensate330; and (b ) the 
respondents'  "joint pricing" theory could not explain the domestic industry's  dramatically worsening 
operating and net losses during the POI.331 We conclude on the basis of our review of the 
USITC  report that the USITC found that joint pricing was not a fa ctor causing injury to the 
domestic  industry, such that the USITC was not required to undertake any non -attribution analysis 
in respect of this alleged factor.  
7.6.2.1.2   Whether  the USITC  provided  a reasoned  and adequate  explanation  that joint 
pricing  was not causing  any injury  to the domestic  industry  
7.190.   Korea argue s that the domestic industry sold matching LRWs and dryers at the same 
minimum advertised price, but because dryers cost less than LRWs to produce, the practice of selling 
both at the same price allowe d the domestic industry to compensate lower profits on LRWs with 
higher profits on dryers.332 Korea contends that the USITC improperly rejected the 
respondents'  argument on joint pricing, and ignored compelling evidence presented by them, while 
relying larg ely on statements by the domestic industry that they did not, or could not, use profits 
on sales of dryers to compensate for losses on LRWs.333 Korea contends in this regard that in 
rejecting the Korean respondents'  arguments on joint pricing, the USITC lar gely relied on statements 
by the petitioners  while ignoring the evidence presented by the Korean respondents.334 Korea also 
challenges the USITC 's explanation on the following two grounds : 
a. an alleged  disconnect between Whirlpool 's record profits from its No rth American 
operations and its losses on US sales of LRWs335; and 
b. an alleged failure by  the USITC to provide any support for its explanation  that, if the 
respondents'  joint-pricing theory was true , Whirlpool should have been able to maintain 
at least a modest level of profitability of LRWs .336 
7.191.   The United  States  notes that the USITC made its determination after considering the 
evidence, which inclu ded sworn testimonies  from representatives of  the US domestic industry, and 
 
328 Korea's  first written submission, para.  422. 
329 See, e.g.  United  States'  first written submission, fn  693. 
330 USITC report, (Exhibit  KOR-1), p.  45. 
331 USITC report, (Exhibit  KOR-1), p.  51. 
332 Korea's  first written submission, para.  429. 
333 Korea's  first written submission, para.  430. 
334 See, e.g.  Korea's  response to Panel question No.  78, para.  97. 
335 Korea's  first written submission, para.  435. 
336 Korea's  first written submission, para.  431. WT/DS546/ R 
 
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  rejecting arguments made by the re spondents in the underlying investigation. In this regard, the 
United  States  refers to extracts from the USITC report that show that the USITC considered th e 
evidence presented by respondents in the underlying investigation, which Korea mistakenly asserts 
the USITC ignored or did not address.337 With regard to Korea 's argument based on the supposed 
disconnect between Whirlpool 's record profits from its North American operations and losses on sales 
of LRWs in the US market, the United  States  notes that Whirlp ool's products other than LRWs could 
have contributed towards the profitability of Whirlpool's  North American operations.338 
7.192.   The question before us is whether Korea has demonstrated that the USITC did not provide 
a reasoned and adequate explanation in suppo rt of its finding that joint pricing was not a cause of 
any injury to the domestic industry.  
7.193.   We note that i n finding that the  record did not support Korean respondents ' assertion that 
Whirlpool and GE purposely priced their LRWs to sell at a loss on the ex pectation that profi table sales 
of matching dryers would compensate for it , the USITC relied on testimony by officials of Whirlpool 
that it expected to make profits from the washers sector itself, and not to subsidize LRWs with profits 
from other products.339 The USITC also noted the GE's statement that it did not and could not use 
profits on sales of dryers to compensate for losses on sales of LRWs because GE did not produce 
dryers domestically, but rather imported them pursuant to a contrac t manufacturing agreement that 
precluded outsized profits on sales of dryers.340 The USITC stated that the record did not 
unambiguously support the respondents ' claim that Whirlpool and GE sold matching pairs of LRWs 
and dryers for the same net wholesale pr ice. The USITC  supported this statement by noting that 
both companies maintained that LRWs and matching dryers were seldom sold together at wholesale, 
and never at the same net wholesale price.  
7.194.   With respect to the USITC's  rejection of the Korean respondent s' arguments on joint pricing, 
Korea asserts that the testimony of the petitioner was the beginning and end of the USITC's  analysis 
on joint pricing.341 Korea refers in this regard to evidence that was presented by Korean respondents 
to the USITC, and asser ts that the USITC did not address the evidence.342 The United  States  rejects 
this argument. The United  States  asserts, by referring to footnote  277 of the USITC report, that the 
USITC expressly referred to the evidence cited by the Korean respondents.343 Review of the 
USITC's  report, specifically footnote  277 of that report, shows  that the USITC did refer to the 
evidence but questioned its probative value.344 Thus, the USITC report, specifically footnote  277, 
contradicts Korea's  view that the USITC did not add ress the evidence presented by the 
Korean  respondents.345 We note that in footnote  277 the USITC balanced and weighed the evidence 
provided by the Korean respondents with the testimony provided by the domestic industry 
petitioners. We do not see, and Korea does not show, why the USITC could not have reached the 
 
337 United  States'  first written submission, paras.  319-323. 
338 United  States'  first written submission, para.  327. 
339 USITC report, (Exhibit  KOR-1), pp.  45-46. 
340 USITC report, (Exhibit  KOR-1), p.  46. 
341 Korea's  second written submission, para.  271. 
342 Korea's  first written submission, paras.  432-434. 
343 United  States'  first written submission, para.  322. 
344 For instance, the USITC noted that documents filed by Samsung did not show "net wholesale pricing" 
for matching L RWs and dryers, as respondents claimed, because the prices listed were not for actual sales, and 
the extent to which the wholesale prices listed in the document may be subject to further negotiation was 
unclear. (USITC report, (Exhibit  KOR-1), fn  277).  
345 Korea refers to the expert report of an economist that Korean respondents provided to the USITC, 
which noted why joint pricing was in line with economic theory, Whirlpool's  reference to the laundry segment in 
its filing with the US  Security and Exchange Com mission, and to evidence that per Korea demonstrated that 
relative higher margins on dryers were capable of offsetting lower margins on washers. (Korea's  response to 
Panel question No.  78, para.  99). Korea asserts that the USITC refused to consider the hig hly plausible 
alternative explanations regarding joint pricing by the domestic industry based on statements made by the 
CEO of the petitioner and because under the US  statute the focus must be on losses to LRWs. However, we are 
not persuaded that these und ermine the USITC's  finding that joint pricing did not explain any injury to the 
domestic industry. In particular, we have already stated above that the investigating authority needs to 
determine the serious injury to the domestic industry producing the lik e or directly competitive product. The 
USITC found LRWs, not dryers, to be the like product. If a domestic producer suffers losses with respect to the 
like product at issue, i.e.  LRWs, and there is serious injury to the producer on account of losses suffer ed on the 
like product, we do not see why higher margins on a product that is not like or directly competitive with the 
PUC (here, dryers) would undermine that finding. In this regard, we note that the USITC found that the record 
did not support the respon dents'  assertion that Whirlpool and GE purposely priced their LRWs to sell at a loss 
with the expectation that profits from dryers would compensate. (USITC report, (Exhibit  KOR-1), p.  45). WT/DS546/ R 
 
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  conclusions that it did ba sed on balancing and weighing the evidence before it. In our view, provided 
an investigating authority acts objectively, it is free to balance and weigh the evidence before it in 
a manner that it deems appropriate, and nothing in the  Agreement precludes an  investigating 
authority from relying on (sworn)  testimonies provided by the petitioner. Our task is not to 
second -guess that explanation based on a de novo review of the evidence before the USITC, but 
instead to consider whether its explanation was reasoned and adequate in light of the record 
evidence. Korea has not persuaded us that it was not.  
7.195.   Regarding the supposed disconnect between Whirlpool 's record pr ofits from its 
North  American operations and its losses on US sales of LRWs , Korea contends that these results 
would not have been possible unless Whirlpool generated reasonable profits from its laundry 
segment (which included dryers and LRWs), and asserts  that the USITC did not respond to this 
evidence.346 While Korea submits that the USITC did not respond to this evidence, the record shows 
that the USITC did in fact respond to this evidence as follows347: 
We are also unpersuaded by respondents ' argument tha t Whirlpool 's growing operating 
losses on sales of LRWs are somehow inconsistent with the increase in Whirlpool 's profit 
margin for its overall  North American operations from 4.8 percent in 2012 to 6.5 percent 
in 2016, as reported in public filings. …  Under the statute, 19 U.S.C. § 2252(c)(6)(A)(i), 
the focus  of our analysis is the domestic industry producing LRWs, PSC/belt drive 
TL LRWs, CIM/belt drive FL LRWs, and covered parts, as the producers as a whole of 
the like or directly competitive article. Beca use Whirlpool's  financial results for its 
North  America segment are based primarily on sales of products other than LRWs, with 
LRWs accounting for only 13.1 to 13.5 percent of the North America segment's  total 
revenue during the 2012 -16 period, we do not f ind those results informative.  
7.196.   This excerpt shows that the USITC explained why Whirlpool's  profits from its North American 
operations, where LRWs accounted for only 13.1 -13.5% of total revenue, was not at odds 
(mathematically speaking)  with Whirlpool's  losses in the US  market on sales of LRWs. Korea has not 
challenged the explanation provided by the USITC in this regard. Thus, the record does not support 
Korea's  argument that the USITC did not respond to this evidence.  
7.197.   As regards Korea's  argument that the U SITC did not provide any support for its statement 
that if the respondents ' joint-pricing theory was true , Whirlpool should have been able to maintain 
at least a modest level of profitability of LRWs, Korea contends that because the USITC did not 
provide such support, its rejection was not based on objective evidence.348 Korea submits in this 
regard that the essence of its claim is that the USITC's  determination on joint pricing was not 
supported by objective evidence or a reasoned and adequate expl anation .349 We note that the USITC 
provided the following explanation in its report350: 
Respondents'  "joint pricing" theory, if true, could at most explain profit margins on sales 
of LRWs that are consistently lower than profit margins on sales of matching d ryers. 
Under respondents'  theory, Whirlpool, the only major domestic producer of matching 
LRWs and dryers, should have been able to maintain at least a modest level of 
profitability on its sales of LRWs during the period of investigation, given its operati ng 
profit margin of *** percent in 2012, strong demand growth, and the competitiveness 
of its LRWs. Instead, Whirlpool suffered dramatically worsening operating losses, which 
widened as a share of net sales from negative *** percent in 2013 to negative ***  
percent in 2014, narrowed to negative *** percent in 2015, and then widened *** to 
negative *** percent in 2016, the largest loss of the period. Respondents do not claim 
that Whirlpool compensated for these increasing losses with increasing profits on sal es 
of matching dryers, nor explain how Whirlpool could have earned increasing profits on 
sales of dryers when dryer prices would have declined with matching LRW prices during 
the period of investigation under their "joint pricing" theory.  
 
346 Korea's  second written submission, para.  271. 
347 USITC report, (Ex hibit KOR-1), fn  210. 
348 Korea's  response to Panel question No.  42, para.  199. 
349 Korea's  response to Panel question No.  42, para.  201. 
350 USITC report, (Exhibit  KOR-1), pp.  46-47. (fns  omitted; redacted original ) WT/DS546/ R 
 
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  7.198.   Taking into accou nt the explanation provided above, we are not persuaded that the USITC 
failed to provide a reasoned and adequate explanation to support its determination. In particular, 
Korea does not dispute the USITC's  explanation that the respondents did not claim that  Whirlpool 
compensated losses on LRWs with profits on sales of matching dryers. The USITC also noted the 
respondents'  failure to explain how Whirlpool could have earned increased profits on dryer sales 
because if dryers and washers were jointly priced, dry er prices would have reduced with reduction 
in washer prices. We thus consider that the USITC provided a reasoned and adequate explanation 
to support its determination.  
7.199.   Based on the foregoing, we reject  Korea 's claim  that the USITC failed to provide a reas oned 
and adequate explanation for rejecting the respondents'  argument that joint pricing was a cause of 
injury to the domestic industry.  
7.6.2.2   The USITC's  rejection  of the "deterioration  of US brands " theory  
7.6.2.2.1   Whether  the USITC  found  deterioration  of US brands  to be a factor  causing  
injury  to the domestic  industry  
7.200.   In the underlying investigation, similar to its analysis on joint pricing, the USITC framed its 
enquiry in terms of US  statutory language by noting that deterioration of US  brands was not a factor 
that wa s an important cause of injury to the domestic industry. Again, we consider that the 
USITC's  issue-specific analysis shows that the USITC found that the deterioration of US  brands was 
not a factor causing injury to the domestic industry.  
7.201.   In particular, the  USITC stated that the respondents ' "brand deterioration" theory did not 
explain the domestic industry 's declining sales prices during the POI, "or any of the resulting 
injury".351 This shows that  the USITC found that "brand deterioration" did not cause any  injury to 
the domestic industry. Other parts of the USITC report support this understanding.352 Therefore , we 
find that the USITC's  finding was that deterioration of US  brands did not cause any injury to the 
domestic industry.  
7.6.2.2.2   Whether  the USITC  provided  a reasoned  and adequate  explanation  that 
deterioration  of US brands  was not a factor  causing  any injury  to the domestic  industry  
7.202.   Korea contends that the  combined effect of failing to innovate and the resultant effect of 
brand deterioration were factors that injured the domestic industry in the POI.353 Noting that the 
USITC found that consumer perception of brands is an important factor affecting purchasing  
decisions of LRWs, Korea submits that there was a shift in consumer demand in the US  market over 
the POI, creating a market segment over which there was no meaningful competition between 
domestic and imported LRWs.354 Korea asserts that the respondents wer e able to serve this newly 
emerging demand due to their brand, innovation , and design whereas the domestic industry was 
not, due to their lack of appropriate innovation as well as the deterioration of their brands.355 In this 
regard, Korea also notes that t he US  producers remained highly dependent on sales of 
agitator -based TL LRWs, which were declining in popularity in the US  market. Korea argues that 
such dependence led to the deterioration of US  brands, which in turn contributed to the injury to the 
domes tic industry.356 However, per Korea, the USITC failed to examine the impact caused by the 
deterioration of US  brands, or to provide an explanation regarding the impact on US  brands due to 
the decline in demand of agitator -based TL LRWs, which formed half of  domestic shipments.357 
7.203.   The United  States notes Korea's  submission that consumer perception of brands is an 
important factor affecting purchaser decisions of LRWs, but states that the USITC concluded that 
 
351 USITC report, (Exhibit  KOR-1), p.  48. 
352 USITC report, (Exhibit  KOR-1), p.  51. The USITC found that the respondents'  alleged alternative 
cause of injury, which included deterioration of US  brands was not supported by the record evidence and also 
that the b rand deterioration theory "could explain none of the injury sustained by the [domestic] industry".  
353 Korea 's response to Panel question No. 43, para. 206. 
354 Korea's  first written submission, paras.  439-441. 
355 Korea's  first written submission, paras.  441-442. 
356 Korea's  first written submission, para.  444. 
357 Korea's  first written submission, paras.  444-445. WT/DS546/ R 
 
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  purchasers did not find imported LRWs to be superior to domestic ones in te rms of brand  based on 
the evidence submitted to it .358 In this regard, the United  States notes that the USITC explained:  
a. that its record did not support the respondents'  argument that subject imports were 
superior to domestic LRWs in terms of non -price fact ors like brand, innovation , and 
design359; and 
b. that this argument was also undermined by:  
i. the price data before the USITC that showed that prices of those imported LRW models 
that respondents considered to be innovative, and thus should have commanded a 
price premium, were declining; and  
ii. the extent to which imported LRWs were found to be priced below domestic LRWs.360 
7.204.   With regard to Korea's  argument concerning the domestic industry's  dependence on 
agitator -based TL LRWs, the United  States  notes that in addit ion to finding that this dependence did 
not prevent the domestic industry from providing high ly-rated FL  and impeller -based TL LRWs, the 
USITC also found that the popularity of agitator -based TL LRWs rebounded post 2015 (thereby 
undermining the respondents ' argument that this model 's demand was on the decline in the 
US market).361 In addition, the United  States  notes that (a ) the USITC rejected the 
Korean  respondents ' argument that consumers preferred imported LRWs because they were 
innovative ; and also (b ) that the Korean respondents did not argue  that the alleged deterioration of 
US brands contributed towards the decline in the domestic industry 's selling price.362 Instead, the  
Korean  respondents only relied on arguments of brand deterioration to explain the 
domestic  industry 's loss of market share during the POI, which in any case the USITC found did not 
occur considering the domestic industry 's market share remained s table throughout the POI.363 
7.205.   The question before us is whether the USITC provi ded a reasoned and adequate explanation 
why deterioration of US brands was not a factor causing any injury to the domestic industry.  
7.206.   In the underlying investigation, the USITC specifically considered and rejected the 
Korean  respondents'  argument regarding the injurious effect of the deterioration of US brands on 
the domestic industry. We find it useful to reiterate that in resolving Korea's  claim , our task is not 
to substitute our judg ement for that of the USITC, nor review the evidence de novo. Instead, ou r 
task is to determine whether the USITC examined all pertinent facts and provided a reasoned and 
adequate explanation in rejecting the Korean respondents'  argument that the alleged deterioration 
of US brands cause d injury to the domestic industry. It is Korea's  burden as the complainant to show 
that the USITC did not do so.  
7.207.   We note in this regard that in rejecting the respondents'  argument on the injurious effect of 
deterioration of US brands , the USITC stated that (a) the USITC's  finding on serious injury was based 
on the adverse impact of low -priced imports on the domestic industry's  prices, as opposed to loss 
of market share, and the respondents did not argue that deterioration of US  brands contributed to 
declinin g sales prices; and (b ) the record did not support the respondents'  contention that 
consumers increasingly favoured imported over domestically produced LRWs for non -price 
reasons.364 In particular, the USITC concluded that the record did not support the res pondents'  claim 
that brand deterioration occurred for non -price reasons, and even if it did, the deterioration could 
explain only a decline in the domestic industry's  market share (not the decline in the 
domestic  industry's  prices).365 
7.208.   Korea does not disput e the USITC's  explanation regarding the absence of arguments from 
respondents on how deterioration of US brands contributed to declining sales prices. It is also not in 
 
358 United  States'  first written submission, para.  331. 
359 United  States'  first written submission, paras.  331 and 333.  
360 United  States'  first written submission, para.  334. 
361 United  States'  first written submission, para.  335. 
362 United  States'  first written submission, paras.  336-337. 
363 United  States'  first writ ten submission, paras.  330 and 337.  
364 United  States'  second written submission, paras.  112-113; USITC report, (Exhibit  KOR-1), p.  48. 
365 USITC report, (Exhibit  KOR-1), p.  51. WT/DS546/ R 
 
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  dispute that the USITC found serious injury to the domestic industry resulted from adve rse impact 
of low -priced imports on the domestic industry's  sales. Thus, we note that the USITC's  explanation 
in this regard remains unchallenged.  
7.209.   With regard to whether US consumers increasingly favoured imported over 
domestically  produced LRWs for non -price reasons, the USITC referred to evidence in terms of 
purchaser surveys, including surveys where most responding purchasers found domestic LRWs to 
be comparable or superior to imported ones in terms of non -price factors; noted that the record 
indicated t hat domestic  LRWs were comparable to imported ones in terms of innovation; as well as 
the favourable ratings of domestically produced LRWs in publications.366 In this regard, the USITC 
found based on the evidence before it that the domestic market encompass ed a broad range of 
brands and models offering diverse features and innovations, with no LRW supplier possessing a 
clear edge over other LRW suppliers in terms of brand, design, performance, features, innovation , 
and other non -price factors.367 The USITC  also rejected the respondents'  argument that US  brands 
suffered in the eyes of the consumers, including because of the domestic industry's  reliance on 
agitator -based TL  LRWs.368 Instead, the USITC noted that the domestic industry's  production of 
agitator -based TL LRWs did not prevent the industry from offering a full range of FL and 
impeller -based TL LRWs, and that the popularity of agitator -based TL LRWs rebounded after 2015 
with US  consumption of this product in 2017 approaching 2012 levels.369 The USITC conc luded that 
the evidence did not support the respondents'  arguments that there were significant 
non-price differences that favoured imported LRWs over domestic ones.370 
7.210.   We are not persuaded that the USITC's  explanations in this regard were not reasoned and 
adequate in light of the record evidence. While Korea makes several arguments in support of its  
claim, Korea repeats arguments made by respondents before the USITC instead of demonstrating 
why the USITC's  rejection of those arguments was not based on a reas oned and adequate 
explanation. For instance, Korea focuses on how there was a shift in consumer demand in the 
US market over the POI, creating a market segment driven by innovation demand that the 
domestic  industry was unable to serve due to their lack of appropriate innovation and the 
deterioration of their brand.371 However, as noted above, the USITC specifically addressed and 
rejected this argument based on, inter alia, its finding that the evidence did not support the 
respondents'  arguments that there  were significant non -price differences that favoured imported 
LRWs over domestic ones. Similarly, Korea contends that the fact that half of domestic sales were 
that of agitator -based TL LRWs "must have meant" that the domestic industry was unable to offer  
innovative products, and the fact that respondents had no sale of such type of TL LRWs or belt -driven 
LRWs should " ipso facto demonstrate" that they shifted from those market segments to more 
innovative LRWs.372 However, our task is not to make such kind of inferences but to assess whether 
the explanation provided by the USITC was reasoned and adequate. We note that the 
USITC  explained that the domestic industry was capable of offering the full range of FL and 
impeller -based TL LRWs , and therefore rejected the Korean respondents ' arguments that the 
domestic industry  was unable to offer innovative products .373 While repeating arguments made by 
Korean respondents, Korea fails to show that the USITC 's responses to tho se arguments were not 
reasoned and adequate in light of the record evidence .374 
 
366 USITC report, (Exhibit  KOR-1), pp.  48-49. 
367 USITC report, (Exhibit  KOR-1), p.  30. See also USITC report, (Exhibit  KOR-1), p.  48. The USITC 
referred back to its explanations in section  IV.C.4 of its report regarding the comparability of domestic and 
imported LRWs in terms of non -price factors.  
368 USITC report, (Exhibit  KOR-1), p.  50. 
369 USITC report, (Exhibit  KOR-1), p.  50. 
370 USITC report, (Exhibit  KOR-1), pp.  49-51. The USITC addressed and rejected arguments made by 
respondents regarding increase in repairs needed by domestically produced LRWs, mold issues in such 
domestically produced L RWs, and effect on US  brands due to Whirlpool failing to differentiate its LRWs from 
that of Maytag as well as the domestic producer's  reliance on agitator -based TL LRWs.  
371 Korea's  first written submission, paras.  441-442. See also Korea's  response to Pane l question No.  44, 
paras.  207-213. 
372 Korea's  second written submission, para.  276. 
373 Instead, Korea asserts that "this is hardly an explanation" to address the impact on brands that 
results from having half of all sales of a LRW model that is in decline. ( Korea's  first written submission, 
para. 445).  
374 Korea also states that the respondents requested the USITC to exclude what it describes as two 
"exceptionally innovative products" produced by the respondents i.e.  Flexwash and Sidekick, from the PUC. 
 WT/DS546/ R 
 
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  7.211.   Based on the foregoing, we reject Korea 's claim that the USITC failed to provide a reasoned 
and adequate explanation rejecting the respondents'  argument that deterioration of US brands  was 
a cause of injury to the domestic industry.  
7.6.2.3   Substantial  cause  test 
7.212.   We note that Korea relied on the language of the  substantial cause test to argue that the 
USITC acknowledged that joint pricing and deterioration of US brands caused some injury to the 
domestic industry. In paragraphs  7.189  and 7.201  above we have rejected that argument and 
concluded that the USITC's  finding was that joint pricing and deterioration of US brands did not 
cause any injury to the domestic industry. However, Korea also asks us to make a separate finding 
that the substantial cause test, as applied in the underlying investigation, did not comply with 
the Agreement  on Safeguards.375 
7.213.   We reject Korea's  claim in this regard  because Korea has not made a prima  facie case that 
the USITC's  application of the substantial cause test in the underlying investigation was inconsistent 
with Article  4.2(b ) of the  Agreement  on Safeguards. In particular,  Korea does not present sufficient 
arguments showing how exactly the substantial cause test violates Article  4.2(b).  
7.214.   We note that Korea contends that the substantial cause test is inadequate in terms of 
complying with the non -attribution requirement of Article  4.2(b).376 However, Korea's  argument that 
the substantial cause test is "inadequate" in ensuring that the injurious effect s of all known factors 
are not attributed to subject imports presupposes a finding by the investigating authority that such 
other factors cause some injury to the do mestic industry. If the investigating authority finds that 
such other factors do not cause any injury to the domestic industry, the need to conduct a 
non-attribution analysis does not arise. We have concluded that the USITC found that joint pricing 
and det erioration of US brands did not explain any of the injury to the domestic industry, and thus  
the USITC was not required to conduct a non -attribution analysis. Thus, to the extent Korea 
challenges the substantial cause test on the premise that the USITC found these two factors were 
causing injury to the domestic industry, that premise is unfounded. In the absence of sufficient 
arguments showing how exactly the substantial cause test violates Article  4.2(b ) of 
the Agreement  on Safeguards, we conclude  that Korea has not made a prima  facie case in this 
regard.377 
 
Korea s tates that the respondents specifically noted that if these two products were excluded the 
domestic  industry's  share in the overall US  market would have increased since 2012. (Korea's  second written 
submission, para.  275). We note that Korea does not chall enge the inclusion of Flexwash and Sidekick in the 
PUC. In addition, as the United  States notes, the USITC found these two products to be like domestically 
produced LRWs . (United  States'  second  written submission, para.  63 (referring to USITC report, 
(Exhibit KOR-1), pp. 13-15)). Korea also does not challenge the USITC's  findings in this regard. Thus, we do 
not see, and Korea does not show, how the inclusion or exclusion o f Flexwash and Sidekick from the PUC 
affects Korea's  claim challenging the USITC's  finding regarding the injurious effect of US  brand deterioration. 
We also note in this regard the United  States'  submission that Samsung introduced Flexwash LRWs in 
March  2017 and LG's  Sidekick LRWs were new as of the USITC's  injury hearing in September  2017.  
(United  States'  second written submission, para.  63). 
375 Korea's  response to Panel question No.  78, para.  88. 
376 Korea's  first written submission, para.  425. 
377 In this regard, Korea relies on the Appellate  Body report in US – Lamb  to support its view. 
Korea  states that in that case the Appellate  Body responded to a claim that the application of the substantial 
cause test in that case violated Article  4.2(b) of the  Agreement on Safeguards. (Korea's  first written 
submission, para.  426). However, we note that t he Appellate  Body found that the USITC in that case did not 
adequately explain "in its Report" how it ensured that injury caused to the domestic industry by factors other 
than increased imports was not attributed to increased imports. (Appellate  Body Repor t, US – Lamb , 
para. 188). The Appellate  Body did not find the substantial cause to be itself inconsistent with Article  4.2(b). In 
contrast, in the case before us, we have concluded that the USITC found that joint pricing and deterioration of 
US brands did not cause any injury, and that the USITC provided a reasoned and adequate explanation to 
support this finding. Therefore, the question of ensuring that injury caused by other factors are not attributed 
to increased imports does not arise in t he case before us.  WT/DS546/ R 
 
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  7.6.2.4   Conclusion  regarding  the second  stage  of the USITC 's causation  determinatio n 
7.215.   We reject Korea 's claims under Articles  3.1 and 4.2(b), as well as Articles  2.1 and 4.2(c ) of 
the Agreement  on Safegu ards challenging the USITC 's finding that ( a) joint pricing of dryers and 
LRWs and ( b) deterioration of US brands , were not factors causing injury to the domestic industry.  
7.216.   We also reject Korea 's claims under Articles  3.1 and 4.2(b), as well as Articles  2.1 and 4.2(c)  
of the  Agreement on Safeguards challenging the USITC 's application of the substantial cause test in 
the underlying investigation.  
7.6.3   Consequential  claims  on causation  
7.217.   Korea contends that because the USITC's  definition of the domestic industry  and its 
determination on increased imports were flawed, the USITC's  causation determination, which relied 
on those flawed findings w as also inconsistent with Article  4.2(b) , as well as Articles  2.1, 3.1, and 
4.2(c) . We have already found that cert ain aspects of the USITC's  definition of the domestic  industry  
and its determination on increased imports were inconsistent with its obligations under 
the Agreement  on Safeguards. Therefore, we do not consider any finding of consequential violation 
under A rticle 4.2(b) , or Articles  2.1, 3.1, and 4.2(c ) would assist in resolving the dispute between 
the parties.  
7.218.   Based on the foregoing, we do not find it necessary to address Korea's  consequential claims 
under Articles  4.2(b), 2 .1, 3.1, and 4.2(c ) of the  Agreem ent on Safeguards . 
7.7  Claims  under  Articles  5.1 and 7.1 of the Agreement  on Safeguards  
7.219.   The first sentence of Article  5.1 of the  Agreement  of Safeguards provides, inter alia, that a 
Member shall apply safeguard measures only to the extent  necessary  to prevent  or remedy  
serious  injury  and to facilitate  adjustment . The first sentence of Article  7.1 of this  agreement  
provides that a Member shall apply safeguard measures only for such period  of time as may be 
necessary to prevent or remedy serious injury and to facilitate adjustment. Korea makes the 
following sets of claims under Article s 5.1 and 7.1 of the  Agreement on Safeguards378: 
a. The United  States failed to limit the applicati on of the safeguard measure to the alleged 
serious injury caused by increased  imports and not by other known factors379: 
i. The United  States acted inconsistently with Article  5.1 because it failed to establish 
that increased imports caused serious injury to the domestic industry, as required by 
Article  XIX:1(a) of the  GATT  1994 and Article  4.2(b)  of the  Agreement on Safeguards , 
and therefore the resultant  safeguard measure was necessary under Article  5.1. 
ii. The United  States acted inconsistently with Article  5.1 because it failed to apply the 
measure only to prevent or remedy injury caused by increased imports and not that 
caused by other factors . 
b. The United  States failed to provide  a reasoned and adequate explanation to support the 
form and level of the safeguard measure .380 
i. The United  States acted inconsistently with Article  5.1 because its imposition of the 
safeguard measure on LRW parts was not necessary g iven the absence of competition 
between imported and domestic LRW parts.381 
 
378 We note that Korea only invokes Article  7.1 of the  Agreement on Safeguards when claiming that the 
United  States acted inconsistently with Articles  5.1 and 7.1 because the safeguard measure went beyond what 
was necessary to facilitate a djustment of the domestic industry . (Korea's  first written submission, paras.  509 
and 511). With respect to other claims, it only invokes Article  5.1. (See, e.g.  Korea's  first written submission, 
paras.  481, 489, 494 -495, and 503 -504).  
379 Korea's  first written submission, section  IX.3.1. 
380 Korea's  first written submission, section  IX.3.3.  
381 Korea's  first written submission, paras.  496-497. WT/DS546/ R 
 
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  ii. The United  States acted inconsistently  with Article  5.1 because t he level of the 
safeguard measure exceeded what was necessary to remedy serious injury.382 
c. The United  States acted inconsistently  with Article  5.1 because it failed to take into 
account existing import restrictions from anti -dumping and countervailing duties .383 
d. The United  States acted inconsistently with Article s 5.1 and 7.1 because the underlying 
safeguard measure  went beyond what was necessary to facilitate adjustment of the 
domestic industry.384 
7.220.   The United  States asks us to reject Korea's  claims.  
7.7.1   Korea's  claims  regarding  the United  States'  alleged  failure  to limit the application  
of the safeguard  measure  to the alleged  serious  injury  caused  by increased  imports  
7.221.   Korea claims that the United  States acted inconsistently with Article  5.1 because the 
USITC's  causation determination was inconsistent with Article  XIX:1(a)  of the  GATT  1994 and 
Article  4.2(b)  of the  Agree ment on Safeguards.385 We note that Korea's  claim under Article  5.1 here 
is essentially a consequential claim and dependent on a finding that the USITC's  causation 
determination was inconsistent with Article  XIX:1(a)  of the  GATT  1994 and Article  4.2(b)  of 
the Agreement on Safeguards. We have found the USITC's  causation determination to be 
inconsistent with Article  4.2(b)  of the  Agreement on Safeguards. Given those findings under 
Article  4.2(b), we do not find it necessary to address Korea's  claim under  Article 5.1 to the extent it 
is consequential to a finding under Article  4.2(b).  
7.222.   Korea also claims that the United  States acted inconsistently with Article  5.1 because 
through the application of the USITC's  substantial cause test, the USITC attributed to increa sed 
imports injury that was caused by other factors, specifically (a)  joint pricing of dryers and washers , 
and (b)  deterioration of US  brands.386 We note that this claim under Article  5.1 is premised on its 
view that the USITC found (a)  joint pricing of dry ers and washers and (b)  deterioration of US  brands 
to be other factors causing injury to the domestic industry. In addressing Korea's  non-attribution 
claims under Article  4.2(b) , we have concluded that the USITC's  finding was that these factors did 
not cau se any injury to the domestic industry. Given these findings, Korea has not established the 
premise of its claim under Article  5.1. 
7.223.   Based on the foregoing, we do not find it necessary to address Korea's  claim under 
Article  5.1 to the extent it is consequen tial to Korea's  claim challenging the USITC 's causation 
determination under Article  4.2(b), which we have upheld. We reject  Korea 's claim under Article  5.1 
to the extent it is premised on its view , which we have rejected,  that the USITC found factors other  
than increased imports were causing injury  to the domestic industry.  
7.7.2   Korea's  claims  concerning  the form and level  of the safeguard  measure  
7.224.   Korea claims, as noted above, that  (a) the United  States'  safeguard measure on LRW parts 
was not "necessary" under Article  5.1; and (b)  the level of the measure on LRWs exceeded what 
was necessary to remedy serious injury suffered by the domestic industry. The United  States  asks 
us to reject both claims . 
7.7.2.1   Safeguard  measure  on LRW parts  
7.225.   Regarding the safeguard measure on LRW parts, Korea contends that the duty on 
out-of-quota LRW parts was not necessary to remedy serious injury and facilitate adjustment 
because there was no competition betwee n domestic and imported LRW parts, or between imported 
LRW parts and domestically produced  LRWs.387 Korea asserts that a measure can only be "necessary" 
if it at least contributes in a material way to remedying the serious injury and facilitating adjustment, 
 
382 Korea's  first written submission, paras.  498-504. 
383 Korea's  first written submission, paras.  490-494. 
384 Korea's  first written submission, paras.  505-511. 
385 Korea's  first written submission, para. 481. 
386 Korea's  first written submission, para.  486. 
387 Korea's  first written submission, paras.  496-497 and 514.  WT/DS546/ R 
 
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  which cannot be the case for non -competing products.388 The United  States submits that allowing 
limitless imports of low -priced parts would create the risk that Samsung and LG would convert their 
US production facilities into kit assembly operations of LRWs, which would be in direct competition 
with LRWs that are produced domestically from domestic pa rts.389 Thus, per the United  States, 
inclusion of covered parts in the safeguard measure was necessary to prevent serious injury and 
facilitate the domestic industry's  adjustment to import competition, and did not result in application 
of the safeguard meas ure beyond the extent necessary under Article  5.1.390 
7.226.   We note that we have found that the USITC acted inconsistently with Article  4.1(c)  in 
defining the domestic industry to include LRW parts. Based on the foregoing , we do not find it 
necessary to separatel y address Korea's  claim under Article  5.1 of the  Agreement on Safeguards 
that the  duty on out -of-quota LRW parts was not necessary  under Article  5.1 to remedy serious 
injury and facilitate adjustment because there was no competition between domestic and im ported 
LRW parts, or between  imported  LRW parts and domestic ally produced  LRWs . 
7.7.2.2   Level of the safeguard  measure  
7.227.   Korea claims  that the level of the measure on LRWs exceeded what was necessary to remedy 
the alleged serious injury  based on the following arguments : 
a. Korea challenges the level of the in -quota rate (20%)  and out -of-quota rate (50%)  
maintained by the United  States, not ing that such rates were introduced even though the 
facts showed weak, non -existent serious injury and average price underselling of only 
14.2%.391 Korea asserts in this regard that since the USITC found lower domestic  prices 
to be directly responsible for the losses to the domestic industry, limiting the safeguard 
remedy to the price difference between subject imports and domestic like products would 
have addressed the domestic industry's  serious injury.392 
b. Korea refers to the statements by two of the four commissioners that in -quota tariff rates 
would exceed the amount necessary to address serious injury to the domestic industry.393 
7.228.   The United  States responds to Korea's  arguments as follows:  
a. Noting Korea's  comparison of the 20% in -quota tariff with the 14.2% weighted -average 
margin of underselling, the United  States submits that such a comparison cannot 
accurately reflect the likely effect of the tariff on import prices.394 
b. Regarding Korea's  argument that two of the four USITC commissioners recommended 
against an in -quota tariff, the United  States notes that the USITC  did not reach an 
institutional recommendation  on this point.395 
7.229.   We note that while Article  5.1 provides that a Member shall apply safeguard measures only 
to the extent necessary to prevent or remedy  serious injury, it does not provide any rules requiring 
the authority to ensure that the safeguard remedy matches the degree of price underselling found, 
which here is the difference between prices of subject imports and domestic like products. Indeed, 
such a requirement would be at odds with the fact that the  Agreement on Safeguards (a)  does not 
even specifically require a price underselling analysis; and (b)  permits the imposition of quantitative 
restrictions (it is unclear to us how exactly as a mathema tical matter a quantitative restriction could 
be designed to match the degree of price underselling, and in any case, the  Agreement on 
Safeguards does not provide rules on this matter). In this regard, the provisions of 
the Agreement  on Safeguards stand in  contrast to, for example, the provisions of the 
Anti-Dumping  Agreement, which require authorities to calibrate their remedy by ensuring that the 
 
388 Korea's  first written submission, para.  496. 
389 United  States'  first written submission, para.  364. 
390 United  States'  first written submission, paras.  364-365 ( referring to USITC report, ( Exhibit  KOR-1), 
p. 74). 
391 Korea's  first written submission, para s. 499-500. 
392 Korea's  response to Panel question No.  55, para.  234. 
393 Korea's  first written submission, para s. 502-503. 
394 United  States'  first written submission, para.  366. 
395 United  States'  first written submission, para.  367 ( quoting  USITC report, ( Exhibit  KOR-1), p.  75). WT/DS546/ R 
 
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  anti-dumping duty not exceed the margin of dumping established under Article  2 of that  agreement 
(see Article  9.3 of the Anti -Dumping  Agreement). Therefore, we do not find any basis in Article  5.1 
to require investigating authorities to calibrate their safeguard measures to reflect the degree of 
price underselling.  
7.230.   Insofar as Korea relies on the views of the two U SITC commissioners who considered that 
the in -quota tariff rates exceed ed the amount necessary to address serious injury to the 
domestic  industry, we note under the  internal decision -making process of the USITC, 
four commissioners of the USITC make their r ecommendations. We do not consider that the views 
of two of the four USITC  commissioners are instructive on whether the United  States'  safeguard 
measure is inconsistent with Article  5.1 of the  Agreement on Safeguards.  
7.231.   Based on the foregoing, we reject Korea 's claim  under Article  5.1 of the  Agreement on 
Safeguards challenging the form and level of the United  States'  safeguard measure.  
7.7.3   Korea's  claim  regarding  the United  States'  alleged  failure  to take into account  
existing  import  restrictions  from  anti-dumping  and countervailing  duty measures  
7.232.   Korea contends that the United  States'  safeguard measure was excessive because it did not 
account for the protection already afforded to the domestic industry through the imposition of 
anti-dumping and countervailing  measures on LRWs.396 Korea asserts that although the existing 
anti-dumping and countervailing measures had the effect of significantly decreasing imports from 
the covered countries, including Korea, the US President made no attempt to calibrate the measures  
to take account of those existing measures.397 
7.233.   The United  States contends that the  Agreement  on Safeguards does not obligate a Member 
to take any particular approach when applying a safeguard measure on products already covered by 
an anti-dumping  or counte rvailing  measure.398 Nonetheless, the United  States submits that the 
USITC took into account and discussed the impact of existing US anti-dumping and countervailing  
orders in its report, and contends, inter alia, as follows:  
a. Referring to the USITC's  finding  that due to such orders the domestic industry was able to 
temporarily increase its market share, but not its prices, the United  States submits that 
the depression and suppression  of domestic like product prices led to the worsening 
financial losses of the domestic industry.399 
b. In addition, contending that Samsung and LG moved production of LRWs to countries not 
affected by the anti-dumping and countervailing  measures, the United  States points to 
data showing that imports of LRWs from countries affected by the anti-dumping and 
countervailing  measures, such as China, declined, whereas imports from other countries 
such as Thailand and Viet  Nam increased.400 
7.234.   We are not persuaded by Korea's  arguments in this regard. We  note that 
the Agreement  on Safeguards imposes conditions for the im position of safeguards, including a need 
for increased imports, and the existence of serious injury caused by those imports. Existing trade 
remedy measures may affect the level of imports (they could decrease it, particularly from sources 
affected by the o rder) and the injury situation of the domestic industry (they could improve the 
domestic industry's  situation). Therefore, to the extent existing trade remedy measures affect those 
parameters, that effect would be reflected in the relevant data examined by  the investigating 
authority (be it increased imports, or data pertaining to the injury situation of the domestic industry). 
If the data shows that imports have been declining instead of increasing, or if it shows that the 
domestic industry is not injured (irrespective of whether this is because of existing trade remedy 
measures), the substantive conditions for the imposition of safeguard measures would not be met. 
If, however, an investigating authority finds that the substantive conditions for the 
safegua rd measures are met, despite existing trade remedy measures, nothing in 
 
396 Korea's  first written submission, paras.  490 and 494. 
397 Korea's  second written submission, para.  288. 
398 United  States'  first written submission, paras.  356-357. 
399 United  States'  first written submission, para.  361. 
400 United  States'  first written submissio n, para.  360. WT/DS546/ R 
 
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  the Agreement  on Safeguards require s any calibration of the measures with those existing 
trade  remedy measures.  
7.235.   We also note in this regard that Article  5.1 refers to the application o f safeguard measures 
only to the extent necessary to prevent or remedy serious injury. Once serious injury is established 
pursuant to a safeguard investigation, the Member has the right to impose safeguard measures to 
the full extent necessary to remedy th at serious injury. It follows that if the serious injury has been 
found despite the existing trade remedy measures, nothing in the  Agreement on Safeguards would 
require Members to adjust the safeguard measures to account for existing trade remedy measures.  
Indeed, if they were to do so, they may not be able to apply safeguard measures to the extent 
necessary to prevent or remedy the serious injury found. To the extent a complainant considers that 
the substantive conditions for imposition of such a safeguard  measure are not met, the complainant 
would be expected to make its case under the substantive provisions of 
the Agreement  on Safeguards.  
7.236.   Based on the foregoing, we reject  Korea 's claim  that the United  States acted inconsistently 
with Article  5.1 of the  Agreement on Safeguards in failing  to take into account existing import 
restrictions from anti-dumping  and countervailing  measures . 
7.7.4   Korea's  claim  that the safeguard  measure  went  beyond  what  was necessary  to 
facilitate  adjustment  of the domestic  industry  
7.237.   Korea claims that the United  States acted inconsistently with Article s 5.1 and 7.1 of 
the Agreement on Safeguards because it failed to ensure that the underlying safeguard measure 
was not more restrictive than necessary to facilitate adjustment.401 Korea makes two main 
arguments with respect to its claims. Korea argues that (a) the US Presidential P roclamation 
(Exhibit  KOR-3) imposing the safeguard measure did not explain why the nature and level of the 
safeguard measure was necessary to facilitate adjustment ; and (b)  the adjustment plans submitted 
by the US domestic industry were weak.402 The United  States submits, relying on previous 
DSB reports , that  (a)  Article  5.1 does not require a Member applying a safeguard measure to justify 
that it is appli ed only to the extent necessary; and (b)  Article  5.1 does not require Members to 
request or consider any adjustment plans from the domestic industry.403 To resolve Korea's  claim, 
we focus on Korea's  arguments regarding the alleged inadequacies of the 
US Presidential  Proclamation and the US domestic industry's  adjustment plan.  
7.238.   Regarding  the US Presidential  Proclamation, and specifically Korea's  argument that this 
proclamation did not explain why the nature and level of the safeguard measure was necessary to 
facilitate adjustment, we agree with previous DSB reports that Article  5.1 does not oblige a Member 
to justify at the time of application that the safeguard measure at issue is applied "only to the extent 
necessary".404 Korea acknowledge s that no such justi fication is necessary, but takes the position  
that this "does not mean that total silence suffices".405 We do not see any basis in Article  5.1 to 
impose a standard that is short of a "clear justification" but more than total silence. Indeed, if 
Article  5.1 does not oblige a Member to justify at the time of application that the safeguard measure 
at issue is a pplied "only to the extent necessary"  (as we have found it does not) , we see no basis to 
find that the United  States acted inconsistently with Article  5.1 because the 
 
401 Korea's  first written submission, paras.  509 and 511.  
402 See, e.g.  Korea's  first written submission, paras.  506 and 510.  
403 United  States'  first written submission, paras.  370 and 372 (referring to Appellate  Body Report, US – 
Line Pipe, para.  233; and Panel Report, Korea  – Dairy, para.  7.108).  
404 Appellate  Body Report, US – Line Pipe, para.  233. 
405 Korea's  first written submission, para.  508. In this regard, we asked Korea to clarify its position by 
explaining what obligation less than "clear justification" but more that "total silence" is imposed by Article  5.1. 
(Panel question No.  56(a) to Korea after the first substantive meeting). In respo nse to our question, Korea 
submits that the fact that (i)  the USITC report explained that imported and domestic parts were not in 
competition; and (ii)  two USITC commissioners recommended that no in -quota tariffs were necessary, 
suggests that the United  States' safeguard measure was not necessary. Thus, per Korea, a compelling 
alternative explanation was required to support the adopted measure. ( Korea 's response to Panel question 
No. 56(a),  para. 237). We note that we have addressed these two issues in (i) and ( ii) when dealing with 
Korea's  claim concerning the form and level of the measure.  In addition, we note that Korea does not explain 
whether the compelling explanation that it expects is to be provided by the investigating authority in its report, 
or by the authority imposing the safeguard duty, or by the respondent in WTO panel proceedings. In any case, 
we see no basis in Article  5.1 to require such a "compelling explanation" either from the investigating 
authority, the authority imposing the safeguard duty, or from the respondent in panel proceedings.  WT/DS546/ R 
 
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  US Presidential  Proclamation did not explain why the nature and level of the safeguard me asure was 
necessary to facilitate adjustment . 
7.239.   Regarding the inadequacies of the domestic industry's  adjustment plan, which per Korea the 
USITC failed to properly examine, we agree with a previous DSB report that  Article  5.1 does not  
impose any obligation o n an authority to consider an adjustment plan by the domestic industry.406 
We also note in this regard that during the later stages of these panel proceedings Korea took the 
view that "[w]hile adjustment plans do not have to be provided in each case per se, submissions 
and considerations of such plans may be desirable  as a means of substantiating that a Member 
complies with Article  5.1".407 To the extent Article  5.1 imposes no obligation on an investigating 
authority to consider an adjustment plan, we see no basis for finding that the USITC acted 
inconsistently with Article  5.1 by not considering such a plan.  
7.240.   Based on the foregoing, we are not persuaded that the United  States  failed to ensure that 
the underlying safeguard measure was not more restrictive than necessary to facilitate adjustment. 
We accordingly reject  Korea 's claim  under Article s 5.1 and 7.1 of the  Agreement  on Safeguards that 
the United  States failed to limit the safeguard measure to what was necessary to remedy injury and 
facilitate adjustment . 
7.7.5   Conclusion  
7.241.   In light of the above : 
a. We reject Korea 's claim under Article  5.1 of the  Agreement on Safeguards that is premised 
on Korea 's view, which we have rejected, that the USITC found factors other than 
increased imports were causing injury to the domestic industry.  
b. We reject Korea 's claim under Article  5.1 of the  Agreement on Safeguards challenging the 
form and level of the United  States'  safeguard measure. To the extent Korea 's claim is 
premised on its view that the duty on out -of-quota LRW parts was not necessary under 
Article  5.1, for the reasons set out in paragraph  7.226  above, we do not find it necessary 
to address this aspect of Korea 's claim.  
c. We reject Korea 's claim under Article  5.1 of the  Agreement on Safeguards that the 
United  States  acted inconsistently with this provision in failing to take into account existing 
import restrictions from anti -dumping  and countervailing  measures.  
d. We reject Korea 's claim under Articles  5.1 and 7.1 of the  Agreement on Safeguards that 
the United  States  failed to limit the safeguard measure to what was necessary to remedy 
injury and facilitate adjustment.  
e. We do not find it necessary to address Korea 's claim under Article  5.1 of the  Agreement 
on Safeguards that is consequential to Korea 's claim under Article  4.2(b ) challenging the 
USITC 's determination on causation.  
7.8  Claims  under  Articles  12.1 and 12.2 of the Agreement  on Safeguards  
7.242.   Korea makes the following  claims under Articles  12.1 and 12.2 of the  Agreement  on 
Safeguards:  
a. Korea claims that the United  States acted inconsistently with Articles  12.1(a), 12.1(b) , 
and 12.1(c)  of the  Agreement on Safeguards  because it failed to make its notifications 
under these  provisions "immediately".  
b. Korea claims that the United  States acted inconsistently with Article  12.2 of 
the Agreement on Safeguards because its notifications under Article s 12.1(b)  and 12.1(c)  
failed to provide "all pertinent information" within the meani ng of Article  12.2. 
 
406 Panel Report, Korea  – Dairy , para.  7.108.  
407 Korea's  second written submission, para.  302. (emphasis  added)  WT/DS546/ R 
 
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  7.243.   Article  12.1 of the  Agreement  on Safeguards  provides  as follows : 
A Member shall immediately notify the Committee on Safeguards upon:  
(a) initiating an investigatory process relating to serious injury or threat thereof and the 
reasons fo r it; 
(b) making a finding of serious injury or threat thereof caused by increased imports; 
and 
(c) taking a decision to apply or extend a safeguard measure.  
7.244.   Article  12.2 provides, in relevant part:  
In making the notifications referred to in paragraphs  1(b) and 1(c), the Member 
proposing to apply or extend a safeguard measure shall provide the Committee on 
Safeguards with all pertinent information, which shall include evidence of serious injury 
or threat thereof caused by increased imports, precise descript ion of the product 
involved and the proposed measure, proposed date of introduction, expected duration 
and time table for progressive liberalization.  
7.245.   Thus, Article  12.1 requires a Member to "immediately" notify the Committee on Safeguards 
(Committee)  when i t: 
a. initiates a safeguard investigation  within the meaning of Article  12.1(a)  (initiation  
notification);  
b. makes a finding of serious injury or threat thereof within the meaning of Article  12.1(b)  
(serious injury notification);  and 
c. takes a decision  to apply or extend a safeguard measure within the meaning of 
Article  12.1(c)  (decision notification).  
7.246.   We note that Article  12.1 uses the term "immediately" but does not prescribe a specific 
timeframe within which a Member needs to make the required notifi cations.  We agree in this regard 
with previous DSB reports that the word "immediately" impl ies a certain urgency, and that the 
degree of urgency required depend s on a case -by-case assessment, account being take n of the 
administrative difficulty involved in  preparing the notification at issue and the character of the 
information supplied.408 Nonetheless,  like previous DSB reports, we consider that  the amount of time 
taken to notify must be kept to a minimum.409 
7.247.   In addition, we note that Article  12.2 requires  that the serious injury and decision 
notifications provide the Committee with "all pertinent information" , which shall include evidence of 
serious injury or threat thereof caused by increased imports, a precise description of the product 
involved and the pr oposed measure, the proposed date of introduction, and the expected duration 
and time table for progressive liberalization.  
7.8.1   Initiation  notification  
7.248.   With respect to the United  States'  initiation notification, the question before us is whether 
this notificati on was made immediately, in the sense of Article  12.1(a). To answer this question, we  
will consider the duration between the date when the USITC initiated the underlying safeguard 
investigation and the date the United  States  notified that initiation to the  Committee on Safeguards. 
We will also take into account any administrative burden  involved in preparing the notification at 
issue and the character of the information supplied . 
7.249.   Regarding the time taken between initiation and notification under Article  12.1(a), we note 
Korea 's conten tion that the date of initiation was 5  June 2017. Korea relies in this regard on the 
 
408 Appellate  Body Report, US – Wheat  Gluten , para.  105. 
409 Appellate  Body Report, US – Wheat  Gluten , para.  105. WT/DS546/ R 
 
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  United  States'  notification to the Committee on Safeguards ( Exhibit  KOR-15), which states that the 
USITC " initiated the investigation on 5  June 2017".410 The United  States  contends that the relevant 
date of initiation for the purpose of Article  12.1(a ) was 8  June 2017, which was the date the USITC 
publicly announced the institution  of the investigation.411 Therefore, the part ies disagree on the date 
of initiation of the safeguard investigation . However, both parties agree that the United  States  
notified its initiation to the Committee on 12  June 2017. 
7.250.   We note that even if we consider the date of initiation of the underlying sa feguard 
investigation to be 5  June 2017, as contended by Korea, this would mean that the United  States 
only took seven days to notify the initiation notification. Taking into account the 
United  States'  explanation regarding the internal administrative proc ess associated with the 
preparation of the initiation notification412 as well as the associated administrative burden413, we do 
not consider that the United  States'  notification of its initiation of the underlying safeguard 
investigation was not "immediate" under Article  12.1(a).414 
7.251.   Based on the foregoing, we reject  Korea 's claim  that the United  States acted inconsistently 
with Article  12.1(a)  of the  Agreement  on Safeguards . 
7.8.2   Serious  injury  notification  
7.252.   Korea claims that the United  States ' serious injury notifications (a)  were not immediate 
under Article  12.1(b)  of the  Agreement on Safeguards; and (b)  did not contain pertinent information 
within the meaning of Article  12.2 of the  Agreement on Safeguards. Therefore, per Korea, the 
United  States acted inconsistently with Article s 12.1(b)  and 12.2 of the  Agreement on Safeguards. 
The United  States asks us to reject both claims.  
7.253.   We note in this regard the following timelines, which are relevant in addressing 
Korea's  claims:  
a. On 5 October 2017, the USITC  commissioners held a public vote on serious injury in which 
they determined that increased  imports caused serious injury to the domestic industry : 
i. On 12  October  2017, the United  States  notified the Committee on Safeguards under  
Article  12.1(b)  of the WTO Agreement  on Safeguards that " there has been a finding of 
serious injury or threat thereof caused by increased imports".415 We refer to this 
 
410 Korea's  second written submission, para.  317. 
411 United  States'  response to Panel question No.  81, para.  51. 
412 The United  States  explains that the US petitioners filed an amended petition on 5  June 2017 
requesting initiation of the unde rlying safeguard investigation. Upon receiving the amended petition, the USITC 
commenced its internal process of considering whether the petition was properly filed. It concluded on 
7 June 2017 that the petition was properly filed and initiated the investi gation effective 5  June 2017. Thus, as 
of 5 June 2017, the United States Trade Representative ( USTR ), the agency responsible for filing 
US notifications was uncertain whether the USITC would consider the amended petition to be properly filed and 
initiate a n investigation on this basis. The USTR was informed on 8  June, through the USITC 's letter to USTR, 
that the investigation had been initiated. ( United  States'  second written submission, paras.  132-133). 
413 With respect to the  administrative burden involved in preparing the notification at issue and the 
character of the information supplied, the United  States  notes that (a ) the USITC and Executive Branch officials 
needed to coordinate with respect to the notification process; (b ) the notification did not just  reproduce the 
text of a previously published notice; (c ) the USITC investigation team was required to review the notification, 
and the process entailed exchanges between different US agencies ; and (d ) the Executive Branch officials 
responsible for the saf eguard proceedings were involved in two concurrent proceedings (solar and washers). 
(United  States'  response to Panel question No. 80, para. 49). Korea contends that the administrative difficulties 
cited by the United  States  may offer some insight into why the notification was late, but does not justify it. 
Korea also contends that the administrative burden cited by the United  States  is not credible  as the 
United  States  is an experienced Member and it does not provide evidence of the genuine nature of the alleged 
concerns. (Korea 's comments on the United  States'  response to Panel question No. 80, para. 111). We have no 
reason to doubt the genuineness  of the burden alluded by the United  States and do not consider that such 
burdens are diminished by a Member's  experience with safeguard investigations.  
414 We accordingly do not need to resolve the factual dispute between the parties on whether the 
safeguar d investigation was initiated on 5  June 2017 or 8  June 2017.  
415 Notification under Article  12.1(b ) of the  Agreement  on Safeguards on Finding a Serious Injury or 
Threat Thereof Caused by Increased Imports : United  States  of 12 October  2017, G/SG/N/8/USA/10 
(13 October  2017) (Original injury notification), (Exhibit  KOR-6). WT/DS546/ R 
 
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  notification as the "original injury notification". The original injury notification stated 
as follows:  
1. Provide  evidence,  citing  relevant  data and the applicable  period  
of investigation  of serious  injury  or threat  thereof  caused  by 
increased  imports  
On 5  October  2017, the U.S. International Trade Commission 
(Commission)  determined that large residential washers are being 
imported in such increased quantities as to be a substantial cause of 
serious injury to the domestic industry.  
The initiation that led to this determination was notified to the Committee 
on Safeguards in G/SG/N/6/USA/12 (dated  12 June 2017).  
The Commission is now considering the appropriate remedy to 
recommend to the President, and will forward its injury findings and 
remedy recommendations to the President by 4  December  2017. This 
report  will include the Commission's  injury de termination, remedy 
recommendations, certain additional findings, and the basis for its injury 
determination, remedy recommendations, and findings as well as the 
factual information compiled in the Commission's  posthearing injury 
report. The United  States will provide a copy of this report , excluding 
confidential business information, to the Committee on Safeguards 
shortly after it is submitted to the President.416 
b. On 4 December  2017, the USITC transmitted its report to the US President , while also 
issuing a t this time a public version  of the report : 
i. On 9 December  2017, the United  States submitted a notification under Article  12.1(b)  
to the Committee, which supplemented the notification of 12  October  2017 
("supplemental injury notification" ). 
7.8.2.1   Providing  all pertinent  information  
7.254.   Korea's  claim under Article  12.2 concerns the original injury notification, and not the 
supplemental injury notification. Korea argues that the United  States'  original injury  notification  was 
inconsistent with Article  12.2 because it  did not contain the following  "pertinent information" : 
(a) information about increased imports or evidence for finding serious injury caused by increased 
imports; (b)  discussion on the injury factors listed in Article  4.2(a)  of the  Agreement  on Safeguards;  
and (c)  explanation on the causal relation.417 
7.255.   The United  States does not dispute that the original injury notification did not contain this 
information. However, the United  States notes that the original injury notification was made with 
respect to the pu blic vote by the USITC  commissioners.418 The United  States explains that when the 
USITC commissioners held a public vote on serious injury  on 5  October  2017, the 
USITC  commissioners  had not completed the process of consolidating their individual reasoning , and 
drafting and finalizing the views of the USITC on serious injury.419 Thus, the original 
injury  notification on 12  October  2017 notified "all pertinent" information that was available at that 
time.420 The United  States notes that its supplemental injury n otification on 9  December  2017 
supplemented the original injury notification with the public version of the USITC report , which 
contained this information, and observes that it is common practice for Members to supplement 
 
416 Original injury notification, (Exhibit  KOR-6), p.  1. (fns  omitted; emphasis  added)  
417 Korea's  first written submission, para.  562. 
418 United  States'  first written submission, para.  388. 
419 United States'  first written submission, para.  396. 
420 United  States'  first written submission, para.  396. WT/DS546/ R 
 
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  notifications under Articles  12.1( b) and 12.1(c)  as new information becomes available or they take 
additional procedural steps.421 
7.256.   In addressing Korea's  claim, we note that it remains undisputed that the USITC had not 
issued its report at the time the United  States notified its original injury notification under 
Article  12.1(b)  to the Committee on Safeguards. Since Korea does not challenge the 
United  States'  supplemental notification under Article  12.2, it is also undisputed that the 
United  States'  supplemental notification contained the pertinent information required under 
Article  12.2. Thus, the question before us is whether the United  States acted inconsistently with 
Article  12.2 because its first notification under Article  12.1(b)  (i.e. the original injury no tification)  
did not contain the pertinent information under Article  12.2, even though the supplementa l injury 
notification under Article  12.2 did  present that information.  
7.257.   In addressing this question, we note that that Article  12.2 refers to "notifications  referred to 
in paragraphs  1(b) and 1(c)" (in the collective ) and identifies the pertinent information that such 
notifications should contain, without necessarily distinguishing between information contained in an 
Article  12.1(b)  notification and that cont ained in an Article  12.1(c)  notification.422 Some of the 
information, such as the "proposed date of introduction" of the measure, that is otherwise pertinent 
under Article  12.2, may not be available at the time a Member makes its serious injury notification  
under Article  12.1(b), and may only become available when a Member subsequently decides to apply 
the safeguard measure. The fact that Article  12.2 does not require Members to provide all pertinent 
information in notifications under Article  12.1(b)  alone s uggests that Article  12.2 permits Members 
to provide the pertinent information identified in Article  12.2 in a staggered manner. Therefore, we 
do not consider that Article  12.2 precludes a Member from supplementing an initial notification under 
Article  12.1(b) with additional information. When a Member does make such a 
supplemental  notification under Article  12.1(b), and the initial and supplemental notification 
collectively identify the pertinent information under Article  12.2, we do not consider that the Member 
could be said to have acted inconsistently with Article  12.2 because its initial notification, taken 
alone, does not set out all the pertinent information under Article  12.2.423 We accordingly are not 
persuaded by Korea's  claim that the United  States  acted inconsistently with Article  12.2 because its 
original injury notification did not contain the information identified by Korea.  
7.258.   Based on the foregoing, we reject  Korea 's claim  that the United  States  acted inconsistently 
with Article  12.2 of the  Agree ment on Safeguards . 
7.8.2.2   Immediacy  of notification  
7.259.   Korea contends as follows:  
a. The original injury notification of 12  October  2017 was not immediate under 
Article  12.1(b)  because it was made seven  days after the USITC had made a finding of 
serious injury through the public vote of the USITC  commissioners on 5  October  2017.424 
b. The supplemental injury notification  of 9 December  2017 was not immediate under 
Article  12.1(b)  because425: 
i. It was made two months  after the public vote of the USITC  commissioners.  
ii. Even if the publication of the USITC report on 4  December  2017 was the triggering 
event for assessing whether the United  States made an immediate notification under 
 
421 United  States'  first written submission, para s. 398-399; response to Panel question No.  86(a),  
para. 56. 
422 Emphasis added.  
423 Indeed, the requirement of "immediate" notification under Article  12.1 and the requirement to 
provide "all pertinent information" under Article  12.2, show that Article  12 seeks to strike a balance between 
requiring a Member to provide the pertinent informa tion under Article  12.2 to the Members, through the 
Committee on Safeguards, and doing so in a timely manner. Our understanding of Article  12 preserves this 
balance because it does not disincentivize a Member from notifying the pertinent information as soon as it is 
notifiable . 
424 Korea's  first written submission, para.  554. 
425 Korea's  first written submission, para.  563. WT/DS546/ R 
 
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  Article  12.1(b), the supplemental injury notification was not immediate as it was 
notified on 9  December  2017, five days after the publication of the report.  
7.260.   The United  States argues that it "immediately" notified its original injury notification as well 
as its supplemental injury notification. T he United  States submits that in determining whether the 
United  States'  notifications were immediate, we should take the following factors into account:  
a. The administrative task of preparing the notification was not pro forma  but had to be 
tailored.426 The s upplemental notification did not just enclose the public version of the 
USITC report, but also pinpointed to findings of potential relevance to Members.427 
b. The original notification had to be reviewed  by the USITC investigating team and required 
exchanges b etween two separate US  agencies (the USITC and the United  States  Trade 
Representative (USTR)).428 
c. The original and supplemental notifications were made at a time when government officials 
responsible for the safeguard measures were extremely busy, including  with the 
LRW investigation and the solar products investigation.429 
7.261.   With respect to the original injury notification, taking into account the 
United  States'  explanation regarding the process involved in preparation of the notification, we are 
not persuaded that the United  States'  notification within seven days of the 
USITC  commissioner's  public vote was not "immediate" under Article  12.1(b). With respect to the 
supplemental injury notification, we note that this notification was based on the USITC report that 
was transmitted to the US  President on 4  December  2017. In determining whether this notification 
was immediate, we consider the time taken from the date the USITC report was transmitted to the 
US President.430 We note that the United  States took  five days to notify the supplemental 
notification. Taking into account the United  States'  explanations regarding the administrative 
process associated with preparing this notification, we are not persuaded that the notification within 
five days was not im mediate for the purpose of Article  12.1(b).  
7.262.   Based on the foregoing, we reject Korea 's claim  that the United  States acted inconsistently 
with Article  12.1(b)  of the  Agreement  on Safeguards with respect to the original injury notification 
and the supplementa l injury notification.  
7.8.3   Decision  notification  
7.263.   Korea claims that the United  States ' decision notification (a)  was not immediate under 
Article  12.1(b)  of the  Agreement on Safeguards; and (b)  did not contain pertinent information within 
the meaning of Article  12.2 of the  Agreement on Safeguards. Therefore, per Korea, the United  States 
acted inconsistently with Article s 12.1(b)  and 12.2 of the  Agreement on Safeguards. 
The United  States asks us to reject both claims.  
7.8.3.1   Providing  all pertinent  information  
7.264.   Korea contends that the United  States'  decision notification  was inconsistent with 
Article  12.1(c)  because it did  not contain all pertinent information , including the evidence on 
serious  injury caused by increased imports.431 Korea submits in this regard that  while the 
United  States'  decision notification referred to the public version of the USITC report, that report  
redacted information without providing sufficient non -confidential summaries. Specifically, 
Korea  points to redactions in the sections  (a) on increased imports where statistics on the 
development of imports over the POI had been redacted ; and (b) on serious injury.432 Korea asserts 
 
426 United  States'  first written submission, para.  393. 
427 United  States'  first written submission, para.  400. 
428 United  States'  first written submission, paras.  393 and 4 00. 
429 United  States'  first written submission, para.  393. 
430 Indeed, considering the USITC report had not been issued when the USITC commissioners held their 
public vote on serious injury on 5  October  2017, the United  States coul d not be expected to notify any 
information based on that report.  
431 Korea's  first written submission, para.  564. 
432 Korea's  first written submission, para.  565. WT/DS546/ R 
 
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  in this regard that the obligation to protect confidential information does not mean that Members  
can redact such information without providing "non -confidential summaries" or the "reasons why a 
summary cannot be provided" as required by Article  3.2 of the  Agreement on Safeguards .433 
Korea  states that the  United  States  failed t o provide such summaries or reasons as to why  not 
"all pertinent information" was provided in the Article  12.1(c ) notification.  
7.265.   The United  States notes that Korea does not explain why the information that the USITC did 
provide was insufficient under Articl e 12.2.434 The United  States also asserts  that Article  12.2 does 
not supersede  the USITC's  obligation under Article  3.2 to not disclose confidential information 
without permission of the party submitting it.435 
7.266.   We note that while Article  12.2 requires Member s to provide all pertinent information in their 
notifications under Articles  12.1(b)  and 12.1(c), we agree with previous DSB reports that such 
information does not need to cover all details of the recommendations and reasoning set out in the 
report of the investigating authorities.436 In addition, we note , as Korea agrees,  that Article  12.2 
does not require Members to disclose confidential information in their notifications.437 However, at 
the same time, considering that notifications under Article  12.1(c)  serve as a basis for consultations 
under Article  12.3, the information must be provided in a manner that would allow exporting 
Members to have meaningful consultations. Therefore, if a complainant is to assert that a notification 
does not contain pertinent i nformation, such as the evidence of serious injury or threat thereof 
caused by increased imports, it must do more than merely assert that the notification redacts 
confidential information. Instead, the complainant must show why the information that has bee n 
conveyed  in the notification is not sufficient under Article  12.2, such that the notifying Member could 
not be said to have "provid[ed]" all pertinent information.  
7.267.   In our view, Korea has not made such a showing. Korea focuses on the redactions in the 
increased imports and serious injury sections  of the USITC report, and the alleged absence of 
non-confidential summaries in those reports.438 In particular, Korea argues that ( a) the increased 
imports section  of the USITC report failed to provide all relevant information, as the relevant 
statistics on the development of imports over the POI was redacted, and no non -confidential 
summaries were provided in this regard; and ( b) the discussion on serious injury in the USITC report 
was highly redacted , and thus left Members at a loss as to crucial aspects of the findings made.439 
However, we note that the relevant question under Article  12.2 is not whether the public version of 
the USITC report cited in the notification redacted confidential information, or d id not cover all details 
of the reasoning set out in that report, but whether the United  States provided all pertinent 
information through its Article  12.1(c)  notification. Korea has not established through the arguments 
set out above that the United  State s failed to do so.  
7.268.   Based on the foregoing, we reject  Korea 's claim  that the United  States acted inconsistently 
with Article  12.2 of the  Agreement  on Safeguards . 
7.8.3.2   Immediacy  of notification  
7.269.   The parties agree that the United  States took the decision to apply a  safeguard measure on 
23 January  2018, when the US President  signed the proclamation detailing the proposed measure.440 
They also agree that the United  States notified this decision to the Committee on 26  January  2018, 
i.e. three days later.441 
7.270.   Korea contend s that because the United  States took three days to notify the Committee  on 
Safeguards  about the decision to apply a safeguard measure, it failed to "immediately" notify the 
Committee under Article  12.1(c) .442 In this regard, Korea contends that there was n o lack of 
resources that would justify such a delay; the decision to be notified comprised only three pages; 
 
433 Korea's  second written submission, para.  326. 
434 United  States'  first written submission, para.  406. 
435 United  States'  first written submission, paras.  405 and 407.  
436 Appellate  Body Report, Korea  – Dairy , para.  109. 
437 Korea's  second written submission, para.  326. 
438 Korea's  first written submission, para.  565. 
439 Korea's  first written submission, para.  565. 
440 Korea's  first written submission, para.  548; United  States'  first written submission, para.  404. 
441 Korea's  first written submission, para.  548; United  States'  first written submission, para.  404. 
442 Korea's  first written submission, para.  556. WT/DS546/ R 
 
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  and the decision did not need to be translated.443 The United  States submits that it complied with 
Article  12.1(c), and refers to the administrative process relating to the preparation of the decision 
notification to explain the time taken to notify444: 
a. Burden on USITC staff : 
i. The US Presidential Proclamation in the underlying LRW safeguard measure was signed 
on the same day as the proclamation in a parallel case on solar products, putting an 
extraordinary burden on US  officials.  
ii. US officials needed to inform agencies charged with a dministering the safeguard 
measure, and respond to questions from the public, including affected governments 
and foreign producers.  
iii. The United  States considered it critical to obtain a formal copy of the 
US Presidential  Proclamation, but the process has se veral formalities that slowed 
receipt of the copies.  
b. Notification preparation : 
i. To prepare the notification, responsible officials had to extract information from the 
documents, distil it to ensure maximum comprehensibility, seek comments from 
relevant offi cials, and execute necessary changes made by those officials.  
c. Time difference between Washington DC and Geneva : 
i. The US  Presidential Proclamation was signed after close of business, Geneva time (on 
23 January  2018)  and the notification was transmitted to Ge neva in the evening of 
25 January  2018. Once the time zone difference is taken into account, the gap 
between signature of the US  Presidential Proclamation and the notification was actually 
just two days.  
7.271.   Taking into account the United  States'  explanations regarding the administrative process 
associated with preparing this notification, we are not persuaded that notification within three days 
was not immediate for the purpose of Article  12.1(c).  
7.272.   Based on the foregoing, we reject  Korea 's claim  that the United  States acted inconsistently 
with Article  12.1(c ) of the  Agreement  on Safeguards . 
7.8.4   Conclusion  
7.273.   In light of the above we reject Korea 's claims under Articles  12.1(a), 12.1(b ), and 12.1(c ) 
of the  Agreement on Safeguards that the United  States  allegedly failed to "immediately" notify its 
initiation notification, serious injury notification and decision notification to the 
Committee  on Safeguards.  
7.274.   We also reject Korea 's claims under Article  12.2 of the  Agreement on Safeguards that the 
United  States  allegedly fail ed to provide "all pertinent information" in its serious injury notification 
and its decision notification.  
7.9  Claims  under  Articles  8.1 and 12.3 of the Agreement  on Safeguards  
7.275.   We note that Article  8.1 of the  Agreement  on Safeguards provides, inter alia, that a Member 
applying a safeguard measure shall endeavour to maintain a substantially equivalent level of 
concessions and other obligations to that existing under  GATT  1994 between it and the exporting 
Members which wo uld be affected by such a measure, in accordance with paragraph  3 of Article  12. 
Article  12.3, in turn, provides  as follows:  
 
443 Korea's  first written submission, para.  557. 
444 United  States'  response to Panel question No.  62, paras.  104-106. WT/DS546/ R 
 
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  A Member proposing to apply or extend a safeguard measure shall provide adequate 
opportunity for prior consultations with those Mem bers having a substantial interest as 
exporters of the product concerned, with a view to, inter alia, reviewing the information 
provided under [Article  12.2], exchanging views on the measure, and reaching an 
understanding on ways to achieve the objective s et out in [Article  8.1]. 
7.276.   Thus, as is evident from the text of Article  8.1, and as also recognized in previous 
DSB reports, a WTO  Member cannot endeavour to maintain an adequate balance of concessions  
under Article  8.1 unless it provides, as a first step, a n adequate opportunity for prior consultations 
on a proposed measure  under Article  12.3.445 
7.277.   Korea argues that the United  States failed to provide an adequate opportunity for prior 
consultations under Article  12.3, and therefore did not endeavour to maintain  substantially 
equivalent level of concessions and other obligations under Article  8.1 of the  Agreement  on 
Safeguards.  Korea's  claim under Article  8.1 is thus directly linked to the question of whether the 
United  States provided adequate opportunity for co nsultations under Article  12.3. Korea contends in 
this regard that the United  States  did not provide it with an adequate opportunity for prior 
consultations because Korea learnt of the scope and effective date of the safeguard measure on 
26 January  2018, which is the date the United  States notified the decision to apply a safeguard 
measure under Article  12.1(c), and the safeguard measure went into effect 12 days later, 
i.e. 7 February  2018.446 Korea acknowledges in this regard that the Unit ed States and Korea held 
consultations on 1  February  2018.447 However, Korea contends that it did not have sufficient time 
to analyse the measure, consider its likely consequence, conduct  appropriate domestic consultations, 
and prepar e for consultations wit h the United  States.448 Therefore, per Korea, the United  States did 
not provide sufficient opportunity for prior consultations.  
7.278.   The United  States considers that it provided Korea with sufficient opportunity for prior 
consultations. In particular, the United  States disagrees that Korea had only 12 days to prepare for 
consultations. The United  States asserts in this regard that t he opportunity for prior consultation s 
arose on 11  December  2017 (not 26  January  2018, as Korea contends), which is when the 
United  States issued a supplemental notification under Article  12.1(b ) of the  Agreement  on 
Safeguards and announced its readiness for consultations.449 The United  States  notes that this 
notification set out a description of the product, evidence of serious injury c aused by increased 
imports, a proposed measure, the proposed dat e of introduction, the expected duration , and a 
timetable for progressive liberalization.450 The United  States  submits that Members had received 
most of the relevant information on 11  December  2017, and the decision notification provided 
limited additional information, making it relatively simple to evaluate how the effects of the 
final safeguard measure would dif fer from expectations based on the proposed measure.451 The 
United  States also submits that the opportunity for consultations continued beyond 7  February  2018 
because the US  Presidential Proclamation explicitly provided further time for consultations, and a n 
opportunity to modify the safeguard measure in response to the results of those consultations.452 
7.279.   The question before us is whether the United  States provided Korea with adequate  
opportunity for prior consultations under Article  12.3. In addressing this q uestion, we note from the 
text of Article  12.3, set out above, that the provision asks Members proposing  to apply  a safeguard  
measure  to provide adequate  opportunity  for prior consultations  to Members with substantial interest 
as exporters of the product c oncerned with a view to, inter alia, (a) reviewing the information 
provided under Article  12.3, (b)  exchanging views on the measures, and (c)  reaching an 
understanding on ways to achieve the objectives set out in Article  8.1. Like previous DSB reports, 
we consider that Article  12.3 requires a Member proposing to apply a safeguard measure to provide 
exporting Members with sufficient information and time to allow for the possibility, through 
consultations, for a meaningful exchange on the issues identified in  Article  12.3.453 We also agree in 
this regard with previous DSB  reports that the obligation to provide adequate opportunity for "prior" 
 
445 Appellate  Body Report, US – Wheat  Gluten , para.  146. 
446 Korea's first written submission, para.  530. 
447 Korea's  response to Panel question No.  84, para.  111. 
448 Korea's  response to Panel question No.  84, para.  112; first written submission, para.  530. 
449 United  States'  first written submission, para. 411. 
450 United  States'  first written submission, para. 411. 
451 United  States'  first written submission, para.  416. 
452 United  States'  first written submission, para.  417. 
453 Appellate  Body Report, US – Wheat  Gluten , paras.  136-137. WT/DS546/ R 
 
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  consultations cannot be met if there is insufficient time prior to the application  of the measure  to 
have a meaningful exchange.454 Instead, a Member having a substantial interest as exporter of the 
product concerned must have sufficient time prior to the application of the measure to have 
consultations with the imposing Member with a view to, inter alia, achieving the objectives set out 
in Article  12.3. 
7.280.   We note that the parties disagree on whether Korea had sufficient time prior to the 
application of the safeguard measure for a meaningful exchange. The parties'  disagreement in this 
regard arises from t heir differing views on whether the opportunity to consult arose on 
11 December  2017, when the United  States notified its supplemental injury notification and 
announced its readiness for consultations  (as the United  States contends), or 26  January  2018, 
when the United  States notified its decision notification (as Korea contends). We note in this regard 
Korea's  argument that it could not have had meaningful consultations on the basis of the 
United  States'  supplemental injury notification because, inter alia: 
a. There was disagreement among the USITC's  four commissioners on the necessity for 
in-quota tariffs for LRW units. Thus, Korea could not have known what remedy the 
US President would apply unless he made a decision in this regard (he ultimately applied 
in-quota tariffs).455 
b. The USITC recommended that the LRW measure not apply to Korea, but the US  President 
decided to apply the measure to Korea.456 
7.281.   Korea notes that as of 11  December  2017, it only knew of the USITC's  recommendation  
reflected in the United  State s' Article  12.1(b)  notification, and did not know what the US President 
would do in terms of ( a) imposition of in -quota tariffs on LRW units, and ( b) inclusion of Korea in 
the scope of the safeguard measure. The United  States does not dispute that its supp lementa l injury 
notification did not provide this information.  
7.282.   In our view, to have an adequate opportunity for prior consultations pursuant to Article  12.3, 
Korea would have required this information. We note in this regard that one of the objectives of 
Article 12.3 consultations is to review the pertinent information identified in Article  12.2 and 
provided to Members through Article s 12.1(b)  and 12.1(c)  notifications. Pertinent information 
includes a "precise description of the product involved and the pr oposed measure". We note in this 
regard that, as Korea argues,  the USITC stated in its report that the safeguard measures would not 
apply to Korea.457 Considering that Korea did not have the information regarding the application of 
the safeguard measure to its exports or the nature of the remedy as of 11  December  2017, 
consultations under Article  12.3 could not have covered this information. Moreover, t he purpose of 
an Article  12.3 consultation is also to exchange views on the measure, and to reach an understanding 
on ways to achieve the objective set out in Article  8.1 of the  Agreement on Safeguards. The objective 
of Article  8.1 is that a Member proposi ng to apply a safeguard measure shall endeavour to maintain 
a "substantially equivalent level of concessions" and other obligations to that existing 
under  GATT  between it and "the exporting Members which would be affected by such a measure" in 
accordance w ith Article  12.3. We do not consider that Korea could have had an adequate opportunity 
for prior consultations under Article  12.3, in the sense of exchanging views on the measure and 
achieving the objective of Article  8.1, in the absence of this informatio n.458 
7.283.   Instead, the opportunity to review this information would have arisen on 26  January  2018, 
when the United  States  notified the decision notification, which provided the information set out in 
 
454 Appellate  Body Report, US – Line Pipe, para.  112. 
455 Korea's  response to Panel question No.  66, para.  264. 
456 Korea's  response to Panel question No.  66, para.  265. 
457 Korea's  response to Panel question No.  66, para.  265; USITC report, (Exhibit  KOR-1), pp.  65-66. 
458 We note in this regard that  previous DSB reports, with which we agree, have found when the report 
of the investigating authorities, notified under Article  12.1(b), did not contain precise recommendations on the 
nature of the measure to be imposed so as to allow the complainant to ac curately assess the likely impact of 
the measure contemplated, or adequately consult with the imposing Member on the overall equivalent 
concessions, the exporting Members could not have meaningful consultations based on the Article  12.1(b) 
notification. (A ppellate  Body Report, US – Wheat  Gluten , paras.  141-142). WT/DS546/ R 
 
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  paragraph  7.280 (a)-(b) above.459 In addition, we note  the United  States'  submi ssion that the 
opportunity for consultation continued beyond 7  February  2018, when the safeguard measure came 
into effect, because the US  Presidentia l Proclamation explicitly provided further time for 
consultations and an opportunity to modify the safeguard measure in  response to the results. 
However, we disagree with this submission because, as we noted above,  the obligation to provide 
adequate opport unity for "prior" consultations cannot be met if there is insufficient time prior to the 
application of the measure to have a meaningful exchange. It remains undisputed that the safeguard 
measure went into effect on 7  February  2018.460 Therefore, in examini ng whether Korea had 
adequate opportunity for prior consultations, we must consider whether Korea had sufficient time 
prior to the application of the measure on 7  February  2018 to have a meaningful exchange pursuant 
to Article  12.3. 
7.284.   We accordingly consider  whether the United  States  provided Korea with sufficient time to 
allow for the possibility , through consultations , for a meaningful exchange based on the information  
set out in paragraph  7.280 (a)-(b) above . Taking into account the time available to Korea prior to 
the application of the safeguard measure on LRWs and the nature of the information set out in 
paragraph  7.280 (a)-(b) above that would inform those consultations, we do not consider that Korea 
had adequate opportunity for prior consultations under Article  12.3. Therefore, we also find t hat the 
United  States  did not endeavour to maintain a substantially equivalent level of concessions and other 
obligations under Article  8.1 between it and Korea, in accordance with Article  12.3. 
7.285.   Based on the foregoing, we find that the United  States acted inconsistently with Article s 12.3 
and 8.1 of the  Agreement  on Safeguards.  
7.10  Claim  under  Article  11.1(a ) of the Agreement  on Safeguards  
7.286.   In its request for findings, Korea claim s that the United  States  acted inconsistently with 
Article  11.1(a ) of the  Agreement  on Safeguards because of violations under other provisions of 
the Agreement  on Safeguards and Article  XIX:1(a ) of the  GATT  1994.461 Therefore, Korea 's claim 
under Article  11.1(a ) is purely consequential and is dependent on a finding of violation with respect 
to Korea's  claims under Article  XIX:1(a) and different provisions of the  Agreement on Safeguards . 
We have upheld certain claims made by Korea under Article  XIX:1(a)  of the  GATT  1994 as well as 
under t he Agreement on Safeguards.  
7.287.   Based on the foregoing, we  do not find it necessary to address Korea's  claim under 
Article  11.1(a ) of the  Agreement  on Safeguards.  
7.11  Claim  under  Article  II:1 of the GATT  1994  
7.288.   Korea contends that as long as a Member takes safeguard measures consistent ly with 
Article  XIX of the  GATT  1994 and the  Agreement  on Safeguards , it may levy tariffs above its bound 
level.462 However, per Korea, the United  States imposed a safeguard measure on imports of LRWs 
even though the prerequisites set forth in Article  XIX:1(a)  of the  GATT  1994 and the  Agreement  on 
Safeguards were not shown to exist.463 Therefore, according to Korea, by imposing an unlawful 
safeguard measure the United  States imposed duties that were in excess of those set forth in its 
Schedule  of Concessions , thereby violating Article  II:1 of the  GATT  1994.464 The United  States notes 
that Korea's  claim  is purely consequen tial and it should fail because the United  States'  safeguard 
measures are consistent with Article  XIX:1(a)  of the  GATT  1994 and with the Agreement  on 
Safeguards.465 In addition, the United  States submits that even if we were to find violations under 
 
459 We note Korea 's confirmation that it had access to, and was aware of, the contents of the 
US Presidential P roclamation on 24  January  2018. (Korea 's response to Panel question No. 85, para. 115). 
However, Korea 's confirmation does not affect our findings above considering consultations under Article  12.3 
are based on the notifications made pursuant to Articles  12.1 and 12.2, and in any case Korea becam e aware 
of the contents only two days prior to 26  January  2018, when the United  States  notified its decision 
notification . 
460 United  States'  response to Panel question No.  65(a), para.  110; Korea's  second written submission, 
para. 312. 
461 Korea's  first writt en submission, para.  573. 
462 Korea's  first written submission, para.  570. 
463 Korea's  first written submission, para.  571. 
464 Korea's  first written submission, para.  571. 
465 United  States'  first written submission, para.  418. WT/DS546/ R 
 
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  Article  XIX:1(a)  of the  GATT  1994 and under the Agreement  on Safeguards, a finding under 
Article  II:1 would be superfluous.466 
7.289.   We note that  Korea's  claim  under Article  II:1 is purely consequential and is dependent on a 
finding of violation with respect to Korea's  claims under Article  XIX:1(a) and different provisions of 
the Agreement  on Safeguards. We have upheld certain claims made by Korea under Article  XIX:1(a)  
of the  GATT  1994 as well as under the  Agreement on Safeguards.  
7.290.   Based on the foregoing, we do not find it necessary to address Korea's  claim under 
Article  II:1 of the  GATT  1994.  
8  CONCLUSIONS  AND RECOMMENDATION  
8.1.  For the reasons set forth in this Report, we conclude as follows:  
a. With respect to Korea 's claims under Article  XIX:1(a)  of the  GATT  1994 and Articles  1 and 
3.1 of the  Agreement on Safeguards challenging the absence of a reasoned and adequate 
explanation on "unforeseen developments" and the "obligations incurred" by the 
United  States, which would have resulted in the alleged increased imports of LRWs cau sing 
serious injury:  
i. We find that the USITC acted inconsistently with Article  XIX:1(a)  of the  GATT  1994 
and Article  3.1 of the  Agreement on Safeguards because its report does not contain a 
reasoned and adequate explanation on "unforeseen developments" and the 
"obligations incurred" by the United  States , within the meaning of Article  XIX:1(a ) of 
the GATT  1994. We do not find it necessary to address whether the USITC also acted 
inconsistently with Article  1 of the  Agreement  on Safeguards for  these same reasons.  
b. With respect to Korea 's claims under Articles  2.1, 3.1, 4.1(c), 4.2(a), and 4.2(b)  of 
the Agreement on Safeguards challenging the USITC 's definition of the domestic industry:  
i. We find that the USITC acted inconsistently with Article  4.1(c) of the  Agreement  on 
Safeguards because it included LRW parts in the definition of the domestic industry 
based on ( 1) its finding of likeness between imported and domestically produced LRW 
parts; and ( 2) its application of the product line approach. We do not find it necessary 
to address whether the USITC also acted inconsistently with Article  2.1 for these same 
reasons.  
ii. We reject Korea 's claim under Articles  3.1 and 4.1(c) of the  Agreement on Safeguards, 
as well as Article  2.1 of the  Agreement on Safegu ards challenging the 
USITC 's inclusion of belt -driven washers in the definition of the domestic  industry.  
iii. We do not find it necessary to address Korea 's consequential claim s that as a 
consequence of the improper definition of the domestic industry, the 
USITC's determination of serious injury and causation was also inconsistent with  
Articles  2.1, 3.1, 4.1(c), 4.2(a), and 4.2(b ) of the  Agreement on Safeguards.  
c. With respect to Korea 's claims under Articles  2.1 and 3.1 of the  Agreement  on Safeguards 
challenging the USITC 's findings on imports in such increased quantities:  
i. We find that the USITC acted inconsistently with Articles  2.1 and 3.1 of the  Agreement 
on Safeguards because it failed to provide a reasoned and adequate explanation i n 
support of its finding on increased imports.  
ii. We reject Korea's  claim that the USITC acted inconsistently with Articles  2.1 and 3.1 
of the  Agreement on Safeguards by ( 1) cumulating imports of LRWs and LRW parts as 
part of its increased imports analysis ; (2) failing to examine the significance of the 
increase in imports relative to domestic consumption ; and (3 ) failing to account for 
 
466 United  States'  first written submission, para.  419. WT/DS546/ R 
 
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  the price and non -price based aspects of the conditions of competition in the market 
in its increased imports analysis.  
d. With respect to Korea 's claims under Articles  2.1, 3.1, 4.1(a), 4.2(a), and 4.2(c)  of 
the Agreement on Safeguards challenging the USITC 's findings on serious injury suffered 
by the domestic industry:  
i. We find that the USITC acted inconsistently with Articles  4.2(a) and 3.1 of 
the Agreement  on Safeguards  by excluding the profit and loss data of the producer of 
belt-driven washers from the profit data used to determine the profitability of the 
domestic industry. We do not find it necessary to separately address whe ther the 
USITC  also acted  inconsistently with Articles  2.1, 4.1(a), and 4.2(c)  for these same 
reasons.  
ii. We reject, for the reasons set out in paragraph  7.119  above, Korea 's claims under 
Article  4.2(a), as well as Articles  3.1, 4.1(a), and 4.2(c ) of the  Agreement on 
Safeguards  that the USITC allegedly failed to objectively examine "profit and loss".  
iii. We reject Korea 's claims under Article  4.2(a ) of the  Agreement on Safeguards  that the 
USITC allegedly failed to objectively examine the share of the domestic market taken 
by increased imports.  
iv. We do not find it necessary to address Korea 's claims under Article  4.2(a), as well as 
Article s 3.1, 4.1(a), and 4.2(c ) of the  Agreement on Safeguards  that the USITC failed 
to evaluate all injury factors set out in Article  4.2(a).  
v. We do not find it necessary to address Korea 's claim s under Article  4.2(a), as well as 
Articles  2.1, 3.1, 4.1(a), and 4.2(c)  of the  Agreement on Safeguards that are 
consequential to Korea 's claims challenging the USITC 's definition of the 
domestic  industry.  
vi. We do not find it necessary to address Korea's  claims under Article  4.2(a), as well as 
Articles  3.1, 4.1(a), and 4.2(c)  of the  Agreement on Safeguards that the USITC failed 
to undertake an objective examination of the significant overall impairment of the 
domestic industry  and based its overall finding of serious injury on one factor alone.  
e. With respect to Korea 's claims under Articles  2.1, 3.1, 4.2(b), and 4.2(c)  of the  Agreement  
on Safeguards challenging the USITC 's findings on causation between subject imports and 
the serious injury to the domestic indus try: 
i. We find that the USITC acted inconsistently with Articles  3.1 and 4.2(b ) the Agreement 
on Safeguards because it (1) did not provide a reasoned and adequate explanation in 
support of its finding that subject imports depressed and suppressed prices of t he 
domestic like product as a whole; and (2 ) did not make a finding on coincidence in 
trends in a manner consistent with Article  4.2(b). We do not find it necessary to 
separately address whether the USITC also acted inconsistently with Articles  2.1 and 
4.2(c) for these same reasons.  
ii. We reject Korea 's claims under Articles  3.1 and 4.2(b), as well as Articles  2.1, and 
4.2(c) of the  Agreement on Safeguards  challenging the USITC 's finding that (1 ) joint 
pricing of dryers and LRWs and (2 ) deterioration of US brands, were not factors 
causing injury to the domestic industry.  
iii. We reject Korea 's claims under Articles  3.1 and 4.2(b), as well as Articles  2.1 and 
4.2(c)  of the  Agreement on Safeguards challenging the USITC 's application of the 
substantial cause test in the underlying investigation.  
iv. We do not find it necessary to address Korea 's claims under Articles  3.1 and 4.2(b), 
as well as Articles  2.1 and 4.2(c ) of the  Agreement on Safeguards regarding the 
USITC 's analysis of non-price related aspects of competition.  WT/DS546/ R 
 
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  v. We do not find it necessary to address Korea 's claims under Article  4.2(b), as well as 
Articles  2.1, 3.1, and  4.2(c) of the  Agreement on Safeguards that are consequential 
to Korea 's claims challenging the USITC 's definition of the domestic  industry and it s 
determination on increased imports.  
f. With respect to Korea 's claims under Articles  5.1 and 7.1 of the  Agreement  on Safeguards:  
i. We reject Korea 's claim under Article  5.1 of the  Agreement on Safeguards that is 
premised on Korea 's view, which we have rejecte d, that the USITC found factors other 
than increased imports were causing injury to the domestic industry.  
ii. We reject Korea 's claim under Article  5.1 of the  Agreement on Safeguards challenging 
the form and level of the United  States'  safeguard measure. To t he extent 
Korea 's claim is premised on its view that the duty on out -of-quota LRW parts was not 
necessary under Article  5.1, for the reasons set out in paragraph  7.226  above, we do 
not find it necessary to address this aspect of Korea 's claim.  
iii. We reject Korea 's claim under Article  5.1 of the  Agreement on Safeguards that the 
United  States  acted inconsistently with this provision in failing to take into account 
existing import restrictions from anti -dumping  and countervailing  measures.  
iv. We reject Korea 's claim under Articles  5.1 and 7.1 of the  Agreement on Safeguards 
that the United  States  failed to limit the safeguard measure to what was necessary to 
remedy injury and facilitate adjustment.  
v. We do not find it necessary to address Korea 's claim under Article  5.1 of 
the Agreement on Safeguards that is consequential to Korea 's claim challenging the 
USITC 's determination on causation.  
g. With respect to Korea 's claims under Articles  12.1 and 12.2 of the  Agreement  on 
Safeguards:  
i. We reject Korea 's claims under Articles  12.1(a), 12.1(b ), and 12.1(c ) of 
the Agreement on Safeguards that the United  States  allegedly failed to "immediately" 
notify its initiation notification, serious injury notification , and decision notification to 
the Committee on Safeguards.  
ii. We reject Korea 's claims under Article  12.2 of the  Agreement on Safeguards that the 
United  States  allegedly failed to provide "all pertinent information" in its serious injury 
notification and its decision notification.  
h. With respect to Korea 's claims under Articles  8.1 and 12.3 of the  Agreement on 
Safeguards, we find that the United  States  acted inconsi stently with Article  12.3 because 
it failed to provide Korea with adequate opportunity for prior consultations under 
Article  12.3 of the  Agreement on Safeguards. We find that as a consequence of this 
violation under Article  12.3, the United  States  also act ed inconsistently with Article  8.1 of 
the Agreement on Safeguards.  
i. With respect to Korea 's claim under Article  11.1(a ) of the  Agreement  on Safeguards, we 
do not find it necessary to address this claim.  
j. With respect to Korea 's claim under Article  II.1 of the  GATT  1994, we do not find it 
necessary to address this claim.  
8.2.  Under Article  3.8 of the DSU, in cases where there is an infringement o f the obligations 
assumed under a covered agreement, the action is considered prima  facie to constitute a case of 
nullification or impairment. We conclude that, to the extent that the measure at issue is inconsistent 
with Article  XIX:1 (a) of the  GATT  1994 and several provisions of the  Agreement  on Safeguards, it 
has nullified or impaired benefits accruing to Korea under th ese agreement s. WT/DS546/ R 
 
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  8.3.  Pursuant to Article  19.1 of the DSU, we recommend that the United  States  bring its measure 
into conformity with its oblig ations under Article  XIX:1(a ) of the  GATT  1994 and the  Agreement  on 
Safeguards.  
__________