WT/DS562/R/Add.1  
 
2 September 2021  
(21-6347) Page: 1/108 
  Original: English  
 
  
 
 
 
UNITED STATES – SAFEGUARD MEASURE ON IMPORTS OF CRYSTALLINE 
SILICON PHOTOVOLTAIC PRODUCTS  
REPORT OF THE PANEL  
Addendum  
This addendum  contains Annexes A to C to the Report of the Panel to be found in document  
WT/DS562/R . 
 
 
_______________  
 
 
 
 
 
 
 
 
 
 WT/DS562/R/Add.1  
 
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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 on Business Confidential 
Information  11 
Annex  A-3 Additional Working Procedures of the Panel Concerning Substantive Meetings 
Conducted via Cisco Webex  13 
Annex  A-4 Additional Working Procedures of the Panel Concerning Substantive Meetings 
Conducted via Cisco Webex – Second Substantive Meeting Update  18 
Annex  A-5 Interim Review  22 
ANNEX B  
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of China  46 
Annex  B-2 Integrated executive summary of the arguments of the United States  66 
ANNEX  C 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of Brazil  89 
Annex  C-2 Integrated executive summary of the arguments of Canada  91 
Annex  C-3 Integrated executive summary of the arguments of the European Union  96 
Annex  C-4 Integrated executive summary of the arguments of Japan  100 
Annex  C-5 Integrated executive summary of the arguments of the Republic of Korea  104 
 
 
 WT/DS562/R/Add.1  
 
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  ANNEX  A 
PANEL  DOCUMENTS  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  4 
Annex  A-2 Additional Working Procedures of the Panel on Business Confidential 
Information  11 
Annex  A-3 Additional Working Procedures of the Panel Concerning Substantive Meetings 
Conducted via Cisco Webex  13 
Annex  A-4 Additional Working Procedures of the Panel Concerning Substantive Meetings 
Conducted via Cisco Webex – Second Substantive Meeting Update  18 
Annex  A-5 Interim Review  22 
 WT/DS562/R/Add.1  
 
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  ANNEX A -1 
WORKING PROCEDURES OF THE PANEL  
Adopted on 20 December 2019  
General  
1. (1) In this proceeding, the Panel shall follow the relevant provisions of the Understanding 
on Rules and Procedures Governing the Settlement of Disputes ("DSU"). In addition, the 
following Working Procedures apply.  
(2) The Panel reserves the right to modify these procedures, as well as any additional 
working procedures, as necessary, after consultation with the parties.  
Confidentiality  
2. (1) The deliberations of the Panel and the documents submitted to it shall be kept 
confidential. Members shall treat as confidential information that is submitted to the Panel 
which the submitting Member has designated as confidential.  
(2) In accordance with the DSU, nothing in these Working Procedures shall preclude a party 
or third party f rom disclosing statements of its own positions to the public.  
(3) If a party submits a confidential version of its written submissions to the Panel, it shall 
also, upon request of a Member, provide a non -confidential summary of the information 
contained in  its submissions that could be disclosed to the public. Non -confidential summaries 
shall be submitted no later than ten days after the written submission in question is presented 
to the Panel, unless a different due date is established by the Panel upon wr itten request of a 
party showing good cause.  
(4) In the event business confidential information (BCI) is submitted, the parties and 
third parties shall treat BCI in accordance with procedures set forth in 
Additional  Working  Procedures  of the Panel Concerni ng Business Confidential Information.  
Submissions  
3. (1) Before the first substantive meeting of the Panel with the parties, each party shall 
submit a written submission in which it presents the facts of the case and its arguments, in 
accordance with the t imetable adopted by the Panel.  
(2) Each party shall also submit to the Panel, before the second substantive meeting of the 
Panel, a written rebuttal, in accordance with the timetable adopted by the Panel.  
(3) Each third party that chooses to make a written  submission before the first substantive 
meeting of the Panel with the parties shall do so in accordance with the timetable adopted by 
the Panel.  
(4) The Panel may invite the parties or third parties to make  additional submissions during 
the proceeding, including with respect to requests for preliminary rulings in accordance with 
paragraph 4 below.  
Preliminary rulings  
4. (1) If the United States considers that the Panel should make a ruling before the issuanc e 
of the Report that certain measures or claims in the panel request or China's first written 
submission are not properly before the Panel, the following procedure applies. Exceptions to 
this procedure shall be granted upon a showing of good cause.  WT/DS562/R/Add.1  
 
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  a. The United States shall submit any such request for a preliminary ruling at the earliest 
possible opportunity and in any event no later than in its first written submission to the 
Panel. China shall submit its response to the request before the first substanti ve meeting 
of the Panel, at a time to be determined by the Panel in light of the request.  
b. The Panel may issue a preliminary ruling on the issues raised in such a preliminary ruling 
request before, during or after the first substantive meeting, or the Pa nel may defer a 
ruling on the issues raised by a preliminary ruling request until it issues its Report to the 
parties.  
c. If the Panel finds it appropriate to issue a preliminary ruling before the issuance of its 
Report, the Panel may provide reasons for t he ruling at the time that the ruling is made, 
or subsequently in its Report.  
d. Any request for such a preliminary ruling by the United States before the first meeting, 
and any subsequent submissions of the parties in relation thereto before the first mee ting, 
shall be served on all third parties. The Panel may provide all third parties with an 
opportunity to provide comments on any such request, either in their submissions as 
provided for in the timetable or separately. Any preliminary ruling issued by th e Panel 
before the first substantive meeting on whether certain measures or claims are properly 
before the Panel shall be shared with all third parties.  
(2) This procedure is without prejudice to the parties' right to request other types of 
preliminary or procedural rulings during the proceeding, and to the procedures that the Panel 
may follow with respect to such requests.  
Evidence  
5. (1) Each party shall submit all evidence to the Panel no later than during the 
first substantive meeting, except evidence n ecessary for purposes of rebuttal, or evidence 
necessary for answers to questions or comments on answers provided by the other party . 
Additional exceptions may be granted upon a showing of good cause.  
(2) If any new evidence has been admitted upon a showing of good cause, the Panel shall 
accord the other party an appropriate period of time to comment on the new evidence 
submitted.  
6. (1) If the original language of an exhibit or portion thereof is not a WTO working language, 
the submitting party or th ird party shall simultaneously submit a translation of the exhibit or 
relevant portion into the WTO working language of the submission. The Panel may grant 
reasonable extensions of time for the translation of exhibits upon a showing of good cause.  
(2) Any objection as to the accuracy of a translation should be raised promptly in writing, 
preferably no later than the next submission or meeting (whichever occurs earlier) following 
the submission which contains the translation in question. Any objection shall be accompanied 
by an explanation of the grounds for the objection and an alternative translation.  
7. (1) To facilitate the maintenance of the record of the dispute and maximize the clarity of 
submissions, each party and third party shall sequentially numbe r its exhibits throughout the 
course of the dispute, indicating the submitting Member and the number of each exhibit on its 
cover page. Exhibits submitted by China should be numbered CHN -1, CHN -2, etc. Exhibits 
submitted by the United States should be numb ered USA -1, USA -2, etc. If the last exhibit in 
connection with the first submission was numbered CHN -5, the first exhibit in connection with 
the next submission thus would be numbered CHN -6. If a party withdraws an exhibit or leaves 
one or more exhibits in tentionally blank, it should indicate this on the cover page that provides 
the number of the blank exhibit.  
(2) Each party shall provide an updated list of exhibits (in Word or Excel format) together 
with each of its submissions, oral statements, and respo nses to questions.  WT/DS562/R/Add.1  
 
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  (3) If a party submits a document that has already been submitted as an exhibit by the 
other party, it should explain why it is submitting that document again.  
(4) If a party includes a hyperlink to the content of a website in a submissi on, and intends 
that the cited content form part of the official record, the cited content of the website shall be 
provided in the form of an exhibit along with an indication of the date that it was accessed.  
Editorial Guide  
8. In order to facilitate the w ork of the Panel, each party and third party is invited to make its 
submissions in accordance with the WTO Editorial Guide for Panel Submissions (electronic copy 
provided).  
Questions  
9. The Panel may pose questions to the parties and third parties at any t ime, including:  
a. Before any meeting, the Panel may send written questions, or a list of topics it intends to 
pursue in questioning orally during a meeting. The Panel may ask different or additional 
questions at the meeting.  
b. The Panel may put questions  to the parties and third parties orally during a meeting, and 
in writing following the meeting, as provided for in paragraphs 15 and 21 below.  
Substantive meetings  
10. The Panel shall meet in closed session.  
11. The parties shall be present at the meetin gs only when invited by the Panel to appear before 
it. 
12. (1) Each party has the right to determine the composition of its own delegation when 
meeting with the Panel.  
(2) Each party shall have the responsibility for all members of its delegation and shall  
ensure that each member of its delegation acts in accordance with the DSU and these 
Working  Procedures, particularly with regard to the confidentiality of the proceeding and the 
submissions of the parties and third parties.  
13. Each party shall provide to  the Panel the list of members of its delegation no later 
than 5.00 p.m. ( Geneva time) three working days before the first day of each meeting with the 
Panel.  
14. A request for interpretation by any party should be made to the Panel as early as possible, 
preferably at the organizational stage, to allow sufficient time to ensure availability of interpreters.  
15. The first substantive meeting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall invite China to make an opening statem ent to present its case first  . 
Subsequently, the Panel shall invite the United States to present its point of view. Before 
each party takes the floor, it shall provide the Panel and other participants at the meeting 
with a provisional written version of i ts statement. If interpretation is needed, each party 
shall provide additional copies for the interpreters before taking the floor.  
b. Each party should avoid lengthy repetition of the arguments in its submissions. Each party 
is invited to limit the durati on of its opening statement to not more than [75] minutes. If 
either party considers that it requires more time for its opening statement, it should inform 
the Panel and the other party at least 3 days before the meeting, together with an estimate 
of the e xpected duration of its statement. The Panel will accord equal time to the other 
party.  WT/DS562/R/Add.1  
 
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  c. After the conclusion of the opening statements, the Panel shall give each party the 
opportunity to make comments or ask the other party questions.  
d. The Panel may subsequently pose questions to the parties.  
e. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with China presenting its statement first. Before each 
party takes the floor, it s hall provide the Panel and other participants at the meeting with 
a provisional written version of its closing statement, if available.  
f. Following the meeting:  
i. Each party shall submit a final written version of its opening statement no later 
than  5.00 p.m. ( Geneva time) on the first working day following the meeting. At the 
same time, each party should also submit a final written version of any prepared 
closing statement that it delivered at the meeting.  
ii. Each party shall send in writing, within th e timeframe established by the Panel before 
the end of the meeting, any questions to the other party to which it wishes to receive 
a response in writing.  
iii. The Panel shall send in writing, within the timeframe established by the Panel before 
the end of the meeting, any questions to the parties to which it wishes to receive a 
response in writing.  
iv. Each party shall respond in writing to the questions from the Panel, and to any 
questions posed by the other party, within the time -frame established by the Panel 
before the end of the meeting.  
16. The second substantive meeting of the Panel with the parties shall be conducted in the same 
manner as the first substantive meeting with the Panel, except that the United States shall be given 
the opportunity to pre sent its oral statement first. If the United States chooses not to avail itself of 
that right, China shall present its opening statement first, followed by the United States. The party 
that presented its opening statement first shall present its closing st atement first.  
Third party session  
17. Each third party may present its views orally during a session of the first substantive meeting 
with the parties set aside for that purpose.  
18. Each third party shall indicate to the Panel whether it intends to make  an oral statement during 
the third -party session, along with the list of members of its delegation, in advance of this session 
and no later than 5.00  p.m. (Geneva  time) three working days before the third -party session of the 
meeting with the Panel.  
19. (1) Each third party has the right to determine the composition of its own delegation when 
meeting with the Panel.  
(2) Each third party shall have the responsibility for all members of its delegation and shall 
ensure that each member of its delegation acts in accordance with the DSU and these 
Working  Procedures, particularly with regard to the confidentiality of the proceeding and the 
submissions of the parties and third parties.  
20. A request for interpretation by any third party should be made to the Panel  as early as 
possible, preferably upon receiving the working procedures and timetable for the proceeding, to 
allow sufficient time to ensure availability of interpreters.  
21. The third -party session shall be conducted as follows:  
a. All parties and third p arties may be present during the entirety of this session.  WT/DS562/R/Add.1  
 
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  b. The Panel shall first hear the oral statements of the third parties, who shall speak in 
alphabetical order. Each third party making an oral statement at the third -party session 
shall provide the  Panel and other participants with a provisional written version of its 
statement before it takes the floor. If interpretation of a third party's oral statement is 
needed, that third party shall provide additional copies for the interpreters before taking 
the floor.  
c. Each third party should limit the duration of its statement to 15 minutes, and avoid 
repetition of the arguments already in its submission. If a third party considers that it 
requires more time for its opening statement, it should inform the Panel and the parties 
at least 10 days before the meeting, together with an estimate of the expected duration 
of its statement. The Panel will accord equal time to all third parties for their statements.  
d. After the third parties have made thei r statements, the parties shall be given the 
opportunity to pose questions to any third party for clarification on any matter raised in 
that third party's submission or statement.  
e. The Panel may subsequently pose questions to any third party.  
f. Followin g the third -party session:  
i. Each third party shall submit the final written version of its oral statement, no later 
than 5.00  p.m. (Geneva time) on the first working day following the meeting.  
ii. Each party may send in writing, within the timeframe to b e established by the Panel 
before the end of the meeting, any questions to one or more third parties to which it 
wishes to receive a response in writing.  
iii. The Panel may send in writing, within the timeframe to be established by the Panel 
before the end  of the meeting, any questions to one or more third parties to which it 
wishes to receive a response in writing.  
iv. Each third party choosing to do so shall respond in writing to written questions from 
the Panel or a party, within a timeframe established by the Panel before the end of the 
meeting.  
Descriptive part and executive summaries  
22. The description of the arguments of the parties and third parties in the descriptive part of the 
Panel report shall consist of executive summaries provided by the part ies and third parties, which 
shall be annexed as addenda to the report. These executive summaries shall not in any way serve 
as a substitute for the submissions of the parties and third parties in the Panel's examination of the 
case. 
23. Each party shall s ubmit a single integrated executive summary of the facts and arguments as 
presented to the Panel in its written submissions and oral statements in accordance with the 
timetable adopted by the Panel. This integrated executive summary may also include a summ ary of 
responses to questions.  
24. Each integrated executive summary shall be limited to 30 pages.  
25. The Panel may request the parties and third parties to provide executive summaries of facts 
and arguments presented in any other submissions to the Panel  for which a deadline may not be 
specified in the timetable.  
26. Each third party shall submit an integrated executive summary of its arguments as presented 
in its written submission and statement in accordance with the timetable adopted by the Panel. This  
integrated executive summary may also include a summary of responses to questions. The 
executive  summary to be provided by each third party shall not exceed six  pages. If  a third -party 
submission and/or oral statement does not exceed six pages in total, t his shall serve as the 
executive  summary of that third party's arguments unless that third party indicates that it does not WT/DS562/R/Add.1  
 
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  wish for the submission and/or oral statement to serve as its executive summary, in which case it 
shall submit a separate executive summary.  
Interim review  
27. Following issuance of the interim report, each party may submit a written request to review 
precise aspects of the interim report and request a further meeting with the Panel, in accordance 
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no 
later than at the time the written request for review is submitted.  
28. Each party may submit written comments on the other party's written request for review. 
Such written comments shall be limited to the other party's written request for review and shall be 
submitted in accordance with the timetable adopted by the Panel.  
Interim and Final Report  
29. The interim report, as well as the final report before its official circulation, shall be kep t strictly 
confidential and shall not be disclosed.  
Service of documents  
30. The following procedures regarding service of documents apply to all documents submitted by 
parties and third parties during the proceeding:  
a. Each party and third party shall su bmit all documents to the Panel by submitting them 
with the DS  Registry  (office No. 2047).  
b. Each party and third party shall submit [1] paper copy of its submissions and [1] paper 
copy of its Exhibits to the Panel by 5.00 p.m. (Geneva time) on the due da tes established 
by the Panel. The DS  Registrar shall stamp the documents with the date and time of 
submission. The paper version submitted to the DS Registry shall constitute the official 
version for the purposes of submission deadlines and the record of t he dispute. If an 
exhibit is in a format that is impractical to submit as a paper copy, then the party may 
submit such exhibit in electronic format (email or on a CD -ROM or DVD). In this case, the 
cover page of the exhibit should indicate that the exhibit is only available in electronic 
format.  
c. Each party and third party shall also send an email to the DS Registry, at the same time 
that it submits the paper versions, attaching an electronic copy of all documents that it 
submits to the Panel, preferably i n both Microsoft Word and PDF format. All such emails 
to the Panel shall be addressed to DSRegistry@wto.org, and copied to other 
WTO Secretariat  staff whose email addresses have been provided to the parties during the 
proceeding. If it is not possible to a ttach all the Exhibits to one email, the submi tting party 
or third party shall provide the DS Registry with four copies of the Exhibits on CD -ROMs 
or DVDs.  
d. Each party shall serve any document submitted to the Panel directly on the other party. 
Each party shall, in addition, serve any submissions in advance of the first substantive 
meeting with the Panel directly on the third parties. Each third party shall serve any 
document submitted to the Panel directly on the parties and on all other third partie s. A 
party or third party may serve its documents on another party or third party by email or 
other electronic format acceptable to the recipient without having to serve a paper copy, 
unless the recipient party or third party has requested a paper copy at least five working 
days before their filing. Each party and third party shall confirm, in writing, that copies 
have been served on the parties and third parties, as appropriate, at the time it provides 
each document to the Panel.  
e. Each party and third pa rty shall submit its documents with the DS Registry and serve 
copies on the other party (and third parties if appropriate) by 5.00  p.m. (Geneva time) on 
the due dates established by the Panel.  WT/DS562/R/Add.1  
 
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  f. As a general rule, all communications from the Panel to the parties and third parties will 
be via email. In addition to transmitting them to the parties by email, the Panel shall 
provide the parties with a paper copy of the Interim Report and the Final Report . 
Correction of clerical errors in submissions  
31. The P anel may grant leave to a party or third party to correct clerical errors in any of its 
submissions (including paragraph numbering and typographical mistakes). Any such request should 
identify the nature of the errors to be corrected, and should be made pr omptly following the filing 
of the submission in question.  WT/DS562/R/Add.1  
 
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  ANNEX A -2 
ADDITIONAL WORKING PROCEDURES OF THE PANEL ON  
BUSINESS CONFIDENTIAL INFORMATION   
Adopted on 20 December 2019  
 
 
1. For the purpose of this proceeding, business confidential information ("BCI") is defined as any 
information that has been designated as such by a party submitting the information to the Panel. 
The parties shall only designate as BCI information that is not available in the public  domain, the 
release of which would cause serious harm to the interests of the originator(s) of the information. 
BCI may include information that was previously treated by the United States International Trade 
Commission ("USITC") as confidential in the co urse of the safeguard proceedings at issue in this 
dispute. However, t hese procedures do not apply to information treated as confidential in the course 
of the specific safeguard proceedings at issue in this dispute, if the entity that provided the 
informat ion agrees in writing to make it publicly available.  
2. No person may have access to BCI except a Panelist, a member of the Secretariat assisting 
the Panel, an employee of a party or a third party, or an outside advisor to a party or a third party 
for the purposes of this dispute. However, an outside advisor to a party or a third party is not 
permitted to access BCI if that advisor is an officer or employee of an enterprise engaged in the 
production, sale, export, or import of the products that were the sub ject of the proceeding[s] at 
issue in this dispute, or an officer or employee of an association of such enterprises.  
3. When third parties receive written submissions pursuant to the Working Procedures, the 
third parties shall receive a version of such wri tten submissions and any exhibits with BCI redacted. 
The BCI -redacted versions of written submissions and exhibits received by third parties shall be 
sufficient to convey a reasonable understanding of the nature of the information at issue.  
4. A third part y may request access to the BCI version of a BCI -redacted written submission or 
exhibit received pursuant to the Working Procedures. The Panel, after consulting the parties, shall 
decide whether to grant access to such BCI, taking into consideration the se nsitivity of the 
information and the need for the third party to see the information for the purpose of participating 
effectively in the Panel proceedings. A ny such request shall include a list of the third party's 
representatives and outside advisors who would like to review the BCI . If granted, the third party's 
access to the non -redacted version of a written submission or exhibit containing BCI will take place 
on the premises of the WTO Secretariat, unless good cause is shown for an alternative arrangeme nt. 
5. A person having access to BCI shall treat it as confidential, i.e., shall not disclose that 
information other than to those persons authorized to have access to it pursuant to these 
procedures. Each party and third party is responsible for ensuring that its employees and outside 
advisors comply with these procedures. BCI obtained under these procedures may be used only for 
the purpose of providing information and argumentation in this dispute and for no other purpose. 
All documents and elect ronic storage media containing BCI shall be stored in such a manner as to 
prevent unauthorized access to such information.  
6. A party submitting BCI shall mark the cover and/or first page of the document containing BCI, 
to indicate the presence of such inf ormation. The first page or cover of the document shall state 
"Contains Business Confidential Information on pages xxxxxx" at the top of the page. The specific 
information in question shall be placed between double square brackets, as follows: [[xx,xxx.xx] ]. 
A party submitting BCI in the form of, or as part of, an exhibit shall, in addition to the above, indicate 
that it contains BCI by putting "BCI" next to the exhibit number (e.g. Exhibit CHN -1 (BCI), 
Exhibit  USA-1 (BCI)).  
7. When BCI is submitted in elec tronic format, the file name shall include the terms 
"Business  Confidential Information" or "BCI". In addition, where applicable, the label of the storage 
medium shall  be clearly marked with the statement "Business Confidential Information" or "BCI".  WT/DS562/R/Add.1  
 
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  8. When a party submits a document containing BCI to the Panel, the other party and 
third parties, when referring to that BCI in its documents, including written submissions, and oral 
statements, shall clearly identify all such information in those documents. A ll such documents shall 
be marked as described in paragraph 6. In the case of an oral statement containing BCI, the party 
or third party making such a statement shall inform the Panel before making it, that the statement 
will contain BCI, and the Panel wil l ensure that only persons authorized to have access to BCI 
pursuant to these procedures are in the room to hear that statement. The written versions of such 
oral statements submitted to the Panel shall be marked as provided for in paragraph 6.  
9. If a par ty considers that information submitted by the other party or a third party should have 
been designated as BCI and objects to such submission without BCI designation, it shall promptly 
bring this objection to the attention of the Panel and the other party or third party, together with 
the reasons for the objection. Similarly, if a party considers that the other party or a third party 
submitted information designated as BCI information which should not be so designated, it shall 
promptly bring this objection  to the attention of the Panel and the other party or third party, together 
with the reasons for the objection. The Panel shall decide whether information subject to an objection 
will be treated as BCI for the purposes of these proceedings on the basis of the criteria set out in 
paragraph 1.  
10. The Panel will not disclose BCI, in its report or in any other way, to persons not authorized 
under these procedures to have access to BCI. The Panel may make statements of conclusion drawn 
from such information. Be fore the Panel circulates its final report to the Members, the Panel will give 
each party an opportunity to review the report to ensure that it does not contain any BCI.  
11. Submissions, exhibits, and other documents or recordings containing BCI will be in cluded in 
the record forwarded by the WTO Secretariat to the Appellate Body in the event of an appeal of the 
Report of the Panel, provided that the Appellate Body confirms that it will not disclose BCI in its 
report, or in any other way, to persons not aut horized under these procedures to have access to 
BCI, other than members of the Appellate Body or a member of the Secretariat assisting the 
Appellate Body.  WT/DS562/R/Add.1  
 
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  ANNEX A -3 
ADDITIONAL WORKING PROCEDURES OF THE PANEL CONCERNING SUBSTANTIVE  
MEETINGS CONDUCTED VIA CISCO WEBEX  
Adopted on 9 September 2020  
 
General  
 
1. These additional Working Procedures set out terms for holding a substantive meeting with the 
Panel via Cisco WebEx Events.  
 
Definitions  
 
2. For the purposes of these additional Working Procedures:  
 
"DORA"  means the Disputes Online Registry Application.  
 
"Host"  means the designated person within the WTO  Secret ariat responsible for the 
management of the virtual meeting.  
 
"Participant"  means any authorized person attending the virtual meeting, either remotely 
or from the designated room at the WTO  premises, including the Members of the Panel, the 
WTO Secretariat staff involved in the dispute and the organization of the virtual meeting, and 
the parties' and third parties' delegations.  
 
"Platform"  means the Cisco WebEx Events platform.  
 
Equipment and technical requirements  
 
3. Each party and third party shall be responsible for ensuring that the members of its delegation 
connecting to the virtual meeting remotely join the virtual meeting and meet the minimum 
equipment and technical requirements for the effective conduct of the virtual meeting.  
 
4. To the extent possible, each party and third party shall ensure that each member of its 
delega tion connecting to the virtual meeting remotely:  
 
(1) Uses a high -speed internet connection;  
 
(2) Accesses the virtual meeting via desktop or laptop computer rather than by smartphone 
or tablet;  
 
(3) Ensures that the devices they use are adequately charged  and that power cables or back -
up batteries are available;  
 
(4) Ensures that their microphone provides sufficient amplification and clarity;  
 
(5) Ensures that their camera creates a sufficiently clear image;  
 
(6) Eliminates any background noise; and  
 
(7) Speaks slowly in their statements and interventions.  
 
Technical support  
 
5. (1) The host will assist participants in planning, testing and conducting the virtual meeting 
and provide participants with technical support pertaining to the platform and its functionality.  
 WT/DS562/R/Add.1  
 
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  (2) In light of the limitations of remote assistance, each party and third party shall be 
responsible for its own technical support pertaining to its computer systems and networks.  
 
Pre-meeting  
 
Registration  
 
6. Each party and third party s hall provide to the Panel a complete list of the members of its 
delegation no later than  5:00 p.m. (Geneva time) 2 working days before the first day of the virtual 
meeting. Such list shall include all members of each party's and third party's delegation, a nd, to the 
extent possible, shall indicate whether they will be participating in the virtual meeting remotely or 
from the designated room at the WTO  premises.  
 
Advance testing  
 
7. In advance of the virtual meeting, each party and third party shall regularl y test the platform 
on the devices that it intends on using to connect to the virtual meeting . 
 
8. Before the virtual meeting, the Secretariat will hold individual test sessions with each party 
and third party and a joint test session with all participants . Such test sessions will seek to reflect, 
as far as possible, the conditions of the proposed virtual meeting. The parties and third parties 
should make themselves available for the test sessions.  
 
Confidentiality and security  
 
9. The virtual meeting shall  be confidential.  
 
10. Each party and third party shall follow any security and confidentiality protocols and guidelines 
set by the Panel in advance of the virtual meeting.  
 
11. The participants shall connect to the virtual meeting through a secure internet connection and 
shall avoid the use of an open or public internet connection.  
 
Conduct of the virtual meeting  
 
Recording  
 
12. The virtual meeting will be recorded in its entirety via the platform. The recording of the virtual 
meeting will form part  of the panel record.  
 
13. The parties and third parties are strictly prohibited from:  
 
(1) Recording, via audio, video or screenshot, the virtual meeting or any part thereof; and  
 
(2) Permitting any non -authorized person to record, via audio, video or scr eenshot, the virtual 
meeting or any part thereof.  
 
Access to the virtual meeting room  
 
14. The participants shall access the virtual meeting room either remotely in accordance with 
paragraph  4 of these additional Working Procedures or from the designated r oom at the 
WTO premises.  
 
15. (1) The host will invite the participants accessing the virtual meeting room remotely to join 
the virtual meeting via email.  
 
(2) For security reasons, access to the virtual meeting will be password -protected and limited 
to participants. Participants shall not forward or share the virtual meeting link or password to 
unauthorized persons.  
 
(3) Each party and third party shall ensure that only participants from its delegation are 
present at the virtual meeting.  WT/DS562/R/Add.1  
 
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  16. (1) The virtua l meeting room will be accessible 60 minutes in advance of the scheduled start 
time of the virtual meeting.  
 
(2) In order to ensure that the virtual meeting will start as scheduled, participants accessing  
the virtual meeting remotely must login to the platform at least 30 minutes in advance of the 
scheduled start time of the virtual meeting.  
 
(3) Participants accessing the virtual meeting remotely will be placed in a virtual lobby where 
they will remain until the Panel is ready to start the virtual meeting, at which time the host 
will admit them to the virtual meeting.  
 
Document sharing  
 
17. Any participant wishing to share a document with the other participants during the virtual 
meeting shall do so by uploading it to DORA.  Any such document  may be shared with other 
participants attending the virtual meeting.  
 
Communication breakdown  
 
18. The parties and third parties shall immediately notify the Panel of any technical or connectivity 
issues affecting the participation of their delegation, or  a member of their delegation, in the virtual 
meeting. To do so, the party or third party that experiences the technical or connectivity issue shall:  
 
(1) If possible, immediately intervene at the virtual meeting and briefly state the nature of 
the issue e xperienced; or  
 
(2) If doing so is not possible, immediately contact the host and explain the nature of the 
issue experienced. The host can be contacted via the platform, by sending an email to 
leslie.stephe nson@wto.org , or by calling at +41227396148 . 
 
19. The Panel will pause the virtual meeting until the technical or connectivity issue is resolved, 
unless the affected party or third party agrees that the virtual meeting can proceed without the issue 
being r esolved.  
 
Participation  
 
20. (1) If a participant attending the virtual meeting remotely wishes to take the floor at the 
virtual meeting, the participant should use the "raise a hand" function in the platform , so that 
the Panel can give the floor to the pa rticipant and allow the participant to unmute their 
microphone and turn their camera on.  
 
(2) If a participant attending the virtual meeting from the WTO  premises wishes to take the 
floor, the participant should raise their placard/flag in the designated room at the 
WTO premises, so that the host can register the request on the virtual meeting platform and 
the Panel can give the floor to the participant. When the participant takes the floor, the camera 
will automatically move to the participant,  once their microphone is turned on.  
 
Structure of the virtual meeting  
 
21. The first substantive meeting of the Panel with the parties will be virtual meeting conducted 
with the following structure:  
 
(1) The Panel will invite China to make an opening statement to present its case first. 
Subsequently, the Panel will invite the United States to present its point of view. Before each 
party takes the floor, the party shall provide the Panel and other participants at the virtual 
meeting with a provi sional written version of its statement by uploading it to DORA.  
 
(2) Each party should avoid lengthy repetition of the arguments in its submissions. Each party 
shall limit the duration of its opening statement to no more than 90  minutes.  
 WT/DS562/R/Add.1  
 
- 16 - 
 
  (3) The Panel wi ll afford each party an opportunity to present a closing statement, with China 
presenting its statement first. Before each party takes the floor, it shall provide the Panel and 
other participants with a provisional written version of its closing statement,  if one is available, 
by uploading it to DORA.  Each party shall limit the duration of its closing statement to no more 
than 30  minutes.  
 
(4) Following the meeting:  
 
a. Each party shall submit the final written version of its opening statement no later 
than 5.00 p.m. (Geneva time) on the first working day following the virtual meeting. By 
the same deadline, each party shall also submit the final written version of any prepared 
closing statement that it delivered at the virtual meeting.  
 
b. Each party may sen d in writing, no later than  5.00 p.m. (Geneva time) on the first working 
day following the virtual meeting, any questions to the other party to which it wishes to 
receive a response in writing.  
 
c. The Panel will send in writing, no later than  5.00 p.m. (G eneva time) on the first working 
day following the virtual meeting, any questions to the parties to which it wishes to receive 
a response in writing.  
 
d. Each party shall respond in writing to the questions from the Panel, and to any questions 
posed by the  other party, within the timeframe established by the Panel before the end of 
the meeting.  
 
22. The format and structure of the first substantive meeting is without prejudice to how the Panel 
decides to conduct subsequent substantive meetings, if any.  
 
Structure of the third -party session  
 
23. The third -party session will be conducted as follows:  
 
(1) All parties and third parties may be present during the entirety of this session.  
 
(2) The Panel will hear the oral statements of the third parties, who sh all speak in alphabetical 
order. Each third party making an oral statement at the third -party session shall provide the 
Panel and other participants with a provisional written version of its statement by uploading 
it on DORA  at the start of the third -party session.  
 
(3) Each third party shall limit the duration of its statement to 15  minutes, and avoid repetition 
of the arguments already in its submission.  
 
(4) Following the third -party session:  
 
a. Each third party shall submit the final written version of  its oral statement no later 
than 5.00 p.m. (Geneva time) on the first working day following the third -party session.  
 
b. Each party may send in writing, no later than  5.00 p.m. (Geneva time) on the first working 
day following the virtual meeting, any ques tions to one or more third parties to which it 
wishes to receive a response in writing.  
 
c. The Panel may send in writing, no later than  5.00 p.m. (Geneva time) on the first working 
day following the virtual meeting, any questions to one or more third part ies to which it 
wishes to receive a response in writing.  
 
d. Each third party choosing to do so shall respond in writing to written questions from the 
Panel or a party, within a timeframe established by the Panel before the end of the virtual 
meeting.  WT/DS562/R/Add.1  
 
- 17 - 
 
  Relationship with the Working Procedures of the Panel adopted on 20  December  2019  
 
24. These additional Working Procedures complement the Working Procedures of the Panel 
adopted on 20  December  2019. To the extent that these additional Working Procedures conflict with 
the Working Procedures of the Panel, these additional Working Procedures shall prevail.  
 
 WT/DS562/R/Add.1  
 
- 18 - 
 
  ANNEX A -4 
ADDITIONAL WORKING PROCEDURES OF THE PANEL CONCERNING  SUBSTANTIVE MEETINGS 
CONDUCTED VIA CISCO WEBEX – SECOND S UBSTANTIVE MEETING UPDATE  
Adopted on 3 December 2020  
 
General  
 
1. These additional Working Procedures set out terms for holding a substantive meeting with the 
Panel via Cisco WebEx Events.  
 
Definitions  
 
2. For the purposes of these additional Working Proce dures:  
 
"DORA"  means the Disputes Online Registry Application.  
 
"Host"  means the designated person within the WTO  Secretariat responsible for the 
management of the virtual meeting.  
 
"Participant"  means any authorized person attending the virtual meeting, either remotely 
or from the designated room at the WTO  premises, including the Members of the Panel, the 
WTO Secretariat staff involved in the dispute and the organization of the virtual meeting, and 
the parties' delegations.  
 
"Platform"  means the Cisco WebEx Events platform.  
 
Equipment and technical requirements  
 
3. Each party shall be responsible for ensuring that the members of its delegation connecting to 
the virtual meeting remotely j oin the virtual meeting and meet the minimum equipment and 
technical requirements for the effective conduct of the virtual meeting.  
 
4. To the extent possible, each party shall ensure that each member of its delegation connecting 
to the virtual meeting rem otely:  
 
(1) Uses a high -speed internet connection;  
 
(2) Accesses the virtual meeting via desktop or laptop computer rather than by smartphone 
or tablet;  
 
(3) Ensures that the devices they use are adequately charged and that power cables or  
back-up batteri es are available;  
 
(4) Ensures that their microphone provides sufficient amplification and clarity;  
 
(5) Ensures that their camera creates a sufficiently clear image;  
 
(6) Eliminates any background noise; and  
 
(7) Speaks slowly in their statements and inte rventions.  
 
Technical support  
 
5. (1) The host will assist participants in planning, testing and conducting the virtual meeting 
and provide participants with technical support pertaining to the platform and its functionality.  
 WT/DS562/R/Add.1  
 
- 19 - 
 
  (2) In light of the limitations of remote assistance, each party shall be responsible for its own 
technical support pertaining to its computer systems and networks.  
 
Pre-meeting  
 
Registration  
 
6. Each party shall provide to the Panel a complete list of the members of its dele gation no later  
than 5:00 p.m. (Geneva time) 1 working day before the first day of the virtual meeting. Such list 
shall include all members of each party's delegation, and, to the extent possible, shall indicate 
whether they will be participating in the vi rtual meeting remotely or from the designated room at 
the WTO  premises.  
 
Advance testing  
 
7. In advance of the virtual meeting, each party shall regularly test the platform on the devices 
that it intends on using to connect to the virtual meeting . 
 
8. Before the virtual meeting, the Secretariat will hold individual test sessions with each party. 
Such test sessions will seek to reflect, as far as possible, the conditions of the proposed virtual 
meeting. The parties should make themselves available for the te st sessions.  
 
Confidentiality and security  
 
9. The virtual meeting shall be confidential.  
 
10. Each party shall follow any security and confidentiality protocols and guidelines set by the 
Panel in advance of the virtual meeting.  
 
11. The participants shall connect to the virtual meeting through a secure internet connection and 
shall avoid the use of an open or public internet connection.  
 
Conduct of the virtual meeting  
 
Recording  
 
12. The virtual meeting will be recorded in its entirety vi a the platform. The recording of the virtual 
meeting will form part of the panel record.  
 
13. The parties are strictly prohibited from:  
 
(1) Recording, via audio, video or screenshot, the virtual meeting or any part thereof; and  
 
(2) Permitting any non-authorized person to record, via audio, video or screenshot, the virtual 
meeting or any part thereof.  
 
Access to the virtual meeting room  
 
14. The participants shall access the virtual meeting room either remotely in accordance with 
paragraph  4 of thes e additional Working Procedures or from the designated room at the 
WTO premises.  
 
15. (1) The host will invite the participants accessing the virtual meeting room remotely to join 
the virtual meeting via email.  
 
(2) For security reasons, access to the virt ual meeting will be password -protected and limited 
to participants. Participants shall not forward or share the virtual meeting link or password to 
unauthorized persons.  
 
(3) Each party shall ensure that only participants from its delegation are present at  the virtual 
meeting.  WT/DS562/R/Add.1  
 
- 20 - 
 
  16. (1) The virtual meeting room will be accessible 60 minutes in advance of the scheduled start 
time of the virtual meeting.  
 
(2) In order to ensure that the virtual meeting will start as scheduled, participants accessing  
the virtual meeting remotely must login to the platform at least 30 minutes in advance of the 
scheduled start time of the virtual meeting.  
 
(3) Participants accessing the virtual meeting remotely will be placed in a virtual lobby where 
they will remain until t he Panel is ready to start the virtual meeting, at which time the host 
will admit them to the virtual meeting.  
 
Document sharing  
 
17. Any participant wishing to share a document with the other participants during the virtual 
meeting shall do so by uploadin g it to DORA.  
 
Communication breakdown  
 
18. The parties shall immediately notify the Panel of any technical or connectivity issues affecting 
the participation of their delegation, or a member of their delegation, in the virtual meeting. To do 
so, the party  that experiences the technical or connectivity issue shall:  
 
(1) If possible, immediately intervene at the virtual meeting and briefly state the nature of 
the issue experienced; or  
 
(2) If doing so is not possible, immediately contact the host and explain  the nature of the 
issue experienced. The host can be contacted via the platform, by sending an email to 
olga.falguerasalamo@wto.org , or by calling at +41227396746 . 
 
19. The Panel will pause the virtual me eting until the technical or connectivity issue is resolved, 
unless the affected party agrees that the virtual meeting can proceed without the issue being 
resolved.  
 
Participation  
 
20. (1) If a participant attending the virtual meeting remotely wishes to t ake the floor at the 
virtual meeting, the participant should use "raise a hand" function in the platform , so that the 
Panel can give the floor to the participant and allow the participant to unmute their microphone 
and turn their camera on.  
 
(2) If a participant attending the virtual meeting from the WTO  premises wishes to take the 
floor at the virtual meeting, the participant should raise their placard/flag in the designated 
room at the WTO  premises, so that the host can register the request on the virtual meeting 
platform so that the Panel can give them the floor. When the participant takes the floor, the 
camera will automatically move to the participant, once their microphone is turned on.  
 
Structure of the virtual meeting  
 
21. The second substanti ve meeting of the Panel with the parties will be a virtual meeting 
conducted with the following structure:  
 
(1) On the first meeting day, the Panel will invite the United States to make an opening 
statement first. If the United States chooses not to avail itself of that right, China shall present 
its opening statement first, followed by the United States. Before each party takes the floor, 
the party shall provide the Panel and other participants at the virtual meeting with a 
provisional written version of i ts statement by uploading it to DORA.  
 
(2) Each party should avoid lengthy repetition of the arguments in its submissions. Each party 
shall limit the duration of its opening statement to no more than 60  minutes.  
 
(3) On the second meeting day and, to the e xtent necessary, on the third meeting day, the 
Panel will pose questions to the parties, which it will communicate to the parties in advance.  WT/DS562/R/Add.1  
 
- 21 - 
 
  (4) On the third meeting day, the Panel shall afford each party an opportunity to present a 
brief closing statemen t. The party that presented its opening statement first shall present its 
closing statement first. Before each party takes the floor, it shall provide the Panel and other 
participants with a provisional written version of its closing statement, if one is a vailable, by 
uploading it to DORA.  Each party shall limit the duration of its closing statement to no more 
than 10  minutes.  
 
(5) Following the meeting:  
 
a. Each party shall submit the final written version of its opening statement no later  
than 5.00 p.m. ( Geneva time) on the second working day following the virtual meeting. 
By the same deadline, each party shall also submit the final written version of any prepared 
closing statement that it delivered at the virtual meeting.  
 
b. Each party may send in writin g, no later  than 5.00 p.m. (Geneva time) on the second 
working day following the virtual meeting, any questions to the other party to which it 
wishes to receive a response in writing.  
 
c. The Panel will send in writing, no later  than 5.00 p.m. (Geneva time ) on the second 
working day following the virtual meeting, any questions to the parties to which it wishes 
to receive a response in writing.  
 
d. Each party shall respond in writing to the questions from the Panel, and to any questions 
posed by the other pa rty within the timeframe established by the Panel before the end of 
the meeting.  
 
Relationship with the Working Procedures of the Panel adopted on 20  December  2019  
 
22. These additional Working Procedures complement the Working Procedures of the Panel 
adopted on 20  December  2019. To the extent that these additional Working Procedures conflict with 
the Working Procedures of the Panel, these additional Working Procedures shall prevail.  WT/DS562/R/Add.1  
 
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  ANNEX A -5 
INTERIM REVIEW  
1 INTRODUCTION  
1.1. In compliance with Article  15.3 of the DSU, this Annex sets out the Panel's  discussion and 
disposition of the requests for review made at interim review stage. As explained below, where we 
have found it appropriate, we have modified certain aspects of our Interim Report in light of the 
comments of the parties. We have also reflected the parties'  corrections of typographical errors.  
1.2. Due to changes resulting from our revie w, the numbering of footnotes in the Final Report has 
changed from the Interim Report. The text below refers to the footnote numbering in the Interim 
Report, with the footnote numbering in the Final Report in parentheses for ease of reference, if 
different . 
1.3. Below, we first consider the request for interim review made by China, and then consider the 
request for interim review made by the United  States.  
2 CHINA'S  REQUEST FOR INTERIM REVIEW  
2.1 General comments  
2.1. China opens its comments on the Interim  Report by arguing, in a section entitled "General 
comments", that the Panel erred in three general ways. First, China claims that the Panel "blurred 
the distinct legal requirements for imposing safeguard measures and lowered the standard that 
authorities must meet".1 In doing so, China claims that the Panel "applied permissive legal 
standards, deviating from the covered agreements and opening the door to potential abuses of 
safeguard measures".2 Second, China claims that the Panel failed to follow the 
Appellate  Body's  guidance that "panels should carefully review findings and critically test proffered 
explanations against the record evidence before the authorities".3 Third, China claims that the Panel 
"simply espoused the US arguments citing the same sec tions of the USITC Final Report that the 
United  States did, concluding without more that the USITC was correct in reaching its findings".4 
Based on this approach, China claims that the Panel "allowed itself to be lured into a subtle rewriting 
of the USITC 's decision".5 
2.2. In its oral statement at the interim review meeting and in its subsequent written comments, 
the United  States claims that China's  "general comments" are outside the purview of the interim 
review process, as they do not meet the basic r equirements of a request for interim review. In this 
regard, the United  States explains:  
Article  15 of the DSU establishes a process for review of a panel's  interim report. The 
first sentence of Article  15.2 states that "the panel shall issue an interim report to the 
parties, including both the descriptive sections and the panel's  findings and  
conclusions." The second sentence of Article  15.2 then sets out the right of a party to 
"submit a written request for the panel to review precise aspects of the interim report." 
The third sentence of Article  15.2 provides that, "[a]t the request of a part y, the panel 
shall hold a further meeting with the parties on the issues identified in the written 
comments." Those "issues identified" are the "precise aspects of the interim report" 
referenced in the second sentence of Article  15. Consequently, per the t hird sentence 
of Article  15.2, a party is not free to raise issues at the "further meeting" beyond those 
identified in the written comments, and those issues must relate to precise aspects of 
the report. Finally, Article  15.3 provides that the final report  "shall include a discussion 
 
1 China's  request for interim review, para.  7. 
2 China's  request for interim review, para.  7. 
3 China's  request for interim review, para.  12. 
4 China's  request for interim review, para.  16. 
5 China's  request for interim review, para.  17. WT/DS562/R/Add.1  
 
- 23 - 
 
  of the arguments made at the interim review stage." Thus, read as a whole, Article  15 
grants a right to review of an interim report, including its findings and conclusions, but 
only where the party seeking review meets the requ irements of Article  15.2.6 
2.3. Accordingly, in the United  States'  view, "[a] party does not have the right, under Article  15.2, 
to seek review of a panel's  interim report generally . A general review would not concern 'precise 
aspects' of the report, and so would not come within Article  15".7 Based on this interpretation, the 
United  States argues that, with its "general comments", China fails to request review consistent with 
Article  15.2 because those comments "do not contain any request of the Panel: th at is, China has 
not requested the Panel to review – or make any changes to – any aspect of the interim report 
referred to in the 'general comments.'"8 The United  States further argues that, "even if its 'general 
comments' could be construed as a request,  China has not identified the 'precise aspects of the 
interim report' for which it seeks review".9 
2.4. In its subsequent written comments, China responds to the United  States'  position by advancing 
that it is based on a "misguided interpretation of Artic le 15 of the DSU" that focuses on the term 
"precise" and ignores "the relationship between China's  general comments and China's  specific 
comments".10 China contends that the meaning of the term "aspects" in the second sentence of 
Article  15.2 provides "Mem bers with the discretion to comment on any 'aspect' of the Interim Report, 
including general complaints as well as requests for edits to specific language, so long as those 
'aspects' are 'precise[ly]' identified".11 As a result, China takes the position th at "the Panel is required 
to address its general comments, which identify various 'precise aspects', that are demonstrated 
through its 43 other comments citing to specific paragraphs or footnotes in the Interim Report".12 
In this regard, China explains tha t: 
[I]t formulated its general comments as overarching categories of mistakes incurred by 
the Panel, which are then reflected in other specific mistakes and omissions that China 
specifically requested be corrected. China's  general comments thus set the sta ge for 
the more specific comments that followed.13 
2.5. As support for its position, China refers to US / Canada – Continued Suspension for the 
proposition that, in prior disputes, "when a party decided to make general comments to the interim 
report which were directly connected with specific comments, the Panel decided to address the 
general comments as part of the review of the more specific paragraphs containing precise requests 
for reconsideration".14 
2.6. We begin our assessment by recalling that  the interim review stage of the dispute settlement 
process is governed by Article  15 of the DSU. Articles  15.2 and 15.3, which are pertinent to the 
present issue, provide in full:  
 
6 United  States'  oral statement at the interim review meeting, para.  4; comments on China's  request for 
interim review, para.  5. (fn omitted)  
7 United  States'  oral statement at the interim review meeting, para.  5; comments on China's  request for 
interim review, para.  6. (emphasis original)  
8 United  States'  oral statement at the interim review meeting, para.  6; comments on China's  request for 
interim review, para.  7. (emphasis original)  
9 United  States'  oral statement at the interim review meeting, para.  7; comments on China's  request for 
interim review, para.  8. 
10 China's  comments on the United  States' request for interim review, par a. 2. 
11 China's  comments on the United  States' request for interim review, para.  3. 
12 China's  comments on the United  States' request for interim review, para.  3. 
13 China's  comments on the United  States' request for interim review, para.  4. (fns omitted)  
14 China's  comments on the United  States' request for interim review, para.  8. In particular, China refers 
to the following paragraph  in US / Canada – Continued Suspension : 
We agree with the reasoning of the above -mentioned panel and therefore consider that t he 
general comments by the European Communities did not require a specific reply from the Panel. 
We limited our replies to the portions of the report on which specific comments, in the form of 
precise requests for reconsideration on specific paragraphs, ha d been made by the European 
Communities. We addressed the EC general comments as part of our review of specific 
paragraphs . 
(Panel Reports,  Canada – Continued Suspension, para. 6.17; US – Continued Suspension, 
para. 6.18 (emphasis added by China))  WT/DS562/R/Add.1  
 
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  2. Following the expiration of the set period of time for receipt of commen ts from the 
parties to the dispute, the panel shall issue an interim report to the parties, including 
both the descriptive sections and the panel's  findings and conclusions. Within a period 
of time set by the panel, a party may submit a written request for  the panel to review 
precise aspects of the interim report  prior to circulation of the final report to the 
Members. At the request of a party, the panel shall hold a further meeting with the 
parties on the issues identified in the written comments. If no c omments are received 
from any party within the comment period, the interim report shall be considered the 
final panel report and circulated promptly to the Members.  
3. The findings of the final panel report shall include a discussion of the arguments made 
at the interim review stage . The interim review stage shall be conducted within the 
time-period set out in paragraph  8 of Article  12.15 
2.7. As such, Article  15.2 permits parties to submit written requests for review of "precise aspects 
of interim report",  while Article  15.3 requires the panel to discuss those requests in its final report. 
Moreover, in the event an interim review meeting is held, Article  15.2 delimits the substance of the 
meeting to the issued identified in the written comments, i.e. the wr itten requests for review of 
"precise aspects of the interim report".  
2.8. Based on these principles, we have decided to not engage directly with China's  "general 
comments" on the basis that they do not request the review of "precise aspects" of Interim Re port. 
2.9. As an initial matter, we note that the parties were asked to submit their written requests for 
review of "precise aspects" of the Interim Report on 9  June 2021. The parties were not granted the 
opportunity to revise or elaborate on their origina l requests for review at the interim review meeting 
or in their subsequent written comments. As such, the relevant question for our consideration of 
China's  "general comments" is whether those comments, as formulated in China's  submission of 
9 June 2021, r equest the review of "precise aspects" of the Interim Report, thus satisfying the 
requirements of Articles  15.2 of the DSU.  
2.10. In its submission of 9 June 2021, China's  "general comments" allege three overarching errors 
in the Interim Report. With the e xception of one instance16, China does not refer to specific 
paragraphs of the Interim Report that it is commenting on. As a result, it is not clear from its 9  June 
submission which "precise aspects" of the Interim Report China is requesting that the Panel  review 
through its "general comments". In these circumstances, we consider China's  "general comments" 
to be insufficiently precise and therefore do not consider that we are required to directly engage 
with those comments in order to comply with the obliga tion in Article  15.3 of the DSU.17 We consider 
that the requisite degree of precision is only provided in the sections of China's  9 June submission 
succeeding China's  "general comments", when China – in its own words – "offers specific comments 
on discrete  issues of the Interim Report".18 Moreover, as we see it, directly engaging with 
China's  "general comments" – which largely repeat legal theories and arguments from its previous 
written submissions – would effectively permit China the opportunity to reliti gate issues from the 
panel proceedings, which is outside the limited function of the interim review stage.19 
 
15 Emphas is added.  
16 China's  request for interim review, para.  15. In this regard, we note that China claims that "[p]erhaps 
the most egregious example" of the Panel's  failure to properly assess the USITC's  findings "is when the Panel 
essentially admits the USITC h ad no record evidence establishing any link between China's  government policies 
and the alleged unforeseen surge in imports, and yet blesses the USITC's  finding on this point anyway (see 
para. 7.38 of the Interim Report)". In our view, China's  characteriza tion misrepresents the nature and extent 
of the Panel's  findings in paragraphs  7.35-7.45 of the Interim Report and in particular ignores the significance 
of the USITC's  finding that the "unforeseen developments" at issue consisted of a series of events. In  this 
context, we explained in paragraph  7.36 that we did "not consider that it was necessary for the USITC to 
directly connect each specific development to the increase in imports so long as there was sufficient evidence 
to find that the 'unforeseen devel opments', overall, resulted in increased imports".  
17 Panel Reports, Japan – Alcoholic Beverages II , para.  5.2; Australia – Salmon , para. 7.3; Canada – 
Continued Suspension , paras. 6.16-6.17; and US – Continued Suspension , para. 6.18.  
18 China's  request for interim review, para.  5. See also ibid. para.  19 ("China will now turn to some 
specific comments and suggestions regarding discrete aspects of the Interim Report").  
19 See, for example, Panel Reports, India – Agricultural Products , para . 6.5; and Russia – Pigs (EU) , 
paras.  6.6-6.7. We further note that the panel in Indonesia – Iron or Steel Products  explained:  WT/DS562/R/Add.1  
 
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  2.11. We further note that, in its subsequent written comments, China seeks to explain the 
connection between its "general comments" and its "speci fic comments".20 Based on this connection, 
China argues that the Panel is required to address its "general comments" when engaging with its 
"specific comments".21 However, we do not consider that China's  explanations concerning the 
connection between its " general comments" and its "specific comments" are properly before the 
Panel, as they do not appear in China's  submission of 9  June 2021.  
2.12. Moreover, even if China's  explanations were properly before the Panel, China appears to 
concede that its "general  comments" may be addressed through its "specific comments". In this 
regard, we recall that China explains that its "general comments … identify various 'precise aspects'[] 
that are demonstrated through its 43 other comments" and that its "general comments " are 
formulated "as overarching categories of mistakes incurred by the Panel, which are then reflected 
in other specific mistakes and omissions that China specifically requested be corrected".22 
Accordingly, based on these statements, the Panel would be addressing the substantive concerns 
raised in China's  "general comments" by addressing its "specific comments".  
2.13. With that being said, we now turn to China's  "specific comments", i.e. its req uest for the review 
of "precise aspects" of the Interim Report.  
2.2 Unforeseen developments  
2.2.1  Paragraph  7.24 
2.14. Regarding paragraph  7.24, China requests that the Panel adjust the text to reflect that it is 
the United  States that argues that "the USITC found that what was unforeseen was the scale of the 
effort, the speed". China further requests that the Panel delete the phrase "the USITC found" from 
the description of the United  States' argument.23 
2.15. In its comments, the United  States objects to China's  request. In its view, because the Panel 
is clearly summarizing the United  States'  position, it is unnecessary to state explicitly that it is the 
United  States that argues "the USITC found that 'what was unforeseen was the scale of the effort, 
the speed".24 The United  States also claims it is unnecessary to delete the phrase "the USITC found" 
as that is the United  States'  position, which the Panel has accepted elsewhere in its report.25 
2.16. With respect to China's  first point, we have revised th e text to include the clarification 
requested by China. With respect to China's  second point, we agree with the United  States that 
 
It is well established that the interim review stage of a panel proceeding is intended to allow 
parties to "submit comments on th e draft report issued by the panel, and to make requests 'for 
the panel to review precise aspects of the interim report '''. The interim review process is not an 
opportunity for parties to advance arguments as to why they consider a particular 'theory' 
allegedly relied upon by a panel in its Interim Report to be incorrect. Neither is it a time for 
parties to enter into a debate about the merits of a panel's  interpretation of relevant legal 
provisions, a fortiori when they have exchanged views on the subject matter during the course of 
a proceeding (as the parties have done in this dispute). Panels are not required to defend their 
findings and conclusions during the interim review stage. Issues of law addressed in a panel 
report and the legal interpretations d eveloped by a panel may always be raised on appeal.  
 
In our view, the complainants'  requests raise questions about the merits of our analysis and 
findings, challenging the very basis of our conclusions and, therefore, go beyond the kinds of 
requests that p roperly fall within the scope of the interim review process envisaged in 
Article  15.2 of the DSU. The complainants'  requests in paragraphs  2.6 to 2.9 of their request for 
interim review do not ask us to modify any specific paragraphs of the Interim Report.  In effect, 
the complainants ask us to reconsider our objective evaluation of, and conclusions, regarding the 
issues addressed in our Report.  
(Panel Report, Indonesia – Iron or Steel Products,  Addendum,  Annex A -3, paras.  2.3-2.4). 
20 China's  comments on the  United  States'  request for interim review, paras.  5-9. 
21 China's  comments on the United  States'  request for interim review, paras.  5-9. 
22 China's  comments on the United  States'  request for interim review, paras.  3-4. (fns omitted)  
23 China's  request for in terim review, para.  20. 
24 United  States'  comments on China's  request for interim review, para.  17. 
25 United  States'  comments on China's  request for interim review, para.  18. WT/DS562/R/Add.1  
 
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  China's  requested revision is unnecessary, given that the Panel is summarizing the 
United  States'  argument with respect to th e USITC's  finding.  
2.2.2  Paragraph  7.31 
2.17. Regarding paragraph  7.31, China requests that the Panel adjust the text to better reflect its 
argument with respect to the increased imports from third countries other than Korea and the overall 
relationship be tween alleged unforeseen developments and the increase in imports.26 
2.18. In its comments, the United  States requests that, in the event the Panel makes 
China's  requested revision, the text should refer to "China's  devised 'clear linkage' test".27 
2.19. We have revised the text of paragraph  7.31 in line with China's  request and the United  States' 
comment.  
2.2.3  Paragraph  7.42 
2.20. Regarding paragraph  7.42, China requests that the Panel add language to footnote 105 to 
clarify that it refers to Korea as the  most obvious example of the USITC's  wrong reasoning but does 
not accept as undisputed the USITC's  findings concerning other exporting countries. China also 
requests that the Panel delete language indicating that China accepts the USITC's  findings on these  
points.28 
2.21. In its comments, the United  States objects to China's  request. In its view, "China never 
contested any of the factual findings set forth in paragraph  7.41 above. Rather, China criticized the 
USITC for allegedly making 'assumptions' that th e increases in exports from the countries identified 
came from Chinese affiliates in these other countries".29 
2.22. We have decided not to grant China's  request. In paragraphs 291 -304 of its second written 
submission, China directly contests (a) the relat ionship between Chinese producers constructing 
factories outside China and Chinese government support30; and (b) the United  States'  "factual 
assertion that it was actually Chinese producers in other countries that accounted for the increased 
imports from t hat country".31 However, the reference to uncontested findings in the first sentence 
of paragraph  7.42 concerns different findings of the USITC, specifically those described in 
paragraph  7.41. The findings referred to in paragraph  7.41 establish  (i) the in crease in global 
capacity of the six largest firms producing CSPV cells and modules in China; and (ii) the increase in 
share of apparent US consumption of imports from countries where Chinese affiliates added both 
CSPV cell and CSPV module capacity. As the se findings are unchallenged in paragraphs 291 -304 of 
China's  second written submission, we consider that China has failed to show why it would be 
appropriate to adjust the text of paragraph  7.42 and footnote 105 in accordance with its request.  
2.2.4  Parag raph  7.48 
2.23. Regarding paragraph  7.48, China requests that the Panel add language to better reflect its 
argument that the USITC failed to appropriately demonstrate that imports increased "as a result … 
of the effect of the obligations incurred" by the U nited States.32 The United  States does not comment 
on China's  request.  
2.24. We have revised the text of paragraph  7.48 in line with China's  request.  
 
26 China's  request for interim review, para.  21. 
27 United  States'  comments on China's  request for interim review, para.  19. 
28 China's  request for interim review, para.  22. As support for these requests, China refers to 
paragraphs  291-304 of its second writte n submission.  
29 United  States'  comments on China's  request for interim review, para.  20. 
30 China's  second written submission, para.  291. 
31 China's  second written submission, paras.  292-304. 
32 China's  request for interim review, para.  23. WT/DS562/R/Add.1  
 
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  2.2.5  Paragraph  7.49 
2.25. Regarding paragraph  7.49, China requests that the Panel add language to more ac curately 
reflect its argument that the United  States engages in impermissible post hoc  rationalization in its 
defence of the USITC report on this issue.33 
2.26. In its comments, the United  States requests that, should the Panel decide to include 
China's  requested revisions, the Panel also include language that clarifies it is summarizing 
China's  argument.34 
2.27. We have revised the text of paragraph  7.49 in line with China's  request and the 
United  States'  comment.  
2.3 Causal link  
2.3.1  Paragraph  7.64 
2.28. Regarding paragraph  7.64, China requests that the Panel use more neutral language to 
characterize the findings supporting the USITC's  serious injury determination, specifically requesting 
that the Panel remove the words "signific ant" and "particularly" from its characterization.35 
2.29. In its comments, the United  States considers that it is appropriate to use those terms as the 
Panel is summarizing the USITC's  serious injury findings in its report, which are unchallenged by 
China  in the present case.36 At the same time, the United  States does not oppose the deletion of the 
term "significant" in one instance where it does not appear in the USITC's  findings.37 
2.30. Paragraph  7.64 appears in section 7.3.1 of the Interim Report, whic h sets out a general factual 
background to the Panel's  analysis of the causal link between increased imports and serious injury. 
In this context, we consider that it is appropriate to use the USITC's  language to describe the 
subsidiary findings that suppor ted its serious injury determination, which are relevant factual 
background to  the causal link. We have clarified the second sentence of paragraph  7.64 to reflect 
this. Moreover, in line with the United  States' suggestion, we have deleted the term "signifi cant" 
where it does not appear in the USITC's  finding.  
2.3.2  Paragraph  7.66 
2.31. Regarding paragraph  7.66, China requests that the Panel insert language to make clear that 
China does not "wholeheartedly" accept the USITC's  findings concerning product defi nition, 
increased imports, or serious injury "without reservation" .38 
2.32. In its comments, the United  States considers that China's  request is unnecessary, as the Panel 
has correctly characterized China's  position.39 
2.33. In order to provide greater cla rity to China's  position, we have inserted a new footnote (148) 
that indicates that China does not accept the existence of serious injury, even though it has not 
challenged the USITC's  serious injury determination in these proceedings.  
2.3.3  Paragraph  7.80 
2.34. Regarding paragraph  7.80, China requests that the Panel revise the language to better reflect 
its argument regarding the USITC's  failure to establish the existence of an overall coincidence in 
trends.40 The United  States does not comment on China's  request.  
 
33 China's  request for interim review, para.  24. 
34 United  States'  comments on China's  request for interim review, para.  21. 
35 China's  request for interim review, para.  25. 
36 United  States'  comments on China's  request for interim review, para.  23. 
37 United  States'  comments on  China's  request for interim review, para.  24. 
38 China's  request for interim review, para.  26. 
39 United  States'  comments on China's  request for interim review, para.  25. 
40 China's  request for interim review, para.  27. WT/DS562/R/Add.1  
 
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  2.35. We have revised the text of paragraph  7.80 in line with China's  request.  
2.3.4  Paragraph  7.83 
2.36. Regarding paragraph  7.83, China requests that the Panel revise the language to reflect in full 
China's  argument concerning the legal require ments to establish an "overall coincidence" between 
increased imports and serious injury.41 
2.37. In its comments, the United  States criticizes China's  request for conflating two of its assertions 
and for not accurately reflecting what China argued to the Panel.42 
2.38. We have decided not to grant China's  request. The point of paragraph  7.83 is not to fully 
summarize China's  position concerning the legal requirements to establish an "overall coincidence" 
between increased imports and serious injury. Rather, the purpose of that paragraph  is to address 
discrete aspects of China's  position that the Panel has identified as being problematic. In these 
circumstances, we consider that the additional text suggested by China to be unnecessary.  
2.3.5  Paragraph  7.76 
2.39. Regarding paragraph  7.76, China requests that the Panel quote previous DSB reports for the 
proposition that "[c]ompetent authorities may not simply presume the existence of an overall 
coincidence but are required to 'provide sufficient explanati ons to justify how an overall coincidence 
in movements has been found'".43 
2.40. In its comments, the United  States objects to China's  request. It contends that China's  request 
"appears to represent an effort to insert China's  own mistaken legal interpreta tions into the 
Panel's  description of its own reasoning".44 In any event, the United  States observes that the Panel 
in its report "clearly understood that competent authorities are required to explain their 
determinations".45 
2.41. We have decided not to g rant China's  request. The proposition that the competent authorities 
of a Member must explain relevant aspects of their determination is acknowledged and applied 
throughout the Interim Report (see, e.g. section 7.1.2 and paragraph  7.85). We therefore consi der 
it unnecessary to refer to previous DSB reports for the proposition that the competent authorities 
must provide "sufficient explanations" to justify a finding of "overall coincidence".  
2.3.6  Paragraph  7.86 
2.42. Regarding paragraph  7.86, China requests  that the Panel fully reflect its position by noting 
that it argued that the USITC understated the positive trends.46 
2.43. In its comments, the United  States objects to China's  request on the basis that the Panel 
"already adequately summarizes – and addre sses – China's  argument that the USITC allegedly 
dismissed certain positive injury factors in its causation analysis in section 7.3.3.3 of the interim 
report".47 
2.44. We have decided not to grant China's  request. In line with the United  States'  objection, we 
note that section 7.3.3.2 of the Interim Report addresses the USITC's  findings  concerning  the 
relationship  between  increased  imports  and negative  factors  of serious  injury. As a result, we do not 
 
41 China's  request for interim review, para.  28. 
42 United  States' comments on China's  request for interim review, paras.  26-27. With respect to the 
latter, the United  States observes that China argued in its second written submission that "[i]t is incumbent on 
the competent authority to establish the existence of a coincidence in trends." (China's  second written 
submission, paras.  31-32) 
43 China's  request for interim review, para.  29. China refers in particular to Panel Reports, India – Iron 
and Steel Product s, paras.  7.248; US – Steel Safeguards , paras.  10.305 -10.307.  
44 United  States'  comments on China's  request for interim review, para.  28. 
45 United  States'  comments on China's  request for interim review, para.  28. 
46 China's  request for interim review, para.  30. 
47 United  States'  comments on China's  request for interim review, para.  29. WT/DS562/R/Add.1  
 
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  consider it necessary to refer to China's  general position concerning positive trends in 
paragraph  7.86. 
2.3.7  Paragraph  7.91 
2.45. Regarding paragraph  7.91, China requests that the Panel delete the sentence indicating "by 
focusing on the significant growth in the utility segment, China  overlooks the USITC's  findings that 
the residential and commercial segments of the market also grew considerably during the POI". In 
China's  view, this sentence inaccurately represents its position, as it agreed that there was growth 
in the residential an d commercial segments.48 
2.46. In its comments, the United  States requests that the Panel retain the sentence China seeks to 
have deleted. To the extent that the Panel entertains China's  requested change, the United  States 
suggests replacing the term "over looks" with "fails to account for".49 
2.47. To accommodate China's  request, we have adjusted the text of paragraph  7.91 to avoid 
leaving the impression that China has not acknowledged that the residential and commercial 
segments grew during the POI.  
2.3.8  Footnote 207  (209)  
2.48. Regarding footnote 207  (209) , China requests that the Panel include text to reflect the context 
within which it concedes that the domestic industry competed in the utility segment.50 The 
United  States does not comment on China's  request.  
2.49. We have revised the text of footnote 207 (209) in line with China's  request.  
2.3.9  Paragraph  7.100  
2.50. Regarding paragraph  7.100, China requests that the Panel reflect its argument that 
"competent authorities need to take into account condit ions of competition even when it conducted 
a single causation analysis".51 
2.51. In its comments, the United  States objects to China's  request on the basis that 
paragraph  7.100 constitutes part of the Panel's  analysis and does not appear to be intended as a 
full recitation of China's  arguments.52 
2.52. To accommodate China's  request, we have referred in footnote 210 (212) to China's  argument 
that the competent authorities are required "to take into account the existence and factual relevance 
of different market segments" when conducting a single causation analysis. As the United  States 
correctly observes, paragraph  7.100 sets out the Panel's  view on the nature of the causation analysis 
that is required when the competent authorities are faced wit h products operating in various market 
segments and sub -segments. In this context, we do not think it is necessary (and consider that it 
would be inappropriate) to refer to China's  position in the body text of the paragraph.  
2.3.10  Footnotes 189 (191) and 191 (193)  
2.53. Regarding footnotes 189 (191) and 191 (193), China requests that the Panel include additional 
language to reflect its argument concerning the factors affecting competition between domestic and 
imported CSPV products, specifically with respe ct to the different technological requirements of the 
residential and commercial segments (60 -cell modules) in relation to the utility segment (72 -cell 
modules).53 
 
48 China's  request for interim review, paras.  31-33. 
49 United  States'  comments on China's  request for interim review, para.  30. 
50 China's  request for interim review, para.  34. 
51 China's  request for interim review, para.  35. 
52 United  States'  comments on China's  request for interim review, para. 31.  
53 China's  request for interim review, para.  36. WT/DS562/R/Add.1  
 
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  2.54. Regarding footnote 189 (191), the United  States requests that, if the Panel makes 
China's requested changes, then the Panel should ensure that it precisely reflects 
China's  argument.54 Regarding footnote 191 (193), the United  States objects to China's  request on 
the basis that the Panel is referring to arguments concerning competition in th e residential and 
commercial segments, while China's  request pertains to the utility segment.55 
2.55. We have revised the text of footnote 189 (191) in line with China's  request and the 
United  States'  comment. We have also revised the text of footnote 191 (193) in line with 
China's  request.  
2.3.11  Paragraph  7.96 
2.56. Regarding paragraph  7.96, China requests that the Panel include language to reflect its 
argument that "the domestic industry only participated 'to a limited degree in the smaller projects' 
of less than 10 MW, which represented 'about 15 -20% of the market.'"56 The United  States does not 
comment on China's  request.  
2.57. The argument to which China refers appears in the context of its non -attribution claim that 
"[t]he USITC conducted an insufficient and contradictory analysis of the participation of the domestic 
industry in the utility segment".57 However, in light o f the factual parallels between China's  causation 
and non -attribution claims concerning the USITC's  analysis of competition in the utility segment, we 
have revised the text of footnote 194 (196) to include reference to China's  argument.  
2.3.12  Paragraph  7.103 
2.58. Regarding paragraph  7.103, China requests that the Panel include language to reflect its 
arguments concerning the distinction between 60 - and 72 -cell modules.58 
2.59. In its comments, the United  States advances that, if the Panel entertains China 's request , then 
the Panel should also include language to signal that this is an argument posed by China and not a 
finding by the Panel.59 
2.60. China's  argument concerning the "the distinction between 60 - and 72 -cell modules as well as 
other technologica l differences between domestic and imported products" is already reflected in 
paragraph  7.103. Nevertheless, for greater completeness, we have decided to accommodate 
China's  request by citing in footnote 216 (218) China's  comment on the United  States'  response to 
Panel question No.  36 of the third set, para.  15. 
2.3.13  Paragraph  7.108  
2.61. Regarding paragraph  7.108, China requests that the Panel delete the sentence indicating that 
China "failed to mention that purchasers also cited 'lower import prices' as  a reason for decreasing 
purchases of US origin CSPV products".60 According to China, this "is a factually incorrect description 
of China's  argument because China did in fact recognize that prices were a factor for influencing 
purchasers' decisions. China' s argument is that price 'was neither the only factor, nor the most 
important factor.'"61 
2.62. In its comments, the United  States objects to the deletion requested by China. The 
United  States notes that the sentence at issue is a conclusion by the Panel a nd also that 
China's  justification for its request "misses the point that in discussing the response to the question 
about changes in purchasing patterns, China only pointed to purchasers' non -price reasons for 
 
54 United  States'  comments on China's  request for interim review, para.  32. 
55 United  States'  comments on China's  request for interim review, para.  33. 
56 China's  request for interim review, para.  37. 
57 China's  second written submission, section III.B.1.  
58 China's  request for interim review, para.  38. 
59 United  States'  comments on Chi na's request for interim review, para.  34. 
60 China's  request for interim review, para.  39. 
61 China's  request for interim review, para.  39. As support, China refers to: China's  comments on the 
United  States'  responses to Panel question Nos.  37 and 41 of the  third set, paras.  16 and 26; response to 
Panel question No.  39 of the third set para.  46; and response to Panel question No.  7 of the second set.  WT/DS562/R/Add.1  
 
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  decreasing purchases of US origin products wh en, in fact, purchasers also reported lower prices as 
a 'most often cited reason'".62 Nevertheless, the United  States considers that the Panel could address 
China's  request by simply deleting the phrase "China fails to mention" from the sentence at issue.63 
2.63. In response, we note that China correctly points out that it has acknowledged  that purchasers 
cited lower import prices as a reason for decreasing purchases of US -origin CSPV products in its 
submissions. However, China has not referred us to where it acknowledged this in its arguments 
against the USITC's  finding that domestic and i mported CSPV products were interchangeable. As a 
result, we consider that it remains accurate to observe in paragraph  7.108 that "China fails to 
mention that purchasers also cited 'lower import prices' as a reason for decreasing purchases of 
US-origin CSPV  products, which supports the USITC's  finding that domestic and imported products 
were interchangeable". Nevertheless, to avoid leaving the wrong impression concerning 
China's  overall position, we have decided to accommodate China's  request by adopting the  
United  States' suggested revision.  
2.3.14  Paragraph  7.129  
2.64. Regarding paragraph  7.129, China requests that the Panel replace the term "narrative" with 
"arguments".64 China also request s that the Panel include the term "still" in the last sentence of t he 
paragraph  before "lost sales".65 The United  States d oes not comment on China's  request.  
2.65. We have revised the text of paragraph 7.129 in line with China's  request.  
2.3.15  Paragraph  7.130  
2.66. Regarding paragraph  7.130, China requests that the Panel  note that China "alleged there was 
an increase in shipments by the domestic industry and that its argument is that the domestic industry 
did not lose sales, but rather, failed to grow apace the market".66 
2.67. In its comments, the United  States objects t o China's  request. According to the United  States, 
"China fails to recognize that, in this paragraph, the Panel is summarizing China's  arguments with 
respect to the USITC's  finding that imports prevented the industry from expanding capacity. On this 
issue,  China did not point to the industry's  increase in shipments, which is relevant to its arguments 
regarding loss of market share discussed in the previous paragraph".67 
2.68. We have decided not to grant China's  request. The United  States correctly notes th at the 
requested additions do not pertain to China's  argument concerning the USITC's  finding that 
increased imports prevented the domestic industry from expanding its capacity.  
2.3.16  Paragraph  7.147  
2.69. Regarding paragraph  7.147, China first requests th at the Panel include language to reflect that 
China expressly noted that it did not accept the USITC's  serious injury findings, even though it does 
not contest those findings in this dispute. China further requests that the Panel "make clear" that 
"finding s concerning the existence of 'serious injury' and 'causal relationship' are separate findings 
under the Agreement on Safeguards, and that the Panel is required to make an objective assessment 
of the USITC's  findings concerning causality".68 
2.70. In its c omments, the United  States objects to China's  requests. In its view, the Panel is correct 
to note that China has not challenged the USITC's  serious injury determination.69 The United  States 
asserts that China's  other requests are misplaced as the Panel is not discussing the relevant legal 
 
62 United  States'  comments on China's  request for interim review, para.  35. 
63 United  States'  comments on China 's request for interim review, para.  36. 
64 China's  request for interim review, para.  40. 
65 China's  request for interim review, para.  41. 
66 China's  request for interim review, para.  42. 
67 United  States'  comments on China's  request for interim review, para. 37. 
68 China's  request for interim review, para.  43. 
69 United  States'  comments on China's  request for interim review, para.  38. WT/DS562/R/Add.1  
 
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  obligations and elsewhere in its report makes clear that its function is to conduct an "objective 
assessment".70 
2.71. Regarding the first aspect of China's  request, we have revised the text of footnote 329 (331) 
to make C hina's  position on the serious injury determination abundantly clear. We have decided not 
to grant the remaining aspects of China's  request, as China's  views on the applicable legal 
obligations do not directly pertain to the point being made by the Panel i n paragraph  7.147.  
2.3.17  Paragraph  7.183  
2.72. Regarding paragraph  7.183, China requests that the Panel revise the language to better reflect 
its argument that it was inadequate for the USITC to recognize the existence of increased capital 
expenditures, but dismiss the significance of that increase on the basis that it was carried out by a 
single firm. In its view, this is particularly the case because the non -confidential version of the USITC 
final report is so heavily redacted that the exp lanation is deficient and ambiguous.71 The 
United  States does not comment on China's  request.  
2.73. We have revised the text of paragraph  7.183 in line with China's  request.  
2.4 Non-attribution  
2.4.1  Paragraph  7.200  
2.74. Regarding paragraph  7.200, China requests that the Panel explicitly refer to its argument that 
"no sufficient reasoned and adequate explanation was provided with regard to some of the injury 
factors, which were dismissed with mere references to petitioners'  argument s without an actual 
analysis".72 
2.75. In its comments, the United  States objects to China's  request on the basis that China has 
failed to provide a citation that supports its argument. The United  States also contends that 
China's  request would result in m ischaracterization of the USITC's  explanations.73 
2.76. We have decided not to grant China's  request. The purpose of paragraph  7.200 is not to 
provide a full overview of China's  arguments with respect to the USITC's  findings concerning the 
alleged missteps  of the domestic industry. Rather, paragraph  7.200 more narrowly pertains to 
China's  arguments that criticize the manner in which the USITC weighed evidence that conflicted 
with its findings. In these circumstances, we consider it unnecessary to reflect Ch ina's additional 
argument concerning the USITC's  explanations of its findings.  
2.4.2  Paragraph  7.201  
2.77. Regarding paragraph  7.201, China requests that the Panel explicitly reflect its position that 
Article  11 of the DSU requires "a critical analysis of the findings reached by the investigating 
authority".74 
2.78. In its comments, the United  States objects to China's  request, claiming that it would "expand 
the Panel's  analysis of what constitutes an 'objective assessment' under Article  11 of the DSU" and 
also that it is unnecessary in light of section 7.1.2 (Standard of review).75 
2.79. We have decided not to grant China's  request. In line with the United  States'  observation, the 
applicable standard of review is set out in section 7.1.2 of the Interim R eport. As a result, we do not 
consider it necessary to include any additional elaboration on this standard in paragraph  7.201.  
 
70 United  States'  comments on China's  request for interim review, paras.  39-40. 
71 China's  request for interim review, para.  44. 
72 China's  request for interim review, para.  45. 
73 United  States'  comments on China's  request for interim review, para.  41. 
74 China's  request for interim review, para.  46. 
75 United  States'  comments on China's  request for interim review, para.  42. WT/DS562/R/Add.1  
 
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  2.4.3  Paragraph  7.202  
2.80. Regarding paragraph  7.202, China contends that "the Panel seems to provide carte blanche  
to the investig ating authorities for ignoring at their own discretion large portions of the evidentiary 
record".76 On this basis, China requests that the Panel explicitly reflect its position that "investigating 
authorities must provide explanations and discussion that d emonstrate that their investigation is 
solid and consistent even when that omitted evidence is taken into consideration" and that "[t]he 
omitted evidence should not lead to alternative plausible explanations".77 
2.81. In its comments, the United  States obj ects to China's  request, taking the position that the 
Panel has properly explained and applied the standard of review and that China's  request appears 
to be based on misunderstanding of the Panel's  discussion in paragraph  7.202.78 
2.82. We have decided not  to grant China's  request. The last sentence of paragraph  7.202 of the 
Interim Report stipulates that "to demonstrate that the USITC's  treatment of certain evidence was 
improper, China must explain why the treatment of such evidence, when viewed in the con text of 
the overall evidentiary record, demonstrates that the USITC's  findings and conclusions were 
unreasoned or inadequate". As this statement reflects both the applicable standard of review and 
burden of proof in these proceedings, contrary to China's  contention, we do not consider that the 
Panel is providing carte blanche  for competent authorities to ignore large portions of the evidentiary 
record at their discretion. Moreover, we recall that the general rule that the competent authorities 
are required to explain relevant aspects of their determination is acknowledged and applied 
throughout the Interim Report.  
2.4.4  Paragraph  7.208  
2.83. Regarding paragraph  7.208, China requests that the Panel refer to differences between the 
market segments, particularl y in terms of the volume of demand. China also requests that the Panel 
refer to its arguments concerning "the level of specialization of each market segment", the "lack of 
investments by the domestic industry", and the fact that imports by the domestic ind ustry were 
used to satisfy customer requirements.79 
2.84. In its comments, the United  States objects to China's  request on the basis that it does not 
accurately reflect the arguments which China cites. The United  States observes that the cited 
paragraph  indicates that China argued that the domestic industry did not "have the product offerings 
necessary to effectively compete", and not that the domestic industry lacked "the required level of 
specialization".80 
2.85. Regarding the first aspect of China's  request, we have revised the text of paragraph  7.208 to 
reflect that demand grew in the utility segment during the POI. Regarding the second aspect of 
China's  request, we note that certain of the additional arguments to which China refers appear in  
section II of its second written submission, which addresses the USITC's  causation determination. 
We therefore have decided to revise the text of paragraph  7.208 to refer to China's  arguments that 
pertain to the USITC's  non-attribution analysis (specifica lly the arguments that appear in 
paragraphs  152 and 156 of its second written submission).  
2.4.5  Paragraph  7.212  
2.86. Regarding paragraph  7.212, China contends that the Panel mischaracterized its argument and 
requests that the Panel clarify that China's  position is that the "domestic industry was specialized in 
other market segments (residential, commercial) and therefore could not capitalize from the increase 
in the demand experienced in the utility market segment".81 
 
76 China's  request for interim review, para.  47. 
77 China's  request for interim review, para.  47. 
78 United  States'  comments on China's  request for interim review, paras.  43-44. 
79 China's  request for interim review, para.  48. 
80 United  States'  comments on China's  request for interim review, para.  45. 
81 China's  request for interim review, para.  49. WT/DS562/R/Add.1  
 
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  2.87. In its comments, the United  States objects to China's  request, contending that the Panel 
correctly characterizes China's  argument. As a result, the United  States submits that there is nothing 
inaccurate about the sentence identified in China's  request.82 
2.88. We have decided not to gra nt China's  request. China's  request obscures the point being made 
by the Panel in paragraph  7.212, which is to narrowly reject the notion that the USITC was required 
to conclude that the domestic industry made a "deliberate business choice" to avoid  compet ing in 
the utility segment. The Panel bases this finding on the record evidence described in paragraph  7.211 
that showed that the domestic industry did in fact compete in the utility segment.  
2.89. While China argues that the domestic industry's  business d ecision to focus on the residential 
and commercial segments made it uncompetitive in the utility segment, the Panel addresses and 
rejects this argument in paragraph  7.213. We have adjusted the text of paragraph  7.213 to clarify 
this point.  
2.4.6  Footnote 448  (451)  
2.90. Regarding footnote 448 (451), China contends that its argument that the USITC should have 
assessed the domestic industry's  sudden decision to increase capacity in the utility segment in light 
of increased demand at the end of the POI, and whether this decis ion was commensurate in light of 
the start -up costs and different technology involved, is supported by the facts set forth in the 
USITC  final staff report concerning the financial performance of the domestic industry. On this basis, 
China requests that the  Panel revise the text to reflect that it is not persuaded by China's  argument, 
rather than state that "China engages in supposition". China claims that this "strong language" is 
inappropriate.83 
2.91. In its comments, the United  States objects to China's  request on the basis that China does not 
indicate where in the USITC final staff report the industry start -up costs were addressed. As a result, 
the United  States contends that the Panel correctly found that "it would have been speculative for 
the USITC to  have assessed the addition of capacity in light of start -up costs".84 
2.92. We have revised the text of footnote 448 (451) in line with China's  request.  
2.4.7  Paragraphs 7.216 -7.218  
2.93. China contends that the Panel omits China's  main argument concernin g product quality, 
namely that "[q]uality was an important factor, and many of the purchasers complained about 
quality or adduced quality as a factor determining their supply source (imported versus domestic), 
or for stopping purchases from domestic suppli ers". On this basis, China requests that the Panel 
include these arguments in a paragraph  at the outset of its summary of China's  arguments.85 
2.94. In its comments, the United State objects to China's  request. The United  States contends that 
the requested  paragraph  is unnecessary given that China's  arguments on quality are already 
summarized in paragraph  7.218. The United  States also contends that China also fails to accurately 
summarize its arguments.86 
2.95. The United  States correctly notes that China's  quality -related arguments are summarized in 
paragraph 7.218. In these circumstances, we have revised paragraph  7.218 to explicitly reflect 
China's  argument that the USITC failed to appropriately analyse product quality. As a consequence 
of these revisions , we have modified paragraph  7.227 to address China's  argument concerning the 
evidence demonstrating the general importance of product quality.  
2.4.8  Paragraph  7.217  
2.96. Regarding paragraph  7.217, China contends that the Panel's  summary does not include 
China's  argument concerning "the close relationship between continued technological innovation and 
 
82 United  States'  comments on China's  request for interim review, para.  46 
83 China's  request for interim review, para.  50 
84 United  States'  comments on China's  request for interim review, para.  47. 
85 China's  request for interim review, para.  51. 
86 United  States'  comments on China's  request for interim review, paras.  48-51. WT/DS562/R/Add.1  
 
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  decreasing costs which was an essential competitive dynamic in the industry, and the fact that China 
referred to specific evidence showing that the domestic industry did not sufficiently innovate."87 
2.97. In its comments, the United  States objects to China's  request, claiming that the arguments 
China seeks to insert are misplaced in the context of the paragraph.88 
2.98. We have decided not to grant China's  request. Paragraph  7.217 already indicates that China 
argues "despite the arguments, facts, and data presented by respondents, the USITC failed to 
adequately explain whether the domestic industry's  lack of prioritization of technological 
development and scal e adversely impacted its financial performance". We consider that this 
statement appropriately captures China's  argument concerning technological innovation and cost. 
Moreover, we do not consider that it is necessary to refer to China's  arguments that appe ar in 
sections of its submissions that address other issues.89 
2.4.9  Paragraph  7.218  
2.99. Regarding paragraph  7.218, China requests that the Panel refer explicitly to its argument that 
"some of the domestic producers failed to qualify or lost their approved status before some of the 
largest purchasers, and that the USITC Final Report merely addressed isolated instances of 
disqualifications ignoring other evidence".90 
2.100.  In its comments, the United  States recommends that, if the Panel includes the  sentence 
referred to in China's  request, then it should more accurately reflect China's  argument.91 
2.101.  We have modified the text of paragraph  7.218 to reflect to China's  argument and the 
United  States'  suggested revisions for accuracy.92 
2.4.10  Paragr aph 7.219  
2.102.  Regarding paragraph  7.219, China requests that the Panel refer explicitly to its argument 
that "some financiers declined providing funding for large scale projects unless the suppliers were 
categorized as Tier 1", which meant that domestic  suppliers without sufficient bankability "could not 
participate in large -scale projects which usually occurred in the utility segment".93 
2.103.  In its comments, the United  States objects to China's  request. In its view, China's  proposal 
lacks precision c ompared to the arguments which it cites.94 
2.104.  We have revised the text of paragraph  7.219 in line with China's  request. We do not share 
the United  States'  concern that China's  proposal lacks precision.  
2.4.11  Footnote 477 (484)  
2.105.  Regarding footnot e 477 (484), China requests that the Panel include a more detailed 
description of the affidavit by Craig Cornelius, President of NRG Renewables.95 
 
87 China's  request for interim review, para.  52. 
88 United  State s' comments on China's  request for interim review, para.  52. 
89 In line with the United  States'  observation, we consider that China's  reference to its argument in 
paragraph  156 of its second written submission is misplaced, as that paragraph  appears in section III.B.1 of its 
second written submission ("The USITC conducted an insufficient and contradictory analysis of the participation 
of the domestic industry in the utility segment").  
90 China's  request for interim review, para.  53. 
91 United  States'  comments on China's  request for interim review, para.  53. 
92 In this regard, we consider the United  States correct to note that China only argued that one 
domestic producer (SolarWorld) was disqualified  by one purchaser (NEXTracker). (China' s second written 
submission, para.  163; SEIA Prehearing Injury Brief, (Exhibit  CHN–20), pp.  77-78). 
93 China's  request for interim review, para.  54. 
94 United  States'  comments on China's  request for interim review, para.  54. 
95 China's  request for interim rev iew, para.  55. WT/DS562/R/Add.1  
 
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  2.106.  In its comments, the United  States requests that, if the Panel makes the changes requested 
by China, t hen it should ensure that the description of the affidavit is accurate.96 
2.107.  We have revised footnote 477 (484) to include a more detailed description of paragraph  12 
of the affidavit, which China refers to in paragraph  164 and footnote 281 of its seco nd written 
submission. As China does not refer to paragraph  27 of the affidavit, we have not included any 
details from that paragraph  in our revision.  
2.4.12  Paragraph  7.227  
2.108.  Regarding paragraph  7.227, China requests that the Panel eliminate the reference to 
"inaccurate reading of the record" on the basis that, during the course of the proceedings, China 
acknowledged that the USITC found that 19 of 95 responding purchase rs reported that "a domestic 
or foreign supplier had failed in its attempt to qualify product or had lost its approved status since 
2012".97 The United  States does not comment on China's  request.  
2.109.  We have revised paragraph  7.227 in line with China's  request.  
2.4.13  Footnote 488 (495)  
2.110.  Regarding footnote 488 (495), China requests that the Panel revise the text to avoid the 
"misleading" suggestion that "China tried to counter evidence concerning SolarWorld with evidence 
concerning Suniva".98 China  claims that its argument was more complex, as it argued in its opening 
statement at the second substantive meeting that "the ranking of SolarWorld by EuPD Research was 
not sufficiently tested or put in context (as it concerned installers which only operat ed in the 
residential and commercial segments and not in the utility where developers were present)".99 China 
further claims that it "pointed out at other contrasting pieces of evidence in the record consisting of 
independent assessment of other domestic p roducers, which would cast doubts on the broader 
finding of quality offered by the domestic industry".100 
2.111.  In its comments, the United  States objects to China's  request, as it considers the Panel to be 
correct in stating that China relied upon evidence regarding Suniva to question the USITC's  reliance 
upon the EuPD report that ranked SolarWorld's  CSPV products as the most purchased brand by 
US installers. The United  States further contends that China mischaracterizes the arguments 
referred to in  its comments concerning the other contrasting evidence on the record.101 
2.112.  We have decided not to grant China's  request. We do not consider that it is in any way 
misleading for the Panel to note that "China's  argument that the USITC failed to test the  evidence 
concerning the ranking of SolarWorld  against contrary evidence is mainly based on evidence that 
Suniva's  products performed poorly". Indeed, this is precisely what China does at paragraph  88 of 
China's  comments on the United  States'  response to P anel question No.  14 of the first set. China 
also refers to its argument that "the ranking of SolarWorld by EuPD Research was not sufficiently 
tested or put in context (as it concerned installers which only operated in the residential and 
commercial segmen ts and not in the utility where developers were present)". However, the Panel 
addressed this very argument in the same footnote, which undermines China's  suggestion that the 
Panel overlooked the complexities of its argument. Finally, we note that China cla ims that it "pointed 
out at other contrasting pieces of evidence in the record consisting of independent assessment of 
other domestic producers, which would cast doubts on the broader finding of quality offered by the 
domestic industry". Yet, this evidence  is ultimately inapposite with respect to the paragraph  at issue 
in footnote 488 (495), which concerns the USITC's  reliance on the ranking of SolarWorld. The Panel 
addresses in paragraph  7.228 the relevance of any limited record evidence indicating that th e 
domestic industry did not have a perfect track record in terms of product quality.  
 
96 United  States'  comments on China's  request for interim review, para.  55. 
97 China's  request for interim review, para.  56. 
98 China's  request for interim review, para.  57. 
99 China's  request for interim review, para.  57. 
100 China's  request for interim review, para.  57. 
101 United  States'  comments on China's  request for interim review, para.  56. WT/DS562/R/Add.1  
 
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  2.4.14  Paragraph  7.229  
2.113.  Regarding paragraph  7.229, China requests that the Panel remove the "harsh language 
concerning China's  arguments", specifically referring to the words "speculative" and "selective". 
China reasons that, "[r]ather than 'speculation', China's  arguments were based on specific evidence 
in the record showing the need of domestic producers to import given their inability to fulfil 
customers' orders". China further contends that "evidence of the domestic producer's  reliance on 
imported products was extensive rather than 'occasional'".102 
2.114.  In its comments, the United  States objects to China's  request. The United  States considers 
that the Panel is co rrect to note that China engages in speculation when it argues that domestic 
producers had to import due to an inability to fulfil orders meant the domestic CSPV products had 
"technical and quality shortcomings", which it claims is an "entirely different r eason for importing 
product".103 
2.115.  We have revised paragraph  7.229 in line with China's  request.  
2.4.15  Footnote 493 (500)  
2.116.  Regarding footnote 493 (500), China requests that the Panel delete the word "only" from the 
sentence indicating that "only  three importers stated that (a) developers, installers, and project 
owners chose module suppliers with high bankability that are listed as Tier 1 by Bloomberg and that 
funding for projects using low Tier modules are often rejected by financiers; and (b) p erformance 
data and bankability of the CSPV products can limit the degree of interchangeability". China reasons 
that this evidence confirms the veracity of its argument that bankability was relevant. China further 
reasons that, "to the extent that these im porters participated in the utility segment, their reports 
about the purchasers' focus on bankability would be of particular significance in explaining the 
competitive dynamics in the utility segment and the domestic industry's  limited participation".104 
2.117. In its comments, the United  States objects to China's  request and sees no reason to delete 
the word "only".105 
2.118.  We have decided not to grant China's  request. The USITC received importer questionnaire 
responses containing usable data from 56 US fi rms that it believed to account for 83% of imports of 
CSPV products from all sources during 2016.106 In this context, we do not think it is inaccurate or 
otherwise misleading to use the word "only" in footnote 493 (500).  
2.4.16  Paragraph  7.233  
2.119.  Regard ing paragraph  7.233, China requests that the Panel refer explicitly to its argument 
that the "USITC did not address the extensive evidentiary record reflecting the multiple complaints 
by purchasers in their deals with the domestic industry".107 
2.120.  In its comments, the United  States objects to China's  requested changes on the basis that 
they are unnecessary and because the Panel did not "ignore[] the main argument by China". 
Nevertheless, the United  States suggests that, if the Panel makes China's  suggest ed changes, then 
it should accurately reflect what China argued.108 
2.121.  We have revised the text of paragraph  7.233 in line with China's  request and the 
United  States'  comment.  
 
102 China's  request for interim review, para.  58. 
103 United  States'  comments on China's  request for interim review, para.  57. 
104 China's  request for interim review, para.  59. 
105 United  States'  comments on China's  request for interim review, para.  58. 
106 USITC final staff report, (Exhibit  CHN-3), p. I -41. See also ibid. pp.  V-16-V-17 and table V -8 
(reporting the views of 47 importers on the interchangeability of CSPV products produced in the United States 
and in other countries, and the views of 45 importers on the importance of factors other than price in sales 
competition b etween CSPV products produced in the United States and in other countries).  
107 China's  request for interim review, para.  60. 
108 United  States'  comments on China's  request for interim review, para.  59. WT/DS562/R/Add.1  
 
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  2.4.17  Paragraphs 7.235 and 7.236  
2.122.  Regarding paragraphs 7.235 and 7.236, China requests that the Panel refer explicitly to "the 
actual standard that the Panel should have addressed in its review".109 
2.123.  In its comments, the United  States objects to China's  requests. Regarding paragraph  7.235, 
the United  States notes t hat the second sentence reflects the non -attribution conclusion reached by 
the Panel, after it finds that China failed to demonstrate that it was inappropriate for the USITC to 
find that the domestic industry did not suffer from widespread service and deli very issues.110 
2.124.  Regarding paragraph  7.236, the United  States contends that China is seeking to change the 
standard of review. In its view, all that is required of the competent authorities is that they "publish 
a report containing a detailed analysis of the case that explains its finding and reasoned conclusions 
reached on the relevant issues". This does not "require a refutation to each argument or 
subcomponent of an argument" and "[t]he fact that there may be other asserted theories that cou ld 
be plausible does not mean the authority has not met its obligation to provide reasoned and adequate 
explanations".111 
2.125.  We have decided not to grant China's  request. As an initial matter, we agree with the 
United  States that the second sentence of paragraph  7.235 reflects the Panel's  conclusion that 
follows from its finding (foreshadowed in the first sentence) that China has failed to demonstrate 
that it was inappropriate for the USITC to find that the domestic industry did not suffer from 
"widespre ad" service and delivery issues.  
2.126.  With respect to the other aspects of China's  request, we note that the applicable standard of 
review is described in section 7.1.2 of the Interim Report. We further note that in paragraph  7.194 
the Panel describes th e non -attribution obligation under the second sentence of Article  4.2(b) of 
the Agreement on Safeguards  and notes specifically that " if the competent authorities determine 
that the other factors are not causing injury at the same time as increased imports,  there is no 
requirement to conduct a non -attribution analysis. However, because such a determination is subject 
to review, it should be supported by an explanation that is reasoned and adequate" . 
2.127.  In conformance with this standard, at paragraph  7.202, the Panel sets out the relevant 
analytical question for its assessment of China's  claims concerning the alleged missteps of the 
domestic industry: "with respect to China's  claim under Article  4.2(b), second sentence, the relevant 
question is whether Chi na has established that the USITC failed to provide reasoned and adequate 
explanations demonstrating that alleged missteps by the domestic industry did not cause injury to 
the domestic industry".  
2.128.  Based on the above, we consider that we have been cle ar in terms of the standard of review 
applied in the Interim Report and specifically in our assessment of China's  claims concerning the 
USITC's  analysis of the alleged missteps by the domestic industry. As a result, we do not consider 
China's  request for a dditional clarification to be necessary.  
2.4.18  Paragraph  7.238 and footnotes 514 (522) and 518 (526)  
2.129.  Regarding paragraph 7.238, China requests that the Panel eliminate the term "significant" 
when characterizing the number of respondents'  allegation s concerning service and delivery issues 
addressed by petitioners. Moreover, regarding footnote 514 (522), China requests that the Panel 
eliminate the term "most" when characterizing the number of petitioners'  responses to 
purchasers'  complaints that are a vailable in the non -confidential versions of petitioners posthearing 
briefs. Finally, regarding footnote 518 (526), China requests that the Panel include the phrase "a 
number of" in its characterization of  petitioners' responses to  the complaints  of purcha sers China 
defines to be "the largest". According to China, these revisions are necessary to avoid suggesting 
"that the large majority of purchaser complaints were addressed by the petitioners, but this is not 
 
109 China's  request for interim review, para.  61. 
110 United  States'  comments on China's  request for interim review, para.  60. 
111 United  States'  comments on China's  request for interim review, para.  61. WT/DS562/R/Add.1  
 
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  the case as shown in footnote 515 of the Inter im Report, which discussed multiple affidavits 
containing various complaints left unaddressed by petitioners".112 
2.130.  In its comments, the United  States objects to China's  requests on the basis that they 
inappropriately downplay the Panel's  findings with  respect to petitioners'  responses to purchaser 
complaints.113 
2.131.  We have decided not to grant China's  request regarding paragraph  7.238. Footnote 515 
(523) refers to five affidavits that petitioners did not respond to in their public submissions. Yet, 
based on the public versions of petitioners'  posthearing briefs, it appears that responses were 
provided to at least eight purchaser complaints, specifically those from DEPCOM, California Solar 
Systems, Borrego, Sunrun, NEXTracker, Siflab, NRG Energy, and Sunpower.114 In these 
circumstances, we do not consider that it is inaccurate to state in paragraph  7.238 that petitioners 
responded to a "significant" number of purchaser complaints.  
2.132.  Regarding footnote 514 (522), we have replaced the word "most" with "certain" to 
accommodate China's  request.  
2.133.  Regarding footnote 518 (526), we note that, in paragraph  145 of China's  response to Panel 
question No.  13 of the second set, China argues that " these complaining purchasers were some of 
the largest", specifically referring to NextTracker, DEPCOM, California Solar Systems, Borrego,  
NRG Energy, and Sunrun. As petitioners appear  to have responded to complaints from these 
purchasers in their posthearing briefs, we do not consider it necessary to include the phrase "a 
number of" when characterizing  petitioners' responses to  the complaints purchasers China defines 
to be "the largest ". We have revised footnote 518 (526) to more accurately reflect China's  argument 
on this point.  
2.4.19  Paragraph  7.239  
2.134.  Regarding paragraph  7.239, China requests that the Panel refer to its argument that "the 
complaining purchasers were actually the  largest purchasers by volume of CSPV products as most 
of them operated in the utility segment".115 
2.135.  In its comments, the United  States contends that China's  requested additions are 
unnecessary in light of footnote 518 (526), which contains the same a rgument.116 
2.136.  We have decided not to grant China's  request. As indicated above, we refer explicitly to 
China's  argument in footnote 518 (526). Accordingly, aside from the clarifications set out above, we 
do not consider it necessary to refer in greater  detail to China's  argument.  
2.4.20  Footnote 517 (525)  
2.137.  Regarding footnote 517 (525), China requests that, in order to "provide an accurate 
description of the factual record", the Panel indicate "the market segments within which the 
questionnaire res pondents are operating, and the fact that the majority of these 106 questionnaire 
respondents were not operating in the utility segment".117 
2.138.  In its comments, the United  States contends that, if the Panel revises footnote 517 (525) 
pursuant to China's  request, then it should correctly reflect the relevant citation (p. I -44 of the USITC 
final staff report).118 
2.139.  We have decided not to grant China's  request. Information concerning the market segments 
within which questionnaire respondents operated is not directly pertinent to the point being made in 
 
112 China's  request for interim review, para.  62. 
113 United  States' comments on China's  request for interim review, pa ra. 62. 
114 SolarWorld's posthearing injury brief, (Exhibit  USA-16), exhibit 1, pp. 5 -21; Suniva's  posthearing 
injury brief, (Exhibit  USA-17), exhibit 9, pp.  4-8. 
115 China's  request for interim review, para.  63. 
116 United  States'  comments on China's  request fo r interim review, para.  63. 
117 China's  request for interim review, para.  64. 
118 United  States'  comments on China's  request for interim review, para.  64. WT/DS562/R/Add.1  
 
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  footnote 517 (525), namely, that the majority of purchasers  of domestic CSPV products did not 
report service and delivery issues.  
2.4.21  Paragraph  7.246  
2.140.  Regarding paragraph  7.246, China requests that the Panel refer to its argument that, 
"although the USITC admitted incentives were designed to decline over time, it failed to conduct any 
analysis on the evolution of incentives and its relation with prices of CSPV modules".119 China further 
requests that the Panel refer to its argument that "certain programs specifically directed to the 
residential and commerci al industry where the domestic industry focused (or targeting the domestic 
industry itself) had expired".120 The United  States does not comment on China's  request.  
2.141.  We have revised the text of paragraph  7.246 and footnote 535 (543) in line with 
China' s request.  
2.4.22  Footnote 562  (570)  
2.142.  Regarding footnote 562 (570), China requests that the Panel refer to its argument that 
"emphasized the three market segments did not experience similar levels of growth", and also 
mention  that "the projected incr ease in demand particularly benefited the utility segment, where 
importers focused, and which was the largest in percentage of installed capacity in 2016".121 China 
appears to justify these requests based on the clarification that it "did not argue that the  extension 
[of the FITC] did not have any positive effect on the domestic industry, but rather that it mainly 
favoured importers which had a greater presence in the utility segment".122 
2.143.  In its comments, the United  States objects to China's  request on  the basis that the requested 
changes are unnecessary and do "nothing to clarify the Panel's  finding that the evidence submitted 
by China suggested that the FITC led to increased demand in the residential and commercial 
segments". Nonetheless, if the Panel  makes China's  requested changes, the United  States requests 
that the Panel accurately reflect what China argued.123 
2.144.  We have decided not to grant China's  request. The arguments referred to by China do not 
directly pertain to the main point being made in footnote 562  (570) , namely, that record evidence 
showed that the FITC applied to all market segments. As a result, we do not consider it necessary 
to refer to those arguments in footnote 562  (570) . 
2.4.23  Footnote 567  (575)  
2.145.  Regarding footnot e 567 (575), China requests that the Panel delete "the evaluation of the 
Econometric Analysis" on the basis that "although the Econometric Analysis does not contain a direct 
correlation between subsidies and prices, it accounted the extent to which subsidi es assisted in 
achieving cost reductions – having an impact in final prices".124 China further notes that "the 
Econometric Analysis developed on the lack of competitiveness that may result from declining level 
of incentives if such reductions are not accomp anied by costs reductions at a similar trend".125 
2.146.  In its comments, the United  States objects to China's  request on the basis that the 
econometric study did not examine the direct correlation between subsidies and prices, but rather 
generally accounte d for subsidies' role in achieving cost reductions.126 
2.147.  To accommodate China's  request, we have revised footnote 567 (575) to clarify that the 
econometric report did not directly  assess the impact of changes in government incentive 
programmes on price s of CSPV products.  
 
119 China's  request for interim review, para.  65. 
120 China's  request for interim review, para.  65. 
121 China's  request for interim review, para.  66. 
122 China's  request for interim review, para.  66. 
123 United  States'  comments on China's  request for interim review, paras.  65-66. 
124 China's  request for interim review, para.  67. 
125 China's  request for interim review, para.  67. 
126 United  States'  comments on China's  request for interim review, para.  67. WT/DS562/R/Add.1  
 
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  2.4.24  Paragraph  7.261  
2.148.  Regarding paragraph  7.261, China requests that the Panel refer explicitly to four additional 
arguments when summarizing China's  position.  
2.149.  First, China requests that the Panel clarify that it argued " that the USITC should have 
considered raw material costs and production efficiencies in its non -attribution analysis, given that 
it heavily relied upon falling prices as an injury factor".127 Second, China requests that the Panel 
refer to its argument that "the USITC immediately attributed high COGS to net sales to increased 
imports without prior assessing alternative plausible explanations", specifically referring to: "(a) 
domestic producers were obliged to pass on any decrease in raw material costs to purc hasers to 
maintain their competitiveness since foreign producers enjoyed larger economies of scale and (b) 
domestic producers had to make face to high factory costs at the beginning of the POI, thus not 
being able to enjoy higher profitability margins caus ed by a decrease in raw material costs".128 Third, 
China requests that the Panel refer to its argument concerning "a correlation between declines in 
raw material costs and evolution of prices".129 Fourth, China requests that the Panel refer explicitly 
to its argument concerning "the lack of analysis of the increased efficiencies including an assessment 
on the extent domestic producers profited from or were able to implement such increased efficiencies 
given their reduced economies of scale compared to foreign  producers, resulting in a competitive 
disadvantage".130 
2.150.  In its comments, the United  States objects to China's  first requested change on the basis 
that it does not accurately characterize China's  argument that "although the USITC acknowledged 
that declining raw material costs caused declining prices, the USITC failed to separate and distinguish 
this injury".131 
2.151.  In response, we note that the additional arguments identified by China do not address the 
key point underlying the P anel's  finding on this issue, namely, that China has not established that 
decreased raw material costs and increased production efficiencies are separate causes of injury that 
are subject to the non -attribution requirement in Article  4.2(b) of the Agreemen t on Safeguards. 
Nevertheless, to accommodate China's  request, we have revised the text of paragraph  7.261 to 
clarify China's  argument. We have also revised the text of footnotes 574 (582) and 575 (583) to 
reflect the additional arguments identified by Chi na that do not already appear in the text of 
paragraph  7.261 or in the footnotes that correspond to that paragraph. As a consequence of these 
revisions, we have also modified the text of footnote 583 (591).  
2.4.25  Paragraph  7.263  
2.152.  Regarding paragraph  7.263, China requests that the Panel address the "core" issue raised in 
its submissions, specifically noting: "[h]aving considered that serious injury was manifested through 
declines in final prices, the USITC should have clarified to what extent decrease s in prices caused by 
declines in raw material costs were actually attributed to increased imports".132 
2.153.  In its comments, the United  States objects to China's  request. It notes that this paragraph  
constitutes the Panel's  reasoning and China is inappro priately attempting to insert its additional 
arguments in the Panel's  analysis.133 
2.154.  We have decided not to grant China's  request. As the United  States observes, this paragraph  
is part of the Panel's  analysis; therefore, it is not necessary to include a full recitation of 
China's  argument. We already refer to the argument identified by China in paragraph  7.261 and 
address it in paragraphs  7.263 and 7.264 and in footnotes 584 (592) and 585 (593).  
 
127 China's  request for interim review, para.  69. 
128 China's  request for interim review, para.  70. 
129 China's  request for interim review, para. 71. 
130 China's  request for interim review, para.  72. 
131 United  States'  comments on China's  request for interim review, para.  68. 
132 China's  request for interim review, para.  74. 
133 United  States'  comments on China's  request for interim review, para.  69. WT/DS562/R/Add.1  
 
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  2.4.26  Paragraph  7.268  
2.155.  Regarding paragraph  7.268, China requests that the Panel discuss its argument that the 
USITC erred by not addressing the impact of grid parity on price trends. China further requests that 
the Panel clarify "China's  criticism to the USITC's  finding on lack of correla tion between natural gas 
and solar energy prices, provided the historical trends between the two". China reasons that "[t]his 
historical trend (constant reduction of solar energy prices towards the objective of grid parity with 
natural gas) was central to China's  argument as it proved that solar energy is not sufficiently 
competitive and requires progressive cost reductions (and price reductions) to compete against 
natural gas".134 
2.156.  In its comments, the United  States objects to China's  request, noting that Panel already 
accurately summarizes China's  main arguments and that China's  proposed additional text is already 
covered by paragraph  7.268 and footnote 593  (602) . Nonetheless, the United  States requests that, 
if the Panel decides to revise paragraph  7.268 in line with China's  request, then it should accurately 
reflect China's  argument.135 
2.157.  We have revised the text of paragraph  7.268 to accommodate China's  request and the 
United  States' comment.  
2.4.27  Paragraph  7.273 and footnote 609  
2.158.  Regard ing footnote 609, China notes that the point concerning the need to reach grid parity 
in the residential segment seems to have no relation to the body text of paragraph  7.273, which 
addresses competition between solar electricity in the utility sector and other types of conventional 
energy. China thus requests that the Panel revise the text of paragraph  7.273 to align with footnote 
609.136 
2.159.  In its comments, the United  States objects to China's  request, noting that it seeks to include 
an irrelevant stat ement about grid parity to "draw attention from and alter the Panel's  actual analysis 
and finding that solar electricity from the utility segment appears to compete more directly with 
other types of conventional energy than in the residential or commercial  segments".137 
2.160.  To address the concern raised by China's  request and to avoid any confusion arising from the 
referenced witness statement, we have decided to delete footnote 609.  
3 THE UNITED  STATES'  REQUEST FOR INTERIM  REVIEW  
3.1 Revisions to enhance  the completeness and accuracy of the Panel's  findings or to 
accurately characterize arguments of the parties  
3.1.1  Paragraph  1.7 
3.1. Regarding paragraph  1.7, the United  States requests that the Panel note: "In adopting its 
Working Procedures, the Panel d eclined the request of the United  States to make the first and second 
substantive meetings – in whole or in part – open to public observation by other WTO Members and 
the public."138 
3.2. In its comments, China asserts that Article  18.2 of the DSU utilizes mandatory language with 
regards to the confidential treatment of submissions, and paragraphs 2 and 3 of Appendix 3 of the 
DSU clarify that  this obligation applies equally to written submissions and oral proceedings which 
discuss the content of written submissions. China further notes that overwhelming past practice has 
been that lack of consent from the parties means that the panel meetings should remain closed. 
 
134 China's  request for interim review, para.  75. 
135 United  States'  comments on China's  request for interim review, paras.  70-72. 
136 China's  request for interim review, para.  76. 
137 United  States'  comments on China's  request for interim review, para.  73. 
138 United States'  request for interim review, para.  4. WT/DS562/R/Add.1  
 
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  China therefore sugges ts that the United  States'  proposed text be amended to include these 
points.139 
3.3. We have decided to accept the United  States'  request without China's  proposed amendments. 
We do not consider that it is necessary in the descriptive part of our report to t ake a position on 
previous panel practice or the DSU with respect to the systemic issue of whether panel meetings are 
presumptively confidential (closed) absent party consent.  
3.1.2  Paragraph  7.97 
3.4. Regarding paragraph  7.97, the United  States requests t hat the Panel revise the third sentence 
to reflect that utility projects had "a median size of 4.9 MW during the POI", in order to accurately 
reflect the record cited in footnote 200 (203).140 
3.5. In its oral statement at the interim review meeting and in its subsequent written comments, 
China agrees with the United  States'  request and further suggests that the Panel also indicate that 
"the mean size was 17.15 MW during 2012 -2016" to avoid conveying "the  wrong idea regarding the 
size of a typical solar project during the period of investigation".141 
3.6. In its comments, the United  States objects to China's  suggestion on the basis that it does not 
align with the underlying information cited by the Panel.142 
3.7. We have revised the text of 7.97 in line wit h the United  States'  request to accurately cite its 
arguments and the underlying record. While China is correct to note that the record also indicated 
that the mean size of utility projects was 17.15 MW during the 2012 -2016 POI, that information is 
not con tained in the United  States'  submission which the Panel cites. As a result, we do not consider 
that it would be appropriate to include that information when referring to the 
United  States'  argument. We further recall that the purpose of paragraph  7.97 is t o reject 
China's  argument that it was inappropriate for the USITC to find that the domestic industry competed 
in the utility segment. The reference to the median size of utility projects, along with the domestic 
industry's  capacity and participation in uti lity projects larger than 1 MW, supports the 
Panel's  conclusion. The Panel discusses China's  argument concerning the inability of the domestic 
industry to supply large -scale utility projects elsewhere in the report.  
3.1.3  Paragraph  7.117  
3.8. Regarding par agraph  7.117, the United  States requests that the Panel revise the 
fourth  sentence to better reflect its argument that "China misrepresents the USITC's  findings with 
respect to the questionnaire responses of purchasers and domestic producers and that 
China 's alternative characterizations of the data ultimately fails to discredit the reasonableness of 
the USITC's  finding".143 China does not comment on the United  States'  request.  
3.9. We have revised the text of paragraph  7.117 in line with the United  States'  request.  
3.1.4  Paragraph  7.196 and footnote 413 (415)  
3.10. Regarding paragraph  7.196 and footnote 413 (415), the United  States requests that the Panel 
better reflect its argument by stating: "[n]evertheless, the United  States maintains that the USITC 
fully complied with its non -attribution obligation in the present case, because the USITC correctly 
found that 'other' factors did not cause injury to the domestic industry, such that the non -attribution 
requirement under Article  4.2(b) did not come into play in this case."144 
3.11. In its oral statement at the interim review meeting and in its subsequent written comments, 
China opposes the United  States'  request. China contends that the inclusion of the phrase "such that 
 
139 China's  comments on the United  States'  request for interim review, paras.  12-15. 
140 United  States'  request for interim review, para. 5.  
141 China's  oral statement at the interim review meeting, para.  15; comments on the 
United  States'  request for interim review, paras.  16-18. 
142 United  States'  comments on China's  request for interim review, para.  77. 
143 United  States'  request for interim review , para.  6. 
144 United  States'  request for interim review, para.  7. WT/DS562/R/Add.1  
 
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  the non -attribution requirement under Ar ticle 4.2(b) did not come into play in this case" would be 
improper as the USITC never made such a finding. In its view, the USITC "merely applied the 
substantial cause test established under U.S. law", which requires determining "whether increased 
imports  are a 'substantial cause not less than any other cause'".145 
3.12. In its comments, the United  States responds to this critique by noting that China's  views, while 
erroneous, are ultimately irrelevant, as the Panel is summarizing the United  States'  argumen t 
regarding the non -attribution requirement under Article  4.2(b).146 
3.13. We have revised the text of paragraph  7.196 and footnote 413 (415) in line with the 
United  States'  request. The United  States'  revisions accurately reflect its argument at 
paragraph  107 of its first written submission. We further agree with the United  States that 
China's  critique is inapposite in this context, as the Panel is summarizing the United  States' position.  
3.1.5 Paragraph  7.227  
3.14. Regarding paragraph  7.227, the United  States requests that the Panel more accurately 
summarize China's  argument in paragraph  193 of its first written submission by noting: "[s]econd, 
on quality, China asserts that the USITC's  finding was flawed because it failed to properly analyse 
the fact that 19 (out of 95)  US purchasers reported that a domestic supplier failed 'to provide a 
quality product' or lost their approved status."147 
3.15. In its comments, China contends that paragraph  7.227 should be revised to accurately reflect 
its subsequent clarification of its argument on this point, specifically the USITC's  failure to analyse 
whether the disqualifications were suffered by importe rs or domestic producers.148 
3.16. We have revised the text of paragraph  7.227 in line with the United  States'  request. We have 
decided not to integrate China's  comment concerning the subsequent clarification of its position. The 
point of paragraph  7.227 is to reject China's  reference to the questionnaire responses addressing 
suppliers'  failure in their att empt to obtain qualification and their disqualification (i.e. loss of 
approved status). The point is not why purchasers reported failure to obtain qualification or 
disqualification occurred, but rather that this reporting pertained to both domestic and foreign 
suppliers. As a result, these questionnaire responses do not support China's  contention that domestic 
CSPV products were inferior to imported products, and thus that the USITC should have interrogated 
this issue in greater detail.  
 
_______________  
 
 
145 China's  oral statement at the interim review meeting, paras.  19-20; comments on the 
United  States'  request for interim review, paras.  19-21. 
146 United  States'  comments on China's  request for  interim review, paras.  78-79. 
147 United  States'  request for interim review, para.  8. 
148 China's  comments on the United  States'  request for interim review, paras.  22-25. WT/DS562/R/Add.1  
 
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  ANNEX B  
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of China  46 
Annex  B-2 Integrated executive summary of the arguments of the United States  66 
 
 WT/DS562/R/Add.1  
 
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  ANNEX B -1 
INTEGRATED EXECUTIVE SUMMARY OF THE  
ARGUMENTS  OF CHINA  
I. The USITC Final Report Must Be Carefully Scrutinized by the Panel as Published, and 
the United States Cannot Explain Away its Fundamental Deficiencies in these 
Proceedings  
1. Panels are required to examine whether the report as published  by the competent authorities 
complies with the requirements set forth in Article XIX of  the GATT 1994 and in Articles 2.1, 3.1 
and 4.2(c) of the Agreement on Safeguards. The report must contain the "reasoned conclusions" 
and "detailed analysis" of the competent authorities, as well as a "demonstration of the relevance of 
the factors examined " and must not leave panels to "deduce for themselves" the reasons for the 
determinations of the competent authorities.1 The report must contain "explicit", "clear and 
unambiguous" explanations and not "merely imply or suggest an explanation".2 Important ly, the 
report of the competent authorities must be examined as published .3 A Member cannot offer 
additional post hoc  argumentation for the conclusions or determinations set forth in the 
report - deficiencies cannot be remedied by post hoc  reasoning, anal ysis or argumentation.  
2. The United States agrees with these well -established principles but then ignores them. It 
improperly attempts to rewrite entire sections of the USITC Final Report, attempting to remedy the 
deficiencies of the report, expansively i nterpreting the USITC's analysis, and reading explanations 
that are not there into gaps of the analysis. The United States also tries to justify any gaps in the 
USITC's analysis as consequence of redactions of confidential information. Nonetheless, it is t he non -
confidential version of the USITC Final Report, as published , that must be examined by the Panel. 
Thus, the USITC Final report is inconsistent with the GATT 1994 and the Agreement on Safeguards 
because the public version does not provide the require d explicit, clear, an d unambiguous 
explanations for its findings, but merely implies or suggests such explanations.  
II. The USITC's Explanation for its Finding of Causal Link Fails to Meet the Requirements 
of the Agreement on Safeguards  
A. Competent Authorities are Required to Establish a Casual Link Between the 
Increase in Imports and the Serious Injury  
3. Articles XIX:1(a) of the GATT 1994 and 4.2(b) of the Agreement on Safeguards establish the 
general conditions for imposing a safeguard m easure and expressly require that the increase of 
imports "cause" serious injury to the domestic industry that produces the like or directly competitive 
product. The first sentence of Article 4.2(b) of the Agreement on Safeguards elaborates on the 
meaning of the core requirements of "causality" and provides that no determination shall be made 
unless the investigating authority "demonstrates, on the basis of objective evidence, the existence 
of the  causal link  between increased imports of the product concern ed and serious injury".  
1. Competent authorities are required to provide a compelling 
explanation for their finding of a causal link when there is no 
overall coincidence in trends  
4. To find the existence of a causal link, competent authorities must determ ine whether there is 
a "genuine and substantial" relationship of cause and effect between the increased imports and 
serious injury. The Agreement on Safeguards does not prescribe any particular method or analytical 
tool for making a determination of causal  link. Nonetheless, the Appellate Body frequently examines 
whether an upward trend in imports coincides with a downward trend in those factors about the 
domestic industry that might suggest serious injury and whether the competent authority has 
 
1 Appellate Body Report, US – Steel Safeguards , paras. 269 -297, 304.  
2 Ibid. See also, A ppellate Body Report, US – Line Pipe , para.  217. 
3 Panel Reports, Ukraine – Passenger Cars , para. 7.26; Dominican Republic – Safeguard Measures , 
para. 7.9; and Appellate Body Reports, US – Steel Safeguards , para. 299; US – Lamb , para. 105.  WT/DS562/R/Add.1  
 
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  provided a reasoned and adequate explanation of this coincidence. This is because an overall 
coincidence in such trends is indicative of the existence of a causal link. But even when there is a 
general coincidence in trends, competent authorities still must provide a  reasoned and adequate 
explanation why the increase in imports caused the injury to the domestic industry.4 
5. The competent authority cannot simply presume the existence of a coincidence in trends 
through superficial observations of the movements in the different trends. Rather, the finding that 
there is a coincidence in trends must be based on a reasoned and adequate analysis based on 
objective evidence and such analysis must be made explicit by the competent authority - in particular 
when there is a div ergence between the trend of increasing imports and certain injury indicators. 
The fact that there may be coincidence with a few select injury factors does not establish an overall  
coincidence.  
6. The USITC failed to demonstrate the existence of an overal l coincidence, and in these 
proceedings, the United States' defence of the USITC overlooks this key point and instead focuses 
on individual factors that seem to show coincidence and ignores or dismisses the other factors that 
show a lack of coincidence. Ho wever, although an "overall coincidence" does not require absolute 
conformity, it does require an overall  coincidence in trends. This means that "a few select factors" 
do not establish the existence of an overall coincidence. To the contrary, the competent  authority 
must look to more than just one or two factors to demonstrate the existence of an overall coincidence 
in trends - it should consider all of the factors, and not just those most convenient to its finding.  
7. An absence of a coincidence in trends,  on the other hand, signals that factors other than the 
increase in imports may be affecting the domestic industry and thus, the competent authority's 
explanation of the existence of a causal link between the increase in imports and the alleged serious 
injury must be compelling .5 
8. The United States disagrees with the proposition that to satisfy the "reasoned and adequate" 
standard in the absence of a coincidence in trends, the explanation provided by the competent 
authority must be "compelling" and tries to dismiss the findings of the panels cited by China in 
support of its argument. But the United States' reasoning contradicts the well -settled interpretation 
of the text of Article 3.1 and does not detract from the explanatory force of those prior panel 
decisions. The fact remains that prior WTO panels have interpreted the text of the 
Agreement  on Safeguards to mean that when the competent authority is unable to demonstrate the 
existence of an overall coincidence in trends the authori ty must provide a compelling explanation 
why it believes causality nevertheless exists even in the absence of such overall coincidence, in order 
for the determination to meet the "reasoned and adequate" standard.6 
9. The United States alleges that China's  argument regarding causal link is undermined by the 
fact that it did not challenge the existence of serious injury. However, that an industry may be 
suffering serious injury has nothing to do with showing the required causal relationship between the 
increased imports and the alleged serious injury. The Agreement on Safeguards sets forth at 
Article  2.1 that a Member may apply a safeguard measure in respect of a product only if it has 
determined that the increase in imports of such product causes or threaten s to cause serious injury 
to its domestic industry. The first sentence of Article 4.2(b), on the other hand, requires the 
competent authorities to make a determination on the basis of objective evidence that there is a 
causal link between the increase in i mports and the serious injury or threat thereof. Under either of 
these provisions, "serious injury" and "causal link" are distinct elements that both must be 
established in a safeguard investigation. That is why the Agreement on Safeguards defines "serious  
injury" in Article 4.1(a), clarifies what factors shall be considered for determining the existence of 
"serious injury" in Article 4.2(a), and then focuses separately on the concept of "causal link" in 
Article  4.2(b). This is why competent authorities cou ld find the existence of serious injury while still 
failing to explain the existence of a causal link. And because China has made a claim that the USITC's 
causal link determination is inconsistent with Article 4.2(b) of the Agreement on Safeguards, the 
Panel should conduct an objective assessment of that claim as required by Article 11 of the DSU.  
 
4 Panel Report, Argentina – Footwear (EC) , para. 8.250; Appellate Body Report, Argentina – 
Footwear  (EC), para. 144.  
5 Panel Report s, US – Steel Safeguards , para. 10.308.  
6 Panel Reports, US – Steel Safeguards , para. 10.308; Argentina – Footwear (EC) , para. 8.238;  US – 
Wheat Gluten , para.  8.95; Appellate Body Report, Argentina – Footwear (EC) , para. 145.  WT/DS562/R/Add.1  
 
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  10. Finally, both WTO and U.S. law treat the issues of serious injury and causal link as legally 
distinct. And the practice of the USITC shows that it agrees with  this interpretation given that, as a 
practical matter, USITC's final reports in safeguard investigations attempt to follow this structure 
through separate sections that addressed these distinct issues: first, whether "the domestic industry 
is seriously in jured", and second, the separate question of whether "increased imports are a 
substantial cause of serious injury". In this case, however, the United States has been unable to 
show that the USITC did in fact provide a compelling explanation for its finding  of causation.  
2. The existence of a causal link must also be evaluated in light of the 
relevant conditions of competition  
11. The existence of a causal link between increased imports and injury suffered by the domestic 
industry also needs to be evaluated in light of the conditions of competition of the particular 
industry,7 which goes to the "substance" of the causal link analysis. In some cases, an apparent 
coincidence between imports and injury factors could be explained by conditions of competition 
present in a particular industry rather than the increased imports. It is essential for a competent 
authority to analyse the impact, if any, that such conditions of competition may have on its analysis 
of causation and whether a coincidence in trends - in light of the conditions of competition - actually 
support a finding of causation.  
12. To satisfy this obligation, competent authorities must demonstrate why they believe that the 
conditions of competitions demonstrate the existence of a causal link. The speci fic conditions of 
competition relevant for the analysis of the competent authority will depend on the products and the 
market. While conditions of competition would typically include sales price, price is certainly not the 
only condition of competition, an d indeed may be irrelevant or only marginally relevant in any given 
case. Failure to take into account conditions of competition of the relevant industry, however, would 
result in an "explanation" of the existence of a causal link that is neither reasoned or adequate, nor 
on the basis of objective evidence. Such "explanation" would be ignoring key factors relevant for the 
causation analysis.  
13. The United States has not disputed the relevance of the conditions of competition to the causal 
link analysis and  has instead embraced China's formulation of the analytical framework. It simply 
argues that the USITC's analysis of the conditions of competition demonstrates the existence of a 
causal link between the increase in imports of CSPV products and the injury a llegedly suffered by 
the domestic industry. However, as China showed, the USITC's determination, as written, failed to 
properly take into account the conditions of competition. Even when the conditions of competition 
showed that certain trends were to be e xpected given the conditions of the CSPV market, the USITC 
instead jumped to the conclusion that there was an overall coincidence in trends and a causal link 
existed between the increase in imports and the serious injury. However, a finding that fails to t ake 
into account the conditions of competition in the relevant industry does not comply with the 
applicable standard.  
B. The USITC's Finding of the Existence of a Causal Link is Inconsistent with the 
Agreement on Safeguards  
1. The USITC did not demonstrate  the existence of a coincidence in 
trends  
14. Objective evidence in the underlying investigation indicates there was an absence of an overall 
coincidence between the increase in imports and the movements in injury factors in this case. While 
the United Sta tes asserts the USITC did demonstrate an overall coincidence, the actual USITC's 
determination merely describes a few select indicators of injury, without ever explicitly showing and 
explaining why it found an overall coincidence, particularly in light of positive trends that undermine 
any conclusion of overall coincidence. Given that there was no overall coincidence in trends, the 
USITC was required to provide a compelling explanation why the alleged injury suffered by the 
domestic industry was caused by t he increase in imports.  
15. The United States' argument that the USITC demonstrated the existence of an overall 
coincidence in trends forgets that the analysis or demonstration of the existence of an overall 
 
7 Appellate Body Reports, US – Wheat Gluten , para.  78; Argentina – Footwear (EC) , para.  144; 
Panel  Report, Argentina – Footwear (EC) , para. 8.250.  WT/DS562/R/Add.1  
 
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  coincidence must be explicit. This means more th an just describing trends and noting that some are 
negative while some are positive. An explicit showing of overall coincidence must directly address 
why the contrary trends - improving trends in injury indicators even in the face of increasing 
imports - do not undermine the finding of overall coincidence. It is not enough to note a trend 
without any discussion of what that trend means or how it fits in with other trends. The United States 
cannot rewrite the USITC Final Report and thus, absent an explicit a nalysis or demonstration of the 
existence of an overall coincidence, the Panel must proceed on the basis that there was an absence 
of such overall coincidence.  
2. The USITC did not provide a compelling explanation for its finding 
of a causal link  
16. The f ailure to show overall coincidence means that the USITC must provide a compelling 
explanation of its finding of a causal link. However, instead of providing a compelling explanation of 
causality in light of the numerous positive factors in this case, the U SITC ignored or downplayed 
these positive factors. The USITC also did not provide a compelling explanation why the negative 
factors it relied upon demonstrated the existence of causality notwithstanding the positive factors. 
In particular, the USITC did no t consider the negative trends in context - in light of the conditions 
of competition in the CSPV industry - that presented certain negative trends in a very different light 
than the USITC's simplistic explanations of its findings.  
17. The USITC was free t o decide what methodology it would use to conduct its analysis of the 
existence of a causal link between the increase in imports and the alleged injury. The USITC chose 
to employ the most commonly observed methodology followed by competent authorities in p rior 
WTO decisions: first, demonstrate the existence of an overall coincidence in trends, and then 
examine whether it could conclude a causal link existed based on such overall coincidence. The fact 
remains that the USITC did not propose any other method t o examine whether a causal link existed. 
The United States confirmed that a coincidence analysis was the methodology chosen by the USITC 
and so, as a consequence of its choice, the USITC was required to first demonstrate the existence 
of such overall coinc idence, and then provide a reasoned and adequate explanation for its finding of 
causality. Thus, having failed to demonstrate the existence of a coincidence in trends, the USITC 
was required to provide a compelling explanation for its finding of causality in light of the conditions 
of competition.  
18. However, the USITC's explanation understated the numerous positive trends in certain injury 
factors in light of the conditions of competition, failed to account for such trends and to address the 
combined weight of those factors. While a number of positive  trends were present during all or part 
of the POI, these positive trends were largely dismissed by the USITC without a sufficient 
explanation, which cast doubt on the USITC's explanation that the increase in the volume of CSPV 
imports caused the alleged i njury suffered by the domestic industry. First, at the time imports were 
increasing, the domestic industry increased its capacity for producing US cells and modules. Second, 
the production by the domestic industry actually increased during the POI. Third, shipments of CSPV 
products by the domestic industry also increased during the POI. Fourth, while there was a small 
decrease in employment at the beginning of the POI, employment for CSPV cell production actually 
increased, by the end of the POI, when impor ts were at their highest levels. Fifth, over the course 
of the POI, the domestic industry increased its capital expenditures, and its overall financial 
performance improved. These positive trends point to the contrary proposition that there is no 
overall c oincidence, and further, no causal link between the increase in imports and the changes in 
the domestic industry.  
19. The USITC's explanation overstated the importance of negative trends in certain injury factors 
in light of the conditions of competition.  The presence of both positive and negative trends means 
that the USITC was required to provide a compelling explanation in light of the conditions of 
competition as to why the negative trends were the result of the increase in imports. However, the 
USITC glossed over the negative trends by merely noting certain injury factors without further 
analysis, misrepresenting the data it collected during the investigation, and making conclusory 
statements asserting there was a connection between imports and the inj ury factors. The 
United  States did not point to where the USITC provided an explanation for the causal link between 
increased imports and negative injury factors; instead, the United States argues any one negative 
development may indicate the existence of a causal link. This is m istaken.  WT/DS562/R/Add.1  
 
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  20. In short, the USITC failed to examine the combined weight of all of the positive and negative 
factors in its analysis of causality. No single injury factor is, by itself, dispositive or a reason sufficient 
for a finding that the increase in i mports caused the alleged injury to the domestic industry. The 
USITC merely noted the existence of positive trends as it summarized data collected during its 
investigation, only to then dismiss them without explaining why they were of minor or no importanc e 
for purposes of its analysis. The United States, on the other hand, tries to explain why each individual 
positive factor is not significant, but this post hoc  attempt must be rejected. Regarding the negative 
trends, the USITC and the United States single d out each one of those factors and emphasized each 
individual trend, mischaracterizing them to appear more negative than the actual market situation. 
However, the USITC and the United States failed to consider any negative trends in the context of 
other p ositive trends.  
3. Consideration of the conditions of competition further detracts 
from the explanatory force of the USITC's explanation  
21. An important reason why the United States cannot seriously assert that the USITC's 
explanation of causality is "co mpelling" is that the USITC failed to properly consider all the relevant 
factors in its determination, including the key conditions of competition.  
22. Contrary to the United States' argument, the conditions of competition weigh in favour of a 
finding that  there was no causation. The two key conditions of competition during the POI were 
(1) the small size of the domestic industry throughout the period, and (2) the explosive growth in 
demand over the period. Taken together, these two conditions of competitio n severely attenuated 
the ability of changes in imports to affect the domestic industry.  
23. Not only has the USITC failed to account for positive factors during the POI in light of these 
conditions of competition, the conditions of competition put certain  apparently negative 
trends - including the domestic industry's declining market share - in a very different light. A proper 
examination of certain trends that the USITC considered negative results in a different interpretation. 
The USITC's failure to prop erly analyse the interplay between trends and the interaction between 
imports and the alleged injury suffered by the domestic industry in light of those trends and the 
conditions of competition results in an explanation that is simply not compelling.  
24. The USITC's explanation is deficient as it failed to properly consider the conditions of 
competition. First, it places too much significance on the fact that the US industry's market share 
decreased over the course of the POI at the time when imports were increasing, without providing 
a compelling explanation for how this indicates the existence of a causal link. The analysis failed to 
consider the fact that the US industry's market share decreased because of the speed at which the 
market grew in relation t o the small size of the domestic industry, and not because the domestic 
industry had any alleged "lost sales".  
25. Second, the USITC exaggerated the importance of price and financial indicators as explanatory 
factors, without giving due consideration to n on-price factors and without providing a compelling 
explanation in this respect. Considered as a whole, the record evidence shows that non -price factors 
were more important than price in describing the market dynamic - and describe a more complex 
market dy namic - demonstrating that falling prices were not the result of increased imports, as the 
USITC assumed. In addition, non -price factors also better explain the domestic purchasers' decision 
to purchase imported products. Nonetheless, the USITC relied on d eclining prices during the POI as 
a key injury factor - ignoring that such decline in prices was caused by other factors, and is part of 
an industry -wide, long -term trend.  
26. Third, the USITC's explanation also failed to seriously consider the consequence s resulting 
from the existence of distinct segments in the market: the residential and commercial segments on 
the one hand, and the utilities segment on the other. The USITC failed to account for the fact that 
US producers chose to focus on the residential  and commercial segments instead of participating in 
the utility segment, whereas most imports focused on the utility segment.  
27. Fourth, the USITC's determinations also failed to provide a compelling explanation for how 
increased imports resulted in pla nt closures. The USITC failed to address the year -over-year trends 
of plant closures and misrepresented period data, which did not demonstrate an overall coincidence. 
Most closures took place at the beginning of the POI, prior to the larger increase in imp orts. When WT/DS562/R/Add.1  
 
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  imports were at their highest level, the number of closures were at their lowest. Certain plant 
closures were the result of other conditions of competition, including corporate restructurings and 
shifting priorities.  
28. The United States and th e USITC try to explain away evidence on the record concerning the 
positive trends of the domestic industry by linking the evidence to the effects of AD/CVD orders, but 
its explanation is also flawed. The USITC simplistically attributed an effect to the AD/ CVD orders, 
suggesting that improvement in the financial conditions of the domestic industry towards the end of 
the POI was the consequence of such orders, which caused prices to stabilize. However, its claim 
that the AD/CVD orders "stabilized" market pric es were unfounded because CSPV cells and modules 
increased modestly for only 6 out of 16 quarters, and the average price for CSPV modules over the 
full period still fell by half. Likewise, the USITC observed that data collected through its 
questionnaires s eemed to indicate that price trends "stabilized somewhat" early in the period, but 
this does not mean that the AD/CVD orders were the main driver of such price "stabilization". In 
fact, an objective examination of the data shows that price trends during th e POI reflect instead the 
overall longer -term trend in the industry, where prices have decreased over time.  
29. Ultimately, during the course of these proceedings, the United States has never seriously 
disputed that the USITC's explanation for its finding of a causal link is not "compelling".  
III. The USITC Failed to Conduct a Non -Attribution Analysis and the United States' 
Arguments Cannot Cure these Fundamental Defects  
A. The USITC Did Not Ensure that Injury Caused from Other Factors was Not 
Attributed t o the Increased Imports  
30. The non -attribution obligation set forth in the second sentence of Article 4.2(b) requires the 
competent authorities to ensure they do not "attribute{e} injury caused by other factors to increased 
imports" . This is a separate an d distinct legal obligation from the requirement to establish a causal 
link. Thus, the outcome of the "causal link" test - or the strength of any such link - is not 
determinative of the outcome of the non -attribution test.  
31. The second sentence of Artic le 4.2(b) does not dictate a specific methodology. Nonetheless, 
the Appellate Body has interpreted the text to require that competent authorities "separate" and 
"distinguish" other factors of injury, as well as identify "the nature" and "extent" of their e ffects in 
the domestic industry. As such, competent authorities are required to do more than making 
conclusory statements when conducting the non -attribution analysis, and instead must provide a 
reasoned and adequate explanation, unambiguously and explicit ly establishing how they separated 
and distinguished other factors and ensured that no other factors of injury are attributed to increased 
imports.  
32. The United States argues that the USITC fulfilled the non -attribution requirement by applying 
the "subs tantial cause" test under U.S. law, which compares the importance of increased imports 
versus each other individual cause to see if imports are an important cause and no less  than any 
other cause.  
33. However, the USITC did not conduct an analysis of the "nature" and "extent" of each individual 
factor, despite recognizing that several other factors were having a negative impact on the domestic 
industry. Moreover, the USITC recognized that other factors were having a negative impact on the 
domestic industry  and then dismissed them in a cursory manner as less important  and not capable 
of explaining the situation of the domestic industry.  
34. The United States also argues that the other factors alleged by the respondents in the USITC 
investigation were mere " symptoms" or "effects" of the increased imports and not "other factors". 
While there may be situations where other factors are at interplay with increased imports and are 
not completely independent. This is precisely why competent authorities are required to 
"disentangle" different factors of injury. The USITC never engaged in this exercise.  WT/DS562/R/Add.1  
 
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  B. The USITC Dismissed Other Factors as not Causing Injury Without Providing a 
Reasoned and Adequate Explanation why these Factors Were Having no Effect 
at all  
35. The United States has not justified in the course of these proceeding the overly simplistic 
analysis performed by the USITC in assessing how injury caused by other factors that were advanced 
by the parties in the safeguard investigation was not attributed to increased imports. First, the USITC 
did not sufficiently address the domestic industry's lack of participation in the utility segment and 
its focus on the commercial and residential segments. In this context, the USITC did not clarify how 
the domestic i ndustry would be suffering injury when imports served an increased demand that the 
domestic industry was not able to supply. Second, the USITC did not address quality as a factor for 
competitive differentiation between imports and the domestic industry. Th ird, the USITC did not 
address compelling evidence concerning the domestic industry's delay in implementing technological 
changes, as well as the delivery and service problems experienced by the domestic industry.  
1. The USITC did not sufficiently address  the domestic industry's lack 
of participation in the utility segment  
36. The USITC did not conduct a serious analysis about the level of participation of the domestic 
industry in the utility segment. The USITC simply dismissed this factor by asserting tha t the domestic 
industry "clearly" sought to compete in the large, concentrated, and price -sensitive utility market, 
but that the domestic competitiveness was impacted by large volume of imports. The USITC's 
analysis is unsupported by an actual analysis of the level of participation of the domestic industry in 
each market segment, and the consequences of such levels of participation.  
37. The USITC failed to take into consideration the different competitive dynamics governing each 
market segment. The utility  segment presented particular characteristics such as booming demand, 
different level of participation by the domestic industry, size of projects, concentration of purchasers, 
higher economies of scale or different channels of distribution.  
38. The domest ic industry made the conscious choice to focus in the residential and commercial 
segment, declining to scale -up its capacities until very late in the POI to serve the larger utility 
segment. This choice resulted in significant missed business opportunities . This choice was reflected 
by the fact that the domestic industry did not serve up to 85 percent of the utility segment prior to 
POI, and up to 95 percent at the end of the period due to the boom in demand. Thus, imports were 
not to blame for the large po rtion of the market that the domestic industry never service and could 
not service in the first place.  
39. The USITC also erred in inferring the domestic industry competed in the whole utility segment 
from its very limited participation among smaller scal e utility projects. The domestic industry, 
however, was not present in the large -scale projects - which constituted the bulk of the overall utility 
segment. The record evidence shows that the domestic industry only had capacity to serve projects 
of a size between 7 and 14 MW, although 82 percent of installed capacity in 2016 corresponded to 
projects larger than 20 MW. Large projects in the utility segment could reach up to 200 MW as 
witnessed by experts in the industry during the original proceedings.  
40. Moreover, the domestic industry was not even competitive in the "small utility" segment, as 
evidenced by multiple complaints on the foreign source (e.g. Thailand, Germany) of 72 -cell modules 
which were purchased to domestic producers. Solarworld indeed onl y introduced a 72 -cell module 
line in 2016, although this was the predominant product in the utility segment since 2013 -2014. 
Thus, it needed to import 72 -cell modules in order to serve the customer demand for this product. 
As to Suniva, although 45  percen t of the production lines were devoted to 72 -cell modules, they 
were shared between the commercial and "small utility" segments.  
41. The United States' argument that the lack of capacity of the domestic industry was a "result" 
or "symptom" of the increase in imports fails. Both the United States and the USITC ignore the fact 
that the domestic industry expanded its capacity late in the POI by 34 percent (42 percent of which 
occurred in 2016). The United States has not explained such expansions, why they were  not made 
earlier, whether they were sufficient for addressing the demand in the utility segment (they were 
not), and whether the switch in the focus of business (i.e. entrance in utility segment) had a negative 
impact in the domestic industry's performanc e.  WT/DS562/R/Add.1  
 
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  42. In any case, even where the USITC asserted that the domestic industry's lack of participation 
was purely the result of increased imports, it was required to disentangle the effects of different 
factors before reaching the superficial conclusion tha t the lack of competitiveness was purely an 
"effect" of increased imports as the United States pictures. The USITC never engaged in such 
exercise. That evaluation would have shed light on the "cause" and "effect" relationship between 
increased imports and domestic industry's participation in the utility segment, if any. Indeed, record 
evidence suggests the contrary to what the United States argues: the earlier lack of competitiveness 
of the domestic industry was the "cause" for imports serving a market wher e the domestic industry 
was not present or was not competitive.  
43. In sum, the USITC failed to "disentangle" the effects of the domestic industry's business 
decision to focus in the residential and commercial segment) from the effects of increased import s, 
and the United States has not cured this defect in the USITC's reasoning.  
2. The USITC erred in concluding that quality was not a factor 
distinguishing domestic CSPV products from imports  
44. Both the USITC and the United States have dismissed the qual ity factor with sweeping 
assertions and simplistic reliance on U.S. producers' arguments. Quality, however, was considered 
among either the first -most or the second -most often cited in the ranking of three factors that 
customers consider in their purchasin g decisions, even ahead of price. Thus, the USITC should have 
paid closer attention to the evidence on record suggesting quality problems experienced by the 
domestic industry.  
45. In this regard, the record evidence shows that the domestic producers thems elves needed to 
import products to meet the customers' specifications and requirements on quality. The USITC never 
looked at the reason why domestic producers themselves had to import rather than relying on their 
own products to meet domestic demand.  
46. On the issue of qualification, the USITC itself found that at least 19 purchasers (19 out of 95, 
that is, 20 percent of the respondents) reported that producers failed in the attempt to qualify a 
product or lost their approved status since 2012. Some of th e reasons cited for not qualifying a 
producer included "customer service, financial strength, broken commitments, cell cracks, use of 
thinner frame, quality control, bankability, failed audit, efficiency, delivery rates". The USITC, 
however, failed to prov ide a detailed analysis of the identity of the producers which did not qualify, 
the specific products concerned, the identity of disqualifying purchasers and their relevance in the 
market. The USITC only addressed in its Final Report NEXTracker's disqualif ication of SolarWorld, 
by denying its importance on the basis of petitioner's argument that the U.S. producer continued to 
be on the list of approved vendors. Such explanation is wholly insufficient since the U.S. producer 
could have been disqualified for certain products, project or period of time. Neither the USITC nor 
the United States addressed record evidence on other disqualifications, such as Suniva's second 
failure in its attempt to qualify before Sunrun in 2016, due to quality reasons. Likewise, ne ither the 
USITC nor the United States have commented on lack of serious attempts of U.S. producers to 
qualify before some of the largest purchasers in the utility segment including DEPCOM or 
NRG Energy.  
47. The domestic industry did not adopt some of the most important innovations that took place 
during the POI, resulting in reduced competitiveness and lowered quality. The USITC did not 
sufficiently scrutinize this evidence during the investigation, and the United States has not contested 
the abundant evid ence in the record concerning technological differentiation between domestic and 
imported CSPV products.  
48. The United States has also tried to downplay USITC's lack of analysis of the bankability factor, 
which is closely connected to quality. As acknowle dged by the USITC itself, the plurality of 
stakeholders operating in the utility segment chose module suppliers with high bankability. Domestic 
producers also noted the importance of bankability and five of them referred to the "{i}nability to 
obtain adequ ate financing" as a factor of injury. In light of this, the USITC should have conducted a 
deeper assessment on the relevance of bankability.  
49. The United States has repeatedly rejected the quality factor on the basis of the high 
"interchangeability" bet ween the domestic and imported CSPV modules. The United States' WT/DS562/R/Add.1  
 
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  argument, however, is largely based on similarity in physical characteristics between products and 
ignores other range of factors affecting competition between domestic and imported CSPV produ cts, 
including quality, performance, reliability, conditions of sale, and others. Further, even as regards 
the physical characteristics alone, the USITC Final Staff Report showed mixed views on the issue, 
with a third of importers and a fourth of purchaser s considering the products as "non -
interchangeable". China has also questioned the notion of "interchangeability" which did not capture 
the differences in wattage ranges and conversion efficiencies between different categories of the 
same product, as well as the focus on different market segments for the domestic producers and 
importers, which required different product categories.  
50. In sum, the United States has not cured the lack of analysis by the USITC on the impact of 
quality as another factor causin g injury.  
3. The USITC ignored competing evidence showing the serious service 
and delivery problems the domestic industry had in supplying 
CSPV  products  
51. The United States has not justified the very superficial analysis conducted by the USITC on 
the se rvice and delivery problems reported by independent purchasers. The USITC's analysis in its 
Final Report was reduced to three sparse sentences, which do not amount to a reasoned and 
adequate explanation. This is particularly true in light of the abundant c onflicting evidence presented 
by purchasers about the service and delivery problems of the domestic industry, which was not 
assessed by the USITC but dismissed uncritically.  
52. The analysis by the USITC is all the more obscure when considering that the s upporting 
evidence (U.S. producers post -hearing briefs as well as attachments) cited in footnote of the USITC 
Final Report is largely confidential, as recognized by the United States in some of its submissions. 
The level of confidentiality and the lack of an accompanying non -confidential summary concerning 
such a significant causal factor is incompatible with the requirement of stating findings in a public 
report in a manner that is "explicit", "clear" and "unambiguous".  
53. The United States has tried to m inimize the importance of the USITC's insufficient analysis by 
representing the complaints as "isolated" or "anecdotal" and rebutted by the petitioners. However, 
the number of complaints were large, and they covered a broad categories of topics: from forei gn 
origin of the product when the order was made for domestic products, service problems, delays, 
defective modules and broken cells, to others. A close look at the petitioners' post -hearing briefs 
shows that their arguments were not "more compelling". Rat her, in some cases, the service and 
delivery problems were not sufficiently justified to the customers. By not explaining how the USITC 
assessed the evidence, or why it rejected each of the purchasers' complaints, the USITC failed in 
conducting an objectiv e assessment of the record.  
C. The USITC Did Not Evaluate the Nature and Extent of Injurious Effects Caused 
by Other Factors that Were Admitted to Have Some Effect  
54. The USITC also dismissed other factors despite having recognized that they were having some 
impact. These factors include evolution of incentives, decline in raw material costs, and the 
imperative to meet grid parity. The USITC did not provide a reasoned and adequate explanation 
about how it ensured that the admitted effects were not attribu ted to increased imports. And the 
United States' has failed to justify the USITC's perfunctory analysis of these factors.  
1. The USITC acknowledged the relevance on the evolution of 
incentives, but unjustifiably dismissed this factor on the basis of a 
superficial link with increased demand  
55. The USITC "recognize[d] that changes in the availability and scope of Federal, state, and local 
government incentives and regulations continue  to affect the price of and demand for CSPV 
products". The United States has tried to dismiss this assertion by su ggesting that these effects did 
not take place over the POI. However, such a post hoc  justification is completely at odds with the 
USITC's own admission that changes in availability in incentive " continue  to affect" the price of and 
demand for CSPV products, in the present tense.  WT/DS562/R/Add.1  
 
- 55 - 
 
  56. Even if the USITC's recognized that "evolution" of incentives affected price and demand for 
CSPV products, the USITC did not assess the development of government support as su ch. The 
USITC does little more than listing a limited number of government incentives and providing 
minimum descriptions of them without addressing their availability. On the issue of trends of 
government incentives, the USITC made ambiguous statements not ing that "some programs have 
expired, while others continue", or that "these incentives and their benefits were designed to decline 
over time" without any specification. To sidestep the USITC's lack of analysis, the United States tries 
to put the focus on growing demand and explain that incentives did not have any effect on the 
domestic industry because demand continues to grow. Nevertheless, this justification cannot cure 
the defective analysis.  
57. Despite the evidence on the record about market segmentat ion, the USITC never considered 
the effects of incentives in different segments of the CSPV market, including to what extent 
incentives that specifically benefited the residential and commercial segments where the domestic 
industry focused continued at the  same level as prior to the POI. This assessment was necessary 
considering the differentiated demand, and the project -scale and focus of the different producers.  
58. The USITC makes an overbroad connection between increased demand and the maintenance 
of the Federal Tax Income Credit. At the federal level, the USITC only looked at the extension of the 
Federal Income Tax Credit in 2016 when dismissing the evolution of incentives as a factor of injury. 
However, this incentive program particularly benefited the  utility segment where demand was 
booming, but where the domestic industry was not focused. On the other hand, incentives which 
particularly targeted the domestic industry or the residential and commercial segments where the 
domestic industry was focusing declined or were terminated (e.g. advanced energy manufacturing 
tax credit ("MTC"); Section 1705 Loan Guarantee Program; and Section 1603 Treasury Cash Grant 
Program). The United States tries to dismiss the importance of these terminations by mentioning 
that they occurred prior to the POI. However, the reality is that these programs were still active 
during the POI and in any event, their termination had an impact on the domestic industry during 
the POI. Ultimately, as the Appellate Body made clear in US – Wheat Gluten , what matters is that 
the serious injury is suffered at the same time of increased imports, regardless of when the events 
giving rise to serious injury took place.8 
59. At the state level, the questionnaire responses evidenced that the overal l level of incentives 
actually declined, including programs which were particularly beneficial for the residential and 
commercial segments (e.g., net metering). The questionnaire responses that referred to increased 
demand due to availability of State ince ntives also mentioned the importance of programs 
particularly beneficial to the utility segment, where the domestic industry did not focus 
(e.g.,  renewable portfolio standards or the Public Utility Regulatory Policies Act of 1978).  
60. The USITC also fail ed to perform any analysis on the impact of incentives on prices. The 
United  States justifies this lack of analysis by referring to questionnaire responses reporting on the 
availability of programs making solar energy more competitive. However, as long as any level of 
incentive exists, the price gap between solar energy and prices of traditional energy will be reduced, 
thus making solar energy more competitive. But this does not address whether the reduced level of 
incentives exerted a downward pressure on CSPV module prices, which needed to maintain the same 
level of competitiveness they had with prior level of incentives.  
61. The United States asserts that the U.S. producers of CSPV modules did not have to reduce 
their prices because of the availability of  incentive programs. This, however, is mere speculation as 
the United States is unable to point to any evidence on the record. To the contrary, the reduction in 
the level of incentives generated a downward pressure on prices of U.S. producers, as they coul d 
not keep abreast of technological developments and cost reductions. From evidence in the record, 
it can be inferred that the domestic producers could do nothing but to absorb the decline in 
government incentives by reducing the profit margin to keep the competitiveness of their product in 
a highly price sensitive market.  
62. The United States also referred to questionnaire responses reporting that changes in the price 
of solar generated electricity had no effect at all on the prices of CSPV products since  2012. The 
United States' effort to decouple prices from CSPV modules and solar energy fails. Several 
respondents reported that the price of CSPV modules is a large factor in the price of solar electricity; 
 
8 Appellate Body, US – Wheat Gluten , para. 88.  WT/DS562/R/Add.1  
 
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  and therefore, that declining CSPV module prices translate directly into less expensive solar 
generated electricity. Moreover, the USITC itself also rejected this disconnect by explaining that 
CSPV modules represented the largest cost in installations, and that any governmental action 
affecting prices of  CSPV modules would impact the demand for solar energy. The USITC thus 
admitted that certain government action (i.e. incentives) affected CSPV module prices and this effect 
was also reflected in solar energy prices.  
63. In sum, the United States has failed  to justify USITC's the lack of analysis of evolution of 
incentives in the demand and prices of the domestic industry. The USITC failed to provide a reasoned 
and adequate explanation on how the negative impact of declined incentives was not attributed to 
increased imports under the disputed case.  
2. The USITC recognized significant declines in raw material costs and 
increased efficiencies, but then never assessed how these changes 
affected the final prices  
64. The USITC recognized that there was an extraord inary decline in the prices of polysilicon 
ingots (52.6 percent) and wafers (54.5 percent), the main components of CSPV. The USITC, 
however, failed to explain how these decreases in raw material prices were reflected in the price 
declines of the domestic i ndustry. Such an analysis was particularly relevant considering the USITC 
focused the analysis of injury and causation on the in declines of domestic prices.  
65. The United States has insisted that the decline in raw material costs should have served as a  
positive factor, and that a mere characterization as "beneficial" was sufficient for purposes of a 
reasoned and adequate explanation under the non -attribution obligation. China disagrees because 
a mere categorization of a factor as "positive" cannot equal  a "reasoned and adequate" explanation 
under the exacting requirements of the non -attribution analysis. Moreover, in claiming that the 
decline in raw material costs is a positive factor, the United States ignores the level of transparency 
in the market und er which U.S. domestic producers had no option but to react to customer demands 
that raw material declines be reflected in the final prices customers paid.  
66. Further, the United States ignores the possibility that decline in raw material costs, coupled 
with increased efficiencies (which neither the USITC nor the United States evaluated), can serve as 
a factor of injury when they generate a competitive differentiation among producers. To the extent 
that certain producers enjoyed greater economies of scale and increased efficiencies, the decreases 
in raw material costs played to their favour creating a competitive advantage as they were able to 
save additional costs by increased production, thus enjoying greater profit margins. In these 
circumstances, U.S. d omestic producers were even more compelled to reduce their final prices given 
the level of transparency in the market and the need to remain competitive despite more limited 
economies of scale and reduced efficiencies. That the decline in raw material cost s was a factor of 
injury was indeed admitted by U.S. producers themselves, with almost half of reporting 
U.S. producers, noting this factor in their questionnaire responses and some of them ranking it as 
an "extremely important" cause of injury.  
67. China  has also shown that the price trends of domestic CSPV modules and trends of main raw 
materials (i.e., polysilicon ingots and wafers) were very similar during the 2012 -2016 period. The 
USITC Final Report described how domestic prices of CSPV modules declin ed substantially in 2012 
but stabilized between 2013 -2015 and then steadily fell throughout 2016. The trends are very similar 
to the unit value of dollars per kW of raw material costs as shown in the U.S. producers financial 
results. The magnitude of the c hange is also similar, with reductions in total costs of production by 
46 percent and reduction in U.S. CSPV module prices around 58.5 percent between 2012 -2016. 
Thus, the United States' contention that domestic prices of CSPV modules are not related to co sts, 
and particularly costs of raw materials, is not supported by record evidence.  
68. Finally, a close look at the U.S. domestic industry financial results shows, that contrary to the 
USITC conclusions, the disproportionate ratio between COGS to net sale s ration had nothing to do 
with increased imports, but was due to other reasons. The domestic industry's financial results show 
that the ratio of gross loss to net sales was particularly negative on 2012 ( -41.3 percent) because 
of the very high "other fact or costs" (amounting to $317,456,000 in the first year of the POI). The 
financial results also show important swings in the SG&A expense ratios at initial high levels in 2012 
(216 $/kW) declined until 2015 (103 $/kW) before rising again in 2016 (338 $/kW).  The reason for WT/DS562/R/Add.1  
 
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  this sudden increase seems to be domestic industry's "impairments", which the USITC did not 
address in its Final Report, despite having the evidence at hand, and despite the Staff Report showing 
the USITC had further enquiries about them.  
69. In conclusion, the USITC never addressed the evolution of raw material costs and its 
relationship with declines of final prices of domestic producers.  
3. The USITC noted grid parity, but then ignored evidence in the 
record showing the important pressure  exerted by this factor in 
declining prices of solar energy  
70. The USITC acknowledged the impact of grid parity on prices by admitting that "prices of 
conventional energy may account for some of the decrease in prices of CSPV products over years". 
The USI TC never clarified the ambiguous meaning of the terms "may" or "some".  
71. Despite admitting its impact, the USITC rejected that the imperative to meet grid parity was 
another factor of injury through a very superficial analysis. In particular, the USITC d etermined that 
there was no "correlation" between natural gas and solar energy prices. Nevertheless, the USITC 
Final Report does not contain a serious analysis of correlation. While it addressed the interim trends 
of natural gas prices, it only mentioned t hat solar energy prices continued to decline throughout the 
POI, without addressing the intermediary trends for solar as it did for natural gas prices. However, 
the year -over-year changes in the price of solar energy closely followed the interim trends of the 
price of natural gas, and with the steeper declines in prices of CSPV products occurring in parallel 
when natural gas prices were at their lowest (i.e., 2012 and 2016). The USITC's separate and 
superficial analysis of natural gas and solar energy loses  sight of the broader picture, which is that 
solar energy continued a decline trend seeking to approach the natural gas price levels, and such 
declining trends softened or sharpened in response to changes of natural gas prices  
72. The United States has tr ied to justify the lack of serious analysis of the USITC by arguing the 
"great variability" in grid parity and the impossibility to identify an absolute target price. However, 
any complexity concerning the actual target level of "grid parity" cannot be use d as an excuse to 
justify the USITC's complete lack of analysis. The USITC was not required to determine an "absolute" 
price target. In this regard, regardless of the time or geographic location used for calculating grid 
parity, there was a constant price gap between prices of solar energy and natural gas. Such a gap 
resulted in a downward pressure on solar prices to achieve parity over the years.  
73. The United States has also tried to downplay the importance of grid parity by arguing there is 
a disconnec t between prices of solar energy and prices of CSPV products. However, the record offers 
declarations from industry experts showing that CSPV manufacturers (including U.S. manufacturers) 
recognized that solar could achieve grid parity in the U.S. if innova tive technologies were introduced 
and costs savings created allowing to reduce prices and increasing demand. As a consequence, 
U.S. CSPV manufacturers had the incentive to decrease prices and achieve grid parity to increase 
demand for their product.  
74. The whole record before the USITC, including testimonies during the hearing and public 
information, evidenced the important price differences between conventional energies and solar 
energy prices. The levelized cost of energy ("LCOE") of natural gas was mu ch lower than solar 
generated electricity. Such differences generated a pressure on U.S. producers to decrease prices. 
That the imperative to meet grid parity constituted a factor of injury was also admitted by the 
domestic industry itself, with a third of  reporting U.S. producers identifying grid parity as an "injury 
factor".  
75. The United States also made little effort in responding to China's argument on the greater 
competitiveness of alternative sources of renewable energy, which presented lower LCOE 
(34.50/MWh subsidized versus 52.40/MWh unsubsidized) than solar produced energy. The USITC 
and the United States completely ignored that wind energy acted as perfect substitute for solar 
energy in the market, not only for cost -conscious consumers (as in th e case of natural gas) but also 
for environmentally aware consumers who wished to switch to "clean energy", and that. competition 
with these alternative renewable energy sources also created pressure on U.S. CSPV producers to 
reduce prices.  WT/DS562/R/Add.1  
 
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  76. The gap be tween prices of solar and conventional energy prices was particularly acute for 
solar energy produced by residential and commercial segments. The USITC Final Report 
acknowledged that the residential and commercial segments could not enjoy the same economie s 
of scale than the utility segment whose prices were closer to conventional energy prices. As a 
consequence, U.S. producers of CSPV modules which focused particularly in the residential and 
commercial segment were less competitive.  
77. Finally, the United  States has attempted to downplay grid parity as a factor by referring to 
China's argument that in some cases, solar energy produced by utilities almost achieved or even 
achieved grid parity with natural gas, resulting in increased demand. The United State s, however, 
ignores that China's argument referred to grid parity between solar energy produced in new plants 
and natural gas produced in new plants. However, in most of the cases, solar energy plants were 
not competing with new plants of natural gas, but rather, with plants that have been in operation 
for decades whose costs were already depreciated. Competition between solar energy and natural 
gas from new plants was the exception, not the rule, given the limited new demand of energy. Even 
in that case, g rid parity was only achieved when solar energy benefitted from government incentives. 
And only for the utility segment but not for residential and commercial installations where a 
considerable price gap remained, and on which the domestic industry focused.   
78. The United States also fails in trying to minimize the importance of grid parity by referring to 
the increased demand in solar new installations in 2016. However, the year 2016 cannot be used as 
a benchmark given the unprecedented demand experienced in the utility segment because of the 
uncertainty as to the termination of the Federal Income Tax Credit and the rushed investment that 
it generated. Analysis of the prior years show that, although the demand for new electricity was 
limited, a significant part of that demand was still satisfied by natural gas and other renewable 
energies such as new wind power plants. The demand for new renewable energy plants (solar, wind) 
fluctuated significantly as they were subject to complex competitive dyn amics including their price 
sensitiveness and dependence on governmental action. In sum, the USITC did not conduct a 
sufficient analysis of the grid parity factor, and did not provide a reasoned and adequate explanation 
on how it ensured the impact of this  factor was not attributed to increased imports.  
D. The USITC Failed to Address Key Pieces of Evidence that Quantified the Effects 
of Different Factors, and the United States Has Not Justified these Failures  
79. The USITC did not provide any analysis conce rning the Econometric Report or explain why 
this key piece of evidence about the relative effect of different causes was ignored. Competent 
authorities must address the totality of the evidence. If the USITC considered that it was necessary 
to dismiss this  key piece of evidence, it should have explicitly explained why, which it did not do.  
80. In the case at hand, it was particularly important for the USITC to assess the Econometric 
Report on its record, which provided a quantification or the relative impor tance of imports versus 
other factors. The nature and complexity of the data, as well as the intricate relations between the 
different competitive forces called for a formal analysis of the relevant contribution of each of the 
factors having an impact on t he domestic industry. Prior panels have offered guidance as to the need 
to provide a reasoned and adequate explanation on how other factors have not been attributed to 
increased imports, particularly when the market is characterized by complex competitive dynamics.9  
E. The USITC Did Not Engage in any Cumulative Assessment of Other Factors and 
the United States' Reasons for Ignoring Such Analysis Are Unsatisfactory  
81. The USITC concluded that "alternative causes cannot individually or collectively  explain  the 
serious injury to the domestic industry". The USITC, however, never conducted any cumulative 
assessment. There is no single analysis of the cumulative assessment of other factors in the USITC 
Final Report.  
82. The United States excuses the USITC's om ission on the basis that no other factor was causing 
injury, and therefore, no cumulative analysis is required. This argument fails because the USITC did 
not separate and distinguish other factors of injury, determining their "nature" and "effects".  
 
9 Panel Report s, US – Steel Safeguards , para.  10.340.  WT/DS562/R/Add.1  
 
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  83. In prior disputes, the Appellate Body has called for a cumulative analysis where the 
circumstances of the case indicated a need to do so.10 Under the present circumstances, such a 
cumulative analysis was required under the circumstances given the interplay between the different 
competitive dynamics and conditions influencing the market (e.g., steady cost reductions, the level 
of incentives and technological developments, importance of achieving the grid parity imperative, 
competition with alternative energy sources representing perfect substitutes, price sensitiveness of 
purchasers, etc.). Nonetheless, the United States has not justified the omission of analysis by the 
USITC and has not justified why this deficiency is not relevant.  
IV. The United States Fail ed to Establish that the Increases in Imports Were the Result 
of "Unforeseen Developments"  
A. Members are Required to Demonstrate the Existence of the Unforeseen 
Developments and the Obligations Incurred, as well as their "Clear Linkage" 
with the Increased  Imports Before Safeguard Measures Can Be Imposed  
84. In addition to the two conditions relating to causation and non -attribution, the investigating 
authority must also find "unforeseen developments ". More specifically, Article  XIX:1(a) of the 
GATT  1994 re quires that the significant increase in imports has occurred "as a result of unforeseen 
developments  and of the effect of the obligations incurred by a contracting party under this 
Agreement ". Thus, a Member can only take the extraordinary step of imposing  safeguard measures 
if the increase in imports is the result of developments that are unexpected.
1. There is no legitimate legal basis for the United States' position that 
there is no requirement to demonstrate "unforeseen 
developments" before the imposit ion of a safeguard measure  
obligation
 
10 Appellate Body Reports, EC – Tube or Pipe Fittings , para.  192; and US – Steel Safeguards , para.  490. 
11 Appellate Body Report, US – Lamb , para.  67. WT/DS562/R/Add.1  
 
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2. The need to demonstrate a clear linkage between the obligations 
incurred and the increased imports is not a "double causation 
argument" as suggested by the United States  
3. The demonstration of the unforeseen developments, the 
obligations incurred, the increased imports, and the clear linkage 
among them must be explained in the safeguard report before the 
imposition of the safeguard measure  
WT/DS562/R/Add.1  
 
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B. The USITC Supplemental Report Fails to Satisfy the Unforeseen Developments 
Requirements of the GATT 1994  
1. The USITC Supplemental Report does not sufficiently identify the 
"obligations incurred" that supposedly resulted in the increased 
import  
103. China has made c lear that the United States has not sufficiently identified the "obligations 
incurred" that allegedly resulted in the increased imports. The unforeseen developments 
requirement contains a bona fide obligation for a Member to identify the specific "obligati ons 
incurred" at issue and to demonstrate that the relevant "obligations incurred" constrained the 
Member's ability to react to the increased imports causing serious injury to its domestic industry. 
The United States argues no such obligation exists, regar dless of the text of Article XIX of the 
GATT  1994 and the Agreement on Safeguards.  
104. The United States claims that this specific requirement was met because the USITC generally 
referenced  the U.S. tariff schedule that was at zero for CSPV products since  1987, since the tariff 
duty for CSPV products was bound under GATT 1994. The United States claims that such general 
reference fulfils the requirement to demonstrate "obligations incurred" under Article XIX:1(a).  
 
12 Panel Report, US – Line Pipe , para.  7.297 -298. 
13 Appellate Body Report, Korea  – Dairy , para.  85. WT/DS562/R/Add.1  
 
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  105. The only discussion of obligations inc urred in the USITC Supplemental Report was a short and 
generic reference to the obligations of the United States' WTO and GATT membership,14 which is 
glaring evidence that the USITC did not comply with the unforeseen developments obligation. First, 
the Uni ted States did not comply with the level of  specificity required  in demonstrating the 
"obligations incurred" . A general statement by the USITC referring to its WTO and GATT membership 
does not meet the requirement to identify the  specific obligations incur red. Further, while a footnote 
in the USITC Supplemental Report noted in passing that the subheading for CSPV products in the 
U.S. Harmonized Tariff Schedule has been free of duty since 1987, such a simple factual statement 
in the USITC Supplemental Report  regarding the period of application of the current existing general 
duty rate does not constitute  sufficient identification of the obligations incurred as contemplated by 
the unforeseen developments requirement.  
106. Moreover, the United States ' argument for an obvious "logical" connection between its HTS 
schedule for CSPV products and its corresponding WTO schedule of concessions must also fail. The 
requirement to identify the obligations incurred would be rendered meaningless if no actual 
identification of the obligations incurred were required  prior to the imposition of the safeguard 
measure . It does not " logically follows ", and it is not obvious, that subheading 8541.40.60 of the 
U.S. Harmonized Tariff Schedule is part of the U.S. schedule annexed to th e GATT 1994 pursuant to 
paragraph 7 of Article II thereof, as its binding tariff. In fact, neither the USITC Supplemental Report 
nor the Final Report  even reference a relevant "tariff concession".  
107. By no means did the USITC Supplemental Report  attempt to provide an identification of the 
United States' obligations incurred in a manner at all similar to the above guidance about the degree 
of specificity.  
2. The USITC Supplement Report's claim that it was completely 
unforeseen that the imposition of AD-CVD duties against China 
would lead to increased imports from other countries is both not 
credible and demonstrably false  
-
-
common knowledge that if the domestic 
industry cannot supply total domestic demand, foreign sources will step in. And so, 
he USITC itself foresaw this very economi c dynamic 
20 years ago in its December
 The USITC was, indeed, well aware of these 
 
14 USITC Supplemental Report, Exhibit  CHN–6, p. 4. WT/DS562/R/Add.1  
 
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  3. The USITC Supplemental Report does not adequately demonstrate 
or explain how government policies by China led to increased 
exports from countri es other than China  
113. The USITC had a clear obligation to provide an adequate explanation of how and why the 
specific unforeseen developments identified resulted in the increase in imports that the USITC found 
caused the serious injury to the domestic i ndustry. Such obligation necessarily requires a clear 
linkage between the unforeseen developments and the increased quantity of imports that allegedly 
caused the serious injury. If a substantial portion of imports are sourced from countries other than 
the country in which the specific unforeseen development occurred, the Panel will need to look for a 
reasoned and adequate explanation offered by the USITC about how the specific "unforeseen 
developments" that occurred in one particular country resulted in the  increases in imports from all 
these other countries.  
114. However, the import data compiled by the USITC itself demonstrates that imports from within 
China  did not contribute to the increased imports in 2016, at the end of the POI. Rather, the increase 
came from countries other than China. Therefore, there is no clear linkage between alleged 
government policies by China - the only allegedly "unforeseen development" source identified by the 
USITC - and the increased imports that caused serious injury. Impor ts from China were decreasing, 
not increasing.
115. Moreover, the USITC's Supplemental Report contains only a single sentence representing its 
entire discussion about the alleged linkage between government policies by China and increases in 
exports from other countries. This sentence contains several assump tions turned into logical 
conclusions for which the USITC provides no explanation and cites to no evidence. The USITC's and 
United States' logic in this sentence appears to suggest, at least, three baseless assumptions. The 
first assumption is that there w ere government policies by China to encourage production both inside 
and outside of China. Second, that Chinese producers took advantage of such government policies 
to build production facilities in countries outside China. And third, that the increase in U.S. imports 
from these other countries came from those Chinese producers that had built the production 
factories. Although the United States has advanced this logic, neither the USITC determinations at 
the time nor the United States before this Panel have  identified sufficient underlying factual evidence 
to support each of these claimed "facts".
116. There is simply no adequate explanation that the alleged government policies in China led to 
unexpected increased imports from other countries in the USITC Su pplemental Report. Except for 
noting that some Chinese companies allegedly created production operations outside China, there is 
simply no discussion of, or evidence for, this link alleged by the United States in the USITC 
Supplemental Report. Rather, this  conclusion is simply asserted as fact by the United States.  
118. The United States implicitly conceded the lack of evidentiary  basis of its unforeseen 
developments conclusion when it argued mightily that the USITC's conclusions on this  issue could 
be supported by "reasonable inferences" - instead of the stricter requirement of compelling evidence. 
China disagrees with this United States' position, given that a safeguard measure is an exceptional, 
extraordinary measure that demands the e xhaustion of a rigorous investigation leading to a decision 
based on solid evidence, not inferences.  
119. Accordingly, if the country locations where the unforeseen development occurred differs from 
the countries where increased imports originated, the inv estigating authority would fail its 
obligations under Article XIX of the GATT 1994 unless it provides a reasoned and adequate 
explanation for this country mismatch. The USITC's Supplemental Report suffers from this 
fundamental failing as the USITC did not demonstrate the required "clear linkage" between the 
unforeseen developments and the increase in imports by alleging without proving that the policies 
promulgated by the Government of China somehow lead to Chinese companies producing in other WT/DS562/R/Add.1  
 
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  countries tha t then exported to the United States. Accordingly, the USITC's determination does not 
comply with the obligation to identify and explain the required unforeseen development.  
V. The USITC Failed to Provide a Sufficient Public Summary of the Confidential Dat a in 
Its Reports to Allow for a Meaningful Defence  
A. The USITC Was Required to Publish Non -Confidential Summaries of Its Reports 
and Intermediate Decisional Documents  
120. Article 3.1 of the Agreement on Safeguards requires competent authorities to publis h a report 
setting forth its findings and reasoned conclusions on all pertinent issues of fact and law, and the 
USITC is not released from this obligation even when its explanation relies on confidential data. 
However, read in conjunction with their obliga tion to respect confidentiality of confidential 
information under Article 3.2, competent authorities are required to publish a non -confidential 
summary of the confidential data relied upon in their report.  
121. Confidential data can be redacted in the non -confidential summary of the authorities' report, 
but authorities still must present such confidential data in a summarized and modified form while 
protecting confidentiality through a presentation of aggregated or indexed data, or other 
alternatives - they can only provide no data when all these methods fail.15 As a consequence, the 
USITC should have characterized the confidential information as much as possible without 
compromising the confidential nature of the information, ideally being as creative as po ssible in 
trying to provide the essence of the confidential information.  
122. The United States also argues that there is no obligation to publish non -confidential summaries 
of intermediate decisional documents. However, the consequence of this argument i s that a 
competent authority would only need to include all confidential information on an "intermediate 
decisional document", and then subsequently publish a final report to avoid its obligation to publish 
a non -confidential summary of such information. M oreover, intermediate decisional documents 
frequently form part of the final report of the authorities - or are themselves documents in respect 
of which the interested parties have a right to present evidence and their views. Consequently, a 
harmonious int erpretation of the obligation to publish a non -confidential summary of the report 
requires the publication of a non -confidential summary of any intermediate decisional document 
incorporated or reproduced in the report. This is also the interpretation by th e United States, as the 
practice of the USITC itself is to publish non -confidential summaries of its staff reports, which it now 
qualifies as an "intermediate decisional document".  
123. The United States asserts that there is no obligation on competent aut horities to publish non -
confidential summaries of their reports, but only an obligation to publish a final report of their 
findings and reasoned conclusions. But this argument ignores consistent practice by WTO Members, 
whose competent authorities invariab ly publish non -confidential summaries of their 
reports - including the USITC itself. While the United States has challenged claims by other members 
in other WTO proceedings as to the appropriateness of the USITC's non -confidential summaries, it 
has not cha llenged the existence of the obligation itself. Finally, WTO panels must rely on the non -
confidential versions of the reports in order to conduct their assessment.  
B. The USITC Was Required to Publish the Non -Confidential Summaries Promptly, 
with Sufficien t Time to Permit Interested Parties to Meaningfully Exercise their 
Right to Present Evidence and Their Views  
124. In a safeguard investigation, interested parties have a right under Article  3.1 to "present 
evidence and their views ". If no sufficient time is provided for the parties to comment on the final 
report, this right would be rendered meaningless. Article 3.1 must further be read in conjunction 
with Article 4.2(c) which requires the competent authorities to "publish promptly " a detailed analysis 
of the case under investigation in accordance with the provisions of Article 3. The consequence of 
the foregoing is that n on-confidential summaries should be published "promptly", but the meaning 
of "promptly" is closely related to the co ntext of the proceeding at issue. A report that is not 
 
15 Panel Report s, US – Steel Safeguards , para.  10.274. See also, Panel Report, US – Wheat Gluten , 
para. 8.23.  WT/DS562/R/Add.1  
 
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  published promptly would impede - or even effectively negate - the parties' ability to meaningfully 
exercise that right.  
C. The USITC Acted Inconsistently with Its Obligations Regarding the Publication  
of the Non -Confidential Summaries  
1. The USITC's Non -Confidential Summaries failed to provide 
characterizations of confidential data in the non -confidential 
summaries sufficient for interested parties to meaningfully 
exercise their rights  
125. The non -confidential version of the USITC Final Report is excessively redacted, entirely 
omitting key sections of extremely important data necessary for interested parties understand the 
USITC's analysis. As regards the USITC's analysis of causality, we note that the se omissions of data 
meant China had to resort to alternative public data in these proceedings - data that did not 
expressly form part of the USITC's "reasoned and adequate" explanation on those points - because 
the lack of characterization or explanation makes the reasons for the USITC's finding extremely 
ambiguous, and certainly not "compelling".  
126. The excessive redaction without proper characterization of confidential data also meant that 
interested parties were unable to meaningfully exercise their right to present evidence and their 
views, both before the USITC - in the case of the USITC Final Sta ff Report - and before the TPSC - in 
the case of the USITC Final Report. As published, the public version of the USITC Final Report is 
deficient and inconsistent with the USITC's obligation to publish a non -confidential summary.  
127. The United States' all egation that the USITC goes further than required by the 
Agreement  on Safeguards by allowing parties, through their US counsel, to access confidential 
information through APO is irrelevant. The terms of the USITC APO impede US counsel from 
discussing confi dential information with their clients, the interested parties. In addition, China's claim 
is not that US counsel of interested parties were unable to examine confidential information, but 
rather that the USITC acted inconsistently with its obligation to p ublish non -confidential summaries 
of such confidential information. Moreover, the USITC required counsel to the interested parties to 
destroy all confidential information before they even had an opportunity to present their arguments 
or comments to the TPS C, making it impossible to rely on confidential information . 
2. The non -confidential summaries were not published "promptly" 
effectively negating the ability of interested parties to meaningfully 
exercise their rights  
128. The timing between the date when the non -confidential summaries of the USITC's reports - the 
"public versions" - were available to the interested parties and the deadline for the submission of 
briefs and the hearings effectively negated the ability of the parties to meaningfully exercise their 
rights. The non -confidential summaries were published and made available one and two business 
days prior to the deadline for the submission of prehearing briefs on injury and remedy, respectively, 
and on the same day comments were due before the TPSC . 
129. China does not dispute that "promptly" does not mean that the non -confidential summaries 
must be published "simultaneously with" the confidential version of the report - but it does mean 
"quickly, without delay or at the arranged time". Given the ti meline of the USITC's investigation, the 
delay in publication of the non -confidential summaries means that they cannot be said to have been 
published promptly.  
130. Finally, the United States argues that competent authorities are not required to provide 
sufficient time for interested parties to comment on their final report. This argument has 
two substantive flaws. First, in the United States, a safeguards investigation does not conclude with 
the USITC Final Report, but has an additional stage before the TP SC, where interested parties have 
a right to present evidence and their views. Second, interested parties do have a right to comment 
on the USITC Final Report. By issuing the non -confidential summary on the date when comments 
before the TPSC were due, the USITC effectively negated the meaningful exercise of this right by 
interested parties.  WT/DS562/R/Add.1  
 
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  ANNEX B -2 
INTEGRATED EXECUTIVE SUMMARY OF THE  
ARGUMENTS  OF THE UNITED STATES  
EXECUTIVE SUMMARY OF THE U.S. FIRST WRITTEN SUBMISSION  
 
I. INTRODUCTION  
 
1. Between 2012 and 2016, the financial situation of the U.S. industry producing crystalline 
silicon photovoltaic ( "CSPV ") products was dismal, particularly deteriorating between 2015 
and 2016. This occurred in the face of explosive demand growth, as confirmed by information 
gathered by the U.S. International Trade Commission ( "USITC " or "Commission ") in the global 
safeguard investigation China has challenged. During this time period, imports of CSPV products 
increased both absolutely and relative to domestic production, reaching record highs in 2016. The 
imports were lower priced than domestically produce d CSPV products, leading to declining domestic 
prices and significant and worsening net and operating losses for the already unprofitable domestic 
industry producing like or directly competitive products. Dozens of domestic facilities shuttered and 
the U.S . industry producing CSPV products experienced significant idling of its production facilities 
and significant unemployment and underemployment. Moreover, a significant number of domestic 
producers were unable to generate capital to finance the modernizati on of their domestic plants and 
equipment or to maintain existing levels of expenditures for research and development. This decline 
occurred despite market conditions that were otherwise extremely favorable to the domestic 
producers, including strong and i ncreasing domestic demand.  
 
2. The domestic industry first sought to resolve the difficulties posed by increasing imports by 
seeking antidumping and countervailing duty measures. But the issuance of antidumping and 
countervailing duty orders on imports fro m China in December 2012 and additional antidumping and 
countervailing duty orders on certain other imports from China and Taiwan in February 2015 did not 
bring relief. The antidumping and countervailing duty measures prompted shifts in production to 
count ries where CSPV products for export to the United States were not subject to such remedies.  
 
3. In 2017, the domestic industry filed a petition with the USITC requesting imposition of a 
safeguard measure on imports of CSPV products from all sources. The USITC conducted an 
investigation and found that increased imports were causing serious injury to the domestic industry. 
On September 22, 2017, the Commission reached a unanimous affirmative determination that 
CSPV  products were being imported into the United States in such increased quantities as to be a 
substantial cause of serious injury to the domestic industry. The investigation then proceeded to the 
remedy phase, so the Commission could provide remedy recommendations in its report to 
the President.  
 
4. The Commission issued a report in November 2017, containing its affirmative serious injury 
determination and recommendations for action to take. On November 27, 2017, the United States 
Trade Representative requested the USITC to provide addi tional information in the form of a 
supplemental report identifying any unforeseen developments that led to the articles at issue being 
imported into the United States in such increased quantities as to be a substantial cause of serious 
injury. The Commiss ion responded to this request by issuing a supplemental report on 
December  27, 2017, containing its finding that the increased imports were a result of unforeseen 
developments and the reasons for that finding. These reports taken together constitute the re port 
of the U.S. competent authorities for purposes of Articles 3.1 and 4.2(c) of the 
Safeguards  Agreement.  
 
5. Following receipt of the Commission 's reports, the President imposed a safeguard measure 
beginning on February 7, 2018, that he determined "will facilitate efforts by the domestic industry 
to make a positive adjustment to import competition and provide greater economic and social 
benefits than costs ". The safeguard measure imposed a 2.5 GW tariff rate quota ( "TRQ") on imports 
of CSPV cells for a period of four years, with unchanging within -quota quantities and annual 
reductions in the rates of duty applicable to goods entering in excess of those quantities in the 
second, third, and fourth years. The measure also imposed ad valorem  duties on import s of WT/DS562/R/Add.1  
 
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  CSPV  modules for a period of four years, with annual reductions in the rates of duty in the second, 
third, and fourth years.  
 
II. STANDARD OF REVIEW AND BURDEN OF PROOF 
 
6. The burden of proof rests with the complaining party alleging a breach of an obligation or the 
party who is asserting a fact. The evidence and arguments underlying a prima facie case must be 
sufficient to identify the challenged measure and its basic import, identify the relevant WTO provision 
and obligation contained therein, and explain the basis for the claimed inconsistency of the measure 
with that provision. Accordingly, China, as the complaining party, bears the burden of demonstrating 
that the safeguard measure within the Panel 's terms of reference is inconsistent with one of  the 
enumerated provisions of the Safeguards Agreement or GATT 1994.  
 
7. Under these standards, panels are charged with the mandate to determine the facts of the 
case and to interpret and apply the relevant text of the covered agreements to the challenged  
measures. In challenging action to impose a safeguard measure, a complaining party brings forward 
evidence and argument relating to the investigation carried out, the findings by the competent 
authority, and the remedy imposed. Therefore, past reports hav e examined whether the authorities 
have provided a reasoned and adequate explanation as to how the evidence on the record supported 
its factual findings and how those factual findings support the overall determination. In reviewing 
agency action, the Panel  must not conduct a de novo  evidentiary review, but instead should bear in 
mind its role as reviewer of agency action. Indeed, it would not reflect the function set out in 
Article  11 of the DSU for a panel to go beyond its role as reviewer and instead subs titute its own 
assessment of the evidence and judgment for that of the competent authority.  
 
III. THE USITC 'S SERIOUS INJURY DETERMINATION IS CONSISTENT WITH ARTICLE XIX  OF GATT  1994  
AND SAFEGUARDS AGREEMENT ARTICLES 2, 3, AND 4 
 
A. Overview of the USITC S erious Injury Determination  
 
1. Conditions of Competition  
 
8. The Commission addressed the question of whether CSPV products were being imported into 
the United States in such increased quantities as to be a substantial cause of serious injury to the 
domestic industry. The Commission began by discussing several conditions of competition that 
informed its analysis. Generally, China does not challenge the Commission 's findings concerning 
conditions of competition.  
 
9. Demand.  The Commission found that demand for CSPV products, which derives from demand 
for solar electricity, increased in every year of the POI. It observed that, consistent with the data, 
the vast majority of firms reported that U.S. demand for CSPV products increased since 2012. 
According to most of these firms, the increase in demand resulted from the reduction in CSPV system 
prices and installation costs as well as the existence of Federal, state, and local incentive programs. 
Firms also tied the increase in demand to the public 's increased knowledge of and general interest 
in renewable energy, increased technology improvements, including module efficiency, and 
increased military use of solar energy.  
 
10. The Commission further found that the vast majority of CSPV modules sold in t he U.S. market 
were connected to the electricity grid and sold to three market segments – residential, commercial, 
and utility. Annual installations of on -grid photovoltaic systems increased from 3,373 MW in 2012 
to 14,762 MW in 2016, an increase of 338 pe rcent. All three on -grid segments experienced 
considerable growth in both the number of installations and the total wattage of installation projects 
during the POI, with residential and utility installations increasing by 423 percent and 488 percent, 
respe ctively, from 2012 to 2016. The domestic industry and importers each sold CSPV products in 
the U.S. market to distributors, residential and commercial installers, and utility customers.  
 
11. Supply.  The Commission found that during the POI, the U.S. market  was supplied primarily 
by imports and to a continuously lesser degree by the domestic industry. Despite the demand 
increase, several U.S. firms closed their domestic production facilities during the POI. As import 
presence skyrocketed, the domestic indust ry's share of the U.S. market declined from 2012 to 2016.  
 WT/DS562/R/Add.1  
 
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  12. The Commission found that imports, as a whole, accounted for the vast majority of the market, 
and their share of apparent U.S. consumption increased dramatically from 2012 to 2016. Imports 
from China were consistently the largest or one of the largest sources of imports except in 2013, 
following the first antidumping and countervailing duty investigation on CSPV cells and modules from 
China. Other large sources included Taiwan (particularly from  2012 to 2014), Korea and 
Malaysia  (2016), and Mexico (each year).  
 
13. Substitutability.  The Commission found a high degree of substitutability between imports 
and domestically produced CSPV products. The Commission observed that throughout the POI, 
U.S. producers and importers made commercial shipments of a wide variety of CSPV products, 
predominantly in the form of modules. Imported and domestically produced CSPV products were 
sold in a range of wattages and conversion efficiencies, and modules were sol d in both 60 -cell 
and 72-cell forms. Imported and domestically produced CSPV products were also sold to overlapping 
market segments through overlapping channels of distribution, and most responding domestic 
producers, importers, and purchasers reported tha t domestic and imported CSPV products were 
interchangeable.  
 
14. The Commission also found that in the U.S. market for CSPV products, purchasers identified 
price as an important factor in their purchasing decisions, among other factors they also took into 
account. Price was the most often cited primary factor, followed by quality/performance and 
availability.  
 
15. Other Conditions of Competition.  The Commission found another important condition of 
competition to be raw material costs. Raw materials accounte d for the largest component of the 
total cost of goods sold ( "COGS ") for both CSPV cells and CSPV modules. Prices of polysilicon, the 
key raw material used in the production of wafers used to manufacture CSPV cells fluctuated but 
declined overall during th e POI.  
 
16. In addition, the Commission found that during the POI, domestic producers and importers 
reported selling CSPV products using transaction -by-transaction negotiations and also contracts. 
In 2016, domestic producers sold the majority of their CSP V products through short -term contracts 
and the remainder on a spot basis, whereas importers sold most of their CSPV products through a 
mix of short -term, annual, and long -term contracts.  
 
17. The Commission also examined the domestic industry 's profitabil ity and found that the 
domestic industry was unable to carry out domestic production operations at a reasonable level of 
profit during the POI. The value of the domestic industry 's net sales declined over the POI and its 
COGS to net sales ratio was high th roughout the POI. Consistent with overall declines in its net sales 
value and high COGS to net sales ratio, the domestic industry experienced hundreds of millions of 
dollars in operating and net losses throughout the POI.  
 
18. The Commission recognized th at the domestic industry 's U.S. shipments increased overall 
between 2012 and 2016. The Commission found, however, that this overall increase was dwarfed 
by the growth in apparent U.S. consumption. Consequently, the domestic industry 's market share 
fell fro m a period high in 2012 to a period low in 2016. Both the domestic industry 's and 
importers ' end-of-period inventories increased overall, and U.S. importers reported that as of 
June 2017, they already had arranged for importation of an additional 10,200 MW  in CSPV products 
for calendar year  2017.  
 
19. As part of its serious injury analysis, the Commission also examined the extent to which the 
U.S. market was a focal point for diversion of exports. It found that foreign industries had substantial 
and increa sing capacity to manufacture CSPV cells and CSPV modules and significant unused 
capacity. Foreign producers ' collective capacity consistently exceeded their combined production 
levels by large margins and their excess capacity exceeded the size of the enti re U.S. market in each 
full year of the POI. In addition, their combined end -of-period inventories increased each year 
from 2012 to 2016.  
 
20. The Commission found that foreign industries had not only the available capacity, but also the 
incentive to expo rt significant volumes of CSPV products to the United States. Although the foreign 
industries collectively consumed the majority of the CSPV cells that they manufactured in their home 
market CSPV module assembly operations, their CSPV module operations wer e export oriented. WT/DS562/R/Add.1  
 
- 69 - 
 
  Indeed, their combined exports of CSPV modules more than quintupled from 2,300 MW in 2012 
to 11,800 MW in 2016.   
 
21. The foreign industries also demonstrated an ability to redirect exports from one market to 
another and to increase exp orts substantially to individual markets from one year to the next. With 
several foreign industries facing antidumping and/or countervailing duty orders on their exports to 
one or more non -U.S. markets, including the European Union (CSPV cells and modules from China, 
Malaysia, and Taiwan), Canada (CSPV modules from China), and Turkey (CSPV modules from China), 
the Commission found the large and growing U.S. market was a target for the foreign industries ' 
exports. This was corroborated by questionnaire data,  which indicated that the foreign industries 
collectively increased their exports of CSPV modules to the United States throughout 2012 to 2016, 
and the U.S. market accounted for an increasing share of their total shipments of CSPV modules 
during this perio d.  
 
22. Finally, the Commission examined prices of CSPV products during the POI. Specifically, the 
Commission examined the pricing data comparing import and domestic prices on the five pricing 
products agreed by the investigation participants to be representative of CSPV sales in the 
United  States. These products included 60 -cell modules as well as 72 -cell modules. These 
comparisons demonstrated that imports of CSPV products were priced lower than domestically 
produced products in 33 of 52 instances involving approximately two -thirds of the total volume of 
products for which the Commission had pricing data, and were priced higher in only 19 instances. 
The Commission observed that domestic producers documented losing sales to low -priced imports 
of CSPV  products, and the majority of purchasers reported that they had increased their purchases 
of imported CSPV products, most often identifying lower price as the reason for increasing their 
purchases of imported CSPV products. It found that the domestic indu stry experienced adverse price 
conditions as imports were lower priced than domestically produced CSPV products and domestic 
prices fell between 2012 and 2016 despite very strong demand growth. The domestic industry 's 
COGS to net sales ratio was high throu ghout the POI with its costs remaining near or above its net 
sale values.  
 
23. Upon its evaluation of all relevant information concerning the condition of the domestic 
industry, the Commission found that the domestic industry was seriously injured.  
 
2. Increased Imports were a Substantial Cause of Serious Injury and an 
Important Cause not less than any Other Cause  
 
24. The Commission found that imports were a substantial cause of serious injury to the domestic 
industry. As the Commission exp lained, consistent with the large and attractive nature of the 
U.S. market and the large and growing size of the export -oriented foreign industries, imports of 
CSPV products increased both absolutely and relative to domestic production in each year 
since 2012, reaching record highs in 2016. The increasing volume of imports also accounted for a 
growing and substantial share of the U.S. market.  
 
25. The Commission noted the change in the composition of imports during the POI. It observed 
that in 2009, the be ginning of the antidumping and countervailing duty investigations on imports 
from China ( "CSPV I "), the domestic industry had held the largest share of apparent 
U.S. consumption followed by imports from China corresponding to the scope of those investigati ons, 
and imports from all other sources. Imports from China, however, overtook the domestic industry 's 
U.S. shipments in 2010 and by the end of 2011, imports from China had nearly doubled from 
their 2009 level.  
 
26. After those imports became subject to a ntidumping and countervailing duty orders in 
December 2012, imports from China and Taiwan corresponding to the scope of subsequent 
antidumping and countervailing duty investigations on imports from China and Taiwan ( "CSPV II ") 
increased their presence in t he U.S. market and replaced entirely the substantial market share 
previously held by the CSPV I imports from China and took additional market share from the 
domestic industry. The Commission further observed that before the CSPV II orders became effective 
in February 2015, imports from additional countries entered the U.S. market. By the end of 2015, 
imports had almost doubled their level from 2014, and imports continued to grow in 2016.  
 
27. The Commission found that while the volume of imports that were highly substitutable with 
the domestically produced product and generally lower priced, grew, prices for all five pricing WT/DS562/R/Add.1  
 
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  products declined between January 2012 and December 2016. Specifically, prices declined 
substantially in 2012. Prices stabilized somew hat after imports from China became subject to 
antidumping and countervailing duty orders in December 2012, additional investigations on imports 
from China and Taiwan were commenced at the end of 2013, and imports grew at a slower pace 
than apparent U.S. c onsumption between 2013 and 2014. As imports from additional sources 
entered the U.S. market and rapidly increased to higher volumes, however, the domestic industry 's 
prices steadily fell throughout 2016. Several purchasers also reported steeper price redu ctions 
in 2016, as the domestic industry 's share of the market fell to its lowest level.  
 
28. The Commission found that consistent with the hundreds of millions of dollars in net and 
operating losses throughout the POI, a significant number of domestic pr oducers were unable to 
generate adequate capital to finance the modernization of their domestic plants and equipment, and 
a significant number of them were unable to maintain existing research and development 
expenditure levels. This inability to generate adequate capital for investments and research and 
development impaired the domestic industry 's ability to develop next -generation products in a highly 
capital -intensive and technologically sophisticated market.  
 
29. Additionally, despite the need to incre ase capacity in order to achieve economies of scale, the 
domestic industry 's capacity and production levels did not increase commensurately with demand 
growth, and its capacity utilization levels remained low and dropped at the end of the POI as imports 
reached their summit. Although many U.S. producers entered the U.S. market seeking to take 
advantage of this demand growth, the consistent inability of the domestic industry to compete with 
low-priced imports forced both new entrants and preexisting producer s to shut down their facilities. 
The substantial number of facility closures during the POI resulted in numerous layoffs and the need 
for trade adjustment assistance for the highly trained, skilled workers affected by these closures.  
 
30. Consistent with t he declines in many of the domestic industry 's trade and financial indicators 
between 2015 and 2016, as imports reached their POI pinnacle, the Commission found that available 
information suggested that the domestic industry 's condition continued to deteri orate into 2017, 
continuing beyond the end of the POI in December 2016. Two additional U.S. production facilities 
closed by July 2017. The domestic industry 's unemployment and underemployment also worsened 
in 2017, with Suniva 's bankruptcy filing and Solar World 's additional layoffs and issuance of worker 
training and readjustment ( "WARN Act ") notices.  
 
31. Based on these considerations, the Commission found "a clear causal link " between increased 
imports and serious injury to the domestic industry.  
 
32. Finally, the Commission undertook to assure that it did not attribute to increased imports 
injury caused by other factors. Specifically, respondents identified two such causes: (1) alleged 
missteps by the domestic industry and (2) factors other than imports that led to declines in domestic 
prices. The Commission found that the facts did not support respondents ' contentions regarding 
these other alleged factors.  
 
33. The Commission first addressed respondents ' claims concerning alleged missteps by the 
domesti c industry, which respondents identified in terms of the types of products the domestic 
industry manufactured, the market segments they served, and the quality, delivery, and service the 
domestic producers provided. The Commission acknowledged that certain  foreign producers may 
have produced CSPV products that were unique or unavailable from other sources, but explained 
that the record evidence indicated that these products accounted for only a small share of the 
U.S. market for CSPV products. Moreover, it found that there was more overlap between U.S. and 
imported specialized CSPV products than acknowledged by respondents.  
 
34. The Commission also found that respondents ' assertions regarding participation in certain 
market segments did not break the causal  link between imports and serious injury to the domestic 
industry. Specifically, respondents claimed that: (1) the domestic producers focused their business 
models on the higher -profit residential and commercial segments of the U.S. market and until 
recent ly did not seek to compete for lower -margin, higher -volume utility sales even though utilities 
were the fastest -growing segment that accounted for the largest share of the market; and 
(2) domestic producers were unable "to provide the required combination of product type and 
demonstrated product performance " demanded by utilities.  
 WT/DS562/R/Add.1  
 
- 71 - 
 
  35. Although the great majority of the domestic industry 's shipments went to residential and 
commercial installers, the USITC found that the domestic industry also competed for and shipped to 
the utility segment of the market. The Commission found that the evidence showed that the domestic 
industry sold both 60 -cell and 72 -cell modules, and that the utility segment purchased both types 
of modules during the POI. Respondents even acknowledged that 60 -cell modules predominated in 
all three segments of the market, including the utility segment, at the beginning of t he POI. Although 
the utility segment later shifted to 72 -cell modules, SolarWorld added a 72 -cell module assembly 
line to its U.S. facilities due to increasing demand and Suniva devoted 45 percent of its cell 
production capacity to 72 -cell modules.  
 
36. The Commission also found that the record evidence did not support respondents ' allegations 
that the domestic industry had quality, delivery, and service issues. As an initial matter, most 
U.S. producers, importers, and purchasers reported that domestically  produced CSPV products were 
interchangeable with imported CSPV products. Moreover, SolarWorld and Suniva both reported low 
warranty claim rates, and independent firms recognized the quality of the domestic industry 's 
products. That the domestic industry p rovided satisfactory quality, delivery, and service was further 
corroborated by the purchaser questionnaire responses, most of which reported that no domestic 
supplier had failed in its attempt to qualify product or had lost its approved status since 2012.   
 
37. The Commission next addressed respondents ' assertions concerning factors other than 
imports that allegedly led to declines in domestic prices. These alleged factors were declining 
government incentive programs, declining polysilicon raw material cos ts, and the need to meet grid 
parity with other sources of electricity. The Commission found that these proposed alternative causes 
could not individually or collectively explain the serious injury to the domestic industry, particularly 
the declining marke t share, low capacity utilization levels, facility closures, and abysmal financial 
performance.  
 
38. Having found that factors other than imports could not individually or collectively explain the 
serious injury to the domestic industry, the Commission co ncluded that increased imports were a 
substantial cause of serious injury to the domestic industry manufacturing CSPV products that was 
not less than any other cause. In doing so, the Commission assured that it had not attributed any 
injury from any other factors to increased imports.  
 
IV. CHINA HAS FAILED TO ESTABLISH THAT IMPORTS DID NOT INCREASE AS A RESULT OF UNFORESEEN 
DEVELOPMENTS AND OF THE EFFECT OF OBLIGATIONS INCURRED  
 
39. The increase in imports observed by the USITC is both the result of unfores een developments 
and of the effect of the tariff concessions made by the United States on CSPV products during the 
Uruguay Round. Specifically, the U.S. negotiators of these tariff concessions did not foresee that a 
WTO Member would undertake systematic ex cessive investment in production facilities for solar 
products so as to create vast overcapacity on a global scale. This effort not only enabled foreign 
producers to penetrate the U.S. market at unexpected speeds, but furthered the ability of those 
foreign  producers to shift production facilities to multiple countries within accelerated and previously 
unknown timeframes. As a result, imports increased 492.4 percent between 2012 and 2016, with 
significant increases from one year to the next during the invest igation period.  
 
40. China argues that the USITC did not demonstrate unforeseen developments that are linked to 
a specific obligation incurred and connected to the increased imports of CSPV products. This 
argument errs in two ways.  
 
41. First, as a legal  matter, Article XIX:1 of the GATT 1994 and Articles 2.1, 3.1, and 4.2 of the 
Safeguards Agreement do not require a finding that unforeseen developments or a specific obligation 
are linked to each other, or that there is a causal link, in the sense of Safe guards Agreement 
Article  4.2(a), with the increased imports. Nor is there any obligation to include findings regarding 
unforeseen developments or obligations incurred in the report of the competent authorities.  
 
42. Second, China 's argument errs as a fact ual matter because the USITC November Report, as 
supplemented by the Supplemental Report, includes findings that identify the tariff concessions and 
unforeseen developments that resulted in the increased imports.  
 
43. China also argues that the findings o n obligations incurred and unforeseen developments must 
appear in the report of the competent authorities. China 's argument fails on its own terms as the WT/DS562/R/Add.1  
 
- 72 - 
 
  USITC November Report, as supplemented by the Supplemental Report, addresses both the relevant 
obligat ions incurred and unforeseen developments. Even aside from China 's erroneous argument, 
the United States notes that Articles 3.1 and 4.2(d) of the Safeguards Agreement require only that 
the report of the competent authorities address whether increased impo rts cause serious injury, and 
not the separate question whether those imports are a result of unforeseen developments and the 
effect of obligations incurred. The Appellate Body statements on which China relies reflect an 
incorrect understanding of the rele vant obligations. They did not address all of the potentially 
relevant arguments and disregard the ordinary meaning of the terms in their context and in light of 
the object and purpose of the relevant arguments. Therefore, the statements in question are 
erroneous and should not be regarded by the Panel as persuasive.  
 
A. The Framework Under Article XIX and the Safeguards Agreement Concerning 
Unforeseen Developments and Obligations Incurred  
 
44. There are important differences between the first and second cl auses of Article XIX:1(a). While 
both contain clauses modifying the main verb "is being imported ", the first clause is triggered "as a 
result of " unforeseen developments, while the sub -clause in the second clause is triggered by "as to 
cause serious injury ". The Appellate Body has stated that "{a}lthough we do not view the first clause 
in Article XIX:1(a) as establishing independent conditions for the application of a safeguard  measure, 
additional to the conditions set forth in the second clause of that par agraph, we do believe that the 
first clause describes certain circumstances which must be demonstrated as a matter of fact  ...". 
Another significant point, which the Appellate Body did not note, is that the circumstances covered 
by the first clause occur b efore the main verb, while the situations covered by the second occur after 
and concurrently with the main verb.  
 
45. These are the substantive obligations indicating the factual circumstances in which a Member 
may take a safeguard measure. The United States does not understand China to disagree with these 
observations. The parties do, however, disagree on where and how a  Member may show that the 
factual circumstances for taking a safeguard measure exist.  
 
46. China considers that findings to this effect must appear in the report of the competent 
authorities. The United States has demonstrated that China 's argument fails on its own terms 
because the USITC November Report, as supplemented by the Supplemental Report, establishes 
that the increased imports are as a result of unforeseen developments and obligations incurred by 
the United States under the GATT 1994.  
 
B. The US ITC's Supplemental Report Identifies and Explains the Unforeseen 
Developments and Obligations Incurred Resulting in the Increased Imports 
that Caused Serious Injury to the U.S. Solar Industry  
 
47. The Supplemental Report identified several factors that culminated in support of its finding 
regarding the unforeseen developments. The USITC ultimately concluded that these targeted 
practices of the Chinese government contributed significantly to the increased imports causing 
serious injury to the relevant ind ustry in the United States. The USITC also found that such 
circumstances were not foreseen by the U.S. negotiators at the time of China 's WTO accession, at 
the time the United States joined the WTO in 1994, or at the time the United States undertook its 
GATT commitments in 1947.  
 
48. Specifically, the USITC found that:  
 
U.S. negotiators could not have foreseen at the time that the United States acceded to 
GATT  1947, at the time that the United States acceded to the WTO, or at the time that 
the United State s agreed to China 's accession to the WTO that the government of China 
would implement the industrial policies, plans, and government support programs such 
as those described above that directly contradicted the obligations that China committed 
to undertake  as part of its WTO accession. U.S. negotiators also could not have foreseen 
that such industrial policies, plans, and support programs would lead to the 
development and expansion of capacity to manufacture CSPV products in China to levels 
that substantial ly exceeded the level of internal consumption. They could not have 
foreseen that this capacity would largely be directed to export markets such as the 
United States. U.S. negotiators also could not have foreseen that the U.S. government 's 
use of authorized  tools, such as antidumping and countervailing duty measures on WT/DS562/R/Add.1  
 
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  imports from China, would have limited effectiveness and instead lead to rapid changes 
in the global supply chains and manufacturing processes in order to facilitate U.S. 
imports of non -covere d products from China and Taiwan and later U.S. imports from 
Chinese producers ' affiliates in other countries.  
49. China asserts that the Supplemental Report "does not actually identify any specific 'obligation 
incurred ' as a result of the GATT or WTO neg otiations ", and asserts that the only reference to an 
obligation in the Supplemental Report is the statement that "[t]he United States has been a 
GATT  member since January 1, 1948, and has incurred the obligations of WTO membership since 
January 1, 1995 ". However, as even China notes, the Supplemental Report says more than this.  
 
50. The Supplemental Report makes clear that CSPV products covered by the safeguard measure 
"are provided for in subheading 8541.40.60 of the U.S. Harmonized Tariff Schedule [and]  have been 
free of duty under the general duty rate since at least 1987 ". This commitment represents a tariff 
concession that the United States undertook as part of its obligation to bind its Schedule under 
Article II of the GATT 1994.  
 
51. China contends that "it is hardly 'unforeseen ' that countries would seek economic development 
and energy security ". But that was not the USITC 's point. What was unforeseen was the scale of the 
effort, the speed with which it boosted Chinese production, the overcapacity t hat it created, and the 
degree to which these effects spilled into other countries where Chinese producers expanded their 
operations. It is telling that China essentially ignores the points about the speed of its industry 's 
growth and the overcapacity that  resulted, which are central to the USITC 's conclusions.  
 
52. China argues that negotiators would certainly have foreseen that trade remedies on China 
would result in increased shipments from other countries because "trade will naturally shift to the 
countries with lower duties ". However, the USITC did not erroneously treat a "natural " shift in 
sourcing as "unforeseen " Rather, it found that China 's policies, plans, and programs "led to vast 
overcapacity in China and subsequently in other countries as Chine se producers built facilities 
elsewhere ". Thus, this was not a case of supply and demand "naturally " leading purchasers to source 
from the country with the lowest prices, but one of China 's practices allowing its producers to move 
their production from one  place to another in ways that were completely unforeseen. Thus, China 's 
assertions do nothing to cast doubt on the USITC 's finding that Chinese producers ' ability to avoid 
trade remedies by shifting production to other countries was unforeseen.  
 
53. China also argues that the specific focus on China 's policies, plans, and programs in the USITC 
Supplemental Report does not explain the connection between these unforeseen developments and 
the increase in imports from other countries, particularly towards the  end of the investigation period 
in 2016. China 's argument is incorrect because both the USITC November Report and the 
Supplemental Report explain how China 's policies, plans, and programs resulted in 
Chinese  producers shifting production facilities to other countries and that U.S. imports from these 
other countries increased massively following this shift.  
 
54. Specifically, the USITC Supplemental Report found that:  
 
the six largest firms producing CSPV cells  and CSPV modules in China increased their 
global CSPV cell and CSPV module manufacturing capacity by expanding 
investments in third countries without reducing their capacity in China. Imports from 
four countries where Chinese affiliates added both CSPV ce ll and CSPV module 
capacity – Korea, Malaysia, Thailand, and Vietnam – increased their share of 
apparent U.S. consumption from *** percent in 2012 to *** percent in 2016. Much 
of this increase occurred between 2015 and 2016, as their collective share of th e 
U.S. market more than doubled from *** percent in 2015 to *** percent in 2016, 
which occurred just after the CSPV II orders went into effect in February 2015.      
 
V. THE USITC  PROPERLY PUBLISHED ITS FINDINGS AND REASONED CONCLUSIONS UNDER 
SAFEGUARDS  AGREEMENT ARTICLE 3.1 AND PROTECTED BCI  UNDER ARTICLE 3.2 
 
55. Article 3.1 of the Safeguards Agreement provides that a Member may take a 
safeguard  measure only after its competent authorities have conducted an investigation, provided 
appropriate  means for interested parties to present evidence and their views, allowed them to 
respond to each others ' arguments, and published a report setting out their findings and reasoned WT/DS562/R/Add.1  
 
- 74 - 
 
  conclusions on all pertinent issues of fact and law. Article 3.2 requires t hat the competent authorities 
not disclose any confidential information they receive in this process without permission of the party 
submitting it. Both articles are mandatory, and the USITC complied with both. At the outset of the 
proceeding, it published  a non -BCI version of the petition. It gave parties multiple opportunities to 
present their views and evidence in writing, and required that they serve each other with copies of 
the submissions. It conducted two public hearings.  
 
56. China asserts that th e USITC acted inconsistently with Article 3 of the Safeguards Agreement 
because it allegedly failed to provide a sufficient public summary of confidential data to allow for a 
meaningful defense. China presents this argument as having a procedural dimension  with respect 
to the timing of the ITC 's release of certain documents, and a substantive dimension with respect to 
the adequacy of public summaries of BCI.  
 
57. An examination of Articles 3.1 and 3.2 and the evidence before the Panel shows these 
arguments  to be meritless. First, the USITC had no obligation under Articles 3.1 and 3.2 to provide 
non-confidential summaries of BCI to the parties during its investigation. Therefore, the timing of 
release of documents during the investigation is irrelevant. Seco nd, the USITC published its non -
BCI report in a manner that gave parties ample time to review it and present their views to the U.S. 
government. Third, the USITC had no obligation to include non -confidential summaries of submitted 
BCI in its published repo rt. The relevant obligation is for the competent authorities ' report to "set[] 
forth their findings and reasoned conclusions reached on all pertinent issues of fact and law ". China 's 
examples of redactions provide no basis to conclude that the USITC report  failed to comply with this 
obligation.  
 
EXECUTIVE SUMMARY OF U.S. RESPONSES TO THE PANEL 'S FIRST SET OF QUESTIONS  
 
U.S. RESPONSE TO PANEL QUESTION 4  
 
58. The USITC considered the domestic industry 's excess capacity and inability to meet the 
entirety of ap parent U.S. consumption, and provided a reasoned and adequate explanation linking 
these circumstances to the serious injury caused by increased imports. Pages 43 to 50 of the USITC 
November Report provide a detailed analysis explaining how the increased im ports caused firms to 
incur hundreds of millions of dollars in losses throughout the POI, resulting in significant idling of 
production facilities and hindering the industry 's ability to increase capacity commensurate with 
demand growth. To summarize, the domestic industry 's inability to expand capacity in parallel with 
the growth in domestic demand was one element of the serious injury caused by increased imports 
and not, as China seems to argue, an independent cause of injury.  
 
59. These imports were hig hly substitutable with and priced lower than the domestically produced 
like product. Given that price was an important consideration in purchasing decisions, prices declined 
as the volume of lower priced imports grew between January 2012 and December 2016.  The data 
demonstrated that prices declined substantially in 2012. Prices stabilized somewhat after imports 
from China became subject to antidumping and countervailing duty orders in December 2012, 
additional investigations on imports from China and Taiwan  were commenced at the end of 2013, 
and imports grew at a slower pace than apparent U.S. consumption between 2013 and 2014. As 
imports from additional sources entered the U.S. market and rapidly increased to higher volumes, 
however, the domestic industry 's prices steadily fell throughout 2016. Several purchasers also 
reported steeper price reductions in 2016, as the domestic industry 's share of the market fell to its 
lowest level.  
 
60. The Commission found that as prices declined over the POI, the domestic  industry 's net sales 
values fell overall and its COGS to net sales ratio was high and exceeded 100 percent at the end of 
the POI, leading to further deterioration of the industry 's condition. Consistent with overall declines 
in its net sales value and hig h COGS to net sales ratio, the domestic industry experienced hundreds 
of millions of dollars in operating and net losses throughout the POI.  
 
61. Thus, despite extremely favorable demand conditions, the domestic industry 's performance 
was "dismal and declining " during the POI. The Commission found that consistent with the hundreds 
of millions of dollars in net and operating losses throughout the POI, a significant number of domestic 
producers were unable to generate adequa te capital to finance the modernization of their domestic 
plants and equipment, and a significant number of them were unable to maintain existing research 
and development expenditure levels. This inability to generate adequate capital for investments and WT/DS562/R/Add.1  
 
- 75 - 
 
  research and development impaired the domestic industry 's ability to develop next -generation 
products in a highly capital intensive and technologically sophisticated market.  
 
62. The Commission also found that, although the remaining firms were capable of supplying 
additional demand, they were unable to do so due to the increasing volume of lower priced imports. 
Domestic producers reported and documented losing bids and sales to low -priced imports of CSPV 
products during the POI. Thus, the remaining firms e xperienced low capacity utilization even with 
increasing demand throughout the POI, with excess capacity for module producers increasing 
from 391,194kW in 2012 to 576,718kW in 2016.  
 
63. Thus, compelling evidence supported the Commission 's findings that t he increasing volumes 
of low -priced subject imports resulted in underutilization of the domestic industry 's production 
assets, underinvestment, and closures, which in turn, affected the industry 's ability to capitalize on 
the strong and increasing domestic  demand. These findings are consistent with and support the 
Commission 's ultimate finding that  increased imports caused serious injury to the domestic industry.  
 
U.S. RESPONSE TO PANEL QUESTION 20  
 
64. The Commission based its finding of a causal link between increased imports and the declining 
prices on a detailed evaluation of the evidence and consideration of the parties ' arguments. The 
Commission also evaluated whether other factors might explain the declining prices and attenuate 
the causal link id entified in the first stage of its analysis. It considered the other causes posited by 
respondents, including declining raw material costs and increased production efficiencies. The 
Commission found that the record did not support respondents ' arguments. N otwithstanding this 
decline in raw material costs – which should have benefitted the domestic industry – the Commission 
observed that the domestic industry remained unprofitable as it continued to incur hundreds of 
millions of dollars in losses over the PO I. Like declining raw material costs, any achievement in 
higher levels of production efficiencies should have been a favorable factor that benefitted the 
domestic industry by lowering its overall costs. As explained, however, the domestic industry 's COGS 
to net sales ratio was consistently high, and exceeded 100 percent in 2016. Thus, rather than being 
able to take advantage of lower overall costs resulting from gains in production efficiencies, prices 
declined at a level that kept pace with their declines in costs.  
 
65. In sum, China 's allegation that other factors were responsible for falling prices does nothing 
to cast doubt on the link the Commission found between increasing low -priced imports and 
decreased prices for domestic CSPV products.  
 
EXECUTIVE S UMMARY OF U.S. COMMENTS ON CHINA 'S RESPONSES TO THE PANEL 'S FIRST 
SET OF QUESTIONS  
 
U.S. GENERAL COMMENTS ON CHINA 'S RESPONSES TO PANEL QUESTIONS ABOUT THE 
USITC 'S DETERMINATION  
 
66. Many of China 's responses to the Panel 's questions concerning the Commis sion's causation 
and non -attribution analysis suffer from the same overarching factual inaccuracies and 
misapprehension of the Panel 's role. Rather than make the same points repeatedly each time China 's 
response commits one of the errors, the United States provided consolidated comments with respect 
to each issue.  
 
67. General Comment 1.  In arguing that other factors caused injury to the domestic industry, 
China repeatedly relies upon respondents ' unproven assertion in the USITC investigation that the  
domestic industry made a business decision to focus on the residential and commercial segments of 
the U.S. market, and to abandon the fast -growing utility segment. As the Commission explained, 
however, the totality of the evidence belied this assertion. R ather, as the Commission found upon 
thorough examination of the complete record, the "domestic industry clearly sought to compete in 
the large, concentrated, and price -sensitive utility market, but the large volume of imports at low 
and declining prices ad versely impacted the domestic industry 's financial performance, making it 
difficult for the domestic industry to increase capacity to a scale that made it more competitive in 
this segment, even if it managed to develop and even pioneer innovative products that utilities and 
others sought ". The Commission identified, with direct citations to the record evidence, the many 
ways in which domestic producers were active in and sought to expand their presence in the utility 
sector.  WT/DS562/R/Add.1  
 
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  68. Other compelling evidence l ikewise demonstrated the industry 's genuine efforts to compete in 
the utility segment. As the Commission observed, SolarWorld added a 72 -cell module assembly line 
to its U.S. facilities specifically to serve the increasing demand in the utility market, and  Suniva 
dedicated nearly half of its cell manufacturing capacity to 72 -cell modules. The domestic industry 
also pioneered certain other CSPV technologies, such as monocrystalline products, which converted 
sunlight more efficiently than multicrystalline pro ducts and were sold in all segments of the 
U.S. market.  
 
69. General Comment 2.  China repeatedly, and wrongly, accuses the Commission of 
mischaracterizing the importance of price as reported in the purchaser questionnaire responses. 
Specifically, China ass erts that the Commission misleadingly "paints the picture " that price was the 
most important factor in purchasing decisions, and that price was the primary reason for purchasers ' 
purchases of imported product over the domestically produced product. It is C hina, however, that 
mischaracterizes the Commission 's price findings, which are fully consistent with the purchaser 
questionnaire response data.  
 
70. Contrary to China 's claim, the Commission did not find that price was the most important 
factor in purcha sing decisions. Rather, the Commission stated that in the U.S. market for CSPV 
products, "purchasers consider a variety of factors in their purchasing decisions, but price continues 
to be an important factor ". Moreover, the Commission did not find that pri ce was purchasers ' primary 
reason for purchasing imports over domestic product. Instead, the Commission stated that the 
"majority of purchasers reported that they had increased their purchases of imported CSPV products, 
most often identifying lower price a s the reason for increasing their purchases of imported CSPV 
products ". 
 
71. General Comment 3.  In its efforts to attack the reasonableness and adequacy of the 
Commission 's analysis, China repeatedly cites to individual assertions and statements made by 
respondents during the course of the administrative proceedings, while ignoring the substantial and 
contradictory evidence and arguments on the record. Articles 3.1 and 4.2(c) call for the report of 
the competent authorities to provide "their findings and re asoned conclusions on all pertinent issues 
of fact and law ", including a "detailed analysis of the case " and a "demonstration of the relevance of 
the factors considered ". Nowhere does the Agreement require that the competent authorities touch 
on every sing le point put forth by the parties, as China seems to suggest. Given the voluminous 
amount of information on the record in this case – literally thousands of pages – such a requirement 
would be onerous and unfeasible.  
 
U.S. COMMENT ON CHINA 'S RESPONSE TO P ANEL QUESTION 24  
 
72. Article XIX:1 of the GATT 1994 provides for a safeguard measure when increased imports are 
"as a result of " unforeseen developments. China errs in asserting that, to establish that this 
circumstance exists, a Member must demonstrate a  "clear linkage " between unforeseen 
developments and increased imports. "Link" is a term of art that appears only in the 
Safeguards  Agreement Article 4.2(b) obligation to demonstrate the existence of a "causal link " 
between increased imports and serious injury. As neither GATT 1994 nor the Safeguards Agreement 
requires such a showing with respect to unforeseen developments, the term "link" has no place in 
the evaluation of a claim that a Member has failed to demonstrate that increased imports are "as a 
result of " unforeseen developments.  
 
73. Indeed, the interpretation advanced by China imposes a double causation requirement that 
unfore seen developments cause the increased imports that caused serious injury. China nowhere 
provides a basis in GATT 1994 or the Safeguards Agreement to set the same causal standard for 
unforeseen developments and serious injury. China 's approach, however, is even more problematic 
because it would require not only that the competent authority show that unforeseen developments 
caused the increased imports that caused serious injury but that the unforeseen developments 
caused the increased imports during a partic ular year.  
 
74. China 's response to the Panel 's question argues that "[t]he question before this Panel is: does 
the USITC 's identification of the unforeseen developments adequately explain the increased imports 
during the most recent time period, that is, from 2015 to 2016? " According to China, not only does 
a competent authority have to establish a link between increased imports and unforeseen 
developments, but the link needs to account for increases from one year to the next during the WT/DS562/R/Add.1  
 
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  period of inves tigation. This particularized conception of unforeseen developments under the 
WTO safeguards disciplines is completely unfounded.  
 
EXECUTIVE SUMMARY OF THE U.S. OPENING STATEMENT AT FIRST VIDEOCONFERENCE 
WITH THE PANEL  
 
75. The U.S. written submissions hav e demonstrated that, by any reasonable standard, the USITC 
met the obligations of the Safeguards Agreement. It conducted an exhaustive investigation of the 
U.S. market for solar cells and modules, including the relevant tariff concessions, the conditions o f 
competition, and the roles played by imported and domestically produced product. It evaluated the 
effects of increased imports and of other factors affecting the industry and determined as a result 
that increased imports themselves caused serious injury to that industry. And finally, the USITC 
issued a massive report explaining its conclusions in detail. At the request of the U.S. Trade 
Representative, it also issued a supplemental report explaining how these increased imports were 
the result of unforesee n developments.  
 
76. The U.S. submissions demonstrated that China failed in its efforts to impugn the USITC 's 
findings. We will not repeat all of those observations, but will focus on three broad points. First, the 
USITC established a causal link between increased imports and the domestic industry 's serious 
injury. Second, the USITC evaluated whether factors other than imports were causing injury to the 
domestic industry and did not attribute any such injury to increased imports. Third, the United States 
has identified that the increased imports were the result of unforeseen developments and obligations 
incurred, consistent with Article XIX.  
 
77. Therefore, China has not carried its burden to show that the safeguard measure on solar 
products is inconsistent  with the United States ' obligations under the WTO Agreement. Instead, 
China has simply repeated the same or similar arguments that various parties raised during the 
underlying investigation and that the USITC found unpersuasive or contrary to the volumino us 
evidence as a whole collected in the investigation. Given China 's failure, we respectfully request that 
the Panel find that China has not established that the United States has acted inconsistently with 
respect to the solar safeguard measure.  
 
EXECUTIVE  SUMMARY OF THE U.S. CLOSING STATEMENT AT FIRST VIDEOCONFERENCE 
WITH THE PANEL  
 
78. Two overarching problems arise again and again with respect to China 's opening statement. 
The first of these is China 's approach to the USITC 's weighing of the evidence. Ch ina repeatedly 
portrays the importers and customers who appeared as respondents in the USITC investigation as 
neutral observers whose assertions the Panel should accept as "compelling ", and the domestic 
producers who appeared as petitioners as partisans wh ose assertions are invariably "self-serving " 
and inherently unreliable. China provides no justification for these characterizations, and there is 
none.  
 
79. In its role as competent authority, the USITC was not permitted to, and did not, presume that 
one side was impartial and the other unreliable. Instead, the USITC treated each party 's assertions 
equally, and relied on what the evidence in the record actually showed in reaching its factual findings. 
Where there was conflict between the views advocated by  the interested parties, the USITC analyzed 
and weighed the submitted evidence as a competent authority must to arrive at a reasoned 
conclusion. This approach fully comports with the obligations under Article 3.1 of the 
Safeguards  Agreement to provide inte rested parties and the public opportunities to present evidence 
and their views, to respond to each others ' presentations, and to provide findings and reasoned 
conclusions. In a WTO proceeding, it is not sufficient for a Member to observe that one set of p arties 
to the investigation presented views and evidence that conflict with the competent authorities ' 
determination, or that the Member challenging the determination considers the conflicting views and 
evidence to be more "compelling ". That would call for a re -weighing of the evidence, which is not 
the job of a panel.  
 
80. A second overarching problem wit h China 's opening statement lies in its repeated assertions 
that U.S. rebuttals of China 's arguments constitute "post hoc " reasoning whenever they do not 
duplicate the text used in the Commission 's determination. This represents a fundamental 
misunderstand ing of the role of a party responding to WTO challenges to the determinations of its 
competent authorities. China, as the complaining party, bears the burden of proof with respect to WT/DS562/R/Add.1  
 
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  its arguments that the USITC failed to comply with U.S. WTO obligations. In rebutting those 
arguments, the United States has the right both to point out legal misinterpretations by China and 
to provide the Panel with further detail and explanation of the Commission 's analysis. Where China 
has misunderstood, misrepresented, or o mitted aspects of the findings, the United States is free to 
identify the errors and point to portions of the record that support the Commission 's conclusions. In 
doing so, the United States has demonstrated why China has failed to make a prima facie case that 
the Commission 's determination is inconsistent with the Safeguards Agreement. Such illumination 
of the Commission 's analysis and exchange of positions and arguments between the parties are 
integral features of the WTO dispute settlement process.  
 
EXEC UTIVE SUMMARY OF U.S. RESPONSES TO THE PANEL 'S SECOND SET OF QUESTIONS  
 
U.S. RESPONSE TO PANEL QUESTION 1  
 
81. China 's decision not to bring a claim contesting the USITC finding that the U.S. CSPV products 
industry was experiencing serious injury precludes  review of that finding. Therefore, the Panel must 
accept that finding as an undisputed fact when assessing the causal link between increased imports 
and that serious injury. Specifically, given that China did not raise a claim with respect to the USITC 's 
determination of serious injury, it may not contest that the state of the domestic industry at the 
time of the determination was one of serious injury. Nor may it assert that individual pieces of 
evidence or certain aspects of the industry 's condition, ind ividually or collectively, are inconsistent 
with serious injury. Such arguments would in effect require assessment of a claim that China has 
not brought under the Safeguards Agreement or GATT 1994.  
 
U.S. RESPONSE TO PANEL QUESTION 11  
 
82. The domestic solar industry 's limited production capacity is a symptom of the serious injury 
suffered during the period of investigation, not a cause thereof. In this way, lack of capacity is no 
different from the domestic industry 's inability to capture marke t share or invest in research and 
development as it increasingly lost sales and had to lower prices in response to competition from 
the growing imports into the United States. The USITC 's report identified such factors as indicators 
of serious injury cause d by increased imports and not as independent causes of injury.  
 
83. This approach comports with the language of Article 4.2(b). The first sentence of that provision 
states that a determination that increased imports have caused serious injury "shall not b e made 
unless this investigation demonstrates ... the existence of the causal link between increased imports 
of the product concerned and serious injury or threat thereof ". The relevant meaning of link is "{a} 
connecting part; esp. a thing or a person serv ing to establish or maintain a connection; a member 
of a series; a means of connection or communication ". "Causal " means "of or relating to a cause or 
causes ". Thus, a "causal link " exists if increased imports result in conditions that lead to serious 
injury, or if those imports start a causal chain connecting them to the development of conditions 
indicative of serious injury.  
 
84. The second sentence of Article 4.2(b) calls on the c ompetent authorities to evaluate whether 
"factors other than increased imports are causing injury to the domestic industry ". "When " that is 
the case, the sentence states that "such injury shall not be attributed to increased imports ". On its 
face, this pro vision distinguishes between factors that "are causing " injury and the injury itself. To 
treat "the injury " itself as also being a factor that is "causing " injury would reverse the analysis 
envisaged in Article 4.2(b). The second clause of the sentence con firms this conclusion – it would be 
absurd to instruct competent authorities not to "attribute " to increased imports an injury that they 
have found to be the result of increased imports.  
 
U.S. RESPONSE TO PANEL QUESTION 23  
 
85. There is no dispute that th e USITC identified in its report that the U.S. tariff schedule provided 
for duty -free treatment of CSPV products from 1987 forward, or that these rates are bound under 
GATT 1994. Neither of these facts constitutes a post hoc rationalization and are suffici ent to establish 
U.S. conformity with Article XIX:1(a). Indeed, as a previous report has noted:  
 
With respect to the phrase "of the effect of the obligations incurred by a Member under 
this Agreement, including tariff concessions, " we believe that this ph rase simply means 
that it must be demonstrated, as a matter of fact, that the importing Member has WT/DS562/R/Add.1  
 
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  incurred obligations under the GATT 1994, including tariff concessions. Here, we note 
that the Schedules annexed to the GATT 1994 are made an integral part o f Part I of 
that Agreement, pursuant to paragraph 7 of Article II of the GATT 1994. Therefore, any 
concession or commitment in a Member 's Schedule is subject to the obligations 
contained in Article II of the GATT 1994.  
86. The USITC report did what was ne cessary to comply with the "obligations incurred " language 
of Article XIX:1(a) when it identified the relevant tariff concession. It is not post hoc rationalization 
for the United States, in response to China 's claim in this proceeding, to point to the rel evant USITC 
finding, or to observe that this finding was sufficient to satisfy the Article XIX:1(a) "obligations 
incurred " language.  
 
U.S. RESPONSE TO PANEL QUESTION 26  
 
87. A tariff rate bound at zero percent has significant implications for demonstrating  that increased 
imports are the result "of the effect of obligations incurred ". When a Member undertakes an 
obligation in the form of a tariff concession pursuant to Article II of the GATT 1994, it represents a 
commitment that, per se, prevents that Member  from raising its tariffs to ameliorate any harm 
caused by increased imports.  
 
88. Accordingly, a Member may establish that increased imports are the "effect of obligations 
incurred " simply by identifying a commitment, such as a tariff concession, that pre vents it from 
raising duties on the imports in question. A tariff rate bound at zero percent, while not necessary, is 
more than sufficient to constitute a restraint on a Member 's freedom to raise its duties and thereby 
qualify as a per se commitment that s atisfies the requirement in Article XIX:1(a) concerning the 
"effect of obligations incurred ". 
 
EXECUTIVE SUMMARY OF THE U.S. SECOND WRITTEN SUBMISSION AND U.S. COMMENTS 
ON CHINA 'S RESPONSES TO THE PANEL 'S SECOND SET OF QUESTIONS  
 
I. THE COMMISSION PROPERLY WEIGHED THE EVIDENCE AND PROVIDED REASONED AND ADEQUATE 
EXPLANATIONS OF ITS FINDINGS AND CONCLUSIONS  
 
89. China 's arguments suffer from the same thematic difficulties that afflicted the arguments in 
each of its prior submissions. First, in challenging the reasonableness and adequacy of the 
Commission 's findings, China ignores the detailed analyses actually undertaken by the Commission 
and points to specific pieces of evidence and individual assertions made by responden ts that, in its 
view, the Commission did not consider. Articles 3.1 and 4.2(c) call for the report of the competent 
authorities to provide "their findings and reasoned conclusions on all pertinent issues of fact and 
law", including a "detailed analysis of the case " and a "demonstration of the relevance of the factors 
considered ". Thus, while an investigating authority must evaluate all relevant evidence and explain 
the basis for its conclusions, nowhere does the Safeguards Agreement mandate that the explana tion 
discuss each piece of evidence and assertion put forward by the parties in its published report.  
 
90. In fact, the Commission considered the evidence or assertions identified by China, but found 
them to be outweighed by other evidence which the Commi ssion found to be more compelling. The 
Commission provided reasoned and adequate explanations regarding its findings. That the 
analysis  did not descend to the granular level of minute detail suggested by China does not render 
the determination WTO -inconsis tent. As explained in the U.S. submissions, the USITC 's 
November  Report contained all the elements called for under the Safeguards Agreement. It explicitly 
included an evaluation of all relevant factors. Moreover, it contained a detailed analysis of the ca se, 
explaining how the facts supported the Commission 's ultimate conclusion that CSPV producers were 
being imported into the United States in such increased quantities as to be a substantial cause of 
injury to the domestic industry. In doing so, the Commis sion fully complied with the obligations 
required of competent authorities under the Safeguards Agreement.  
 
91. China 's criticisms of the Commission 's findings simply amount to a view that the Commission 
should have weighed the evidence differently. China  repeatedly points to different methodologies 
with respect to tabulation of the data and provides different characterizations of the evidence to 
support its own preferred theory of the case. However, none of China 's claims demonstrate any 
inconsistency wit h U.S. obligations under the Safeguards Agreement.  WT/DS562/R/Add.1  
 
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  92. On this last point, it is important to note that it is China, as the complaining party, that bears 
the burden of demonstrating that the safeguard measure within the Panel 's terms of reference is 
incons istent with the cited provisions of the Safeguards Agreement. In challenging an action to 
impose a safeguard measure, a complaining party brings forward evidence and argument relating 
to the investigation carried out, the findings by the competent authorit y, and the remedy imposed. 
And in reviewing the competent authority 's action, a panel must not conduct a de novo evidentiary 
review, but instead should bear in mind its role as reviewer of agency action. Indeed, it would not 
reflect the function set out in  Article 11 of the DSU for a panel to go beyond its role as reviewer and 
instead substitute its own assessment of the evidence and judgment for that of the competent 
authority.  
 
II. CHINA HAS FAILED TO CARRY ITS BURDEN ON UNFORESEEN DEVELOPMENTS AND OBLIG ATIONS 
INCURRED UNDER ARTICLE XIX 
 
93. China has erred, as a legal matter, when describing the requirements under Article XIX of the 
GATT 1994 and has failed, as a factual matter, to rebut the findings in the USITC 's November Report 
and Supplemental Report  on these issues. Accordingly, China cannot carry its burden because it 
identifies the wrong framework for the Panel 's evaluation and has not submitted arguments or 
evidence that establish any way in which the USITC 's detailed findings and reasoned conclus ions are 
inconsistent with the relevant WTO obligations.  
 
94. On the legal question, China repeatedly mischaracterizes the requirements in Article XIX:1(a), 
including the connection that must be established between the different elements. Article XIX:1(a) 
applies when "any product is being imported into the territory of [a] contracting party in such 
increased quantities, " without regard as to the source or origin of that product. Thus, in evaluating 
whether this situation is "as a result of unforeseen devel opments ", a Member is free to examine 
increased imports of the "product " as a class, and need not separately evaluate imports from 
individual sources.  
 
95. Furthermore, China argues that, for a Member to apply a safeguard measure, its competent 
authoritie s must address the question of increased imports that are as a result of unforeseen 
developments and the effect of obligations in its published report. While a Member may elect to have 
its competent authorities address this question in their report, there is no requirement to 
demonstrate the satisfaction of the first clause of GATT 1994 Article XIX:1(a) before the Member 
applies a safeguard measure. As explained, the references in Article XIX to unforeseen developments 
and the effect of obligations incurred  are circumstances that must exist for application of a 
safeguard  measure . They are not conditions under Article 2 of the Safeguards Agreement that must 
be demonstrated in the competent authorities ' report.   
 
96. The USITC found, for example, in the Supplemental Report that "the six largest firms 
producing CSPV cells and CSPV modules in China increased their global CSPV cell and CSPV module 
manufacturing capacity by expanding investments in third countries without reducing their capacity 
in China. Imports from four countries where Chinese affiliates added both CSPV cell and CSPV 
module capacity – Korea, Malaysia, Thailand, and Vietnam – increased their share of apparent U.S. 
consumption from *** percent in 2012 to * ** percent in 2016. Much of this increase occurred 
between 2015 and 2016, as their collective share of the U.S. market more than doubled from 
*** percent in 2015 to *** percent in 2016, which occurred just after the CSPV II orders went into 
effect in Febru ary 2015 ". The USITC specifically noted that the imports from these countries, 
collectively, more than doubled their share of the U.S. market during the time just after the trade 
remedy orders in CSPV II took effect. China cannot reasonably argue that its producers ' massive 
increase in production capacity in certain countries is unrelated to a significant increase in exports 
to the United States from those same countries at the same time.  
 
U.S. COMMENT ON CHINA 'S RESPONSE TO PANEL QUESTION 2  
 
97. It is imp ortant to note that China 's response to this question reveals two general flaws with 
its approach. First, China misapprehends the role of the Panel. China acknowledges that "serious 
injury " and "causation " are two distinct legal issues, and that it has not  challenged the Commission 's 
finding of serious injury. In light of this, the Panel 's review of causal link starts with the given that 
the domestic industry suffered serious injury during the period of investigation. Notwithstanding 
this, China suggests th at the Panel should conduct its own new assessment of the facts, including 
those related to serious injury. However, this approach would be exactly the type of de novo review WT/DS562/R/Add.1  
 
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  that panel and appellate reports have universally found to be improper for a pane l. Thus, to the 
extent that China raises the state of the domestic industry as an issue in its challenge to the 
Commission 's finding of a causal link, the Panel should reject such arguments. China 's decision not 
to bring a claim contesting the Commission 's serious injury finding, precludes Panel review of that 
finding.  
 
98. Second, China misapprehends the legal obligations applicable to the competent authorities ' 
determination. The Appellate Body in US – Lamb  confirmed that "the method and approach 
WTO Memb ers choose to carry out the process of separating the effects of increased imports and 
the effects of the other causal factors is not specified by the Agreement on Safeguards ". 
 
99. In addition to misapprehending the relevant legal obligations, China fails  to resolve the 
contradiction at the heart of the Panel 's question – that China 's assertions that trends in the relevant 
factors were moving upward is inconsistent with the USITC 's unchallenged finding that the domestic 
industry was experiencing serious in jury. China seeks to reconcile its position by arguing that there 
was not causation because, while the industry was injured, its condition was improving at the same 
time that imports were increasing.  
 
100. The effort is unavailing. China 's argument that trends in the domestic industry 's performance 
were improving relies on upward movement in a subset of the performance factors. The Commission 
recognized these upward movements in its analysis of serious injury, but found that when these 
factors were considered within the context of the relevant conditions of competition and in light of 
the downward trends in other significant factors, and the overall downward trends, particularly 
between 2015 and 2016 as imports reached their peak, there was a  direct correlation between 
increasing imports and the industry 's dismal and deteriorating financial performance. The 
Commission provided detailed analyses on how declining prices and the industry 's dismal and 
deteriorating financial condition corresponded  to import trends. The Commission explained that the 
market otherwise was favorable to domestic producers, with explosive demand growth and trade 
measures in place against sources of dumped and subsidized imports that had previously caused 
material injury.  However, instead of benefitting from this rapidly expanding demand, the domestic 
industry struggled and remained unprofitable, as low -priced, highly substitutable imports flooded 
the market. The industry incurred hundreds of millions of dollars in net and  operating losses 
throughout the POI and was unable to generate adequate capital to finance modernization of their 
domestic plants and equipment and unable to maintain existing research and development 
expenditure levels.  
 
101. Thus, the Commission object ively found that the domestic industry 's financial condition, which 
was at its worst at the beginning of the POI, improved marginally after imposition of the orders and 
the filing of new antidumping and countervailing duty cases, but remained poor, and the n 
deteriorated further in 2016, as imports peaked in terms of volume and market share and prices 
dropped anew. By demonstrating how global capacity and supply chains shifted and how imports 
harmed the domestic industry 's condition after imposition of the C SPV I and CSPV II orders, the 
Commission not only established an overall coincidence between increased import volume and 
market share, on the one hand, and the domestic industry 's dismal and deteriorating financial 
condition, on the other, but the Commissi on also demonstrated that the seemingly positive trends 
in other factors did not detract from this conclusion. China has accordingly failed to establish that 
the Commission 's analysis was inconsistent with Article 4.2(b).  
 
U.S. COMMENT ON CHINA 'S RESPONSE TO PANEL QUESTION 12  
 
102. As the United States pointed out in its answer to this question, where interested parties to a 
safeguards investigation offer conflicting views on a specific issue, a competent authority must 
determine which evidence it finds to be the most probative. During the course of an investigation, a 
competent authority may conclude that certain evidence outweighs other evidence or is more 
credible. This is consistent with the obligations of Articles 3.1 and 4.2(c), which do not e stablish an 
abstract level or nature of explanation that competent authorities must provide for each finding. 
Instead, these provisions require only that the analysis be "detailed " and the findings and conclusions 
be "reasoned ". There is no obligation to e xplain how the competent authority weighed the evidence 
or argumentation beyond what is needed to meet these standards as set out in the 
Safeguards  Agreement.  
 WT/DS562/R/Add.1  
 
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  103. It is important to interpret these obligations in their broader context. The 
Safeguards  Agreement requires the competent authorities to provide importers, exporters, and 
other interested parties to present evidence and their views, and to respond to presentations of 
other parties. They must conduct an investigation of and evaluate "all relevant  factors of an objective 
and quantifiable nature having a bearing on the situation of the industry ". If they perform these 
tasks diligently – as the USITC did in the CSPV Products investigation – they will have before them 
a huge mass of evidence and argum entation, which may run (as it did in this case) to many 
thousands of pages. And, any public discussion must avoid any disclosure of business confidential 
information. By necessity, any "findings and reasoned conclusions " consistent with these principles 
will involve summarization of evidence and parties ' views. To conclude otherwise would present the 
competent authorities with an impossible task.  
 
104. That is exactly what China seeks to do. It seeks to frame the task as one where a competent 
authority mus t "explain its reasoning in a manner that makes sense and is supported by objective 
evidence on the record ", which "needs to be satisfactory in light of all relevant fact and more 
reasonable than other plausible explanations ". However, its critique of the USITC applies these 
principles in an unreasonably extreme way.  
 
105. For example, it accuses the USITC of failing to address "all the evidence " because it 
summarized parties ' positions ( "the USITC set up many issues as 'petitioner argued on the one hand ' 
and 'respondents replied on the other hand '") and did not reference every point made by every 
respondent ( "complaints against Suniva by DEPPCOM, Borrego, NRG Energy, Silfab Solar, and 
SunPower are not even mentioned. "). But the Safeguards Agreement does not  require the competent 
authorities to address every single assertion made by every party. The USITC cited relevant 
assertions by petitioners and respondents, provided specific allegations as examples, and explained 
why petitioners ' rebuttals led them to di scredit the allegations – generally because other statements 
by the respondents showed the allegations to be insubstantial. The Commission also considered 
these allegations within the context of other relevant evidence, including questionnaire responses 
from 104 purchasers and found that, in any event, these specific allegations failed to demonstrate 
any "widespread " delivery and service problems. This approach of references and examples provides 
a "reasoned explanation " for the USITC 's conclusion, and Chin a provides no basis to believe that the 
examples were unrepresentative or that other evidence would have led to a different conclusion.  
 
106. China does not dispute that Article 3.2 requires competent authorities to protect BCI from 
disclosure to the publi c, but nonetheless criticizes the USITC for redacting BCI from its public report, 
arguing that "a mere reference to confidential information is not sufficient for the purposes of 
providing a 'detailed analysis ' as requirement by Article 4.2(c) ". Article 3. 2's explicit provisions for 
collection and protection of BCI recognize that BCI may be critical for making the determination 
called for in Article 4.2(a), and that parties will not provide such information absent assurances that 
it will be protected. Thus, t o argue – as China does – that the mere fact of redactions evidences a 
failure to provide findings and reasoned conclusions would make it impossible for competent 
authorities to comply with the Safeguards Agreement.  
 
U.S. COMMENT ON CHINA 'S RESPONSE TO PA NEL QUESTION 21  
 
107. As the United States noted in its answer to the Panel 's question, China cannot reasonably 
argue that its producers ' massive increases in production capacity in certain countries have no effect 
on the significant increase in exports to  the United States from those same countries at the same 
time. And since Article XIX does not require arguments or evidence on unforeseen developments 
with more particularity than this, the United States does not need to show import -specific 
information on  a transaction -by-transaction (or company -by-company or country -by-country) basis.  
 
108. As for China 's second response that such developments were not "unforeseen ", China argues 
that the Chinese producers ' expansion into other countries represents a "natural shift " or "well-
documented phenomenon " according to market -based principles and economic concepts that the 
USITC comprehends. Notably, China does not respond to the United States ' point that, under the 
Marrakesh Declaration, WTO Members have declared t hat their economies will participate in the 
international trading system based on "open, market -oriented policies and the commitments set out 
in the Uruguay Round Agreements and Decisions ". Nor does it have any reply to the USITC 's findings 
in the Suppleme ntal Report regarding China 's pervasive and unexpected practices to pursue 
industrial policies and government programs to distort the market and manipulate the behavior of 
individual firms. As such, China 's "store" analogy in its response to the Panel 's question only applies WT/DS562/R/Add.1  
 
- 83 - 
 
  if one store was able to undercut the other on price by misappropriating its trade secrets or engaging 
in some other form of unfair trade practices.  
 
109. Despite China 's protestations, the USITC specifically found that U.S. negotiators  could not 
have foreseen that China would contradict its commitments by implementing a series of industrial 
policies and government programs favoring renewable energy product manufacturing, and that this 
would "lead to the development and expansion of capa city to manufacture CSPV products in China 
at levels that substantially exceeded the level of internal consumption ". The intentional development 
of overcapacity in China and, following the U.S. trade remedy orders, in other countries, belies 
China 's argume nt that the findings identified in the Supplemental Report merely represent a natural 
ebb and flow according to market dictates rather than purposeful and export -oriented manipulation 
of the CSPV market.  
 
EXECUTIVE SUMMARY OF THE U.S. OPENING STATEMENT AT SECOND VIDEOCONFERENCE 
WITH THE PANEL  
 
110. The USITC 's November Report fully satisfies the legal requirements set forth under the 
Safeguards Agreement. In this report, the Commission provided a detailed analysis of the case, 
explaining how objective and c ompelling evidence supported its ultimate conclusion that increased 
imports of CSPV products caused serious injury to the domestic industry. The USITC complied with 
Safeguards Agreement Article 4.2(b) in finding a causal link between increased imports and the 
domestic industry 's serious injury. In particular, the USITC (1) adequately addressed upward 
movements in certain of the injury trends; (2) adequately considered the negative injury trends 
within the relevant conditions of competition; and conducted a non-attribution analysis that fully 
satisfied its obligations under the Safeguards Agreement.  
 
111. In particular, China is confusing the substantive obligations regarding the existence of 
unforeseen developments and obligations incurred with a procedural obligation that the competent 
authorities demonstrate the existence of these circumstances in their report. The United States does 
not dispute the existence or applicability of these obligations to the safeguard measure on CSPV 
products. What th e United States disputes is China 's non -textual assumption that, because the 
Safeguards Agreement charges the competent authorities with a determination as to serious injury, 
those same competent authorities must also address unforeseen developments and obligations 
incurred. China 's second written submission does nothing to counter the U.S. showing that there is 
no such obligation on the competent authorities.  
 
112. To be clear, this is a moot point, as the USITC provided the necessary fi ndings in the 
November  Report and the Supplemental Report. Nonetheless, if the Panel finds a shortcoming in the 
USITC analysis, the question of how a Member may demonstrate compliance with the unforeseen 
developments and obligations incurred becomes releva nt. The United States has shown that, in that 
case, the Panel is free to rely on additional argumentation presented in this proceeding, and China 
has not shown otherwise.  
 
113. China also challenges the USITC 's Supplemental Report by questioning a suppose d finding by 
the USITC that "the United States was completely surprised – it was 'unforeseen ' – that other CSPV 
product exporting countries would increase their exports to the United States given the decrease in 
exports from China because of the AD -CVD dut ies". Of course, the relevant standard is not whether 
circumstances were a "complete surprise ". That would mean that they were "unforeseeable " in the 
sense of "unpredictable " or "incapable of being foreseen, foretold or anticipated ". This is contrary to 
the ordinary meaning of "unforeseen, " namely, that "unforeseen developments " are those that were 
simply "unexpected ". The USITC 's findings establish that this was the case with respect to the 
developments identified in the USITC November Report and Supplemen tal Report.  
 
114. Accordingly, these developments were not a simple product of supply and demand 
considerations. Instead, they represent the market distorting effects of excess capacity and the 
export -oriented nature of Chinese producers ' production of mo dules that U.S. negotiators would not 
have foreseen at the time that the United States undertook commitments to bind its rate of duty for 
such products at zero percent. In particular, the magnitude of these market distortions and the 
speed by which the lar gest Chinese solar producers were able to set up new production facilities in 
other countries, without decreasing their domestic operations, is contrary to market -based firm 
behavior. U.S. negotiators would not have foreseen such behavior, as the USITC fou nd in its 
Supplemental Report.  WT/DS562/R/Add.1  
 
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  EXECUTIVE SUMMARY OF THE U.S. CLOSING STATEMENT AT SECOND VIDEOCONFERENCE 
WITH THE PANEL  
 
115. This dispute has called upon the Panel to scrutinize the USITC 's reports. The Panel has seen 
that the data show an industry that had every chance for success – booming domestic demand, 
products that its customers rated as competitive over all other sources, and numerous plans to 
expand existing facilities and build new ones. The Panel has also seen that throughout the period of 
investigation, imports entered at increasingly lower prices. Domestic products lost sales and market 
share in every sector in the market. Ambitions for expansion became impossible in light of consistent 
large losses, start -ups failed, and existing producers ex ited the market. The Commission thoroughly 
documented each of its findings based on a record thousands of pages long, derived from the 
Commission 's own detailed questionnaires, written submissions by interested parties, and testimony 
at two day -long public  hearings. If this exhaustive review of the evidentiary record is not enough to 
comply with Article XIX and the Safeguards Agreement, it is difficult to imagine what competent 
authority could comply. In other words, China 's view of these disciplines would effectively nullify the 
right to take a safeguard measure. That might be an outcome satisfactory to China, but it would not 
be consistent with the terms of Article XIX and the Safeguards Agreement.  
 
EXECUTIVE SUMMARY OF U.S. RESPONSES TO THE PANEL 'S THIRD SET OF QUESTIONS  
 
U.S. RESPONSE TO PANEL QUESTION 45  
 
116. The Commission found that any changes in the overall availability of incentives had not 
resulted in an increase in the net cost to solar electricity generators. This meant that domestic 
producers did not need to reduce their prices to make solar energy more competitive with other 
sources of energy. Most questionnaire respondents confirmed that the availability in incentives led 
to a decrease in the price of solar generated electricity and  that changes in the price of solar 
generated electricity had not at all affected the prices of CSPV products since 2012. Based upon the 
totality of the evidence concerning these incentives and in light of the continued robust demand for 
CSPV products, the  Commission reasonably concluded that the availability of government incentive 
programs had not caused injury to the domestic industry.  
 
U.S. RESPONSE TO PANEL QUESTION 49  
 
117. The domestic industry 's unprofitable financial state was one of the compelling  pieces of 
evidence supporting the Commission 's conclusion that the need for solar generators to attain grid 
parity was not the reason for the domestic industry producing CSPV products to reduce prices for its 
cells and modules during the period of investi gation.  
 
118. Other record evidence supporting the Commission 's conclusion demonstrated the complexities 
of grid parity. Far from being a uniform concept, the data showed that the levelized cost of energy 
of photovoltaic systems varied by region, time of d ay, and availability of other electricity sources, 
and even could vary widely for a given energy source. Indeed, as the Commission observed, installed 
photovoltaic system prices differed greatly from state to state and project to project, with a 
considerab le spread among the prices in each market segment. Respondent SEIA 's own expert 
confirmed that "{i}t is possible that, within a particular state, the residential solar segment might 
have achieved grid parity but the utility -scale segment has not, or vice v ersa". And China itself 
stated that the cost for solar -generated electricity systems in the utility segment was already at grid 
parity, which "made them cost -competitive with other energy sources ". Given this great variability, 
there could not have been on e absolute target price that all domestic producers strove to meet in 
selling their CSPV products.  
 
119. In addition, the record evidence further demonstrated that the need to attain grid parity had 
not even translated into continuously declining prices f or CSPV products as China asserts. Rather, 
the price data showed that prices for CSPV products, in fact, had stabilized after the CSPV I orders 
were imposed and new investigations were initiated in CSPV II. The Commission observed that 
although installed p hotovoltaic system prices declined steadily in all three market segments, this 
was due to falling non -module costs rather than to any price changes in CSPV products 
between  2013 and 2015. Although U.S. module prices declined in 2016, this was, as the Commi ssion 
explained, a direct result of low -priced imports from additional sources that entered the U.S. market. 
Moreover, as those imports rapidly increased to higher volumes in 2016, U.S. module prices rapidly 
declined. This correspondence demonstrates that,  rather than the need for solar generators to attain WT/DS562/R/Add.1  
 
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  grid parity, low -priced imports were the real factor in the overall price declines of CSPV products 
during the period of investigation.  
 
U.S. RESPONSE TO PANEL QUESTION 56  
 
120. First, China asserts that the USITC based its unforeseen developments analysis only on 
"Chinese producers " who "did not control any significant CSPV production in Korea ". That is not the 
case. The ITC based its analysis on "the six largest firms producing CSPV cells and CSPV modules in 
China ". The USITC November Report lists Hanwha Qidong as one of these six companies. Hanwha 
Qidong 's corporate parent (Hanwha) produces cells and modules in Korea.  
 
121. Second, regardless of whether Chinese producers contro lled significant production in Korea, 
this country was one of four specifically targeted by Chinese firms to offshore their production 
operations in efforts to circumvent the CSPV I and CSPV II orders. The increase in imports from 
Korea therefore provided direct support for the Commission 's finding of unforeseen developments.  
 
122. Third, China does not even cite to the most accurate table for its assertions regarding the 
increase in imports from Korea. Table C -7 of the Annex to the November Report, upon wh ich China 
relies, was sourced from U.S. customs statistics for headings 8541.40.6020 and 8541.40.6030. 
These headings covered all solar cells and modules, including out of scope thin film photovoltaic 
products. In addition, those headings were underinclusi ve, as they did not account for some of the 
covered imported products. Consequently, the USITC did not rely on these data in its unforeseen 
developments analysis, citing instead to tables derived from questionnaire responses limited to 
covered products. Th us, the data on which China relies is not relevant to the USITC 's unforeseen 
developments analysis.  
 
123. In any event, Table C -7 indicates that Korea accounted for one -third of the increase in imports 
by value. Malaysia, Thailand, and Vietnam (the three o ther countries where Chinese firms had added 
both cell and modules capacity) accounted for almost two -thirds of the total increase shown in that 
table. The USITC 's findings regarding increased imports from all of these countries where Chinese 
companies had  added both CSPV cell and module capacity were sufficient to establish that increased 
imports were "as a result of unforeseen developments " for purposes of Article XIX:1(a).  
 
EXECUTIVE SUMMARY OF U.S. COMMENTS ON CHINA 'S RESPONSES TO THE PANEL 'S 
THIRD SET OF QUESTIONS  
 
U.S. COMMENT ON CHINA 'S RESPONSE TO PANEL QUESTION 36  
 
124. China insists that it "has not argued that there is any need for separate causation analysis for 
each segment, " but asserts that the Commission erred by "ignor{ing} " the existence and factual 
relevance of different market segments. China cites to the panel findings in US – Lamb  as an example 
of "how an authority should deal with different segments ". This panel repo rt, however, is inapposite 
because it involved the issue of industry segments, and not market segments.  
 
125. Specifically, in US – Lamb , the panel accepted arguendo the Commission 's domestic industry 
definition as including all industry segments, includi ng growers and feeders of live lamb, on the one 
hand, and packers and breakers of lamb meat, on the other. The panel explained that to provide an 
adequate explanation, the Commission report should have contained a discussion regarding:  
 
(i) why conclusive  inferences from the data concerning one industry segment can be 
drawn for another industry segment, or (ii) why the factual constellation in particular 
industry segment in the given case does not permit data collection (i.e., not a "factor 
of a objective and quantifiable nature "), or (iii) renders a certain injury factor not 
probative in the circumstances of a particular industry segment (i.e., not a factor 
"having a bearing on the situation of that industry " within the meaning of 
SG Article  4.2(a).  
126. Unlike in US – Lamb , the issue raised by China is not whether the Commission collected and 
analyzed trade and financial data separately for different types of producers along the production 
chain. (In fact, the Commission did just this sort of analysis by gathering and analyzing separate 
data on CSPV cell producers and CSPV module producers.) Rather, the question raised in this dispute WT/DS562/R/Add.1  
 
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  is whether the Commission sufficiently analyzed the factual distinctions and degree of competition 
within the three sectors  (residential, commercial, and utility) of the U.S. market.  
 
127. As the United States has explained, the Commission gathered data on and examined the 
distinctions that existed in the different market segments to determine the degree of competition 
between  imports and the domestic like product. The Commission determined that all three segments 
experienced considerable growth, imports and domestically produced CSPV products competed 
against each other across all three sectors of the U.S. market, and that dom estic producers lost 
market share in each of the market segments to imports that were lower priced than domestically 
produced products and that caused domestic prices to decline during the period of investigation. 
Contrary to China 's view, this analysis "address{ed} specifically the nature of the interaction 
between the imported and domestic products ". It provided a holistic analysis of the three segments 
that supported the ultimate conclusion with respect to injury to "the producers as a whole of the like 
or directly competitive products ". That is all that the Safeguard Agreement calls for.  
 
U.S. COMMENT ON CHINA 'S RESPONSE TO PANEL QUESTION 39  
 
128. In its response to this question, China asserts that the "global decline in CSPV prices " and the 
domestic i ndustry 's failure to increase capacity to a larger scale and innovate explained the lower 
prices of imported CSPV products compared to the domestically produced product. China 's assertions 
are factually flawed because China ignores the record evidence demo nstrating that the domestic 
industry did, in fact, innovate and supply CSPV products that were highly substitutable with imports. 
China also fails to account for the imports ' role in hindering the domestic industry 's ability to increase 
capacity to a large r scale in the first instance.  
 
129. Specifically, the Commission found that domestic producers pioneered certain CSPV 
technologies, and that they continued to innovate, develop, and manufacture leading -edge products 
during the period of investigation. The record demonstrated that the domesti c industry supplied a 
wide variety of monocrystalline and multicrystalline products that competed against imported CSPV 
products, including CSPV products with 2, 3, 4, and 5 busbars, PERC products, frameless modules, 
heterojunction cells, bifacial products , and hybrid CSPV products. To the extent that certain CSPV 
products were only available from foreign suppliers, the Commission explained that available 
objective evidence indicated that CSPV products that were unique or unavailable from other sources 
accounted for only a small share of the U.S. market. Indeed, most U.S. producers, importers, and 
purchasers confirmed that product from domestic and foreign sources were interchangeable.  
 
130. Regarding the domestic industry 's asserted inability to increase c apacity to a larger scale, 
China ignores a critical finding made by the Commission – that increasing imports at declining prices 
adversely affected the industry 's financial performance, making it difficult for the industry to increase 
capacity to a scale that made it more competitive. Indeed, of the 33 CSPV cell or CSPV module 
facilities operating in the United States as of January 1, 2012, only 13 of those facilities remained 
open by December 31, 2016. And although 16 additional facilities opened se eking to take advantage 
of the demand growth, the consistent inability of the domestic industry to compete with low -priced 
imports, forced many of these firms to close. The domestic producers remaining in the market 
continued to operate at below full capac ity, particularly for CSPV module assembly operations. 
China 's argument fails, in that it amounts to a circular attempt to attribute the domestic industry 's 
higher costs to its smaller scale, which itself was causally linked to the pricing pressure exerted  by 
the flood of lower priced imports.  
 
131. In any event, China still does not explain the overall relevance of its assertions regarding the 
alleged global decline in CSPV prices to its claim that the ITC 's price analysis was inconsistent with 
the Safegua rds Agreement. In fact, this assertion serves only to disprove that other factors identified 
by China as causing the declines in domestic prices (i.e., the domestic industry 's decreasing costs, 
increased efficiency, and technological innovation) were respo nsible for the domestic industry 's 
serious injury. Indeed, China contradictorily argues in response to this question that the "small scale 
of the domestic industry ' and its "inefficiencies " resulted in "higher costs for the domestic industry ", 
explaining w hy "import prices were lower than domestic products ". The logical conclusion of China 's 
argument is that the lower -priced imports were the real culprit in the price declines of domestic 
products over the period of investigation.  
 WT/DS562/R/Add.1  
 
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  U.S. COMMENT ON CHINA 'S RESPONSE TO PANEL QUESTION 57  
 
132. China 's response attempts to undermine the U.S. position by arguing that the United States 
is now asserting for the first time that the zero general duty rate is the actual bound rate established 
during the GATT negotiatio ns and that this position constitutes a post hoc rationalization. However, 
instead of a mere assertion, it is an incontrovertible fact that the U.S. duty rate for imports of CSPV 
products is bound at zero percent. Referring to this fact during WTO dispute settlement proceedings 
cannot constitute post hoc rationalization, as China continues to argue, because its self -evident 
nature is apparent to any user of the WTO 's publicly available systems that contain a Member 's tariff 
bindings. The only thing necessar y to carry out this task is an identification of the tariff lines in 
question for a cross reference within the WTO systems.  
 
133. The USITC 's identification of the relevant tariff lines in the November and Supplemental 
Reports, along with the reference to  their duty -free treatment, is directly related to the tariff 
concession that the United States undertook to bind its rate of duty at zero percent. Accordingly, by 
identifying the tariff treatment under the relevant tariff schedule, the USITC identified th e 
commitment that the United States has taken in the form of a rate of duty bound at zero percent. 
Moreover, as in this dispute, where a Member has undertaken an obligation to bind its rate of duty 
at zero, there can be no legitimate question that the Memb er is prevented from raising its tariffs on 
the imported products causing serious injury and that such a concession per se qualifies as an 
"obligation incurred " necessary for exercising the right under Article XIX of the GATT 1994 to apply 
a safeguard meas ure and temporarily depart from the WTO obligation preventing such action.  
 
CONCLUSION  
 
134. For the foregoing reasons, the United States respectfully requests that the Panel find the 
safeguard measures at issue consistent with the United States ' obligatio ns under Article XIX of the 
GATT 1994 and the Safeguards Agreement.  
 
 
_______________  
 WT/DS5 62/R/Add.1  
 
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  ANNEX  C 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of Brazil  89 
Annex  C-2 Integrated executive summary of the arguments of Canada  91 
Annex  C-3 Integrated executive summary of the arguments of  the European Union  96 
Annex  C-4 Integrated executive summary of the arguments of Japan  100 
Annex  C-5 Integrated executive summary of the arguments of the Republic of Korea  104 
 
 WT/DS562/R/Add.1  
 
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  ANNEX C -1 
INTEGRATED EXECUTIVE SUMMARY OF THE  
ARGUMENTS  OF BRAZIL  
I. Introduction  
 
1. Brazil welcomes this opportunity to present its views before the Panel as a third party in this 
dispute. Brazil does not wish to delve into the factual issues in the current dispute or to take a 
definite position on the arguments submitted by the parties. Rather, Brazil would like to present 
certain comments of systemic interest so as to ensure the proper and consistent interpretation of 
the WTO Agreements, notably the Agreement on Safeguards and the GATT 1994.  
 
2. In this submission, Brazil will comment o n three issues raised by the parties with respect to 
the interpretation of Article XIX of the GATT 1994: (1) the requirements of Article XIX:1(a) of the 
GATT  1994 and the Agreement on Safeguards are cumulative; (2) the analysis of the linkage 
between unfor eseen developments/obligations and increase on imports; and (3) a pplied tariff rates 
prior to WTO Membership should not have a bearing on tariff commitments  upon joining the 
Organization . 
 
I. The Requirements of Article XIX:1(a) of the GATT 1994 and of the Agreement on Safeguards 
are cumulative  
 
3. Brazil believes that, in order for a safeguard measure to be in accordance with the Covered 
Agreements, it must comply with the requirements of both the Agreement on Safeguards and the 
Article XIX of the GATT cumulatively.  
 
4. Brazil is of the view that Article XIX:1(a) of the GATT sets out the factual circumstances, as 
well as the conditions, that must be present in order for a safeguard measure to be legitimate. The 
surge of imports that are allegedly causing  or threatening to cause serious prejudice to the domestic 
industry of the imposing Member must have happened "as a result of unforeseen developments and 
of the effect of the obligations incurred by a contracting party under this Agreement ".  
 
5. Therefore , it is Brazil 's view – and the parties do not seem to dispute it – that, in the absence 
of unforeseen developments, a safeguard measure cannot be said to be in accordance with the 
provisions of Article XIX of the GATT.  
 
II. The analysis of the linkage bet ween unforeseen developments/obligations and increase on 
imports  
 
6. In the present dispute, China argues that the "unforeseen developments " and "the effect of 
GATT obligations " requirements must be demonstrated concurrently with the conditions set out in 
Article 2.1 of the Agreement on Safeguards and be contained in the same report. China further 
questions the timing of the "Supplementary Report ". 
 
7. Brazil, nevertheless, is of the view that, if a Member assesses the unforeseen developments 
and all the ot her safeguards conditions before the final decision to apply the safeguards measures, 
it will have met all the necessary elements to make its decision regarding the application of 
safeguards and will have complied with the relevant provisions of the WTO Ag reements.  
 
8. As there is no clear procedural guidance in the text of Article XIX:1(a) of the GATT 1994 as to 
how the investigating authority must proceed, there should not be too strict a reading for the 
investigating authority to meet this requirement, for instance, to gather the factual circumstances 
and conditions in one single document.  
 
9. Brazil recognizes the logical connection between "unforeseen developments " and "safeguards 
conditions " set forth, respectively, in the first and second clause of Article XIX:1(a) of the GATT, the 
investigating authority must be aware of all conditions and circumstances before enacting the legal 
order to impose safeguards.  WT/DS562/R/Add.1  
 
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  10. Nevertheless, Brazil cannot s ee in the Agreement on Safeguards, nor in Article XIX:1(a), an 
obligation for investigating authorities to address all the safeguards criteria in one single report. If 
the connection between the two clauses occurred in a Supplementary Report, but the inter ested 
parties defence rights have been respected, this procedure should not be considered as a violation.  
 
III. Applied tariff rates prior to WTO Membership should not have a bearing on tariff commitments 
upon joining the Organization  
 
11. China1 seems to  argue that the applied tariff rate on CSPV products has been 0% since at 
least 1987 and, because this tariff reduction has been in place well before the United  States incurred 
obligations under the WTO, the United States could not demonstrate that the inc rease on imports 
would be a result of tariff commitments undertaken.  
 
12. Brazil does not see how an applied tariff rate, which is not a tariff commitment neither under 
the WTO, nor previously under the GATT, can preclude an analysis of the trade effects o f the bound 
tariff rate to which a Member committed upon joining the WTO. Even if a Member 's applied tariff 
was 0% before joining the Organization, this cannot be understood to imply that a tariff binding on 
that good was not an obligation incurred by that  Member, nor that such obligation is not capable of 
preventing it from appropriately responding to an unforeseen surge of imports.  
 
 
 
1 China, FWS, paras. 257 -258. WT/DS562/R/Add.1  
 
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  ANNEX C -2 
INTEGRATED EXECUTIVE SUMMARY OF THE  
ARGUMENTS  OF CANADA  
I. CAUSAL LINK BETWEEN INCREASED IMPORTS AND SERIOUS INJURY  
 
A. Legal standard for "causal link " 
 
1. In US – Steel Safeguards , the Appellate Body elaborated upon the legal standard for 
determining a "causal link " under the  Agreement on Safeguards.1 Article 2.1, read in conjunction 
with Articles 3.1 and 4.2, requires a competent authority 's determination to demonstrate a causal 
link between increased imports and serious injury on the basis of objective evidence2, while 
Article  4.2(c) requires a competent authority to provide a "detailed analysis of the case under 
investigation as well as a demonstration of the relevance of the f actors examined ". When considered 
together, the evidence must demonstrate a "genuine and substantial " relationship of cause and 
effect between increased imports and serious injury.3 
 
2. Once the competent authority has identified and evaluated all relevan t factors, the results 
must be compared with increases in imports to determine whether a genuine and substantial causal 
relationship exists between increased imports and serious injury.4 The Appellate Body has confirmed 
that "it is the relationship betwee n the movements in imports (volume and market share) and the 
movements in injury factors that must be central to a causation analysis and determination ".5 
Accordingly, an overall coincidence in trends exists where an unambiguous inverse correlation is 
present between substantially all of the relevant factors, on the one hand, and the increase in 
imports, on the other.6 
 
3. Regardless of whether or not there is an overall coincidence in trends, the 
Agreement  on Safeguards requires the competent authorities  to produce a report that provides a 
reasoned and adequate explanation of why serious injury is causally linked to imported products.7 
Where a competent authority does identify positive trends in relevant factors showing an 
improvement in the situation of  a domestic industry, the competent authority will need to provide a 
compelling explanation of why and how the domestic industry is injured despite such positive 
trends.8 
 
B. The USITC 's evaluation of causal link  
 
4. The USITC Final Report identified and highlighted a coincidence in trends between many 
relevant import and injury factors, including profitability, productivity, employment and excess 
capacity, which, when viewed together, were said to indicate an overall coincidence in trends.9 The 
USITC also identified positive trends in several injury factors, including increases in domestic cell 
and module production, production capacity, cell capacity utilization, US domestic industry 
shipments, employment for cell manufacturing, and capita l expenditures.10 The USITC was required 
to explain how, notwithstanding the positive increase in capacity and production, and especially in 
 
1 Appellate Body Report, US – Steel Safeguards , paras. 485 -491; and Panel Report s,  
US – Steel Safeguards , paras. 10.290 -10.293.  
2 Ibid. para. 4 89. 
3 Appellate Body Reports, US – Wheat Gluten , paras. 67 -70; US – Lamb , para. 17 9; and Panel Reports, 
US – Steel Safeguards , paras. 10.290 -10.315.  
4 Appellate Body Reports, US – Steel Safeguards,  para. 488; US – Wheat Gluten , paras. 67 -70; and 
US – Lamb , paras. 179 -180; and Panel Reports, US – Steel Safeguards , paras. 10.290 -10.315.  
5 Appellate Body Report, Argentina – Footwear (EC) , para. 144 (emphasis original).  
6 Panel Report s, US – Steel Safeguards , paras. 10.301 -10.302.  
7 Appellate Body Reports, US – Lamb , paras. 103 -104; and US - Steel Safeguards , para. 486. 
8 Panel Reports , India – Certain Measures on Imports of Iron and Steel Products , para. 7.209; and 
US – Steel Safeguards , paras. 10.306 -10.308.  
9 USITC Final Report, Exhibit CHN -2, p. 43.  
10 USITC Final Report, Exhibit CHN -2, pp. 32 -37. WT/DS562/R/Add.1  
 
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  light of these positive trends that occurred at the same time as increased imports, there was still a 
causal link between increased imports and serious injury .11 
 
5. With respect to price effects, the USITC Final Report identified lower -priced imports as a major 
contributor to decreasing financial performance in the domestic industry12, despite noting that less 
than 40 percent of producers indicated having to reduce their prices to compete with lower -priced 
imports.13 In finding a causal link, the USITC Final Report relied on negative pricing effects from 
increased competition driven by growth concentrated in the ut ility segment of the CSPV market.14 
Among other evidence, the USITC considered that the vast majority of the domestic industry 's 
shipments served the residential and commercial installers in 2016, whereas a majority of imports 
were shipped to the utility segment.15 
 
6. In terms of the effect on employment, the USITC Final Report discussed evidence that cell 
manufacturing employment increased over the POI, while module employment decreased overall 
by 3.1% over the POI of 2012 -2016, with employment increasing each year between 2014 
and 2016.16 Nevertheless, the USITC found significant unemployment and underemployment in the 
domestic industry.  
 
7. In accordance with the requirements under Articles 3.1 and 4.2, a competent authority must 
provide a rea soned and adequate explanation of why the serious injury is causally linked to imported 
products.17 Further, where positive trends are present in injury indicators, as in the present case, a 
competent authority is required to provide a "compelling explana tion" for its finding of an overall 
coincidence in spite of such trends.18 In the present dispute, the Panel must examine whether the 
USITC Final Report satisfied these requirements in examining the factors discussed above.  
 
II. NON-ATTRIBUTION  
 
A. Legal standard for non -attribution analysis  
 
8. The non -attribution analysis and its associated legal standard are part of the overall 
requirement to demonstrate the existence of a causal link between increased imports and serious 
injury . To satisfy this p ortion of the standard, it is incumbent on the competent authority to "establish 
explicitly, through a reasoned and adequate explanation, that injury caused by factors other than 
increased imports is not attributed to increased imports ".19 
 
9. Accordingly , the competent authority must separate and distinguish the injurious effects 
caused to the domestic industry by increased imports from those caused by other factors20, then 
attribute "injury " caused by increased imports and by other relevant factors.21 This process ensures 
that any injury caused by factors other than increased imports is not attributed to increased 
imports.22 
 
10. Where several factors are causing injury at the same time, a final determination about the 
injurious effects caused by incre ased imports can only be made if the injurious effects caused by all 
the different causal factors are distinguished and separated.23 Otherwise, any conclusion based 
exclusively on an assessment of only one of the causal factors – increased imports – rests on an 
 
11 Panel Reports , India – Certain Measures on Imports of Iron and Steel Products , para. 7.209; and 
US – Steel Safeguards , paras. 10.306 -10.308.  
12 USITC Final Report, Exhibit CHN -2, pp. 41 -43. 
13 Ibid. p. 42. 
14 Ibid. p. 28. The USITC  cited evidence of a shift in the distr ibution of sales among the  three market 
segments . The commercial segment was the largest segment of US market by installation in 2009, whereas the 
utility segment was three times larger than the commercial and residential segments combined by 2016.  
15 Ibid. p. 28, see also p. 59.  
16 Ibid. pp. 33 -34. 
17 Appellate Body Reports, US – Lamb , paras. 103 -104; and US – Steel Safeguards , para. 486. 
18 Appellate Body Report, Argentina – Footwear (EC) , para. 144;  Panel Report s, India – Iron and Steel 
Products , para. 7.20; US – Wheat Gluten , para. 8.95; and US – Steel Safeguards , paras. 10.303 -10.308. 
19 Appellate Body Report, US – Steel Safeguards , para.451,  quoting Appellate Body Report, US – Line 
Pipe, para. 217.  
20 Appellate Body Report, US – Wheat Gluten , paras. 68 -69. 
21 Ibid. para. 69; and US – Lamb , paras. 179 -180. 
22 Appellate Body Report, US – Steel Safeguards , para. 451.  
23 Appellate Body Report, US – Lamb , para. 179.  WT/DS562/R/Add.1  
 
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  uncertain foundation, because it assumes that the other causal factors are not causing the injury 
which has been ascribed to increased imports.24 
 
11. Only after conducting this analysis can the competent authority finally determine whether a 
causal link, or genuine and substantial relationship of cause and effect, exists between increased 
imports and serious injury suffered by the domestic industry.25 The competent authority must 
provide a reasoned and adequate explanation of how it ensured t hat it did not attribute the injurious 
effects of factors other than imports to the imports included in the measure.26 Otherwise, a panel is 
not in a position to find that the competent authority complied with the non -attribution requirement 
under Article  4.2(b) of the Agreement on Safeguards.27 Moreover, Article 4.2(b) must be read in 
conjunction with the obligation of competent authorities under Article 3.1 to "publish a report setting 
forth their findings and reasoned conclusions reached on all pertine nt issues of fact and law ".28 
 
B. The USITC 's non -attribution analysis  
 
12. With respect to whether the domestic industry failed to serve the utility segment of the 
market, the Panel must take into account the explanation provided by the USITC for rejecting the 
allegation that the domestic industry did not serve this segment, along with the confidential data on 
the US industry 's level of participation in each segment of the market.29 In light of this evidence, 
and in accordance with the legal stand ard discussed above, the Panel must determine whether the 
USITC provided a reasoned and adequate explanation of how imports could have caused injury in 
this segment.  
 
13. Regarding declining government incentive programs, the USITC Final Report repeatedly 
recognized that incentive programs have had an effect on prices and indicated that certain programs 
may have had an effect on demand.30 The USITC further stated that, "we recognize that changes in 
the availability and scope of Federal, state, and local go vernment incentives and regulations continue 
to affect the price of and demand for CSPV products ".31 Yet, the USITC dismissed this factor because 
"demand continued to experience robust growth throughout the POI "32, despite questionnaire 
respondents repor ting that "the availability of these incentives has led to a decrease in the price of 
solar-general electricity, and several attributed the decline in the price of solar -generated electricity 
to the increase in supply of solar -generated electricity in the market place ".33 
 
14. Throughout its Final Report, the USITC placed a high importance on declining prices as an 
injury factor during the POI, with USITC discussions on several factors highlighting evidence that 
the factor had an impact on price.34 In par ticular, the USITC Final Report explained that raw material 
costs constitute the largest component of the total cost of production, accounting for 84.9% of 
module production costs in 2016, while a halving in the costs of polysilicon ingots and wafers resul ted 
in a decline in the production costs of CSPV products over the POI.35 Yet, the USITC found that this 
factor did not explain the injury to domestic industry given declines in net sales values and increases 
in low -priced imports.36 
 
15. Relatedly, many  interested parties reported that declines in the price of conventional energy 
have caused declines in the price of solar -generated electricity.37 While the USTIC did find that 
conventional energy prices may account for some of the decline in the prices o f CSPV products, it 
was determined that these did not explain the consistent observed price declines over the entire  POI. 
 
 
24 Ibid. 
25 Appellate Body Report, US – Wheat Gluten , paras. 69 -70. 
26 Appellate Bod y Report, US – Steel Safeguards , para. 452.  
27 Ibid. citing Appellate Body Report, US – Line Pipe , para. 217.  
28 Appellate Body Report, US – Steel Safeguards , paras. 303 -304. 
29 USITC Final Report, Exhibit CHN -2, pp. 60-61. 
30 See USITC Final Report, Exhibit CHN -2, p. 63: "Questionnaire respondents were divided on whether 
the level or availability of state and local incentives had changed since 2012, but a plurality of them reported 
an increase in the demand for CSPV products due to the availab ility of state and local incentives."  
31 Ibid. p. 61.  
32 Ibid. p. 63.  
33 Ibid. p. 63.  
34 Ibid. pp. 45 -47. 
35 Ibid. p.64.  
36 Ibid. 
37 Ibid. p. 65. WT/DS562/R/Add.1  
 
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  16. In light of the legal standard discussed above, the Panel must examine whether the USITC 's 
non-attribution analysis properly separated and distinguished the effects of these factors on the 
domestic industry from the effects of imported products.38 
 
17. With respect to the collective effects of the non -attribution factors, t he Appellate Body in 
US – Steel Safeguards  found that an examination of collective effects may be necessary if a failure 
to do so would result in the competent authority improperly attributing the effects of other factors 
to imports.39 Accordingly, the Panel must examine whether an anal ysis of the collective effects of 
the non -attribution factors was necessary and, if so, whether the USITC improperly attributed to 
imports the collective effects of other factors of injury.  
 
III. UNFORESEEN DEVELOPMENTS  
 
18. The text of Article XIX:1(a) of  the GATT 1994 establishes a condition that increased imports 
causing or threatening to cause injury must be "as a result of unforeseen developments and the 
effect of obligations incurred by a contracting party under this Agreement ". It is clear from an 
ordinary reading of this text that there is a logical connection between unforeseen developments 
and the effect of obligations incurred, on the one hand, and increased imports on the other hand, 
based on the use of the words "as a result of " linking the two clauses.  
 
19. Emergency actions under Article XIX:1(a) are to be invoked only in situations when, as a 
result of obligations incurred under the GATT 1994, an importing Member finds itself confronted with 
developments it had not "foreseen " or "expected " when it incurred that obligation, leading to 
increased imports causing serious injury.40 In addition, the competent authority 's published report 
must demonstrate that a WTO Member imposing a safeguard measure is subject to an obligation 
under the GATT 1994 a nd explain how that obligation constrains its ability to react to the import 
surge causing injury to its domestic industry.41 
 
20. Therefore, there must be a rational connection or a relational nexus between "unforeseen 
developments and the effect of the obligations incurred " and increased imports . The competent 
authorities must explain this connection or nexus in sufficient detail in their report, in accordance 
with Article 3.1 of the Agreement on Safeguards whereby the competent authorities must "set for th 
their findings and reasoned conclusions on all pertinent issues of fact and law ". 
 
IV. PROVISION OF MEANINGFUL NON -CONFIDENTIAL SUMMARIES  
 
21. A competent authority is obliged to provide meaningful non -confidential summaries of 
confidential information relied on to make a determination . While a competent authority is permitted 
to protect confidential data, it is "still required to provide through means other than full disclosure 
of that data, a reasoned and adequate explanation " of the information and th e conclusions to be 
drawn from it.42 In other words, a competent authority is obliged to provide these explanations to 
the fullest extent possible without disclosing confidential information.43 A competent authority can 
comply with this obligation using an explanation in words and without numbers, summarizing the 
conclusions and analysis to be derived from data within a non -confidential public summary.44 
 
22. In order for interested parties to meaningfully exercise their right to respond to the evidence 
and views presented, they must have timely access to non -confidential versions of the "presentations 
of other parties ". If a competent authority publishes confidential intermediate decisional doc uments 
that are made available to certain parties, but not to other parties who cannot be given access to 
confidential information, this would vitiate the procedural right of the latter parties to "respond to 
the presentations of other parties and to submi t their views ". 
 
 
 
38 Appellate Body Reports, US – Wheat Gluten , para. 69; US – Lamb , para s. 179-180; and US – Steel 
Safeguards , para. 451.  
39 Appellate Body Report, US – Steel Safeguards , para. 490.  
40 Appellate Body Report, Korea – Dairy , paras. 85 -87. 
41 Panel Report, India – Iron and Steel Products , para. 7.89.  
42 Panel Report s, US – Steel Safeguards , para s. 10.272 -10.275 . 
43 Ibid. para. 10.274.  
44 Ibid. para. 10.275.  WT/DS562/R/Add.1  
 
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  23. This obligation is established through a reading of Articles 3.1 and 3.2 together, an approach 
that is in line with the principles of treaty interpretation and the Panel Reports in US – Steel 
Safeguards .45 Article 3.2 states that interested parties provid ing confidential information may be 
requested to furnish non -confidential summaries thereof, ostensibly so that interested parties have 
access to information that could otherwise not be disclosed for reasons of confidentiality . This 
requirement is linked t o Article 3.1, which sets out that interested parties have the procedural right 
to "present evidence and their views " and the right to respond to the presentations (i.e. evidence 
and views) of other parties, which is crucial since interested parties are a primary source of 
information for competent authorities.46 
 
24. While Canada does not have access to the confidential information in this report, if the Panel 
finds that the non -confidential summaries did not provide a reasoned and adequate explanation of  
how the facts support the determination "to the fullest extent possible without disclosing confidential 
information ", this would constitute a violation of Article 3 of the Agreement on Safeguards.47 
 
 
 
45 Panel Reports, US – Steel Safeguards , para.  10.274. See also Appellate Body Repo rts, 
Argentina  – Footwear (EC) , para.  81; US – Gasoline , p. 23; Japan – Alcoholic Beverages II , p. 12; and 
India – Patents (US) , para. 45. 
46 Appellate Body Report, US – Wheat Gluten , para. 54.  
47 Panel Report s, US – Steel Safeguards , para. 10.274 . WT/DS562/R/Add.1  
 
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  ANNEX C -3 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS  
OF THE EUROPEAN UNION  
I. Whether the USITC failed to properly demonstrate that CSPV imports were a cause 
of serious injury to the domestic industry  
 
1. The function of panels comprises an objective assessment of the facts of the case under 
Article  11 of the DSU. When a complainant does not challenge the serious injury determination but 
makes claims only with reg ard to the causal link, a panel, in making an objective assessment of the 
existence or not of the causal link between increased imports and serious injury should not simply 
accept the findings in the serious injury determination as undisputed facts.  
 
2. Similarly, the objective assessment of the matter before a panel, including the applicability of 
and conformity with the relevant covered agreements, means that even if the parties to a dispute 
agree on the approach to a certain legal provision, this does n ot mean that panels or the 
Appellate  Body are bound by that.  
 
3. A clear example is Indonesia – Iron or Steel Products , where both complainants and the 
respondent agreed that the measure at issue was a safeguard measure. The measure at issue was 
taken pur suant to Indonesia 's domestic safeguards law and following those proceedings. However, 
on the basis of the objective characteristics of the measure at issue (Indonesia has no tariff binding 
on galvalume in its WTO Schedule of Concessions), the panel and th e Appellate Body have found 
that the measure at issue cannot be objectively characterized as a safeguard measure (the 
imposition of the specific duty did not suspend any of Indonesia 's GATT obligations, nor did it 
withdraw or modify any of Indonesia 's GATT  concessions).  
 
4. The Panel should take into account all evidence before it. The Panel should ascertain whether 
in establishing the causal link between increased imports and serious injury/threat of injury, the 
competent authorities have separated the effects of imports from the effects of other factors. In 
doing so, the Panel should determine whether the domestic industry 's inability to further improve 
certain aspects of its performance during a period of favourable market conditions is o r not 
attributable to increased imports.  
 
II. Whether the USITC failed to ensure that the injurious effects of other factors were 
not attributed to increased imports  
 
5. The non -attribution analysis in the second sentence of Article 4.2(b) of the 
Agreement  on Safeguards requires that "other " factors are distinguished from increased imports. 
The phrase "other than increased imports " suggests that such factors should be, indeed, different 
from increased imports.  
 
6. Article 4.2(b) presupposes two steps: first , in the competent authorities ' examination of 
causation, the injurious effects caused to the domestic industry by increased imports must be 
distinguished from the injurious effects caused by other factors. Second, the competent authorities 
can then attribute to increased imports "injury" caused by them, separately from other factors.  
 
7. Under Article 3.1 of the Agreement on Safeguards, "the competent authorities shall publish a 
report setting forth their findings and reasoned conclusions reached on all pertinent issues of fact 
and law ". Thus, competent authorities are required to offer a reasoned and adequate explanation of 
their findings.  
 
8. A panel must examine whether the explanation given by the competent authorities in their 
published report is reasoned and adequate without conduc ting a de novo  review of the evidence nor 
substituting the authorities ' conclusions; this does not mean that panels must simply accept the 
conclusions of the competent authorities. They must find that an explanation is not reasoned, or is 
not adequate, if some alternative explanation of the facts is plausible, and if the competent WT/DS562/R/Add.1  
 
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  authorities ' explanation does not seem adequate in the light of that alternative explanation, as stated 
by the Appellate Body Report in US – Lamb . 
 
9. As part of the objective ass essment of the matter before it, a panel has the duty to choose 
the explanation which meets that legal standard. In order to be able to do so, a panel may need to 
look into (1) how competent authorities weighed competing evidence and arguments submitted by  
interested parties in the course of the safeguards investigation; and (2) why they considered the 
evidence of certain interested parties to be more compelling.  
 
III. China 's claims with regard to imports not increased as a result of "unforeseen 
developmen ts" 
 
10. In US – Steel Safeguards , the Appellate Body has stated that the circumstances of unforeseen 
developments within the meaning of Article XIX:1(a) must be demonstrated as a matter of fact, 
together with the conditions mentioned in Article 2.1 of the  Agreement on Safeguards, in the report 
of the competent authority and before a safeguard measure can be applied.  
 
11. Indeed, Article 1 of the Agreement on Safeguards refers to the "measures provided for in 
Article XIX of GATT 1994 ". Article XIX:1(a) of G ATT 1994 contains in the relevant part references to 
"unforeseen developments " and "the effect of the obligations incurred by a [Member] under this 
Agreement ". Thus, all the relevant provisions of Article XIX of the GATT 1994 and the 
Agreement  on Safeguard s should be given their full meaning and their full legal effect.  
 
12. A competent authority would normally clearly show in its findings that the issue of unforeseen 
developments has been examined and would present a reasoned and adequate explanation to th at 
effect, in line with the requirements contained in Article XIX of the GATT 1994 and the 
Agreement  on Safeguards.  
 
13. The competent authorities are required to demonstrate compliance with the first clause of 
GATT Article XIX:1(a) in their report. In a s afeguard investigation, like in an antidumping 
investigation, the relevant documents are those on the competent authorities ' record, which were 
considered when conducting the investigation.  
 
14. Thus, the European Union disagrees with the US that the compe tent investigating authorities 
are under no legal obligation to assess whether there were "unforeseen developments " as a "result 
of the obligations occurred " in their report. The European Union is also reluctant to the US ex -post 
rationalization argument, according to which "unforeseen developments " may be explained for the 
first time in litigation proceedings.  
 
15. The Panel should objectively assess whether the explanations in the USITC Supplemental 
Report with regard to China 's increased manufacturing capacity and to the shifting in production 
from one country to another meet the required standard in order to amount to a demonstration of 
"unforeseen developm ents" and not to a mere allegation.  
 
16. Article XIX:1(a) refers to "as a result of " unforeseen developments and "the effect of " the 
obligations incurred. When something is "a result of " or an "effect of " something else, then it is, 
indeed, a relational nexus between the two elements, which follows a cause and effect logic.  
 
17. Both Article XIX:1(a) of the GATT 1994 and Article 4.2(b) of the Agreement on Safeguards 
contain a causality test, whether it may  be called relational nexus or causal link.  
 
18. However, there are important differences between the two provisions. Under Article XIX:1(a) 
of the GATT 1994, two factual pre -requisites should be demonstrated before any safeguard may be 
applied: (a) the ex istence of unforeseen developments, and (b) the existence of one or several 
obligation(s) under the GATT 1994. These pre -requisites are linked to the very notion of economic 
emergency a safeguard measure responds to.  
 
19. Article 4.2(b) of the Agreement on  Safeguards refers to a subsequent stage, when during the 
investigation a competent authority is called to establish the connection between increased imports 
and serious injury or threat thereof.  WT/DS562/R/Add.1  
 
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  20. Both the pre -requisites of Article XIX:1(a) and the requ irements of Article 4.2(b) are 
conditions for the legality of a safeguard measure, for its consistency with the covered agreements 
and must not be conflated with the two defining characteristics of a safeguard measure.  
 
21. As there may be several obligati ons that apply to the product in question, Article XIX:1(a) 
requires an identification of the specific relevant obligation(s) and their effects. WTO Members ' 
Schedules annexed to the GATT 1994 are made an integral part of that Agreement, pursuant to 
paragr aph 7 of Article II of the GATT 1994. Therefore, any concession or commitment in a Member 's 
Schedule is subject to the obligations contained in Article II of the GATT 1994.  
 
22. Thus, a tariff rate bound at zero percent may have implications for demonstrat ing compliance 
with the requirement emanating from the phrase "of the effect of the obligations incurred " under 
GATT Article XIX:1(a). In most cases, there is a difference between the bound level and the applied 
level of duties, referred to as "water " or "binding overhead ". When the bound level is set at 
zero percent, such a difference does not exist and there is thus much less flexibility in modulating 
the response to an injurious increase in imports.  
 
IV. Whether the USITC failed to provide a sufficient p ublic summary of confidential data 
to allow for interested parties to present a meaningful defence  
 
23. Articles 3.1 and 3.2 of the Agreement on Safeguards establish a balance between the principle 
of due process and the confidentiality of certain aspects of a safeguard investigation. As a safeguard 
investigation addresses an emergency action with regard to imports, and taking into account the 
fact that an investigation is usually framed by precise deadlines under domestic law, the publication 
of the report  without undue delays is in the very nature of a safeguard investigation exercise. 
Though, there is no express obligation to publish the report promptly in Article 3.1.  
 
24. Article 3.1 does not provide for an additional opportunity to comment on the final  report. 
However, such an opportunity may be part of "procedures previously established and made public 
in consonance with Article X of GATT 1994 ". 
 
25. Furthermore, the notification requirements in Article 12 are complementing the obligations 
incumbent on  the competent authorities under Article 3. Under Article 12, the adopting Member shall 
provide adequate opportunity for prior consultations with those Members having a substantial 
interest as exporters of the product concerned.  
 
26. The text of Article 3. 2 provides for the possibility ( "may be requested ", as opposed to "shall 
be requested ") that competent authorities ask for non -confidential summaries from the Parties 
providing confidential information. The European Union considers that this is an importan t element 
for a proper exercise of the rights of defence.  
 
27. A competent authority is obliged to provide these explanations to fullest extent possible 
without disclosing confidential information. This implies that if there are ways of presenting data in 
a modified form (e.g. aggregation or indexing), which protects confidentiality, a competent authority 
is obliged to resort to these options. Conversely, the provision of no data at all is permitted only 
when all these methods fail in a particular case.  
 
V. With regard to virtual panel meetings  
 
28. The European Union welcomes the Panel 's decision to conduct its first substantive meeting, 
including the third party session, online. This is the first time such a solution is adopted, in light of 
exceptional c ircumstances.  
 
29. The Covid -19 pandemic should not indefinitely paralyse the WTO dispute settlement system 
because it is considered that in -person hearings should not be held for public health reasons, or 
because of applicable travel restrictions. Rather,  once the period within which hearings would 
normally be expected has clearly passed, and if there is little prospect of normal operation resuming 
within the immediately foreseeable future, virtual hearings must be organised instead, on an even -
handed basi s in all cases, for all Members.  
 
30. Among the various controlling principles in the DSU, which are sometimes in competition with 
each other, two of the most important are prompt settlement, that is, resolution of the dispute within WT/DS562/R/Add.1  
 
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  the time -frames set o ut in the DSU, and due process, which finds expression in various provisions 
throughout the DSU. The Covid -19 situation requires a reasonable balance to be found between 
these competing principles.  
 
31. Parties and third parties have a right to at least on e meeting or hearing, as indicated in 
Article  10 of the DSU. A second hearing is the normal practice, as foreshadowed in Appendix 3 of 
the DSU, but it is not an absolute right, as demonstrated, for example, by the practice of single 
hearings in compliance and arbitration panel proceedings.  
 
32. Virtual hearings are sufficiently similar to in -person hearings that, against the backdrop of 
Covid -19, panels have the discretion, and indeed the obligation at some point, to organise virtual 
hearings in lieu of in -person hearings. This is the only way to ensure compliance with the principle 
of prompt settlement. This can also be done in a manner that ensures compliance with the principle 
of due process, having regard to the Covid -19 situation. Steps can also be take n to ensure the 
confidentiality of such hearings.  
 
 WT/DS562/R/Add.1  
 
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  ANNEX C -4 
INTEGRATED EXECUTIVE SUMMARY OF THE  
ARGUMENTS  OF JAPAN  
I. OBLIGATIONS RELATED TO "UNFORESEEN DEVELOPMENTS " 
 
1. The requirement to determine whether the increase in imports is the result of "unforeseen 
developments " is an affirmative obligation that is based on the text of the first sentence of 
Article  XIX:1(a) of the GATT 1994. The Appellate Body in Korea – Dairy  clarified that "unforeseen 
developments " are "circumstances which must be demonstrated as a matter of fact in order for a 
safeguard measure to be applied consistently with the provisions of Article XIX of the GATT 1994 ".1 
Thus, the existence of "unforeseen  developments " is one of the express requirements imposed by 
Article XIX:1(a) in order for a safeguard measure to be applied consistent ly with the relevant 
WTO obligations .  
 
2. The phrase "as a result of unforeseen developments " in the first sentence of Article XIX:1(a) 
indicates that such developments are "circumstances " that must exist before the "increased " 
imports, because the increased imports must be a "result " of the "unforeseen developments ". A 
"result " is defined as "an effect, issue, or outcome from some action, process or design ". Thus, 
logically, the unforeseen developments must precede the increase in imports. This, in turn, means 
that the unforeseen developments are circumstances that must exist before a safeguard me asure is 
applied. The requirement that unforeseen developments exist before application of a safeguard 
measure is therefore firmly grounded in the text of Article XIX:1(a) of the GATT 1994 and follows 
from the ordinary meaning of the terms used in that pro vision .  
 
3. Furthermore, competent authorities must make affirmative findings as to the existence of 
"unforeseen developments " in their published reports, as required under Articles 3.1 and 4.2(c) of 
the Safeguards Agreement.2 An authority must provide a  "reasoned and adequate explanation " of 
how the facts therein support its determination of "unforeseen developments ".3 A published report 
that does not discuss or offer any explanation as to why certain factors mentioned in it are to be 
considered "unfore seen developments " cannot be held to demonstrate that the safeguard measure 
has been applied "as a result of unforeseen developments ".  
 
4. As to the timeframe for assessing the "unforeseen developments ", panels and the 
Appellate  Body have considered that,  to be consistent with the text of Article XIX:1(a) of the 
GATT  1994, such developments had to be unforeseen at the time the importing Member negotiated 
the relevant tariff concessions (usually the time at which the Member concerned became a Member 
of  the  WTO).4 The importing Member must demonstrate that, at that time, it did not foresee the 
developments that gave rise to the increased quantity of imports.5 Therefore, Japan is of the view 
that certain circumstances under the first clause of Article XIX:1 (a) of the GATT 1994 – namely, 
unforeseen developments and obligations incurred by a Member under the GATT 1994, including 
tariff concessions – must be demonstrated as a matter of fact, as part of the substantive obligations 
before a safeguard measure can be lawfully imposed.  
 
5. Thus, in accordance with  Articles 3.1 and 4.2(c) of the Safeguards Agreement and 
Article  XIX:1(a) of the GATT 1994, the competent authorities ' published report must contain, at a 
minimum, some discussion as to  why the alleged "unforeseen developments " were "unexpected " for 
the importing Member concerned at the time that Member negotiated the tariff concessions at issue. 
This required discussion forms part of "their findings and reasoned conclusions reached on all 
pertinent issues of fact and law " under Article 3.1 of the Safeguards Agreement.6 It should be also 
 
1 Appellate Body Report, Korea  – Dairy , para. 85. See also Appellate Body Report, Argentina – 
Footwear  (EC), para. 92.  
2 Appellate Body Report, US – Lamb , para. 72.  
3 Appellate Body Report, US – Steel Safeguards , paras. 279, 290.  
4 Appellate Body Reports, Argentina – Footwear (EC) , para. 96; and Korea – Dairy , para. 89.  
5 Panel Report, Dominican Republic – Safeguard Measures , para. 7.128 and footnote 210.  See also 
Appellate Body Report, Korea – Dairy , para. 85.  
6 Panel Report, Dominican Republic – Safeguard Measures , para. 7.141.  WT/DS562/R/Add.1  
 
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  noted that "[a] mere phrase in a conclusion, without supporting analysis of the exist ence of 
unforeseen developments, is not a substitute for a demonstration of fact ".7 
 
6. In this case, as China noted8, although the USITC Final Report does not contain any express 
discussion of "unforeseen developments ", the USITC Supplemental Report app arently refers to the 
issue of "unforeseen developments ". The report notes that China implemented "the industrial 
policies  … favoring renewable energy product manufacturing, including CSPV products "9, including 
subsidies10, which resulted in the signific ant increase of "capacity and production of CSPV products 
in China "11, mainly "directed to markets outside of China ".12 It also mentions a series of trade 
remedies13 intended to address the relevant "imports from China and Taiwan " and concludes that 
these imports materially injured the domestic industry. The Panel should examine if these 
statements fulfill the United States ' obligation to include in the "findings and reasoned conclusions " 
a discussion of the "developments " that were not foreseen when the relevant tariff concessions were 
negotiated, and that gave rise to the alleged increase in imports.  
 
7. In this regard, China emphasized the "failure of the main USITC Report (dated 
13 November  2017) to address this issue at all " and claimed that "the belated and brief later 
discussion " in the USITC Supplemental Report (dated 27 December 2017) is a "fatal flaw ".14 
Considering the text of Article 3.1 of the Safeguards Agreement ( "[t]he competent authorities shall 
publish a report setting forth their finding and reasoned conclusions ") and its function (due process 
objective in the safeguard investigation), it would be ideal to include all of the "findings and reasoned 
conclusions " in one single report, but issuing more than one report is not prohibited under 
Articles  3.1 and 4.2(c) of the Safeguards Agreement .  
 
II. "LOGICAL CONNECTION " BETWEEN THE UNFORESEEN DEVELOPMENTS AND THE 
SERIOUS INJURY  
 
8. The clause "as a result of unforeseen developments " in Article XIX:1(a) o f the GATT 1994 has 
been interpreted to require a "logical connection " between the "unforeseen developments " identified 
by an authority and the increase in imports causing or threatening to cause serious injury. Based on 
the plain language of Article XIX:1 (a) of the GATT 1994 and the requirement in Article 4.2(c) of the 
Safeguards Agreement, an authority 's published report must not only demonstrate the existence of 
"unforeseen developments ", but it must also explain how these "unforeseen developments " had the 
effect of resulting in an increase in imports that has caused or is threatening to cause serious injury 
to the domestic industry. In other words, the competent authorities are required to demonstrate the 
"logical connection " between these two elements in their published reports, in accordance with 
Article XIX:1(a) of the GATT 1994, as well as Articles 3.1 and 4.2(c) of the Safeguards Agreement .  
 
9. Japan further notes that, in order to substantiate the explanation of the "logical connection ", 
the increased imports must be found to cause or threaten to cause serious injury to the "domestic 
industry " of the importing Member. The "domestic industry " is defined under Article 4.1(c) of the 
Safeguards Agreement as the domestic producers "of the like or directly competitive products ". 
Japan is therefore of the view that the competent authorities must show how the "unforeseen 
developments " have modified the competitive relationship between the im ported and domestic 
products to the detriment of the latter and to such a degree as to result in an increase in imports 
that causes, or threatens to cause, serious injury to the domestic industry. If the "unforeseen 
developments " have not modified this com petitive relationship, it should follow that the increase in 
imports alone did not cause injury to the domestic industry because imports did not replace sales of 
the domestic like product.  
 
10. Japan 's view is consistent with the function of Article XIX o f the GATT 1994 and the purpose 
of the Safeguards Agreement. Taking into account the tariff concessions Members make on a 
product -by-product basis when entering the WTO, safeguard measures function as a "safety net " to 
 
7 Panel Report, Argentina – Preserved Peaches , para. 7.33.  
8 China's First Written Submis sion, paras. 245 -248. 
9 USITC Supplemental Report, Exhibit CHN -6, page 5.  
10 Ibid, page 6.  
11 Ibid, page 7.  
12 Ibid, page 7.  
13 Ibid, pages 5 -6. 
14 China's First Written Submission, para. 280.  WT/DS562/R/Add.1  
 
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  convince interested parties to recogn ize the importance of "the need to enhance rather than limit 
competition in international markets " (Preamble of the Safeguards Agreement).  
 
11. At the same time, if there are "unforeseen developments " affecting the competitiveness of the 
domestic industry  and which result in increased imports, a Member would need some time to 
"prevent or remedy such injury " (Article XIX:1(a) of the GATT 1994) by way of a "structural 
adjustment " (Preamble of the Safeguards Agreement) that restores the industry 's internation al 
competitiveness. That is the logical reason why a safeguard measure is designed to be implemented 
where "unforeseen developments " are connected to increased imports that cause serious injury, but 
only "to the extent and for such time as may be necessary to prevent or remedy such injury " 
(Article  XIX:1(a) of the GATT 1994).  
 
12. The competent authorities must explain not only why the event constitutes an "unforeseen 
development ", but also how such event actually resulted in the increased imports that caused serious 
injury or threat thereof to the domestic industry.  Also, the competent authorities must show how 
the "unforeseen develop ments " have modified the competitive relationship between the imported 
and domestic products to the detriment of the latter and to such a degree as to result in an increase 
in imports that cause, or threaten to cause, serious injury to the domestic industr y.  
 
13. In this case, the USITC Supplemental Report seems to identify as "unforeseen developments " 
China 's industrial policies favoring renewable energy product manufacturing, including CSPV 
products. If the Panel recognizes that these factors can qualify  as "developments " unforeseen at the 
time of the relevant tariff negotiation, the Panel must examine the logical connection between such 
"developments " and the increase in imports causing serious injury to the domestic industry.  
 
14. China has identified a  few issues that indicate the United States ' failure to provide an adequate 
explanation of the required "logical connection ". In particular, China notes the United States ' (i) 
improper treatment of positive or diverse trends in the injury factors15; and ( ii) lack of a reasoned 
and adequate explanation of the non -attribution factors16, such as the different market segments 
targeted by the domestic industry and imports, domestic producers ' business decisions, and quality 
issues with the domestic products. Although China discusses these issues with regard to the 
requirement for a causal link between imports and serious injury under Articles 2.1, 3.1 and 4.2(b) 
of the Safeguards Agreement, th ese issues also concern the required "logical connection " between 
the "unforeseen developments " and the increase in imports causing or threatening to cause serious 
injury .  
 
15. China insists that the US domestic industry did not have the capacity to meet the "explosive 
growth in demand " in the utility segment because of the industry 's own business choice and that the 
"demand " was thus largely served by imports.  If, as China insists, the market segments of domestic 
products and imported products are so diff erent as to raise doubts about the products ' competitive 
relationship, a question could arise as to whether the United States has fulfilled the "logical 
connection " requirement. China emphasizes the "important distinctions " between the utility segment 
and other segments, and that the "domestic shipments were not displaced " by imports, since the 
domestic industry did not adjust to, and could not compete in, that "distinct " utility segment.17  
 
16. The crucial issue here is then, whether the competitive rela tionship between the imported and 
domestic products has been modified by the alleged "unforeseen developments " in reality, whether 
such modification actually resulted in an increase in imports that caused serious injury to the 
domestic industry, and whethe r the Member is prevented from taking measures to offset it (e.g.,  the 
increase in the applicable import duty rate due to its tariff bindings).  
 
17. Unless the authority finds that the "unforeseen developments " have modified the competitive 
relationship to the disadvantage of the domestic products, it should follow that any concurrent 
increase in imports must not have displaced sales of the domestic product thus causing "injury " to 
the domestic industry, which c ould be prevented or remedied by suspending, withdrawing or 
modifying the relevant tariff concession. The second clause of Article XIX:1(a) of the GATT 19 94 
provides "any product is imported  … in such increased quantities and under such conditions as to 
cause or threaten serious injury ". These terms should be interpreted as follows: if imports have not 
 
15 China's First Written Submission, paras. 111 -158. 
16 China's First Written Submission, paras. 181 -226. 
17 China's Responses to Panel's Questions, paras. 9-29. WT/DS562/R/Add.1  
 
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  displaced domestic products in the market, the increase in imports, if any, must not have been "in 
such … quantities " nor "in such conditions " "as to cause o r threaten serious injury " to the domestic 
industry. Japan is of the view that this is the "causal link " required under Article 4.2(b) of the 
Agreement on Safeguards.  
 
18. Thus, the "causal link " requirement under Article 4.2(b) of the Agreement on Safeguards is, 
according to the text, between "increased imports " and "serious injury or threat thereof ", both of 
which must result from the "unforeseen development ", i.e., at the end of the flow of the  "logical 
connection " required under Article XIX:1(a) of the GATT 1994, as discussed above, and be linked to 
each other through the changes in the competitive relationship resulted from the "unforeseen 
development ". Article XIX:1(a) of the GATT 1994, which  constitutes part of the context for 
Article  4.2(b), requires this interpretation. Japan further notes that this understanding makes clear 
why the consideration of "other factors " is required.  
 
19. Also, even if China 's industrial policy is found to have r esulted in a change in the competitive 
relationship between imports from China and the domestic like products, then the United States 
still must explain how such "developments " resulted in increased imports of a product that warrant 
the application of safe guard measures "irrespective of its source " (Article 2.2 of the 
Safeguards  Agreement). To justify a global safeguard measure, the United States must therefore 
explain how the industrial policies of China have resulted in an increase in imports from both Ch ina 
and other exporting countries, including Mexico and Korea, which caused serious injury by changing 
the competitive relationship between the imports from all of these Members and the domestic like 
products.  
 
20. In this regard, the USITC Supplemental Re port seems to imply a correlation between a series 
of US trade remedy measures on CSPV exports from China and the capacity development of 
Chinese  producers in third countries.18 The Panel should examine if the United States ' statements, 
including the abov e, fulfill its obligation to explain  how "developments " in one Member resulted in 
the increased imports from all relevant Members as to cause injury.  
 
III. PUBLICATION OF NON -CONFIDENTIAL INFORMATION  
 
21. As for the issue of whether the competent authorities should publish non -confidential versions 
of intermediate decisional documents during the investigation, Japan notes that the third sentence 
of Article 3.1 of the Agreement on Safeguards refers to "a rep ort setting forth their findings and 
reasoned conclusions reached on all pertinent issues of fact and law ", but does not directly indicate 
whether "non-confidential versions " are required. Japan does not contend that any specific measures 
such as preparing  a preliminary report and "promptly " publishing a non -confidential version thereof 
are always required. Japan maintains that how competent authorities must treat confidential 
information, or whether such treatment violates Article 3, must be analysed in li ne with the ultimate 
due process function of Article 3, and the nature and importance of the confidential information at 
issue.  
 
22. In this respect, Japan maintains, and the Parties seem to agree, that neither Article 3.1 
nor 4.2(c) of the Safeguards Agr eement requires that the report must address every piece of 
evidence and that every minor error would invalidate the otherwise substantiated conclusions. 
Perfection is not the standard to meet under the Safeguards Agreement. The text of Article 3.1 
relevan tly requires only "findings and reasoned conclusions " on all "pertinent " issues of fact and law.  
 
23. Japan notes that which issues of fact and law that are "pertinent " and what constitutes 
"reasoned conclusions " should be analyzed in parallel with the co re requirement in Article XIX:1(a) 
of the GATT 1994 – the existence of a "logical connection " between the "unforeseen developments " 
and the increase in imports causing or threatening to cause serious injury. One minor error on 
marginal facts may not affect  the "logical connection ". This being said, certain facts and evidence 
may be essential to the establishment of the basis for the finding of the required "logical connection ". 
This is a "pertinent " issue that must be supported by a sufficiently "reasoned c onclusion ". A 
substantial error in the assessment of such "pertinent " factual issues, for example, will call into 
question the affirmative conclusions on the "logical connection ", pursuant to Article 3.1 of the 
Safeguards Agreement.  
 
18 USITC Supplemental Report, Exhibit CHN -6, pages 6 -9. WT/DS562/R/Add.1  
 
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  ANNEX C -5 
INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS  
OF THE REPUBLIC OF KOREA  
I. INTRODUCTION  
 
1. Korea is participating in this dispute because of its systemic interest in the proper 
interpretation of the legal disciplines applying to Members ' safeguard measures taken under 
Article  XIX of the General Agreement on Tariffs and Trade ( "GATT ") 1994 and the 
Agreement  on Safeguards.  
 
2. It is important to underscore at the outset that safeguard measures are "extraordinary 
remedies " allowed by the WTO covered agreements in "emergency situations " as they restrict 
imports from other Members in the absence of any allegation of unfair trade practices.1 Indeed, 
safeguard measures are intended to provide temporary relief to industries suffering economic harm 
that have been caused by an unexpected surg e in imports . Safeguards are available to Members as 
an insurance mechanism if unexpected harm is caused by trade liberalization, in particular as a 
result of the lowering of import tariffs under the GATT 1994 . The unforeseen nature of the 
developments tha t result in the increased imports is an essential aspect of this emergency insurance 
mechanism.  
 
3. Thus, safeguards are of a fundamentally different nature than the unfair trade -related forms 
of contingent trade protection (i.e. anti -dumping and anti -subsidy/countervailing duty measures) . 
This fundamental difference in nature cannot be ignored . Otherwise safeguards would effectively 
become just an easier -to-use form of trade remedy, as it would do away with complex dumping and 
subsidy calculations while al lowing for the same remedy . Safeguards are, and should remain, the 
exceptional, temporary adjustment -related insurance remedy that they were meant to be.  
 
II. APPLICABLE STANDARD OF REVIEW  
 
4. The general standard of review contained in Article 11 of the D ispute Settlement 
Understanding ( "DSU") is applicable also to disputes under the Agreement on Safeguards.2 Pursuant 
to this provision, a WTO panel is required to make an objective assessment of the matter before it, 
including an objective assessment of th e facts of the case and the applicability of and conformity 
with the relevant agreements . In the specific context of disputes brought under the 
Agreement  on Safeguards, this standard has been interpreted to mean that:  
 
[P]anels must examine whether the co mpetent authority has evaluated all relevant 
factors; they must assess whether the competent authority has examined all the 
pertinent facts and assessed whether an adequate explanation has been provided as to 
how those facts support the determination; and they must also consider whether the 
competent authority 's explanation addresses fully the nature and complexities of the 
data and responds to other plausible interpretations of the data.3 
5. Panels must also examine whether the Member imposing a safeguard  measure provided 
"explicit " explanations in the sense that they are "clear and unambiguous " and do "not merely imply 
or suggest an explanation ". This review is to be based on the published report(s), which must contain 
the "reasoned conclusions ", "detaile d analysis ", and "demonstration of the relevance of the factors 
examined ".4 
 
1 Appellate Body Reports, US – Line Pipe , para. 80; Korea – Dairy , para. 86; US – Steel Safegu ards, 
para. 347; and Indonesia  – Iron or Steel Products , para. 5.53.  
2 Appellate Body Reports, Argentina – Footwear (EC) , para. 120; US – Lamb , paras. 100 -102; and 
Panel  Report, Dominican Republic – Safeguard Measures , para. 7.4.  
3 Appellate Body Reports, US – Cotton Yarn , para. 74; Argentina – Footwear (EC) , para. 121; 
US – Lamb , para. 103; and US – Wheat Gluten , para. 55.  
4 Appellate Body Report, US – Steel Safeguards , para. 304.  WT/DS562/R/Add.1  
 
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  III. PROPER INTERPRETATION OF ARTICLES 2.1,  3.1,  AND 4.2( B) OF THE AGREEMENT ON SAFEGUARDS 
FOR ESTABLISHING A CAUSAL LINK BETWEEN THE INCREASED IMPORTS AND THE SERIOUS INJURY TO T HE 
DOMESTIC INDUSTRY  
 
6. To make a proper causation determination under the Agreement on Safeguards, Korea 
considers the following aspects are important to bear in mind.  
 
7. First, the Appellate Body has explained that there must be a "genuine and substantial 
relationship of cause and effect " between the increased imports and the serious injury to the 
domestic industry, and that the requirement implies that the increased impor ts must have 
contributed to "bringing about ", "producing " or "inducing " the serious injury of threat thereof.5 
 
8. The relationship between the "movements " in imports and the "movements " in injury factors 
is central to finding causation . In Argentina – Footwear (EC) , the Appellate Body agreed with the 
panel that "the words 'rate and amount ' and 'changes ' in Article 4.2(a) mean that 'the trends  -- in 
both the injury factors and the imports  -- matter as much as their absolute levels '", and that "it is 
the relationship between the movements in imports (volume and market share) and the movements 
in injury factors that must be central to a causation analysis and determination ".6 
 
9. In US – Steel Safeguards , the panel found that upward movements in imports should normally 
occur at the same time as downward movements in injury factors in order for coincidence to be 
indicative of a causal link.7 While such a coincidence by itself cannot prove ca usation, an absence of 
a coincidence in time would create serious doubts as to the existence of a causal link, and would 
require a very compelling analysis of why causation still is present.8 This is also supported by the 
way in which the causation requir ement is interpreted in the similar context under the 
SCM Agreement and the Anti -Dumping Agreement.9 
 
10. As the panel explained in US – Steel Safeguards , the "overall  coincidence is what matters and 
not whether coincidence or lack thereof can be shown in relation to a few select factors which the 
competent authority has considered ".10 This means that the competent authorities must look at "the 
overall  trends in import s and the overall  trends in serious injury factors pertaining to the overall 
situation of the industry over the period of investigation " to see whether "there is a general 
coincidence between the trends in injury factors and the trends in imports which wou ld support a 
finding by the investigating authority of a causal connection between increased imports and serious 
injury ".11 Thus, the competent authorities must examine the trends for all injury factors in order to 
be in a position to determine whether th ere is a coincidence between the trends in imports and the 
trends in injury factors.  
 
11. Second, the terms "under such conditions " in Article 2.1 has been interpreted as requiring an 
examination of the conditions of competition between the imported produc t and the domestic like 
product in order to support a determination of causation.12 A proper examination of price 
developments between the increased imports and the like domestic product is an essential aspect 
of assessing the conditions of competition . The panel in US – Steel Safeguards found that proper 
consideration of prices "is an important, if not the most important, factor in analyzing the conditions 
of competition in a particular market ".13 
 
12. In the present case, the USITC found that increased imports are a substantial cause of serious 
injury to the domestic industry of solar products . Korea invites the Panel to examine the USITC 's 
analysis with the above interpretative guidance in mind.  
 
5 Appellate Body Report, US – Wheat Gluten , paras. 67 -69. 
6 Appellate Body Report, Argentina – Footwear (EC) , para. 144 (emphasis original).  
7 Panel Report, US – Steel Safeguards , para. 10.299.  
8 Appellate Body Report, Argentina – Footwear (EC) , para. 144; and Panel Report, Argentina – Footwear 
(EC), para. 8.238.  
9 See, e.g. Appellate Body Report, US – Softwood Lumber IV (Article 21.5 – Canada) , para. 132.  
10 Panel Report s, US – Steel Safeguards , para. 10.302 (emphasis original); see also, Panel Report s, 
US – Wheat Gluten , paras. 8.97, 8.101.  
11 Panel Report, US – Wheat Gluten , para. 8.97 (emphasis original).  
12 Appellate Body Report, Argentina – Footwear (EC) , para. 145; and Panel Reports, Argentina – 
Footwear (EC) , para. 8.229; US – Wheat Gluten , para. 8.91; US – Lamb , para. 7.232; and US – Steel 
Safeguard , paras. 10.313 -10.321.  
13 Panel Report s, US – Steel Safeguards , para. 10.320.  WT/DS562/R/Add.1  
 
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  IV. PROPER INTERPRETATION OF ARTICLES 2.1,  3.1,  AND 4.2( B) OF THE AGREEMENT ON SAFEGUARDS 
WITH RESPECT TO THE NON -ATTRIBUTION ANALYSIS  
 
13. Korea notes that, in order to make a proper causation determination, competent authorities 
are required to ensure that, when factors other than increased imports are causing  injury to the 
domestic industry at the same time, any injury from such other factors must not be attributed to 
the increased imports.14 This non -attribution requirement requires the separation and distinguishing 
of the injurious effects of the known other injury factors from the injury caused by the increased 
imports.15 This requires competent authorities to "identify " and to sufficiently "explain " the nature 
and extent of the injurious effects of the other factors.16  
 
14. Korea considers the following two aspects are important to recall.  
 
15. First, to ensure that the injurious effects caused by all the different causal factors are 
distinguished and separated from the increased imports, the Appellate Body has clarified that 
authorities must "establish explicitly, through a reasoned and adequate explanation " that "injury 
caused by factors other than increased imports is not attributed to increased imports ". This 
explanation must be "clear and unambiguous " and must be explained in "express terms ".17  
 
16. Second, WTO panels have found that the Agreement on Safeguards and relevant jurisprudence 
anticipate that quantification of the impact of the different injury factors can be particularly desirable 
in cases involving complicated factual situation s, especially where qualitative analyses may not be 
sufficient to understand fully the dynamics of the relevant market.18 The panel in US – Steel 
Safeguards even considered that "quantification may, in certain cases, be entailed in the obligation 
on compe tent authorities to establish non -attribution 'explicitly ' on the basis of a reasoned and 
adequate explanation ", and may thus be "necessary to rebut allegedly plausible alternative 
explanations that have been put forward ".19 
 
17. Korea invites the Panel t o examine the USITC 's analysis with the above interpretative guidance 
in mind.  
 
V. PROPER INTERPRETATION OF ARTICLE XIX:1(A)  OF THE GATT  1994  THAT THE INCREASED IMPORTS 
MUST BE THE RESULT OF "UNFORESEEN DEVELOPMENTS " AND OF THE "EFFECT OF THE OBLIGATIONS 
INCURRED " 
 
18. Korea notes that establishing that the increased imports were the result of "unforeseen 
developments " and "the effect of the obligations incurred [under the GATT 1994] " are foundational 
requirements to justify the imposition of a safeguard measure.  
 
A. "Unforeseen Developments " that Resulted in Such Increased Imports  
 
19. Korea notes that Article 1 of the Agreement on Safeguards provides that this Agreement 
"establishes rules for the application of safeguard measures which shall be understood to mean 
those measures provided for in Article XIX of GATT 1994 ". In turn, Article XIX:1(a) of the GATT 1994 
enumerates the circumstances and conditions that must be met for the impo sition of a safeguard 
measure, providing in relevant part that an "emergency action on imports of particular products " in 
the form of a temporary suspension of concessions is possible:  
 
If, as a result of unforeseen developments and of the effect of the ob ligations incurred  
by a [WTO Member] under this Agreement , including tariff concessions, any product is 
being imported into the territory of that [WTO Member] in such increased quantities 
and under such conditions as to cause or threaten serious injury to domestic producers 
in that territory of like or directly competitive products. (emphasis added)  
 
14 Appellate Body Reports, US – Line Pipe , para. 208; and US – Steel Safeguard , para. 485.  
15 Appellate Body Report, US – Line Pipe , para.  215 (referred to in Panel Report, Ukraine – Passenger 
Cars, para. 7.316).  
16 Appellate Body Report, US – Line Pipe , para. 215 (referred to in Panel Report, Ukraine – Passenger 
Cars, para. 7.316).  
17 Appellate Body Report, US – Line Pipe , paras. 200 -222. 
18 See, e.g. Panel Report s, US – Steel Safeguards , para. 10.336.  
19 Panel Report s, US – Steel Safeguards , para. 10.340.  WT/DS562/R/Add.1  
 
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  20. Given the reference in Article 1 of the Agreement on Safeguards to Article XIX of the 
GATT  1994, Korea agrees with the Appellate Body that the demonstration  of "unforeseen 
developments " is a prerequisite for the imposition of a safeguard measure.20 
 
21. It is not sufficient for a competent authority to satisfy itself merely that "unforeseen 
developments " exist as a factual matter . Rather, the existence must be found affirmatively and 
supported by reasoned conclusion in the published report.21 
 
22. What constitutes "unforeseen developments " must be determined on a case -by-case basis . 
The key condition for identifying "unforeseen developments " is that they were unexpected  at the 
time the imposing Member incurred the relevant GATT obligation.22 The standard is based on what 
the Member in question could not have reasonably foreseen or expected when it incurred the relevant 
GATT obligations – which for the United States was at the completion of the Uruguay Round on 
1 January 1995.  
 
23. It is particularly important to distinguish the unforeseen developments, on the one hand, from 
the increased imports, on the other . Since a competent authority must  establish that the increased 
imports are a result of the unforeseen developments, an increase in imports cannot, by definition, 
constitute the unforeseen developments . That would be circular and inconsistent with the legal 
disciplines.23 
 
B. The "Effect of the Obligations Incurred " under the GATT 1994  
 
24. Separately from determining the existence of "unforeseen developments ", Article XIX of the 
GATT 1994 also provides that the increased imports must be the "effect of the obligations incurred " 
by the Memb er in question under the GATT 1994 . Thus, the report of the competent authorities must 
clearly identify and explain which the relevant "obligations incurred " are that resulted in the 
increased imports.  
 
25. Since there are two -parts to this obligation (i.e . identification and explaining the link with the 
increase imports), it does not suffice for a Member to state merely that the imports in question are 
subject to certain tariff bindings . Rather, it must be demonstrated that the increased imports were 
a result of the tariff bindings.24 
 
26. The panel in Dominican Republic – Safeguard Measures added that it falls on the Member in 
question "to identify those obligations incurred under the GATT 1994 that are linked with the increase 
in imports causing serious injury to its domestic industry ", and that "[t]hese findings and conclusions 
must be reflected in the report of the competent authority ".25 In that dispute, the panel found that 
the Dominican Republic incurred obligations under the GATT 1994 with respect to the covered 
products as it had granted a tariff concession of 40% ad valorem  on those products, but that the 
Dominican Republic 's investi gation report did not link this element with the alleged increased 
imports.26 Thus, it was not possible for the panel to conclude that the Dominican Republic complied 
with Article XIX:1(a) of the GATT 1994.27 
 
27. Korea invites the Panel to examine the U SITC's analysis on "unforeseen developments " and 
"the effect of the obligations incurred [under the GATT 1994] " with the above interpretative guidance 
in mind.  
 
 
20 See, e.g. Appellate Body Report, US – Lamb , para. 72.  
21 Appellate Body Report, US – Lamb , paras. 72, 76.  
22 Appellate Body Reports, Argentina – Footwear (EC) , para. 93; and Korea – Dairy , para. 86.  
23 Panel Reports, Ukraine – Passenger Cars , para. 7.83; and Indonesia – Iron or Steel Products , 
para. 7.51.  
24 Panel Report, Ukraine – Passenger Cars , para. 7.96.  
25 Panel Report, Dominican Republic – Safeguard Measures , para. 7.146.  
26 Panel Report, Dominican Republic – Safeguard Measures , paras. 7.147, 7.149.  
27 Panel Report, Dominican Republic – Safeguard Measures , para. 7.149.  WT/DS562/R/Add.1  
 
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  VI. CONCLUSION  
 
28. Korea welcomes the opportunity to present its views on the legal standards that must be 
satisfied to justify the imposition of extra -ordinary, emergency safeguard measures under the 
Agreement in Safeguards and Article XIX of the GATT 1994 . This dispute presents an important 
opportunity to confirm that strict adherence t o these standards is essential to avoid that safeguards 
become simply another easy -to-use form of contingent trade protection.  
 
 
__________