WT/DS529/R  
 
4 December  2019 
(19-8304) Page: 1/59 
  Original: English  
 
  
AUSTRALIA – ANTI -DUM PING MEASURES ON A4 COPY PAPER  
REPORT OF THE PANEL  
 
 
 WT/DS529/R  
 
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  TABLE OF CONTENTS  
1   INTRODUCTION  ................................ ................................ ................................ ...........  9 
1.1   Complaint by Indonesia  ................................ ................................ ................................ . 9 
1.2   Panel establishment and composition  ................................ ................................ ..............  9 
1.3   Panel proceedings  ................................ ................................ ................................ .........  9 
1.3.1    General  ................................ ................................ ................................ ....................  9 
1.3.2    Requests for enhanced third -party rights  ................................ ................................ .... 10 
1.3.3    Amicus curiae  submission  ................................ ................................ .........................  10 
2   FACTUAL ASPECTS ................................ ................................ ................................ ...... 10 
2.1   The measures at issue  ................................ ................................ ................................  10 
2.2   Other factual aspects  ................................ ................................ ................................ .. 11 
3   PARTIES' REQUEST S FOR FINDINGS AND R ECOMMENDATIONS  ................................ . 11 
4   ARGUMENTS OF THE  PARTIES  ................................ ................................ ....................  12 
5   ARGUMENTS OF THE  THIRD PARTIES  ................................ ................................ .........  12 
6   INTERIM REVIEW  ................................ ................................ ................................ ....... 12 
7   FINDINGS  ................................ ................................ ................................ ..................  12 
7.1   General principles regarding treaty interpretation, the applicable standard of review, and 
burden of proof  ................................ ................................ ................................ ..................  12 
7.1.1    Treaty interpretation  ................................ ................................ ................................  12 
7.1.2    Standard of review ................................ ................................ ................................ ... 12 
7.1.3    Burden of proof  ................................ ................................ ................................ ....... 13 
7.2   Whether the Anti -Dumping Commission's decision to disregard Indonesian  
producers' domestic sales as the basis for normal value was inconsistent with Arti cle 2.2  
of the Anti -Dumping Agreement  ................................ ................................ ..........................  13 
7.2.1    Introduction  ................................ ................................ ................................ ............  13 
7.2.2    The Anti -Dumping Commission's determination to disregard domestic sales as the  
basis for normal value  ................................ ................................ ................................ ........  14 
7.2.3    Whether the Anti -Dumping Commission's determination of a situation in the market  
for A4 copy paper was inconsistent with Article  2.2 of the Anti -Dumpin g Agreement  ..................  16 
7.2.3.1    Introduction  ................................ ................................ ................................ .........  16 
7.2.3.2    "Particular market situation" is an undefined term in the Anti -Dumping  Agreement  ....... 16 
7.2.3. 3   Situations that distort input costs  ................................ ................................ ............  19 
7.2.3.4    Situations not having an exclusively unilateral impact on domestic market sales ...........  21 
7.2.3.5    Situations arising from government action  ................................ ...............................  23 
7.2.3.6    Conclusion in respect of "particular market situation"  ................................ ................  26 
7.2.4    Whether the Anti -Dumping Commission properly determined that domestic market  
sales did "not permit a proper comparison"  ................................ ................................ ...........  27 
7.2.4.1    Introduction  ................................ ................................ ................................ .........  27 
7.2.4.2    Requirement to  account for effects on export prices by the particu lar market situation 
when determining whether "a proper comparison" is permitted  ................................ ................  27 
7.2.4.3    Whether a proper comparison is necessa rily permitted when a low -priced input is used 
identically to produce merchandise for domestic and export market  ................................ .........  32 WT/DS529/R  
 
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  7.2.4.4    Whethe r the ADC should have examined if the domestic sales of A4 copy paper  
permitted a proper comparison because of the particular market situation  ................................  33 
7.2.4.5    Conclusion in respect of "permit a proper comparison"  ................................ ..............  35 
7.2.5    Conclusion  ................................ ................................ ................................ ..............  35 
7.3   Whether the Anti -Dumping Commission's decision not to use the hardwood pul p component  
of Indah Kiat's and Pindo Deli's records in constructing the normal value of A4  copy paper is 
inconsistent with Articles 2.2.1.1 and 2.2 of the Anti -Dumping Agreement  ................................  35 
7.3.1    Introduction  ................................ ................................ ................................ ............  35 
7.3.2    The Anti -Dumping Commission's rationale for rejecting the hardwood pulp component of 
Indah Kiat's and Pindo Deli's recorded costs  ................................ ................................ ..........  37 
7.3.3    Whether the Anti -Dumping Commission rejected the hardwood pulp component of Indah 
Kiat's and Pindo Deli's recorded costs inconsistently with Articles 2.2.1.1 and 2.2 of the  
Anti-Dumping Agreement  ................................ ................................ ................................ .... 41 
7.3.4    Conclusion  ................................ ................................ ................................ ..............  45 
7.4   Whether the Anti -Dumping Com mission constructed the "cost of production" of  
A4 copy paper for Indah Kiat and Pindo Deli in a manner inconsistent with Article  2.2 of the  
Anti-Dumping Agreement  ................................ ................................ ................................ .... 46 
7.4.1    Introduction  ................................ ................................ ................................ ............  46 
7.4.2    Whether the Anti -Dumping Commission was entitled to replace the recorded pulp costs of 
Indah Kiat and Pindo Deli with adjusted third -country export prices of pulp  ...............................  47 
7.4.3    Whether the absence of adjustments to the pulp benchmark for different levels of  
profit is inconsistent with Article  2.2 of the Anti -Dumping Agreement  ................................ ....... 48 
7.4.3.1    The adjustment for profit to the pulp benchmark for Indah Kiat  ................................ .. 50 
7.4.3.2    The adjustment for profit to the pulp benchmark for Pindo Deli  ................................ ... 52 
7.4.4    Whether the Anti -Dumping Commission acted inconsistently with Article  2.2 of the  
Anti-Dumping Agreement when it replaced Indah Kiat's pulp costs with the pulp benchmark  
based on third -country export prices instead of replacing woodchips costs  ................................  53 
7.4.5    Conclusion  ................................ ................................ ................................ ..............  56 
7.5   Whethe r Australia has calculated and imposed anti -dumping duties in excess of the margins  
of dumping permitted by Article  2 of the Anti -Dumping Agreement and therefore acted  
inconsistently with the chapeau  of Article  9.3 of the Anti -Dumping Agreement and  
Article  VI:2 of the GATT 1994  ................................ ................................ ..............................  57 
7.5.1    Conclusion  ................................ ................................ ................................ ..............  58 
8   CONCLUSIONS AND RECOMMENDATION  ................................ ................................ .... 58 
 
 WT/DS529/R  
 
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  LIST OF ANNEXES  
ANNEX A 
PANEL DOCUMENTS  
Contents  Page  
Annex  A-1 Interim Review  4 
ANNEX  B 
ARGUMENTS OF THE PAR TIES 
Contents  Page  
Annex  B-1 First i ntegrated executive summary of the arguments of Indonesia  9 
Annex  B-2 First i ntegrated executive summary of the arguments of Australia  21 
Annex  B-3 Second i ntegrated executive summary of the arguments of Indonesia   36 
Annex  B-4 Second i ntegrated executive summary of the arguments of Australia  48 
ANNEX C 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of China  64 
Annex  C-2 Integrated executive summary of the arguments of the European Union  67 
Annex  C-3 Integrated executive summary of the arguments of Japan  72 
Annex  C-4 Integrated executive summary of the arguments of the Republic of Korea  77 
Annex  C-5 Integrated executive summary of the arguments of the Russian Federation  82 
Annex  C-6 Integrated executive summary of the arguments of Thailand  87 
Annex  C-7 Integrated executive summary of the arguments of the United States  89 
 
  WT/DS529/R  
 
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  CASES CITED IN THIS REPORT  
Short Title  Full Case Title and Citation  
Canada – Dairy  
(Article 21.5 – New Zealand 
and US II) Appellate Body Report, Canada – Measures Affecting the Importation of Milk 
and the Exportation of Dairy Products – Second Recourse to Article 21.5 of the 
DSU by New Zealand and the United States , WT/DS103/AB/RW2 , 
WT/DS113/AB/RW2 , adopted 17 January 2003, DSR 2003:I, p. 213  
China – Broiler Products  Panel Report, China − Anti-Dumping and Countervailing Duty Measures on 
Broiler Products from t he United States , WT/DS427/R  and Add.1, adopted 
25 September  2013, DSR 2013:IV, p. 1041  
China – Broiler Products 
(Article 21.5 – US) Panel Report, China − Anti-Dumping and Countervailing Duty Measures on 
Broiler Products from the United States – Recourse to Article 21.5 of the DSU 
by the United States , WT/DS427/RW  and Add.1, adopted 28 February 2018  
EC – Hormones  Appellate Body Report, European Communities – Measures Concerning Meat 
and Meat Products (Hormones) , WT/DS26/AB/R , WT/DS48/AB/R , adopted 
13 February 1998, DSR 1998:I, p. 135  
EC – Fasteners (China)  Appellate Body Report, European Communities – Definitive Anti -Dumping 
Measures on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R , 
adopted 28 July 2011, DSR 2011:VII, p. 3995  
EC – Fasteners (China)  Panel Report, European Communities – Definitive Anti -Dumping M easures on 
Certain Iron or Steel Fasteners from China , WT/DS397/R  and Corr.1, adopted 
28 July 2011, as modified by Appellate Body Report WT/DS397/AB/R, 
DSR 2011:VIII, p. 4289  
EC – Poultry  Appellate Body Report, European Communities – Measures Affecting the 
Importation of Certain Poultry Products , WT/DS69/AB/R , adopted 23 July 1998, 
DSR 1998:V, p. 2031  
EC – Tube or Pipe Fittings  Appellate Bo dy Report, European Communities – Anti-Dumping Duties on 
Malleable Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/AB/R , adopted 
18 August 2003, DSR 2003:VI, p. 2613  
EEC – Cotton Y arn GATT Panel Report, European Economic Community – Imposition of 
Anti-Dumping Duties on Imports of Cotton Yarn from Brazil , ADP/137, adopted 
30 October  1995, BISD  42S/17  
EU – Biodiesel (Argentina)  Appellate Body Report, European Union – Anti-Dumping Measures on Biodiesel 
from Argentina , WT/DS473/AB/R  and Add .1, adopted 26 October 2016, 
DSR 2016:VI, p. 2871  
EU – Biodiesel (Argentina)  Panel Report, European Union – Anti-Dumping Measures on Biodiesel from 
Argentina , WT/DS473/R  and Add.1, adopted 26 October 2016, as modified by 
Appellate Body Report WT/DS473/AB/R, DSR 2016:VI, p. 3077  
EU – Fatty Alcohols 
(Indonesia)  Panel Report, European Union – Anti-Dumping Measures on Imports of Certain 
Fatty Alcohols from Indonesia , WT/DS442/R  and Add.1, adopted 29 September 
2017, as modified by Appellate Body Report WT/DS442/AB/R, DSR 2017:VI, 
p. 2765 
EU – Footwear (China)  Panel Report, European Union – Anti-Dumping Measures on Certain Footwear 
from China , WT/DS405/R , adopted 22 February 2012, DSR 2012:IX, p. 4585  
India – Agricultur al Products  Panel Report, India – Measures Concerning the Importation of Certain 
Agricultural Products , WT/DS430/R  and Add.1, adopted 19 June 2015, as 
modified by Appellate Body Report WT/DS430/AB/R, DSR 2015:V, p. 2663  
India – Solar Cells  Appellate Body Report, India – Certain Measures Relating to Solar Cells and 
Solar Modules , WT/DS456/AB/R  and Add.1, adopted 14 October 2016, 
DSR 2016:IV,  p. 1827  
Japan – DRAMs (Korea)  Panel Report, Japan – Countervailing Duties on Dynamic Random Access 
Memories from Korea , WT/DS336/R , adopted 17 December 2007, as modified 
by Appellate Body Report WT/DS336/AB/R, DSR 2007:VII, p. 2805  
Thailand – H-Beams  Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections 
of Iron or Non -Alloy Steel and H -Beams from Poland , WT/DS122/R , adopted 
5 April 2001, as modified by Appellate Body Report WT/DS122/AB/R, 
DSR 2001:VII, p . 2741 
Ukraine – Ammonium 
Nitrate  Appellate Body Report, Ukraine – Anti-Dumping Measures on Ammonium 
Nitrate , WT/DS493/AB/R  and Add.1, adopted 30 September 2019  
Ukraine – Ammonium 
Nitrate Panel Report, Ukraine – Anti-Dumping Measures on Ammonium Nitrate , 
WT/DS493/R , Add.1 and Corr.1, adopted 30 September 2019, as upheld by 
Appellate Body Report WT/DS493/AB/R  
US – Anti-Dumping and 
Countervailing Duties 
(China)  Appellate Body Report, United States – Definitive Anti -Dumping and 
Countervailing Duties on Certain Products from China , WT/DS379/AB/R , 
adopted 25 March 2011, DSR 2011:V, p. 2869  
US – Carbon Steel (India)  Appellate Body Report, United States – Countervailing Measures on Certain 
Hot-Rolled Carbon Steel Flat Products from India , WT/DS436/AB/R , adopted 
19 December 2014, DSR 2014:V, p. 1727  WT/DS529/R  
 
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  Short Title  Full Case Title and Citation  
US – Clove Ci garettes  Appellate Body Report, United States – Measures Affecting the Production and 
Sale of Clove Cigarettes , WT/DS406/AB/R , adopted 24 April 2012, 
DSR 2012:XI, p. 5751  
US – Coated Paper 
(Indonesia)  Panel Report, United States – Anti-Dumping and Countervailing Measures on 
Certain Coated Paper from Indonesia , WT/DS491/R  and Add.1, 
adopted  22 January 2018  
US – COOL  Appellate Body Repor ts, United States – Certain Country of Origin Labelling 
(COOL) Requirements , WT/DS384/AB/R  / WT/DS386/AB/R , adopted 
23 July 2012, DSR 2012:V, p . 2449  
US – Countervailing Duty 
Investigation on DRAMS  Appellate Body Report, United States – Countervailing Duty Investigation on 
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea , 
WT/DS296/AB/R , adopted 20 July 2005, DSR 2005:XVI, p. 8131  
US – Gambling  Appellate Body Report, United States – Measures Affecting the Cross -Border 
Supply of Gambling and Betting Services , WT/D S285/AB/R , adopted 
20 April 2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475)  
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R , adopted 20 May 1996, DSR 1996:I, p.  3 
US – Hot-Rolled Steel  Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R , adopted 23 August 
2001, DSR 2001:X, p. 4697  
US – Hot-Rolled  Steel Panel Report, United States – Anti-Dumping Measures on Certain Hot -Rolled 
Steel Products from Japan , WT/DS184/R , adopted 23 August 2001 modified by 
Appellate Body Report WT/DS184/AB/R, DSR 2001:X, p. 4769  
US – Lamb  Appellate Body Report, United States – Safeguard Measures on Imports of 
Fresh, Chilled or Frozen Lamb Meat fr om New Zealand and Australia , 
WT/DS177/AB/R , WT/DS178/AB/R , adopted 16 May 2001, DSR 2001:IX, 
p. 4051 
US – Offset Act (Byrd 
Amendment)  Appellate Body Report, United States – Continued Dumping and Subsidy Offset 
Act of 2000 , WT/DS217/AB/R , WT/DS234/AB/R , adopted 27 January 2003, 
DSR 2003:I, p. 375  
US – Poultry (China)  Panel Report, United States – Certain Measures Affecting Imports of Poultry 
from China , WT/DS392/R , adopted 25 October 2010, DSR 2010:V, p. 1909  
US – Shrimp II (Viet  Nam)  Panel Report, United States – Anti-Dumping Measures on Certain Shrimp from 
Viet Nam , WT/DS429/R  and Add.1, adopted 22 April 2015, upheld by 
Appellate  Body Report WT/DS429/AB/R, DSR 2015:III, p. 1341  
US – Softwood Lumber V  Panel Report, United States – Final Dumping Determination on Softwood 
Lumber from Canada , WT/DS264/R , adopted 31 August 2004, as modified by 
Appellate  Body Report WT/DS 264/AB/R, DSR 2004:V, p. 1937  
US – Softwood Lumber VI 
(Article 21.5 – Canada)  Appellate Body Report, United States – Investigation of the International Trade 
Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of the 
DSU by Canada , WT/DS277/AB/RW , adopted 9 May 2006, and Corr.1, 
DSR 2006:XI, p. 4865  
US – Stainless Steel 
(Mexico)  Appellate Body Report, United States – Final Anti -Dumping Measures on 
Stainless Steel from Mexico , WT/DS344/AB/R , adopted 20 May 2008, 
DSR 2008:II, p. 513  
US – Upland Cotton 
(Article  21.5 – Brazil)  Appellate Body Report, United States – Subsidies on Upland Cotton – 
Recourse to Article 21.5 of the DSU by Brazil , WT/DS267/AB/RW , adopted 
20 June 2008, DSR 2008:III, p. 809  
US – Upland Cotton 
(Article  21.5 – Brazil)  Panel Report, United States – Subsidies on Upland Cotton – Recourse to 
Article  21.5 of the DSU by Brazil , WT/DS267/RW  and Corr.1, adopted 
20 June 2008, as modified by Appellate Body Report WT/DS267/AB/RW, 
DSR 2008:III, p. 997  
US – Wool Shirts and 
Blouses  Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R , adopted 23 May 1997, 
and Corr.1, DSR 1997:I, p. 323  
US – Zeroing (EC)  Appellate Body Report, United States – Laws, Regulations and Methodology for 
Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R , adopted 9 May 
2006, and Corr.1, DSR 2006:II, p. 417  
US – Zeroing (Japan)  Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/AB/R , adopted 23 January 2007, DSR 2007:I, p. 3  
 
  WT/DS529/R  
 
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  EXHIBITS REFERRED TO  IN THIS REPORT  
Exhibit  Short Title  Title 
IDN-1 Statement of 
Essential Facts  Statement of Essential Facts No.  341 alleged dumping of A4 copy 
paper exported from the Federative Republic of Brazil, the 
People's  Republic of China, the Republic of Indonesia, and the 
Kingdom of Thailand and alleged subsidization of A4 copy paper 
exported from the People's  Republic of China and the Republic of 
Indonesia (D ecember 2016)  
IDN-3 Anti-Dumping 
Notice No. 2017/39  A4 copy paper exported from the Federative Republic of Brazil, the 
People's  Republic of China, the Republic of Indonesia, and the 
Kingdom of Thailand, findings in relation to a dumping investigation, 
Public notice under Subsections 269TG(1) and (2) of the Customs 
Act 1901, Anti -Dumping Notice No.  2017/39 (18 April 2017, 
published 19  April 2017)  
IDN-4 Final Report  Report No.  341, alleged dumping of A4 copy paper exported from the 
Federative Republic of Brazil, the People's  Republic of China, the 
Republic of Indonesia, and the Kingdom of Thailand and alleged 
subsidization of A4 copy paper exported from the People's  Republic of 
China and the Republic of Indonesia (17 March 2017, published 
19 April 2017)  
IDN-5 Submission of the 
Government of 
Indonesia 
(20 February 2017)  Submission of the Government of Indonesia to the Anti -Dumping 
Commission No. 196 (20 February 2017)  
IDN-9 Indah Kiat's 
Verification Report  Indah Kiat Pulp and Paper TBK's  Verification Report (August 2016)  
IDN-10 Pindo Deli's 
Verification Report  Pindo Deli Pulp and Paper Mills' Verification Report (August 2016)  
IDN-15  Sinar Mas Group's  submission (29 December 2016)  
IDN-18  Australia Senate Economics Legislation Committee, Customs 
Amendment (Anti -Dumping) Bill (June 2011)  
IDN-28 (BCI)   Attachment G -6 to Indah Kiat's  questionnaire response  
AUS-4 Extracts of 
Customs 
(International 
Obligations) 
Regulation 2015  Extracts of Customs (International Obligations) Regulat ion 2015, 
Compilation No.  3 (20 December 2015)  
AUS-26 (BCI)   RISI, hardwood pulp prices in Asia by source (2010 -2015)  
AUS-27A (BCI)   Hawkins Wright, hardwood pulp prices in China by source 
(December  2002-August 2016)  
AUS-27B (BCI)   Hawkins Wright, hardwood pulp prices in South Korea by source 
(December 2002-August 2016)  
  WT/DS529/R  
 
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  ABBREVIATIONS USED I N THIS REPORT  
Abbreviation  Description  
Anti-Dumping Agreement  Agreement on Implementation of Article VI of the General Agreement on Tariffs 
and Trade 1994  
ADC Australian Anti -Dumping Commission  
BCI business confidential information  
CTMS  cost to make and sell  
CIF costs, insurance, and freight  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
EC European Community  
FOB free on board  
GAAP  generally accepted accounting principles  
GATT 1994  General Agreement on Tariffs and Trade 1994  
Indah Kiat  PT Indah Kiat Pulp and Paper Tbk  
NME non-market economy  
Pindo Deli  PT Pindo Deli Pulp and Paper Mills  
SCM Agreement  Agreement on Subsidies and Countervailing Measures  
Vienna Convention  Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 
1155 UNTS 331; 8 International Legal Materials 679  
WTO World Trade Organization  
 
 
  WT/DS529/R  
 
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  1  INTRODUCTION  
1.1  Complaint by Indonesia  
On 1 September  2017, Indonesia  requested consultations with Australia  pursuant to Article  4 
of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) , 
Article  XXII:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994), and Article  17 of 
the Agreement on Implementation of Article  VI of the General Agreement on Tariffs and Trade 1994 
(Anti-Dumping  Agreement) with respect to the measures and claims set out below.1 
Consultations were held on 31 October 2017 . 
1.2  Panel establishment and composition  
On 14 March 2018 , Indonesia  requested the establishment of a panel pursuant to Article  6 of 
the DSU with standard terms of reference.2 At its meeting on 27 April 2018 , the Dispute Settlement 
Body (DSB) established a panel pursuant to the request of Indonesia  in document WT/DS 529/6 , in 
accordance with Article  6 of the DSU.3 
The Panel's terms of reference are the following:  
To examine, in the light of the re levant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by Indonesia  in document 
WT/D S529/6  and to make such findings as will assist the DSB in making the 
recommendations or in giving the rulings prov ided for in those agreements.4 
On 12 July 2018 , the parties agreed that the panel would be composed as follows:  
Chairperson : Mr Hugo Perezcano Díaz  
 
Members :  Mr Marco Tulio Molina Tejeda  
   Ms Tomoko Ota  
 
Canada, China, Egypt, the European Union, India, Israel, Japan, the Republic of Korea, the 
Russian Federation, Singapore, Thailand, Ukraine, the United States, and Viet Nam  notified their 
interest in participating in the Panel proceedings as third parties.  
1.3  Panel proceedings  
1.3.1   General  
After consultat ion with the parties, on 5 October 2018, the Panel adopted its Working 
Procedures5, Additional Working Procedures on Business Confidential Information (BCI)6, and the 
partial timetable.7 The Panel, in consultation with the parties, subsequently revised the  timetable on 
26 February 2019  and 2 June 2019 , and revised the timetable again on 18 July 2019.8 Pursuant  to 
the Working Procedures, these documents were circulated to the DSB in the course of this 
proceeding . 
The Panel held a first substantive meeting wi th the parties on 18 and 19 December 2018 . 
A session with the third parties took place on 19 December 2018 . The Panel held a second  substantive 
meeting with the parties on 14 and 15 May 2019 . On 24 July 2019, the Panel  issued the descriptive 
 
1 Request for consultations by Indonesia, WT/DS529/1 (Indonesia's consultations request).  
2 Request for the establishment of a panel by Indonesia, WT/ DS529/6  (Indonesia's panel request) . 
3 DSB, Minutes of Meeting held on 27 April 2018, WT/DSB/M/ 412. 
4 Const itution note of the Panel, WT/ DS529/7 . 
5 Working Procedures of the Panel, WT/ DS529/ 9. 
6 Additional Working Procedures on Business Confidential Information , WT/ DS529/ 10. 
7 Timetable for the Panel proceedings, WT/ DS529/ 8. 
8 Revised timetable for the Panel proceedings, WT/DS529/8/Add.1 ; Revised timetable for the Panel 
proceedings, WT/DS529/8/Add. 2. WT/DS529/R  
 
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  part of its Report to the parties. The Panel issued its Interim Report to the parties on 
23 September  2019. The Panel issued its Final Report to the parties on 11 November  2019.  
1.3.2   Request s for enhanced third -party rights  
At the organiz ational meeting held on 21 September 2018, Australia requested additional rights  
for third parties in this proceeding. Australia confirmed its request in writing on 15 October 2018 . 
On 3 October 2018, China submitted a request for enhanced third-party righ ts. The Panel gave an 
opportunity to third parties to comment on Australia's and China's requests, and a subsequent 
opportunity to the parties to provide comments. On 16 October 2018, Canada, the European Union, 
Japan, the Republic of Korea, the Russian Fe deration, and the United States submitted comments.  
In its comments, the Russian Federation requested additional third -party rights similar to those 
indicated in China's request.  Indonesia objected to the requests for additional third -party rights while 
Australia generally supported China's request for enhanced third -party rights.  The Panel issued the 
decision on 29 November 2018, in which it denied the granting of additional participatory rights.9  
Subsequently, a t the third -party session, which took place on 19 December 2018, the 
European Union request ed that the third parties be allowed to observe the second substantive 
meeting of the Panel with the parties.  The request was submitted in writing on 11 January 2019. 
Indonesia objected to the European U nion's request; Australia supported the request. The Panel 
denied the request in its decision issued on 24 April 2019.10  
Pursuant to the Working Procedures, the decisions of the Panel were circulated to the DSB in 
the course of the proceeding.  
1.3.3   Amicus curia e submission  
On 23 January 2019, the Panel  received an amicus curiae  submission  from the Environmental 
Investigation Agency and Kaoem Telapak , dated 22 January 2019  and addressed to the Chairman 
of the Panel in these proceedings.  In the communication of 28  January 2019, the Panel forwarded  
the amicus curiae  submission  to the parties  inviting them  to provide comments on the acceptability 
and content of the submission. Indonesia provided comments on 15 February 2019; Australia 
submitted its comments on 15 February 2019 and on 1 March 2019 as part of its second written 
submission.  
2  FACTUAL ASPECTS  
2.1  The measures at issue  
This dispute concerns Australia' s measure s imposing anti -dumping duties on certain exporters 
of A4 copy paper from Indonesia , namely PT Indah Kiat Pulp and Paper Tbk (Indah Kiat) and PT  Pindo 
Deli Pulp and Paper Mills (Pindo Deli) . Indonesia challenges  the anti -dumping duties on Indah Kiat 
and Pindo Deli, as set forth in  Anti-Dumping Notice No. 2017/39 dated 1 8 April 2017 and i ssued by 
the Assistant Minister for Industry, Innovation , and Science and Parliamentary Secretary to the 
Minister for Industry, Innovation , and Science accepting the recommendations and the reasons for 
the recommendations set out by the Commissioner of the  Australian Anti -Dumping Commission 
(ADC) in Report No. 341  (hereinafter, the Final Report ) dated 17 March 2018 and posted to the 
public record on the website of the Commission on 19 April 2017.11 Under these measures, Australia 
imposed anti -dumping dut ies on certain exporters  of A4 copy paper from Indonesia  at the rate 
of 35.4%  for Indah Kiat  and at the rate of 38.6% for Pindo Deli.12 
 
9 Decision of the Panel concerning the requests for enhanc ed third -party rights, WT/DS529/12.  
10 Decision of the Panel concerning the European Union's request for third parties to observe the 
second  substantive meeting of the Panel, WT/DS529/13.  
11 Anti-Dumping Notice No. 2017/39 , (Exhibit IDN -3). Indonesia explains that the Anti -Dumping 
Commission 's complete findings are set forth in  the Final Report , (Exhibit IDN -4) and Statement of Essential 
Facts, (Exhibit  IDN-1). (Indonesia's first written submission, para. 14  and fn 9; see also Indonesia's panel 
request, section A ). 
12 Indonesia's first written submission, paras. 15 -16. 
 WT/DS529/R  
 
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  2.2  Other factual aspects  
On 9 March 2018,  following the recommendation from the Anti -Dumping Review Panel,  the 
anti-dumping duty rate for Indah Kiat was reduced from 35. 4% to 30% and the anti -dumping duty 
rate for Pindo Deli was reduced from 38. 6% to 33%, applicable  from the date of publication of the 
Anti-Dumping Notice  No. 2017/39  (19 April 2017) .13 The partie s agree that, despite these changes, 
the aspects of Anti -Dumping Notice No. 2017/39 and the Final Report that are challenged by 
Indonesia remain in effect.14 
3  PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  
Indonesia requests that the Panel find that Aust ralia's measures are inconsistent with 
Australia 's obligations under the Anti -Dumping Agreement and GATT 1994 , namely : 
a. Article  2.2 of the Anti -Dumping Agreement because Australia  disregarded the Indonesian 
producers ' domestic sales prices and calculated a constructed normal value based on a 
finding of a "particular market situation ", which rested  on an incorrect interpretation  of 
that term .  
b. Article  2.2 of the Anti -Dumping Agreement because Australia  disregarded the I ndonesian 
producers ' domestic sales prices based on an incorrect interpretation of Article  2.2 of the 
Anti-Dumping Agreement and calculated a constructed normal value even though a proper 
comparison of domestic prices to export prices was possible.  
c. Articles 2.2 and 2.2.1.1 of the Anti -Dumping Agreement because in constructing the 
normal value for the Indonesian producers under investigation, Australia did not calculate 
the cost of production for A4 copy paper on the basis of the records kept by those 
produ cers even though the records were in accordance with generally accepted accounting 
principles and reasonably reflected the actual cost of production of A4 copy paper, and 
because Australia therefore failed to properly calculate the cost of production and p roperly 
construct the normal value for those producers.  
d. Article  2.2 of the Anti -Dumping Agreement because Australia failed to construct the 
normal value for the Indonesian producers under investigation on the basis of the cost of 
production of A4 copy pape r in the country of origin, i.e. Indonesia.  
e. Chapeau  of Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 of the GATT 1994 
because having calculated  the dumping margin for the Indonesian producers  inconsistently 
with Article  2 of the Anti -Dumping A greement , Australia collected anti -dumping duties in 
excess of the actual dumping  margin , if any, of the Indonesian producers .15 
Indonesia further requests, pursuant to the second sentence of Article  19.1 of the DSU, that 
the Panel "make use of its discreti on to suggest ways in which Australia should implement the 
recommendations and rulings of the DSB to bring its measures into conformity with the 
Anti-Dumping Agreement and GATT 1994 ".16 Indonesia consider s that the measures at issue should 
be withdrawn.  
Australia requests that the Panel reject Indonesia 's claims in this dispute in their entirety.  
 
13 Australia's first written submission, paras. 87 -88; responses to Panel question s Nos. 1(a) and (b)  
following the first meeting of the Panel; and Indonesia's responses to Panel question s Nos. 1(a) and (b)  
following the first meeting of the Panel.  
14 Indonesia's response to Panel question No. 1(c) following the first meeting of the Panel, p. 6; 
Australia's response to Panel question No. 1(c) following the first meeting of the Panel, paras. 5 -7. 
15 Indonesia's first written submission, paras. 178 -183. 
16 Indonesia's first written submission, para. 185.  WT/DS529/R  
 
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  4  ARGUMENTS OF THE PAR TIES  
The arguments of the parties are reflected in their integrated executive summaries, provided 
to the Panel in accordance with paragraph 24 of the Working Procedures adopted by the Pan el (see 
Annexes B-1, B-2, B-3, and B-4). 
5  ARGUMENTS OF THE THI RD PARTIES  
The arguments of China, the European Union, Japan, the Republic o f Korea, the 
Russian  Federation, Thailand,  and the United States  are reflected in their integrated executive 
summaries, provided in accordance with paragraph 27 of the Working Procedures adopted by the 
Panel  (see Annexes C -1, C-2, C-3, C-4, C-5, C-6, and C -7). Canada, Egypt, India, Israel, Singapore, 
Ukraine, and Viet Nam  did not submit written or oral arguments to the Panel.  
6  INTERIM REVIEW  
On 7 October 2019 , Australia  submitted written requests for the review of precise aspects of 
the Interim Report  while Indonesia indicated that it does not seek interim review. Neither party 
requested an interim review meeting. On 10 October 2019 , Indonesia  submitted comments on 
Australia's  requests for review. Our discussion and disposition of th ose requests are set out i n 
Annex  A-1.  
7  FINDINGS  
7.1  General principles regarding treaty interpretation, the applicable standard of review, 
and burden of proof  
7.1.1   Treaty interpretation  
Article  3.2 of the DSU provides that the WTO dispute settlement system serves to clarify the 
existing provisions of the covered  agreements "in accordance with customary rules of interpretation 
of public international law". Article  17.6(ii) of the Anti -Dumping  Agreement similarly requires panels 
to interpret that  agreement's  provisions in accordance with the customary rules of interpretation of 
public international law. The principles codified in Articles  31 and 32 of the Vienna Convention are 
generally accepted as such customary rules.  
7.1.2   Standard of review  
Article  11 of the DSU provides, in relevant part, that:  
[A] panel should make an objective assessment of the matter before it, including an 
objective assessment of the facts of the case and the applicability of and conformity 
with the relevant covered  agreements.  
In addition, Article  17.6 of the Anti -Dumping  Agreement sets forth the special standard of review 
applicable to disputes under the Anti -Dumping  Agreement:  
(i) in its assessment of the facts of the matter, th e panel shall determine whether 
the authorities'  establishment of the facts was proper and whether their evaluation of 
those facts was unbiased and objective. If the establishment of the facts was proper 
and the evaluation was unbiased and objective, even though the panel might have 
reached a different conclusion, the evaluation shall not be overturned;  
(ii) the panel shall interpret the relevant provisions of the  Agreement in accordance 
with customary rules of interpretation of public international law. Wh ere the panel finds 
that a relevant provision of the  Agreement admits of more than one permissible 
interpretation, the panel shall find the authorities'  measure to be in conformity with 
the Agreement if it rests upon one of those permissible interpretation s. 
Thus, Article  11 of the DSU and Article  17.6 of the Anti -Dumping  Agreement together establish 
the standard of review we will apply with respect to both the factual and the legal aspects of the WT/DS529/R  
 
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  present dispute. The Appellate  Body has explained that when a panel is reviewing an investigating 
authority's  determination, the "objective assessment" standard in Article  11 of the DSU requires a 
panel to review whether the authority has provided a reasoned and adequate explanation as 
to (a) how the evidence on th e record supported its factual findings; and (b) how those factual 
findings support the overall determination.17 In reviewing an investigating authority's  determination, 
a panel should not conduct a de novo review of the evidence, nor substitute its judgmen t for that of 
the investigating authority. A panel must limit its examination to the evidence that was before the 
investigating authority during the investigation18 and must take into account all such evidence 
submitted by the parties to the dispute.19 At the same time, a panel must not simply defer to the 
conclusions of the investigating authority; a panel's  examination of those conclusions must be 
"in-depth" and "critical and searching".20 
In the context of Article  17.6(i) of the Anti -Dumping  Agreement, the Appellate  Body has 
clarified that while the text of this provision is couched in terms of an obligation on a panel, in effect 
it defines when an investigating authority can be considered to have acted inconsistently with the 
Anti-Dumping  Agreement in the c ourse of its "establishment" and "evaluation" of the relevant 
facts.21 Therefore, a panel must assess if the establishment of the facts by the investigating authority 
was proper and if the evaluation of those facts by that authority was unbiased and objecti ve.22 
If these broad standards have not been met, a panel must hold the investigating 
authority's  establishment or evaluation of the facts to be inconsistent with the 
Anti-Dumping  Agreement.23 
7.1.3   Burden of proof  
The general principles applicable to the allocati on of the burden of proof in WTO dispute 
settlement require that a party claiming a violation of a provision of a WTO  Agreement must assert 
and prove its claim.24 Therefore, as the complaining party in this proceeding, Indonesia bears the 
burden of demonstr ating that the challenged aspects of the measures at issue are inconsistent with 
the Anti -Dumping  Agreement and the GATT 1994. The Appellate  Body has stated that a complaining 
party will satisfy its burden when it establishes a prima facie  case, namely a c ase which, in the 
absence of effective refutation by the defending party, requires a panel, as a matter of law, to rule 
in favour of the complaining party.25 Finally, it is generally for each party asserting a fact to provide 
proof thereof.26 
7.2  Whether the Ant i-Dumping Commission's decision to disregard Indonesian 
producers' domestic sales as the basis for normal value was inconsistent with Article  2.2 
of the Anti -Dumping Agreement  
7.2.1   Introduction  
Indonesia claims that the ADC 's determination of the normal value o f A4 copy paper produced 
by Indah Kiat and Pindo Deli is inconsistent with Article  2.2 of the Anti -Dumping Agreement. In its 
dumping determination, the ADC used a constructed value, rather than domestic market sales, to 
determine the normal value. The ADC' s disregard of domestic market sales was premised on the 
finding that the market situation in the Indonesian A4 copy paper market was such that sales in that 
market were not suitable for use in determining the normal value.27 
 
17 Appellate  Body Reports, US – Countervailing Duty Investigation on DRAMS , para.  186; US – Lamb , 
para. 103. 
18 Article  17.5(ii) of the Anti -Dumping Agreement requires a panel to examine the matter based on th e 
facts made available to the authorities.  
19 Appellate  Body Report, US – Countervailing Duty Investigation on DRAMS , para.  187. 
20 Appellate  Body Report, US – Softwood Lumber VI (Article  21.5 – Canada) , para. 93. 
21 Appellate  Body Report, US – Hot-Rolled Ste el, para.  56. 
22 Appellate  Body Report, US – Hot-Rolled Steel , para.  56. 
23 Appellate  Body Report, US – Hot-Rolled Steel , para.  56. 
24 Appellate  Body Report, US – Wool Shirts and Blouses , DSR 1997:1, p.  337. 
25 Appellate  Body Report, EC – Hormones , paras.  98 and 104.  
26 Appellate  Body Report, US – Wool Shirts and Blouses , DSR 1997:1, p.  337. 
27 Final Report , (Exhibit IDN -4), section 6.5, p. 36.  
 WT/DS529/R  
 
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Indonesia claims the ADC's determination is inconsistent with Article  2.2 of the 
Anti-Dumping  Agreement because the situation found was not a "particular market situation" within 
the meaning of Article  2.2 of the Anti -Dumping Agreement.  Separately, Indones ia argues that the 
ADC acted inconsistently with Article  2.2 by disregarding domestic market sales on this basis, even 
though a proper price comparison  was possible. According to Indonesia, the ADC failed to examine 
the issue of whether domestic market sal es "permit a proper comparison" and, thus, improperly 
disregarded domestic market sales solely on the basis of finding a "particular market situation" 
existed. Indonesia further argues that because the basis of the ADC's "particular market situation" 
finding was distorted input costs, which Indonesia asserts affect both domestic and export prices, 
the ADC could not possibly find that the disregarded domestic market sales did "not permit a proper 
comparison" , as required by Article  2.2. 
In the sections that follow, we address each of these closely interrelated arguments in turn, 
after briefly summari zing the relevant facts.28  
7.2.2   The Anti -Dumping Commission's determination to disregard domestic sales as the 
basis for normal value  
In the course of the ADC's invest igation, Paper Australia Pty Ltd (Australian Paper ) claimed 
that a particular market situation existed in the Indonesian market and, as a result, domestic sales 
of A4 copy paper in Indonesia were "not suitable  for determining normal values" under Australia n 
legislation.29 The applicant alleged that A4 copy paper prices in Indonesia were artificially low due 
to the influence of the Government of Indonesia on raw material inputs and subsidies provided 
during the investigation period.30 
The ADC found that a mark et situation in the Indonesian A4 copy paper market existed such 
that sales in that market were not suitable for use in determining normal value under Australian 
legislation.31 On this basis, the ADC disregarded the domestic sales of Indah Kiat and Pindo De li in 
determining the normal value.  The ADC's assessment of the alleged market situation in Indonesia 
for A4 copy paper is set out in section A2.9 ("Market situation in the Indonesian paper market") of 
Appendix 2 ("Particular market situation findings") of  its report and runs for 23 pages.32 Section  A2.2 
("Findings") of Appendix 2 states in full in respect of Indonesia:  
The Commission has found that:  
 
… 
 
There is a market situation in the Indonesian A4 copy paper market:  
 
The [Government of Indonesia] exerts significant influence over the Indonesian timber 
and pulp industries through various programs and policies including those relating to 
provision of land for plantations and an export ban on logs. The Commission considers 
that these progra ms and policies have rendered Indonesian domestic A4 copy paper 
prices unsuitable for determining normal values.33  
Section A2.4 ("Framework for assessing market situation claims") of Appendix 2 states, in 
relevant part:  
The Act does not prescribe what is required to reach a finding of market situation 
however it is clear that a market situation will arise when there is some factor or factors 
 
28 Indonesia presents these arguments as two separate claims that the ADC's determination to disregard 
domestic market sales as the basis for the normal value was inconsistent with Article  2.2 of the 
Anti-Dumping  Agreement. As these arguments relate to the s ame provision, i.e. Article  2.2 of the 
Anti-Dumping Agreement, and are closely interrelated, we examine them as such.  
29 Final Report, (Exhibit IDN -4), section 6.5, p. 36.  
30 Final Report, (Exhibit IDN -4), section 6.5, p. 36.  
31 Final Report, (Exhibit IDN -4), section 6.5, p. 36.  
32 Final Report, (Exhibit IDN -4), section A2.9, pp. 165 -188. 
33 Final Report, (Exhibit IDN -4), section A2.2, p. 146.  WT/DS529/R  
 
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  impacting the relevant market in the country of export generally with the effect that 
sales in that market are not suitable for use in determining normal value.  
In considering whether sales are not suitable for use in determining a normal value 
under [Australian legislation] because of the situation in the market of the country of 
export the Commission may have regard to factors such as:  
• whether the prices are artificially low; or  
• whether there are other conditions in the market that render sales in that 
market not suitable for use in determining prices under [Australian legislation].  
Government influence on prices or input costs could be one cause of artificially low 
pricing. Such government influence could come from any level of government.  
In assessing whether a market situation exists due to government influence, the 
Commission will assess whether government involvement in the domestic market has 
materially distorted market conditions. If market conditions have been materially 
distorted then domestic prices may be artificially low or not substantially the same as 
they would be in a co mpetitive market.  
Prices may also be artificially low or lower than they would otherwise be due to 
government influence on the costs of inputs. The Commission looks at the effect of any 
such influence on market conditions and the extent to which domestic p rices can no 
longer be said to prevail in a normal competitive market. Government influence on costs 
will disqualify the associated sales if those costs are shown to affect domestic prices.  
The Manual provides further guidance on the circumstances in which  the Commission 
will find that a market situation exists.34 
Section A2.9.1 ("Conclusions and findings") of Appendix 2 states, in its entirety:  
The Commission concludes that there is a market situation in the Indonesian A4 copy 
paper market such that the dom estic price for Indonesian A4 copy paper is not suitable 
for the determination of normal values under [Australian legislation]. Findings in support 
of this conclusion include:  
• The [] involvement [of the Government of Indonesia]  in forestry and pulp 
industr ies through its support for the development of timber plantations and 
its prohibition on the export of timber logs has directly resulted in the distortion 
of the domestic price for A4 copy paper; and  
• The domestic price of Indonesian A4 copy paper is signif icantly below 
comparable regional benchmarks.35 
In the course of the investigation, the Government of Indonesia argued the ADC had no basis 
to make a "particular market situation" finding, citing a lack of evidence in relation to the alleged 
oversupply of t imber or pulp in the Indonesian market.36 The Government of Indonesia also disputed 
the relevance of various government policies identified by the ADC, which the Government of 
Indonesia considered insufficient to support the ADC's conclusion that such polic ies artificially 
lowered the price of inputs.37 Indonesian producers in turn argued that the ADC had no evidence to 
show that the alleged distortions impacted domestic and export prices differently, thereby resulting 
in domestic prices being distorted and u nsuitable for comparison with export prices.38 In support of 
this line of argument, the Government of Indonesia made a submission to the ADC asserting that 
 
34 Final Report, (Exhibit IDN -4), section A2.4, pp. 147 -148. 
35 Final Report, (Exhibit IDN -4), section A2.9.1, p. 165.  
36 Submission of the Government of Indonesia (20 February 2017), (Exhibit IDN -5), p. 5.  
37 Submission of the Government of Indonesia (20 February 2017), (Exhibit IDN -5), p. 5.  
38 Sinar Mas Group's submission  (29 December 2016), (Exhibit IDN -15), p. 2. We note th at Sinar Mas 
Group includes three exporters under investigation: Indah Kiat, Pindo Deli and PT Pabrik Kertas Tjiwi Kimia . 
 WT/DS529/R  
 
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  the nature of the A4 copy paper process is such that, even if input prices for hardwood timber were 
distorted, the same inputs were used to manufacture A4 copy paper sold to the Indonesian domestic 
market and the A4 copy paper exported to the Australian market.39 
The ADC responded to the above arguments in its report. The ADC considered that the 
distortion s in the Indonesian forestry industry were demonstrated in the ADC's log pricing 
assessment and the extent of Indonesia's pulp exports.40 The ADC indicated that it considered that 
the distorted supply of timber would have an effect on downstream transaction s, notwithstanding 
whether those transactions take place in competitive markets.41 Citing the provision of land and the 
log export ban, the ADC noted that it quantified the distortion in the Indonesian log market and was 
satisfied that the significant disto rtions found in that assessment impacted the pulp and paper 
industries such that domestic sales of A4 copy paper were unsuitable for use in determining normal 
value.42 The ADC further responded that a comparative examination of effects on domestic and 
expor t prices would be contrary to the legislative scheme, pursuant to which normal values, export 
prices, and comparison of these are determined under separate sections of Australian legislation.43 
We understand from the ADC's explanation that the decrease in p ulp prices and consequently 
A4 copy paper prices  arose from the distortions the ADC found to exist in the Indonesian log market . 
7.2.3   Whether the Anti -Dumping Commission's determination of a situation in the market 
for A4 copy paper was inconsistent with Articl e 2.2 of the Anti -Dumping Agreement  
7.2.3.1   Introduction  
Indonesia maintains that, in disregarding domestic market sales, the ADC relied on a situation 
with certain features that do not constitute a "particular market situation" within the meaning of 
Article  2.2 of the Anti -Dumping Agreement.  In particular, Indo nesia argues that the situation relied 
upon by the ADC cannot qualify as a "particular market situation" because the proper interpretation 
of that expression necessarily excludes ( a) situations where input costs are distorted; ( b) situations 
not having an exclusively unilateral impact on domestic market sales; and ( c) situations arising from 
government action.  Indonesia argues that each of these features disqualifies the situation at issue 
from constituting a "particular market situation" consistent with Article 2.2 of the 
Anti-Dumping  Agreement.   
While Indonesia disputes the underlying factual findings made by the ADC in reaching its 
market situation determination, Indonesia does not challenge the ADC's establishment and 
evaluation of the facts except insof ar as the ADC's factual findings were guided by an allegedly 
erroneous understanding of the meaning of the term "particular market situation".44 Thus, 
Indonesia's claim turns on the legal interpretation of the term "particular market situation" rather 
than the factual findings underlying the ADC's determination with respect to the situation found to 
exist on the domestic market for A4 copy paper in Indonesia.  
With this understanding, we  first turn to consider the merits of the interpretative arguments 
Indonesia has advanced in support of its view that the term "particular market situation", as used 
in Article  2.2 of the Anti -Dumping Agreement, necessarily excludes the three situations de scribed 
above.   
7.2.3.2   "Particular market situation" is an undefined term in the 
Anti-Dumping  Agreement  
Article  2.2 of the Anti -Dumping Agreement states:  
When there are no sales of the like product in the ordinary course of trade in the 
domestic market of the ex porting country or when, because of the particular market 
situation or the low volume of the sales in the domestic market of the exporting 
 
39 Submission of the Government of Indonesia (20 February 2017), (Exhibit IDN -5), p. 4.  
40 Final Report, (Exhibit IDN -4), section A2.9.6 .6, p. 184.  
41 Final Report, (Exhibit IDN -4), section A2.9.6.6, p. 184.  
42 Final Report, (Exhibit IDN -4), section A2.9.6.8, p. 185.  
43 Final Report, (Exhibit IDN -4), section A2.9. 6.1, pp. 177 -179. 
44 Indonesia's opening statement at the first meeting of the Panel, para. 9; responses to Panel 
questions  Nos. 3 and 34 following the first meeting of the Panel, pp. 8 -9. WT/DS529/R  
 
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  country2, such sales do not permit a proper comparison, the margin of dumping shall 
be determined by comparison with a comparable price of the like product when exported 
to an appropriate third country, provided that this price is representative, or with the 
cost of production in the country of origin plus a reasonable amount for administrative, 
selling and general costs  and for profits.  
2 Sales of the like product destined for consumption in the domestic market of the exporting country 
shall normally be considered a sufficient quantity for the determination of the normal value if such 
sales constitute 5 per cent or more of the sales of the product under consideration to the importing 
Member, provided that a lower ratio should be acceptable where the evidence demonstrates that 
domestic sales at such lower ratio are nonetheless of sufficient magnitude to provide for a prope r 
comparison.  
No panel or Appellate Body report has previously interpreted the phrase "particular market 
situation" as it appears in Article  2.2 of the Anti -Dumping Agreement. A GATT panel did interpret 
this phrase in a dispute regarding Article  2:4 of the  Tokyo Round Anti -Dumping Code in the case 
EEC – Cotton Yarn .45 The GATT panel rejected Brazil's claim that the European Community  (EC) 
should have discarded domestic market prices because they did not permit a proper comparison due 
to a "particular market situation" arising from frozen exchange rates imposed to control high 
inflation. The GATT panel specifically emphasized that the existence of a "particular market situation" 
alone was not sufficient to discard domestic sales:  
In the Panel's view, the wordi ng of Article  2:4 made it clear that the test for having 
[recourse to constructed value] was not whether or not a "particular market situation" 
existed per se . A "particular market situation" was only relevant insofar as it had the 
effect of rendering the sales themselves  unfit to permit a proper comparison.  … Even 
assuming arguendo  that an exchange rate was relevant under Article  2:4, it would be 
necessary, in the Panel's view, to establish that it affects the domestic sales themselves 
in such a way that t hey would not permit a proper comparison.46  
Both parties have set forth their understanding of the ordinary meaning of the phrase  
"particular market situation" in context and in light of the object and purpose of the 
Anti-Dumping  Agreement. Indonesia argues that the provision relates to an "exceptional set of 
circumstances affecting comparability of domestic market prices in such a way as to affect them 
unilaterally and, thus, prevent them from being compared to export prices ".47 Australia, by  contrast, 
argues that the proper interpretation of the term "particular market situation" is any condition, state 
or combination of circumstances in respect of the buying and selling of the like product in the market 
of the exporting country that is disti nguishable and not general.48 Indonesia argues that Australia 's 
interpretation would expand the circumstances for disregarding domestic market sales in the 
determination of normal value far beyond what was intended in the Anti -Dumping Agreement.49 
Australia claims that Indonesia seeks to promote a more restrictive interpretation of core terms in 
the Anti -Dumping  Agreement than is warranted.50 Australia argues that the ordinary meaning of the 
term "particular market situation" is broad51, and emphasizes that Article 2.2 makes the application 
 
45 Article  2:4 of the Tokyo Round Anti -Dumping Code stated:   
When there are no sales of the like product in the ordinary course of trade in the domestic 
market of the exporting country or when, because of the particular market situation, such sales 
do not permit a proper comparison, the margin of dumping shall be de termined by comparison 
with a comparable price of the like product when exported to any third country which may be the 
highest such export price but should be a representative price, or with the cost of production in 
the country of origin plus a reasonable  amount for administrative, selling and any other costs 
and for profits. As a general rule, the addition for profit shall not exceed the profit normally 
realized on sales of products of the same general category in the domestic market of the country 
of origin. 
46 GATT Panel Report, EEC – Cotton Yarn , adopted 30 October 1995,  paras. 478 -479. 
(underlining  original)  
47 Indonesia's first written submission, para. 72.  
48 Australia's first written submission, paras. 106 and 112.  
49 Indonesia's first written submissio n, para. 72; second written submission, paras. 9 -11. 
50 Australia's first written  submission, para. 95.  
51 Australia's first written submission, para. 106.  
 WT/DS529/R  
 
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  of alternative means of determining the normal value mandatory if one of the three conditions 
therein is satisfied, including the condition that incorporates the "particular market situation".52  
We begin by observing that a  "situation " is a "state of affairs " or a "set of circumstances ".53 
This term is qualified by the terms  "particular " and "market " functioning as adjectives in Article  2.2 
of the Anti -Dumping  Agreement. The situation in question must arise in, or relate to the "market "54, 
and the market situation  must be a "particular " one. It follows from the qualifier "particular" that 
the market sit uation must be "distinct, individual, single,  specific ".55 Thus, a fact-specific and 
case-by-case analysis  of the particular market situation is necessarily called for.  In addition, w e 
agree with the observation of the GATT panel in EEC – Cotton Yarn  that a "particular market 
situation" is only relevant insofar as it has the effect of rendering domestic sales unfit to permit a 
proper comparison .56 The phrase "particular market situation" does not lend itself to a definition that 
foresees all the varied  situations that an investigating authority may encounter that would fail to 
permit a "proper comparison".  In our view, the drafters' choice to use such a phrase should be 
treated as a deliberate one.  Consequently, while the expression "particular market s ituation" is 
constrained  by the qualif iers "particular" and "market ", it nevertheless cannot be interpreted in a 
way that comprehensively identifies the circumstances or affairs constituting the situation that an 
investigating authority may have to conside r.  
There is no dispute between the parties that the underlying circumstances in this case concern 
or relate to the market for A4 copy paper.  However, they disagree  as to what makes a situation 
particular . Indonesia argues that the circumstances must be exceptional  and, moreover, affect "the 
comparability of domestic market prices in such a way as to affect them unilaterally and, thus, 
prevent them from being compared to export prices ".57 Australia argues that the circumstances must 
be distinguishable and no t general.58 In our view, the market situation must be distinct, individual, 
single,  specific  but that does not necessarily make it unusual or out of the ordinary — 
i.e. exceptional.59 
 
52 Australia's first written submission, para. 101.  
53 Oxford Dictionaries online, definition of "situat ion" 
http://www.oed.com/view/Entry/180520?redirectedFrom=situation  (accessed 16 September 2019). 
54 Oxford Dictionaries online, definition of "market" 
https://www.oed.com/view/Entry/114178?rskey=Cd0jFA&result=1#eid  (accessed 
16 September  2019):  
"market, n."  
II. Trade, business, and other extended uses.  
 4. a. The action or business of buying and selling; a commercial transaction, a purchase or sale; 
a (good or bad) bargain. Now  hist. and Sc. 
 6. A geographical area of commercial activity; the potential demand for a commodity or service 
provided by such an area. Now also: the potential demand for a  commodity or service within a 
demographic group; the commercial activity of such a group in total. Frequently with the area or 
group specified. See also  home market  n. 
7. a. Sale as controlled by demand;  esp. the demand  for a commodity, product, etc. Now 
also concr.: those people who form the demand for a particular product, commodity, or service. 
Also fig. 
8. a. The arena in which commercial dealings in a particular commodity or product are 
conducted; the trade in a particular commodity or product.  on (al so in) the market: offered for 
sale. to put (something) on the market: to offer for sale. Also  fig. Frequently with commodity or 
product specified (either  attributive  or with  in); for common collocations, 
as art, land, money,  property market: see the first  element. See also  stock-market  n. 
 b. The state of trade in a commodity or product at a particular time or in a particular 
context;  esp. the condition of trade with respect to demand. Also with commodity or product 
specified (see sense  8a). 
55 Oxford Dicti onaries online, definition of "particular" 
http://www.oed.com/view/Entry/138260?rskey=Ssayz3&result=1&isAdvanced=false  (accessed 
16 September  2019). 
56 GATT Panel Re port, EEC – Cotton Yarn , adopted 30 October 1995,  paras. 478 -479. 
57 Indonesia's first written submission, para. 72.  
58 Australia's first written submission, paras. 97 -112. 
59 We note that t he phrase  "particular market situation" , as used in  the English versi on of Article  2.2 of 
the An ti-Dumping Agreement, is further qualified by the definite article "the"; the phrase  "situación especial del 
Mercado"  as used in the Spanish version of Article  2.2 of the Anti -Dumping Agreement, is further qualified by 
the indefi nite Article  "una"; and in the French version of Article  2.2 of the Anti -Dumping Agreement, the phrase 
"situation particulière du marché"  is qualified by the definite Article  "la". The parties agree that whether the 
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In the following subsections, we address three specific arguments of Indonesia in respect of 
the interpretation of the phrase "particular market situation".  
7.2.3.3   Situations that distort input costs  
We first address Indonesia's contention that a correct interpretation of "particular market 
situation" necessarily excl udes situations that distort input costs, specifically situations that lower 
input costs.  We observe that Indonesia makes two arguments in this respect. The first relates to the 
alleged incapability of low input costs to prevent a proper comparison.60 The second relates to silence 
in the negotiating history of the "particular market situation" condition in contrast to historical 
discussions around the issue of "input dumping".61 We address these arguments in turn.   
Indonesia argues that "a 'particular market situation' must render domestic prices unfit for 
comparison to export prices". Moreover, according to Indonesia, "[w]hen low priced inputs are used 
to produce merchandise for domestic sales and export [sales]  in the exact manner prices remain 
comparable" .62 Indonesia reasons that its interpretation of "particular market situation" takes 
account of the context provided by the proximity of the phrase "not permit a proper comparison".63 
On this basis, Indonesia asks the Panel to rule on the "specific issue of wh ether a low -price input 
used identically to produce merchandise for the domestic and export markets can constitute a 
'particular market situation'".64 In this respect, Indonesia asserts that "a 'particular market 
situation' … must be capable  of preventing a proper comparison of domestic to export prices" .65 A 
situation of a low -priced input identically used in the production for export and domestic sales 
categorically does not have this capability, according to Indonesia.66 Indonesia  asserts  that in this 
situation the price of domestic sales and exports would be equally affected .67 Accordingly, Indonesia 
argues that the prevention of a proper comparison cannot arise "because of" this type of situation.68 
Australia submits that Indonesia's interpre tation conflates the condition "particular market 
situation" with the condition "not permit a proper comparison" such that part of the analysis of 
whether "such sales do not permit a proper comparison" becomes an integral part of the "particular 
market sit uation" analysis.69  
In our assessment, the phrases  "particular market situation" and "permit a proper 
comparison" function together to establish a condition for disregarding domestic market sales as the 
basis for normal value.  Specifically, that domestic s ales "do not permit a proper comparison" must 
be "because of the particular market situation".  If domestic sales do permit a proper comparison, 
then they cannot be disregarded as the basis for normal value, regardless of the existence of the 
particular mar ket situation and its effects, whatever those may be.  We find no functional purpose is 
served by incorporating into the meaning of "particular market situation" part of the function that 
will necessarily be served by the terms "because of" and "not permit a proper comparison".  
Accordingly, we find that "capable of preventing a proper comparison" is not a necessary qualification 
for a situation to constitute the "particular market situation".  Indeed, incorporating such a meaning 
into the term "particular mar ket situation" would alter the functioning of this provision.  Thus, we 
find that the term "particular market situation" does not require or contemplate an analysis relating 
to the capability of causing domestic sales to not permit a proper comparison in th e abstract. Rather, 
 
article is definite  or indefinite should be assigned no particular significance for purposes of interpreting the 
phrase "particular market situation" in this dispute. Likewise, we do not find it necessary to draw any 
conclusions from the use of the definite or i ndefinite art icles before the phrase "particular market situation " for 
the purposes of this dispute.  (Indonesia's response to Panel question No. 25 following the second meeting of 
the Panel, paras. 66 -67; Australia's response to Panel question No. 25 following the seco nd meeting of the 
Panel, paras. 124 -126).  
60 Indonesia's first written submission, paras. 73 -78. 
61 Indonesia's first written submission, paras. 58 -71. 
62 Indonesia's first written submission, para. 77.  
63 Indonesia's opening statement at the second meeting of the panel, paras. 3 and 24.  
64 Indonesia's responses to Panel question No. 2(b) following the first meeting of the Panel, p. 8.  
65 Indonesia's responses to Panel question No. 2(a) following the first me eting of the Panel, p. 7. 
(emphasis original)  
66 Indonesia's responses to Panel question No. 2(a) following the first meeting of the Panel, p. 7; 
second  written submission, paras. 18 -19. 
67 Indonesia's second written submission, paras. 15 -16. 
68 Indonesia's s econd written submission, para. 18.  
69 Australia's second written submission, para. 51.  
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  the terms "because of" and "not permit a proper comparison" in Article  2.2 already properly and 
adequately fulfil this function.  
Turning to the specific issue posited by Indonesia of a low -priced input used identically to 
produce mercha ndise for the domestic and export markets70, we are again unpersuaded that a 
categorical disqualification from constituting the "particular market situation" can be sustained as a 
matter of interpretation.  We understand that Indonesia is arguing that a situ ation that equally affects 
the cost of producing merchandise for sale in domestic and export markets will necessarily equally 
affect the sales prices in both markets and will, therefore, permit a proper comparison between 
domestic market sales and export s ales. First, we find no legitimate interpretative basis for 
incorporating this proposed meaning into the term "particular market situation", particularly where 
such considerations are more appropriately examined in relation to the terms "because of" and 
"permit a proper comparison" as suggested by the above analysis.  Second, we do not accept as a 
given that an equal impact on cost of merchandise produced for domestic and export markets would 
necessarily  affect sales prices in both markets equally such that a proper comparison between 
domestic sales and export sales would not be prevented.  We consider that these assertions are not 
appropriate elements for an interpretation of the term "particular market situation", but rather are 
better suited to an analysis of whether domestic sales do not permit a proper comparison because 
of a particular market situation identified by an investigating authority.  We will return to these points 
in our examination of Indonesia's arguments relating to the meaning of the term "permit a proper 
comparison".   
Indonesia argues that the negotiating history of the 19 67 Anti -Dumping Code and subsequent 
negotiations that maintained the term "particular market situation" as it now appears in Article  2.2 
of the Anti -Dumping Agreement confirm that the "particular market situation" provision cannot be 
used to address distor tions in the cost of inputs.71 Indonesia contrasts the discussion that was 
generated by the issue of "input dumping" with the silence in the negotiating history in connection 
with the "particular market situation" provision.72 Indonesia cites the 1984 paper of the Ad -Hoc 
Group on Implementation of the Anti -Dumping Code ("Draft Recommendation Concerning Treatment 
of the Practice Known as Input Dumping") as demonstrating that input cost issues have generated 
active discussions without resulting in any agreement  to regulate "input dumping".73 In contrast, 
Indonesia refers to silence in the negotiating history regarding the inclusion of the phrase "particular 
market situation" in the 1967 Anti -Dumping Code and continued silence in subsequent negotiating 
history whe n use of the phrase was continued.74 Indonesia argues that if the terms "particular 
market situation" had been intended to apply to situations of low -priced inputs, their inclusion in the 
1967 Anti -Dumping Code and in subsequent anti -dumping agreements woul d have generated a more 
active discussion as could be observed when the issue of "input dumping" was discussed.75 
Australia argues that "input dumping" is not at issue in this case, and in any event the "Draft 
Recommendation Concerning Treatment of the Prac tice Known as Input Dumping" cited by Indonesia 
was never adopted by the Committee on Anti -Dumping Practices.76 In regard to negotiating history, 
Australia argues there is no basis in the rules of treaty interpretation to claim that "silence in the 
negotiat ing history" supports a narrow interpretation of "particular market situation".77  
We note that under the customary rules of interpretation, preparatory work, including 
negotiating history and certain other materials , are supplementary means of interpretati on and have 
relevance only to confirm the meaning reached by the interpreter, or to determine the meaning 
when the ordinary meaning, context and object and purpose of a particular provision give rise to an 
interpretation that is ambiguous or obscure or lea ds to a result that is absurd or unreasonable.78 We 
 
70 We note that Australia denies that this description accurately characterizes  the situation the ADC 
found to exist in respect of the A4 copy paper market in Indonesia. For purposes of testing Indonesia's 
interpretive legal theory in connection with this aspect of Indonesia's claim, it is not necessary for us to resolve 
this factual issue.  
71 Indonesia's first written submission, paras. 58 -71. 
72 Indonesia's first written s ubmission, paras. 68 -71. 
73 Indonesia's first written submission, para. 69 (referring to Draft Recommendation Concerning 
Treatment of the Practice Known as Input Dumping , ADP/W/83/Rev.2).  
74 Indonesia's first written submission, paras. 59 -68. 
75 Indonesia's first written submission, paras. 68 -71. 
76 Australia's first written submission, para. 160.  
77 Australia's first written submission, para. 159.  
78 Articles 31 and 32 of the Vienna Convention.  WT/DS529/R  
 
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  do not consider that the meaning of the phrase "particular market situation " is ambiguous or obscure 
or that it leads to a result that is absurd or unreasonable.  Therefore , it is not necessary to resort to 
supplementary materials in order to confirm or determine  the meaning of the  phrase "particular 
market situation". In any event, we note that t he "Draft Recommendation Concerning Treatment of 
the Practice Known as Input Dumping" defined the issue it was ad dressing as "where materials or 
components that are used in manufacturing an exported product are purchased at … dumped or 
below cost prices".  We find the issue addressed by the paper, i.e. below cost or dumped inputs for 
exported product, is distinctly di fferent from the situation at issue in this dispute, i.e. a situation 
that decreases input cost of the product under consideration in an anti -dumping investigation. 
Furthermore, t he paper does not address the meaning of "particular market situation" , and t he 
silence surrounding the inclusion of the phrase does not allow us to draw any conclusions as to the 
meaning of it.   
In the light of the above examination, we find that Indonesia has failed to demonstrate that 
a situation of a low-priced input used ident ically to produce merchandise for the domestic and export 
markets  is necessarily disqualified from constituting a "particular market situation" within the 
meaning of Article  2.2 of the Anti -Dumping Agreement. Accordingly, the mere fact that the 
ADC's  finding of a "particular market situation" was based, in part, on the existence of low input 
prices does not render that finding inconsistent with Article  2.2 of the Anti -Dumping Agreement.   
7.2.3.4   Situations not having an exclusively unilateral impact on domesti c market sales  
We next address Indonesia's submission that a correct interpretation of "particular market 
situation" necessarily excludes situations not having an exclusively unilateral impact on domestic 
market sales.  
Indonesia argues that the phrase "par ticular market situation" is correctly interpreted to mean 
"an exceptional set of circumstances affecting comparability of domestic market prices in such a way 
as to affect them unilaterally and, thus, prevent them from being compared to export prices" .79 
Indonesia finds support for this interpretation in the understanding that "market" connotes that the 
situation is "taking place in a geographic region"80, and that "market" is used in the singular rather 
than the plural, suggesting that the situation relates  to the domestic market only.81 In 
Indonesia's  understanding, a particular market situation, correctly interpreted, must have an "effect 
[that] is one -sided and on the domestic market".82 In Indonesia's view, a situation that affects the 
domestic market sign ificantly, but export markets less so cannot be a "particular market situation" 
because the impact on prices must be exclusively unilateral.83 Indonesia argues that the other two 
bases in Article  2.2 of the Anti -Dumping Agreement for disregarding domestic s ales (i.e. sales 
outside of the ordinary course of trade and low volume sales) both concern circumstances affecting 
sales in the domestic  market, and neither situation relates to circumstances that also affect export 
prices.84 Indonesia considers that an ex clusively unilateral effect is a common element of these other 
two bas es for disregarding domestic sales, and Indonesia argues that this supports the argument 
that the "particular market situation" should also be interpreted to exclude situations that do n ot 
have an exclusively unilateral effect on domestic prices.85  
Australia argues that the ordinary meaning of "particular market situation" does not 
incorporate the concept of "unilateral" or anything like it.86 According to Australia, Indonesia 
erroneously asserts that the other conditions in Article  2.2 could not "also affect export prices", are 
"one-sided" and are "[only] on the domestic market".87 Australia claims that it is quite possible for 
there to be export sales that are, in whole or in part, not in the ordinary course of trade or exhibit 
"low volume".88 Australia argues that examination of the existence of each of the conditions focuses 
on the domestic market exclusively, with no requirement to consid er whether export sales are 
 
79 Indonesia's first written submission, para. 72.  
80 Indonesia's first written submission, para. 37.  
81 Indonesia's first written submission, para. 38.  
82 Indonesia's first written submission, para. 40.  
83 Indonesia's response to Panel question No. 5 following the first meeting of the Panel, p. 11.  
84 Indonesia's first written submission, paras. 39 -40. 
85 Indonesia's first written submission, para. 40.  
86 Australia's first written submission, para. 158.  
87 Australia's first written submission, paras. 166 -167. 
88 Australia's first written submission, paras. 164 -166. 
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  similarly affected.89 Australia submits, in terms of context,  that a "particular market situation" is a 
condition co-located with  two other conditions  that comprise specific circumstances in respect of 
sales of the like product i n the market of the exporting country.90 Australia maintains that the 
existence of a particular market situation is unaltered by whether it affects prices in the domestic 
market exclusively, affects prices in the domestic market and export market differentl y, or affects 
prices in the domestic market and export market identically.91 Australia considers the impact on 
export prices to be irrelevant to the determination of particular market situation, which Australia 
argues is focused instead on whether a situati on causes "such sales" (i.e. domestic market sales) to 
"not permit a proper comparison".  
We consider that the text of Article  2.2 confirms that this provision, including the "particular 
market situation", is focused on the domestic market.  Article  2.2, in relevant part, reads:  
When there are no sales of the like product in the ordinary course of trade in the 
domestic market  of the exporting country or when, because of the particular market  
situation or the low volume of the sales in the domestic market  of the exporting country, 
such sales  do not permit a proper comparison …92  
The word "market" in "the particular market situation" refers to the domestic market because 
the term "such sales" refers to domestic market sales that may be rendered unfit to permit a  proper 
comparison, as we will explain further below.  In our view, however, it does not follow that a situation 
arising in the domestic market of the exporting country that affects domestic sales in such a way 
that does not permit a proper comparison canno t be considered to constitute "the particular market 
situation" simply because it also affects export sales.  We do not consider the presence of some effect 
on export sales automatically forecloses the possibility that the effect on domestic sales will, 
nevertheless, be such that a proper comparison is not permitted. As we will discuss in relation to 
Indonesia's argument in respect of the interpretation of "permit a proper comparison" , the "proper 
comparison" language allows for an assessment of the relative  effect upon domestic and export sales 
of the "particular market situation".  Incorporating the requirement of an exclusively unilateral effect 
into the phrase  "particular market situation" , as Indonesia suggests , would, in our view, deprive the 
"permit a p roper comparison" language of its intended function.  
We note that Article  2.2 uses the term "sales" three times. The first use of the term is in the 
phrase  "no sales of the like product in the ordinary course of trade in the domestic market of the 
exporting country" . The second time the word is used, it also refers to " the sales in the domestic 
market ". It follows therefore  that the third use of the term "sales" in the phrase "such sales" equally 
refers to the sales in the domestic market. This conc lusion is supported by the structure of the 
sentence in Article  2.2. The main clause of Article  2.2 is conditionally operative , and two subordinate 
clauses set forth the conditions for the main clause being operative. The main clause can be 
simplified as f ollows: The margin of dumping shall be determined by comparison with the comparable 
price of the like product when exported to an appropriate third country or with the cost of production 
in the country of origin.93 The subordinate clauses modify the verb "shall be determined ". The first 
subordinate clause tells us that the main clause is operative when there are no sales of the like 
product in the ordinary course of trade in the domestic market of the exporting country . The qualifier 
"such" in the phrase "such sales " in the second subordinate clause  makes clear that the reference is 
to "sales of the like product in the ordinary course of trade in the domestic market of the exporting 
country " mentioned in the first subordinate clause . The second subordinate cl ause pertains  to when 
sales of the like product in the ordinary course of trade in the domestic market of the exporting 
country are present but do not permit a proper comparison  of the domestic sales price with the 
export price for one of the two reasons : (i) because of the particular market situation , or (ii) because 
 
89 Australia's first written submission, paras. 166 -167. 
90 Australia's first written submission, paras. 102 -103; see also paras. 141 -142 (Australia arguing that 
"particular market situation" and sales outside the ordinary course of trade are "both situations [that] relate to 
determining whether the domestic price  is suitable to use as the basis for the 'normal value'" and that similar 
factors are relevant for determining whether domestic sales "permit a proper comparison"); response to Panel 
questions Nos. 22 and 23 following the second meeting of the Panel, paras . 118-120. 
91 Australia's response to Panel question No. 6 following the first meeting of the Panel, paras. 25 -26. 
92 Emphasis added; fn omitted.  
93 The full text of the main clause is: "the margin of dumping shall be determined by comparison with a 
comparabl e price of the like product when exported to an appropriate third country, provided that this price is 
representative, or with the cost of production in the country of origin plus a reasonable amount for 
administrative, selling and general costs and for pr ofits".  WT/DS529/R  
 
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  of their low volume in the domestic market of the exporting country. This confirms also  that the 
word "market" in "the particular market situation" refers to  the "market of the exporting count ry", 
i.e. the domestic market , as we  stated above .  
We are also not persuaded that the other bases for disregarding domestic market sales as a 
basis for normal value support Indonesia's suggested interpretation.  First, in our view, none of the 
underlying phenomena appear to be inherently restricted to impact domestic sales exclusively.  High 
production costs during a period could result in all domestic sales being below cost and therefore 
outside the ordinary course of trade making the "no sales in the ordinary course of trade" provision 
applicable despite the fact that export sales may also be affected.  Second, the "low volume of sales 
in the domestic market" condition in the first instance is measured in relation to the volume of export 
sales su ch that the phenomenon of low volume of sales in the domestic market may well arise as a 
consequence of a relatively high volume of sales in the export market.  The language of Article  2.2 
focuses on domestic market sales simply for the reason that the prov ision is concerned with whether 
the domestic market sales are an appropriate basis for determining normal value, not because the 
effects of the underlying phenomena are necessarily exclusively unilateral in nature.   
In the light of the above examination, w e find that Indonesia has failed to demonstrate that 
a domestic market situation that does not impact domestic sales unilaterally (i.e. that also, in some 
way, impacts export sales) cannot constitute the "particular market situation", within the meaning 
of Article  2.2. To this extent, there is no legal basis to support Indonesia's claim that the 
ADC's  "particular market situation" finding was inconsistent with Article  2.2 because it rests on a 
factual finding concerning a situation that allegedly did not ex clusively affect domestic sales.   
7.2.3.5   Situations arising from government action  
We next address Indonesia's argument that a situation arising from government action is 
necessarily disqualified from constituting the "particular market situation" within the mean ing of 
Article  2.2 of the Anti -Dumping Agreement.  
Indonesia argues that it is impermissible to interpret the terms "particular market situation" 
in a way that interjects the Anti -Dumping Agreement "into the sphere of regulating government 
behaviour which i s expressly regulated in the [Agreement  on Subsidies and Countervailing Measures 
(SCM Agreement )]".94 Indonesia further argues that Australia's action amounted to "specific action 
against a subsidy" and that the prohibition of such action under Article  32.1 of the SCM Agreement 
should be read as context to limit the scope of the term "particular market situation" to exclude 
situations arising from government action.95 
Australia agrees that, in accordance with customary rules of treaty interpretation, the 
provisions of the SCM Agreement may be relevant context to the interpretation of the 
Anti-Dumping  Agreement.96 Australia argues, however, that Article  32.1 of the SCM Agreement does 
not support Indonesia's argument because it does not pr eclude specific action against dumping 
where the constituent elements of dumping are found, irrespective of whether the dumping arises 
from a subsidy.97 According to Australia, footnote 56 of the SCM Agreement clarifies this 
understanding of Article  32.1 of  the SCM Agreement, and the Appellate Body in US – Offset Act 
(Byrd Amendment)  has confirmed this interpretation.98 
We understand footnote 56 of the SCM Agreement and Article  18.1 of the 
Anti-Dumping  Agreement to provide that Article  32.1 of the SCM Agreeme nt does not prevent 
application of anti -dumping duties to a situation where, in addition to fulfilment of the other required 
elements under the Anti -Dumping Agreement, the export price is found to be less than normal value, 
even if the reason for the diffe rence can be traced to a subsidy.  Article  32.1 of the SCM Agreement 
reads:  
 
94 Indonesia's first written submission, para. 46.  
95 Indonesia's response to Panel question No. 10(d) after the first meeting of the Panel, p. 15.  
96 Australis's second written submission, para. 126.  
97 Australia's second written submission, paras. 12 8-133. 
98 Australia's second written submission, paras. 128 -138 (referring to Appellate Body Report, 
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  No specific action against a subsidy of another Member can be taken except in 
accordance with the provisions of GATT 1994, as interpreted by this Agreement.  
Footnote 56, clarifying Article  32.1 of the SCM Agreement, reads:  
This is not intended to preclude action under other relevant provisions of GATT 1994, 
as appropriate.  
Article  18.1 of the Anti -Dumping Agreement reads:  
No specific action against dumping of exports from another Mem ber can be taken except 
in accordance with the provisions of GATT 1994, as interpreted by this Agreement.  
The GATT 1994 and the Anti -Dumping Agreement authorize specific action against dumping 
of exports where the requisite elements are satisfied, irrespec tive of whether the exports at issue 
also benefit from a subsidy.  This action does not constitute specific action against a subsidy under 
Article  32.1 of the SCM Agreement because the authority to take the specific action derives from the 
satisfaction of t he requisite elements for specific action against dumping of exports.  The converse 
analysis is equally applicable in relation to specific action against a subsidy and in connection with 
Article  18.1 of the Anti -Dumping Agreement, irrespective of whether th e subsidy benefits exports 
that may also be dumped.  In this way, Article  32.1 of the SCM Agreement and Article  18.1 of the 
Anti-Dumping Agreement are interpreted harmoniously with each other.  This understanding is 
confirmed by the clarification provided in footnote 56 of the SCM Agreement (and the corresponding 
footnote 24 of the Anti -Dumping Agreement).  Specific action against dumping of exports constitutes 
"action under other relevant provisions of GATT 1994, as appropriate" in th e meaning of footnote  56 
of the SCM Agreement.  Therefore, Article  32.1 of the SCM Agreement is not intended to preclude 
such action.  
In our view, this understanding is consistent with the reasoning offered by the Appellate Body 
in US – Offset Act (Byrd Ame ndment) : 
[A]ction is specific to dumping (or a subsidy) when it may be taken only when the 
constituent elements of dumping (or a subsidy) are present[.] … Footnotes 24 and 56 
are clarifications of the main provisions, added to avoid ambiguity; they confirm  what 
is implicit in Article  18.1 of the Anti -Dumping Agreement and in Article  32.1 of the 
SCM Agreement, namely, that an action that is not  "specific" within the meaning of 
Article  18.1 of the Anti -Dumping Agreement and of Article  32.1 of the SCM Agreemen t, 
but is nevertheless related to dumping or subsidization, is not prohibited by Article  18.1 
of the Anti -Dumping Agreement or Article  32.1 of the SCM Agreement.99 
As an initial point, we note that, to the extent Indonesia suggests that a "particular market  
situation" finding could constitute a "specific action" within the meaning of Article  32.1 of the 
SCM Agreement such that Article  32.1 acts to constrain the scope of situations that can be examined 
under this provision of Article  2.2 of the Anti -Dumping A greement100, we disagree because a 
"particular market situation" finding is not an action.  Rather, such a finding is merely one element 
in a determination of whether the criteria in the Anti -Dumping Agreement for imposing an 
anti-dumping measure are satisfied. A finding of "particular market situation" on its own and in 
isolation does not entail any consequences that could be characterized as an action against a 
subsidy.101  
In light of the above Appellate Body interpretation of Article  32.1 of the SCM Agreement, an 
anti-dumping measure taken in accordance with the Anti -Dumping Agreement and Article  VI of the 
GATT 1994 would not  be precluded by the operation  of Article  32.1 of the SCM  Agreement . Our task 
here is to determine whether Indonesia has demonst rated that the challenged measures are 
inconsistent with Article  2.2 of the Anti -Dumping Agreement.  If the answer is affirmative, this may 
 
99 Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 262 . 
100 Indonesia's response to Panel question No. 10(d) following the first meeting of the Panel, pp. 15 -16. 
101 We recall that Indonesia's panel request and our terms of reference do not include a claim under 
Article  32.1 of the SCM Agreement. We therefore refrai n from considering Indonesia's arguments that the 
challenged measures are inconsistent with Article  32.1 of the SCM  Agreement. (Indonesia's response to Panel 
question No. 10(d) following the first meeting of the Panel, pp. 15 -16). WT/DS529/R  
 
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  have implications in relation to Article  32.1 of the SCM Agreement, but Article  32.1 of the 
SCM Agreement does not as sist us in making the relevant determination before us in respect of 
Article  2.2 of the Anti -Dumping Agreement.  We are not persuaded , therefore, by 
Indonesia's  argument that Article  32.1 of the SCM Agreement supports interpreting the term 
"particular marke t situation" to exclude situations that arise  from circumstances that include 
government action  that could be characterized as a subsidy if it were examined under the 
SCM Agreement.  For greater clarity, we are not here finding that the question of whether a situation 
at issue that constitutes a subsidy under the SCM Agreement is relevant or irrelevant to the 
necessarily fact-specific and case-by-case analysis  of whether a set of circumstances constitutes a 
particular market situation.  
Indonesia also argues that there is a general principle that under the GATT 1994 and the 
Anti-Dumping Agreement the anti -dumping remedy is not concerned with government action, except 
where specific provisions expressly define an exception to this general principle.102 Indonesia argues 
that Article  VI:5 of the GATT 1994 ("same situation of dumping or export subsidization"), the second 
Ad Note to Articles VI:2 and VI:3 of the GATT 1994 ("multiple currency practices"), the second 
Ad Note to Article  VI:1 of the GATT 1994 ("all domestic prices fixed by the State"), and Article  2.7 
of the Anti -Dumping Agreement (referring to the second Ad Note to Article  VI:1 of the GATT 1994) 
are narrow and clearly defined express exceptions from the general principle that the Anti -Dumping 
Agreement is not concerned with government action.103 In support of its position, Indonesia cites 
the following reasoning of  the panel in EU – Biodiesel (Argentina)  in regards to the provision on 
multiple currency practices104: 
We therefore see no reason to extrapolate from this provision that the concept of 
"dumping" is generally intended to cover any distortion arising out of g overnment action 
or circumstances such as those surrounding Argentina's export tax system and its 
impact on soybean prices as an input material for biodiesel.105 
Australia counters that the panel in EU – Biodiesel (Argentina)  was responding to the 
EU argumen t that the second Ad Note to Articles VI:2 and VI:3 of the GATT 1994 ("multiple currency 
practices") was relevant to the second condition of Article  2.2.1.1 ("reasonably reflect the costs 
associated with the production and sale"), and not in relation to th e meaning of "particular market 
situation".106 Australia argues that t he term "particular market situation" does not include any 
language indicating that the situation must be independent of any government intervention.107 
Australia further argues that governm ent action is not exclusively covered by the SCM Agreement, 
and that government intervention that results in market distortion can render the domestic price not 
suitable to determine the normal value and preclude a proper comparison.108 Australia argues that  
the examples given by the second Ad Note to Article  VI:1 of the GATT 1994 and Article  2.7 of the 
Anti-Dumping Agreement demonstrate that government actions are relevant to the determination 
of dumping consistent with the Anti -Dumping Agreement.109 Australia also argues that the possibility 
of "double remedies" arising as demonstrated in US – Anti-Dumping and Countervailing Duties 
(China)  and in connection with the situation described in Article  VI:5 of the GATT 1994 
("same  situation of dumping or ex port subsidization"), is directly contrary to Indonesia's argument 
that the effects of subsidies cannot be remedied under the Anti -Dumping Agreement.110 
We are not persuaded of the existence of the general principle that Indonesia proposes. We 
note that the proposed general principle that anti -dumping measures otherwise available in 
accordance with the provisions of the GATT 1994 and the Anti -Dumping Agreement are nevertheless 
precluded where the difference, or part of the difference, between export price and  normal value 
can be traced to government action is not found explicitly expressed in any text of the 
Anti-Dumping  Agreement or the SCM Agreement.  In light of our prior analysis in connection with 
the express provisions of Article 18.1 of the Anti -Dumping Agreement and Article  32.1 of the 
SCM Agreement and their clarifying footnotes, we find it implausible that such a general principle 
 
102 Indonesia's response to  Panel question No. 10(a) following the first meeting of the Panel, pp.  13-14. 
103 Indonesia's response to Panel question No. 10(b) following the first meeting of the Panel, p.  14. 
104 Indonesia's response to Panel question No. 10(b) following the first meetin g of the Panel, p.  14. 
105 Panel Report , EU – Biodiesel (Argentina) , para. 7.240.  
106 Australia's second written submission, paras. 144 -145. 
107 Australia's second written submission, para. 143.  
108 Australia's first written submission, paras. 161 and 135 -139. 
109 Australia's first written submission, paras. 135 -139. 
110 Australia's response to Panel question No. 26 following the first meeting of the Panel, paras.  64-67. WT/DS529/R  
 
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  with preclusive effect on the scope of application of the Anti -Dumping Agreement would exist without 
an express basis in th e text of either the Anti -Dumping Agreement or the SCM Agreement.  Moreover, 
we find support in the text of Article  VI:5 of the GATT 1994 for a contrary inference that is consistent 
with our prior analysis.  Article  VI:5 of the GATT 1994 provides:  
No product  of the territory of any contracting party imported into the territory of any 
other contracting party shall be subject to both anti -dumping and countervailing duties 
to compensate for the same situation of dumping or export subsidization.  
We are not convinced by Indonesia's assertion that the existence of the proposed general 
principle can be inferred from the understanding that Article  VI:5 constitutes an express exception 
to the general principle.  We find that the text of Article  VI:5 of the GATT 1994 does not support this 
claim. The provision does not contain any language to authorize application of anti -dumping duties 
to the situation of a price difference that constitutes dumping that arises from the situation of an 
export subsidy.  Rather, Article  VI:5 prohibits the "double remedy" of applying anti -dumping duties 
and countervailing duties to remedy twice the situation where an export subsidy creates a difference 
between export price and normal value that constitutes dumping.  Article  VI:5 does not authorize the 
imposition of anti -dumping duties that would otherwise be precluded by operation of 
Indonesia's  proposed general principle.  Instead, Article  VI:5 creates a prohibition of "double 
remedies" to address a specific situation that arises only on the basis of an implicit assumption that 
anti-dumping duties could have been applied by reason of the price difference that constitutes 
dumping despite the fact that the same situation is also understood to constitute export 
subsid ization . In other words, Article  VI:5 represents a narrow exception to the general principle 
that anti -dumping duties and countervailing duties may be applied whenever the criteria set forth in 
the GATT 1994 , the Anti -Dumping Agreement , and the SCM Agreement  are sat isfied.  This contradicts 
Indonesia's argument that Article  VI:5 represents an express authorization and exception to a more 
general rule that dumping arising from government action cannot be addressed by the provisions of 
the Anti -Dumping Agreement.  At the  same time, we do not take the view whether government action  
that affects the market for the domestic like product can be addressed by treating government action 
as a sufficient condition for finding that a "particular market situation" exists.  As we conc luded in 
our above examination of "particular market situation", a fact-specific and case-by-case analysis  of 
the particular market situation is necessarily called for.  
Our reasoning is consistent with the Appellate Body's findings in US – Anti-Dumping and  
Countervailing Duties (China)  where it was found that "double remedies" may also arise in 
connection with countervailing domestic  subsidies and simultaneous application of a non -market 
economy (NME) methodology.111 We find nothing in the reasoning of the Ap pellate Body in that case 
to suggest that the anti -dumping duties at issue in that dispute were precluded by reason of the 
existence of a general principle that the Anti -Dumping Agreement does not afford a remedy in 
circumstances where the difference betwe en export price and normal value can be traced to a 
domestic subsidy.  Rather, the anti -dumping duties were understood to be authorized under the 
Anti-Dumping Agreement, and to the extent that the difference between export price and normal 
value was attribu table to the differential impact of the domestic subsidy on the export price and the 
normal value, this amount was deducted pursuant to Article  19.3 of the SCM Agreement from the 
"appropriate amount" that could be included in any countervailing duties appl ied to remedy the same 
subsidy.112 
In the light of the above examination, we find that Indonesia has failed to demonstrate that 
a situation arising from government action in whole or in part is necessarily  disqualified from 
constituting the "particular marke t situation", within the meaning of Article  2.2 of the Anti -Dumping 
Agreement.  Accordingly, the mere fact that the ADC's finding of a "particular market situation" was 
based, in part, on certain Indonesian government policies affecting the timber and pulpwood sector, 
does not render that finding inconsistent with Article  2.2 of the A nti-Dumping Agreement.   
7.2.3.6   Conclusion in respect of "particular market situation"  
On the basis of the above findings, we determine that Indonesia has not demonstrated that 
the ADC acted inconsistently with Australia's obligations under Article  2.2 of the 
Anti-Dumping  Agreement when it found that a "particular market situation" existed in the Indonesian 
 
111 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 541.  
112 Appellat e Body Report, US – Anti-Dumping and Countervailing Duties (China) , para. 582.  WT/DS529/R  
 
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  domestic market for A4 copy paper.  Indonesia's arguments have not persuaded us that a domestic 
market situation resulting in a lower cost for an input used to p roduce both exported and 
domestically sold product is necessarily excluded from constituting "the particular market situation". 
Nor are we persuaded that, as a general proposition, any situation which has or may have some 
impact on export sales in addition  to domestic market sales is necessarily excluded from constituting 
"the particular market situation" because we consider that, in at least some cases, differences in the 
impact on domestic and export sales could prevent a proper comparison.  Finally, we ar e also not 
persuaded that "the particular market situation" referenced in this provision necessarily excludes 
any situation that arises from a subsidy or other governmental action.   
7.2.4   Whether the Anti -Dumping Commission properly determined that domestic mark et 
sales did "not permit a proper comparison"  
7.2.4.1   Introduction  
Indonesia  asserts that, in disregarding domestic market sales, the ADC failed to make, or 
properly make , a determination that the domestic market sales affected by the particular market 
situation d id "not permit a proper comparison", as required by Article  2.2 of the 
Anti-Dumping  Agreement.113  
The principal difference in the parties' interpretations of "permit a proper comparison" is that 
under Australia's interpretation it is sufficient to determine  that domestic sales are "not suitable" for 
use as the basis for normal value114, whereas under Indonesia's interpretation a comparison of 
domestic and export prices is required.115 In view of this difference of interpretation, the parties 
dispute whether the ADC's determination to disregard domestic sales was inconsistent with 
Article  2.2. 
As with its arguments in connection with "particular market situation", Indonesia is not here 
challenging the ADC's establishment and evaluation of the facts except insofar as the ADC's factual 
findings were guided by an allegedly erroneous understanding of the meaning of the phrase "permit 
a proper comparison".116 Thus, Indonesia's argument turns in the first instance on the legal 
interpretation of the phrase "permit a proper comparison".  
We first examine whether Indonesia's interpretative arguments demonstrate that the phrase  
"permit a proper comparison", as used in Article  2.2 of the Anti -Dumping Agreement, requires an 
investigating authority to examine whether the particular market situation found to exist affects 
export prices, in addition to domestic prices, in such a way that does not permit a proper comparison 
between the export price and the domestic price.  We then evaluate the merits of 
Indonesia's  argument th at in any case such a requirement arises in the circumstance where a 
low-priced input is used identically to produce merchandise for domestic and export markets.  Finally, 
we apply the proper interpretation to the relevant facts to determine whether the 
ADC's determination is inconsistent with Article  2.2 of the Anti -Dumping Agreement.   
7.2.4.2   Requirement to  account for effects on export prices by the particular market 
situation when determining whether "a proper comparison " is permitted  
We examine Indonesia's clai m in respect of the interpretation of the phrase "permit a proper 
comparison" within the meaning of Article  2.2 of the Anti -Dumping Agreement.  Indonesia asks the 
Panel to adopt an interpretation of "permit a proper comparison" which requires a consideratio n of 
the effect on both domestic prices and export prices.117 The essential point of disagreement between 
the parties is whether, in the circumstances of this case, domestic sales prices, found to be distorted, 
will nevertheless permit a proper comparison wi th export prices and cannot, therefore, be 
 
113 Indonesia's first written submission, para. 115; opening statement at the first meeting of the Panel, 
paras. 26-29. 
114 Australia's first written submission, paras. 118 -148; sec ond written submission, paras.  80-93. 
115 Indonesia's first written submission, paras. 80 -122; second written submission, paras. 32 -38. 
116 Indonesia's opening statement at the first meeting of the Panel, para. 9 ; responses to Panel 
questions Nos. 3 and 34 following the first meeting of the Panel, pp. 8 -9. 
117 Indonesia's second written submission, paras. 22 and 32 -38. 
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  disregarded as a basis for normal value.  Australia disagrees that the distorted domestic sales prices  
in question  can be suitable for use as a basis for normal value.118 
Indonesia argues that , even if a "particular market situation" has properly been found to exist, 
Article  2.2 requires an investigating authority to use domestic sales prices as the normal value if 
domestic sales of the like product in the ordinary course of trade permit a proper comparison  with 
the e xport price .119 Australia agrees with Indonesia that, before discarding domestic market sales 
as a basis for determining normal value, it is necessary to determine that domestic market sales "do 
not permit a proper comparison" because of the particular marke t situation.120 Thus, the parties 
appear to agree that, in addition to a finding that the particular market situation exists, Article  2.2 
also requires a distinct finding that the domestic sales "do not permit a proper comparison" because 
of the particular market situation.  We proceed to examine the content of that requirement.  
Indonesia argues that the term "proper comparison" must be understood in respect of the 
usual comparison described in Article  2.1 between prices of domestic market sales an d export prices 
to determine if dumping exists.121 Indonesia argues that while a particular market situation may be 
capable of preventing proper price comparisons just like a low volume of sales may be, Article  2.2 
requires the investigating authority in bot h scenarios to make an evidentiary finding.122 Indonesia 
asks the Panel to agree that Article  2.2 requires an evidentiary finding whether an individual 
exporter 's domestic prices can properly be compared to that individual exporter 's export prices even 
where  it is demonstrated that the domestic prices have been affected by the particular market 
situation.123 According to Indonesia, because the proper comparison is between the individual 
producer 's domestic and export prices, whether a proper comparison is permi tted cannot be 
determined by examining only the domestic sales.124 Indonesia notes the reasoning of the 
Appellate  Body that "dumping" and "margin of dumping" are exporter -specific concepts which arise 
from the pricing behaviour of individual exporters and ca n be understood as "international price 
discrimination".125 According to Indonesia, this reasoning supports the understanding that Article  2.2 
requires examination of price comparability between domestic sales and export sales even in the 
context of a partic ular market situation. Indonesia argues that the purpose of the dumping inquiry 
is to determine whether international price discrimination is occurring126, and therefore  a proper 
comparison is possible if the particular market situation equally affects domes tic and export prices.  
Indonesia asks the Panel to rule on the "specific issue of whether a low -price input used 
identically to produce merchandise for domestic and export market prevents a proper 
comparison".127 Indonesia finds support for its position on this point in the observation made by the 
Appellate Body in US – Anti-dumping and Countervailing Duties (China)  to the effect that, when 
domestic subsidies are granted in market economies, "both the normal value and the export price 
will be lowered as a result of the domestic subsidy, so that the dumping margin should not be 
 
118 Australia's response to Panel question No. 19 following the first meeting of the Panel, 
paras.  124-125.  
119 Indonesia's first written submission, paras. 79, 81, 82, 102, 107, 115, and 122.  
120 Australia's second written submission, paras. 19 -20. 
121 Indonesia' s first written submission, para. 87.  
122 Indonesia's response to Panel question No. 2(b) following the first meeting of the Panel , p. 8 . 
123 Indonesia's response to Panel question No. 3 following the first meeting of the Panel , p. 9 . 
124 Indonesia's response to  Panel question No. 3 following the first meeting of the Panel , p. 9.  
125 Indonesia's first written submission, paras. 90 -100 (referring to Appellate Body Report, 
US – Stainless Steel (Mexico) , paras. 87, 88, 90, 91, 94, 95, and fn 208) . Indonesia finds addi tional support 
for the "pricing discrimination" understanding of dumping by reference to a WTO technical paper and an 
Australian legislative report, and in the submissions of several members in 1966 during the Kennedy Round 
negotiations when "particular ma rket situation" was first included in the Anti -dumping Code. (Indonesia's 
first written submission, para. 91  (referring to WTO, Technical information on anti -dumping, 
https://www.wto .org/english/tratop_e/adp_e/adp_info_e.htm  (accessed on 22 August 2018) and Australia 
Senate Economics Legislation Committee , Customs Amendment (Anti -Dumping) Bill (June 2011), 
(Exhibit  IDN-18), para. 2.4 and fns 1-2); second written submission, paras. 27 -31 (referring to Comments by 
the European Economic Community on Items I to V and IX to XIII , TN.64/NTB/W/12/Add.2  (24 June 1966); 
Comments by Japan on Items I to V and IX to XI , and XIII , TN.64/NTB/W/12/Add.6 (1 July 1966 ); Comments 
by the Govern ment of Canada on Items I -V, IX-XI and XIII, TN.64/NTB/W/12/Add.3  (29 June 1966 ); and 
Comments by the United States on Items I -V, TN.64/NTB/W/12/Add.5 (30 June 1966 )). 
126 Indonesia's first written submission, para. 106.  
127 Indonesia's response to Panel quest ion No. 2(b) following the first meeting of the Panel, p.  8; 
response to Panel question No. 20 following the second meeting of the Panel, para. 38.   
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  affected" .128 Indonesia reasons that a low cost input identically used in production for export and 
domestic sales will have the same effect on  those sales as a 'domestic subsidy' would" .129 
Australia argues that the proper interpretation of the phrase "permit a proper comparison" is 
to allow a suitable and accurate comparison to: (a) ascertain whether the product is to be considered 
as being dumpe d, and (b) determine the margin of dumping.130 Australia argues that the 
Anti-Dumping Agreement does not explicitly identify the factors that will determine whether or not 
using the domestic price as the basis for the "normal value" would allow an investigat ing authority 
to conduct "a suitable and accurate comparison".131 Australia argues that Article  2.7 of the 
Anti-Dumping Agreement and the second Ad Note to Article  VI:1 of the GATT 1994 (regarding 
imports  "from a country which has a complete or substantially  complete monopoly of its trade and 
where all domestic prices are fixed by the State") demonstrate that government intervention (both 
in respect of the like product and in respect of inputs to the like product) can result in the domestic 
price not being su itable to use as the basis for the normal value.132 Australia refers to the statement 
of the Appellate Body in EC – Fasteners (China)  that the second Ad Note to Article  VI:1 "allows 
investigating authorities to disregard domestic prices and costs  of such a n NME in the determination 
of normal value and to resort to prices and costs in a market economy third country" .133 Australia 
also argues that prices fixed in a manner incompatible with normal commercial practice or according 
to criteria which are not those of  the marketplace are not suitable to use as the basis for the normal 
value, as recognized by the Appellate Body in US – Hot-Rolled Steel where the Appellate Body 
considered a situation where the domestic sales were not in the "ordinary course of trade".134  
Australia challenges Indonesia's reliance on certain statements of the Appellate Body in 
US – Anti-Dumping and Countervailing Duties (China)  in support of the proposition "that domestic 
subsidies equally affect domestic and export price".135 Australia argues that the 
Appellate  Body's  actual reasoning in that case was that "domestic subsidies" could  affect both 
domestic and export prices such tha t "double remedies" (simultaneous application of anti -dumping 
and countervailing duties to offset the subsidy and then again to offset the price effect of the subsidy) 
could  arise.136 Australia argues that these statements do not support Indonesia's argument s that 
domestic and export prices are necessarily equally affected by a low input price.137 Australia argues 
that the statements in the panel and Appellate Body reports in US – Anti-Dumping and Countervailing 
Duties (China)  relied upon by Indonesia for the p roposition that domestic subsidies affect both 
domestic and export prices are inapposite because that dispute was not about Article  2 of 
Anti-Dumping Agreement and did not involve a finding of "particular market situation".138  
With respect to Articles 2.1 a nd 2.2 of the Anti -Dumping Agreement, we  note that in 
EC – Tube or Pipe Fittings , the Appellate Body stated as follows:   
We begin our analysis with a review of the provisions that lead to the calculation of 
constructed normal value.  Article  2.1 of the Anti -Dumping Agreement identifies a 
product as "dumped" where the product is introduced into the commerce of another 
country at "less than its normal value".  "Normal value" is understood by virtue of that 
provision to be the "price, in the ordinary course of t rade, for the like product when 
destined for consumption in the exporting country".  Where the price of the product in 
the home (exporting country) market is not "comparable" to the export price of the like 
product, Article  2.2 provides alternative bases fo r deriving "normal value":  
 
128 Indonesia's first written submission, paras. 120 -121 ( referring to  Appellate Body Report, 
US – Anti-Dumpi ng and Countervailing Duties (China) , fn 519).  
129 Indonesia's first written submission, para. 121.  
130 Australia's first written submission, para s. 130-132. 
131 Australia's first written submission, para. 133.  
132 Australia's first written submission, para. 136. 
133 Australia's first written submission, para. 137 ( referring to  Appellate Body Report, EC – Fasteners 
(China) , para. 285) . (emphasis added)  
134 Australia's first written submission, paras. 140 and 141 ( referring to  Appellate Body Report, 
US – Hot-Rolled  Steel, paras. 140 -141).  
135 Australia's first written submission, para. 170; response to Panel question No. 4(c) following the 
first meeting of the Panel, paras.  17-24 (referring to  Indonesia's first written submission, para. 121).  
136 Australia's response to  Panel question No. 4(c) following the first meeting of the Panel, para.  19. 
137 Australia's response to Panel question No. 4(c) following the first meeting of the Panel, para.  19. 
138 Australia's first written submission, para. 170.  WT/DS529/R  
 
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  When there are no sales of the like product in the ordinary course of trade 
in the domestic market of the exporting country or when, because of the 
particular market situation or the low volume of the sales in the domestic 
market  of the exporting country2, such sales do not permit a proper 
comparison, the margin of dumping shall be determined by comparison 
with a comparable price of the like product when exported to an appropriate 
third country, provided that this price is representative, or with the cost of 
production in the country of origin plus a reasonable amount for 
administrative, selling and general costs and for profits.  
2 Sales of the like product destined for consumption in the domestic market of the 
exporting cou ntry shall normally be considered a sufficient quantity for the 
determination of the normal value if such sales constitute 5 per cent or more of the 
sales of the product under consideration to the importing Member, provided that a 
lower ratio should be acc eptable where the evidence demonstrates that domestic 
sales at such lower ratio are nonetheless of sufficient magnitude to provide for a 
proper comparison.  
Article  2.2 makes clear that an alternative basis for deriving "normal value" must be 
relied upon by  an investigating authority where one of three conditions exists:   
(a) there are no sales in the exporting country of the like product in the 
ordinary course of trade; or   
(b) sales in the exporting country's market do not "permit a proper 
comparison" because of "the particular market situation"; or  
(c) sales in the exporting country's market do not "permit a proper 
comparison" because of their low volume.  
Where one of these c onditions exists, Article  2.2 further specifies two alternative bases 
for the calculation of "normal value":   
(a) third-country sales, that is, the comparable price of the like product when 
exported to an "appropriate" third country, provided the price is 
"representative"; or  
(b) constructed normal value, that is, the sum of:  
(i) the cost of production in the country of origin;   
(ii) a "reasonable amount" for SG&A; and  
(ii) a "reasonable amount" for profits.139 
In respect of the first condition, there is an  absence of the domestic price "when there are no 
sales of the like product in the ordinary course of trade in the domestic market of the exporting 
country ". In US – Hot-Rolled Steel , the Appellate Body stated  that "Article  2.1 requires investigating 
authorities to exclude sales not made 'in the ordinary course of trade', from the calculation of normal 
value, precisely to ensure that normal value is, indeed, the 'normal' price of the like product, in the 
home market of the exporter ".140 It follows that, when there are "no sales " in the "ordinary course 
of trade ", no domestic price would exist to be compared with.  
The second condition contemplates  a situation in which there are sales of the like product in 
the ordinary  course of trade in the  domestic market of the exporting country but the volume of those 
sales is low, such that they may not permit a proper comparison of the domestic price with the 
export price . 
 
139 Appellate Body Report, EC – Tube or Pipe Fittings , paras. 93 -95. 
140 Appellate Body Report, US – Hot-Rolled Steel , para. 140.  WT/DS529/R  
 
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In respect of the low volume condition, footnote 2 of the Anti -Dumping Agreement provides 
a useful and relevant clarification:  
Sales of the like product destined for consumption in the domestic market of the 
exporting country shall normally be considered a sufficient quantity for the 
determination of the normal value if such sales con stitute 5 per cent or more of the 
sales of the product under consideration to the importing Member, provided that a lower 
ratio should be acceptable where the evidence demonstrates that domestic sales at such 
lower ratio are nonetheless of sufficient magni tude to provide for a proper comparison.  
Thus, the situation of a low volume of domestic market sales may prevent a proper 
comparison between the domestic and the export price but, as provided for in footnote 2, it does 
not necessarily do so.  Specifically,  under the terms of footnote 2, if domestic sales are at least 5% 
of export sales, they shall normally not be considered to be low in volume within the meaning of 
Article  2.2; and a volume of domestic sales less than 5% of export sales may also be acceptab le if 
the sales are of "sufficient magnitude to provide for a proper comparison" . It follows that, when 
there are low volume sales, a further enquiry may determine whether such low volume sales "permit 
a proper comparison ". 
 Where a "particular market situ ation" is found to exist, the investigating authority must 
examine whether "a proper comparison " of the domestic and the export price is permitted or not. 
We consider that the "proper  comparison " language calls for an assessment in respect of the 
comparison of domestic and export prices . 
The ordinary meaning of the term "proper " is "suitable for a specified or implicit purpose or 
requirement; appropriate to the circumstances or conditions; … apt, fitting; correct, right ".141 The 
term "comparison " can be understood as "the action, or an act, of comparing, or noting the 
similarities and differences of two or more things ".142 The function of the "permit a proper 
comparison " test is to determine whether th e domestic price can or cannot be used as a basis for 
comparison with the export price to identify the existence of dumping. It is implied here in Article  2.2 
that the words "a proper comparison " refer to the comparison between the domestic price and the 
export price. Thus, the purpose of an investigating authority 's examination under the second clause 
of Article  2.2 of the Anti -Dumping Agreement is to determine whether domestic sales of the like 
product in the ordinary course of trade do not permit  a prope r comparison between the export price 
and the domestic sales price because of the particular market situation or the low volume.  
While the proper comparison in Article  2.2 refers to the comparison between the domestic 
and export prices, a purely numerical comparison between the two prices may not reveal anything 
about whether the domestic price can be properly compared with the export price.  Rather, it is 
necessary to conduct a qualitative  comparison  of the domestic and export prices.  The phrase 
"because of the particular market situation" makes clear that the qualitative assessment of whether 
the domestic and export prices can be properly compared should focus on how the particular market 
situation a ffects that comparison.  We therefore consider that the "proper comparison" language calls 
for an assessment of the relative effect of the particular market situation on domestic and export 
prices.  We understand that , in certain circumstances, as a result o f this assessment, the 
investigating authority may conclude that the particular market situation has no effect on the export 
prices.   
Turning to the assessment of whether "a proper comparison" is not permitted because of the 
particular market situation, we  note that the focus of the analysis is on whether the effect of the 
particular market situation is such that a proper comparison between domestic sales prices and 
export prices under examination is not permitted. In other words, the investigating authorit y must 
examine the domestic sales in order to determine whether a proper comparison between the 
two prices is permitted in spite of the effect of the particular market situation.  The point is to 
determine if there is a comparable domestic price (i.e. if th ere is "the comparable price, in the 
ordinary course of trade, for the like product when destined for consumption in the exporting 
country " in the sense of GATT 1994 Article  VI:1(b) and Article  2.1 of the Anti -Dumping Agreement).  
 
141 Oxford Dictionaries online, definition of "proper" 
https://www.oed.co m/view/Entry/152660?rskey=KTB4na&result=1#eid  (accessed 17 September 2019).  
142 Oxford Dictionaries online, definition of "comparison" 
https://www.oed.com/view/Entry/37450?rs key=sdGRr4&result=1#eid  (accessed 17 September 2019).  WT/DS529/R  
 
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  That determination is fact -specific and should be made on a case -by-case basis by the investigating 
authority assessing the effect of particular market situation on the domestic price in relation to the 
effect on the export price, if any.  This relative assessment is necessary becau se, as we explain in 
the following subsection, while a particular market situation may have an effect on both domestic 
and export prices, it does not follow that the impact on domestic and export prices will be the same.  
If the investigating authority find s that because of a particular market situation a proper comparison 
of the domestic price and the export price is not permitted, it is required to give a reasoned and 
adequate explanation of its conclusion.  
7.2.4.3   Whether a proper comparison is necessarily permit ted when a low -priced input is 
used identically to produce merchandise for domestic and export market  
We now turn to Indonesia's argument that, where  a low -priced input is used identically to 
produce merchandise for the domestic and the export market, a p roper comparison will be 
permitted.143 Indonesia argues that the low -priced input affects domestic and export sales in the 
same way.  We recall that Indonesia finds support for its claim in the observation made by the 
Appellate Body in US – Anti-dumping and C ountervailing Duties (China)  to the effect that, when 
domestic subsidies are granted in market economies, "both the normal value and the export price 
will be lowered as a result of the domestic subsidy, so that the dumping margin should not be 
affected ".144  
We believe there is a logical analogy between the domestic subsidies at issue in that case and 
the low -priced input posited by Indonesia's argument.  As Indonesia asserts, the Appellate Body 
adopted the rationale that domestic subsidies  having the effect of decreasing costs could result in 
similarly decreased prices in the domestic and export markets.  The Appellate Body found that under 
the NME methodol ogy at issue in that case (where domestic prices and costs were disregarded in 
favour of market -based external values) a "double remedy" could arise as a consequence.  However, 
a close reading of the Appellate Body report in US – Anti-Dumping and Countervai ling Duties (China) 
does not fully justify Indonesia's categorical claim that domestic and export prices are necessarily 
equally affected by domestic subsidies.  In that case, the Appellate Body explained:  
In principle, we agree with the statement by the Pa nel that double remedies would likely 
result from the concurrent application of anti -dumping duties calculated on the basis of 
an NME methodology and countervailing duties, but we are not convinced that double 
remedies necessarily  result in every instance of such concurrent application of duties.  
This depends, rather, on whether and to what extent domestic subsidies have lowered 
the export price of a product, and on whether the investigating authority has taken the 
necessary corrective steps to adjust its m ethodology to take account of this factual 
situation.145 
Moreover, we asked the parties to respond  to the following question:  
Explain your agreement or disagreement with the following statement: "Faced with a 
decrease in the cost of a significant input, a producer may decide to decrease some, all 
or none of the prices at which their product is offered for sale in various markets. 
The extent to which actual sales of the product can be made at the prices offered in the 
various markets will depend sig nificantly on the market conditions in those markets ." 
Both parties expressed their agreement or general agreement with the statement.146 
 
143 We note that Australia has objected to this characteriz ation of  the situation the ADC found in respect 
of the A4 copy paper market in Indonesia. For purposes of testing Indonesia's interpretive legal theory in 
connection with Indonesia's argument , it is not yet necessary for us to resolve whether Australia's measure 
matches this description. We will turn to that question in the following subsection.  
144 Indonesia's first written submission, paras. 120 -121 ( quoting  Appellate Body Report, 
US – Anti-Dumping and Countervailing Duties (China) , fn 519).  
145 Appellate Body Report , US – Anti-Dumping and Countervailing Duties (China) , para. 599.  
(fn omitted; emphasis original)  
146 Indonesia's response to Panel question No. 4 following the second meeting of the Panel; 
Australia's  response to Panel question No. 4 following the second meeting of the Panel.  
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In our view, how domestic prices and export prices of an individual exporter147 are affected 
notwithstanding an equal decr ease in input costs is likely to depend significantly upon a number of 
factors, including the prevailing conditions of competition in each market and the existing 
relationship between price and cost.  We consider that an exporter may find itself with differ ent 
options in respect of how to take advantage of an input cost decrease depending on market 
conditions in each market.  This is similar to a situation when a cost increase occurs and the exporter 
faces differing market conditions in domestic and export ma rkets such that the exporter is able to 
pass on the cost increase to customers in one market but unable to do so in the other.  
Accordingly, we are not persuaded that a low -priced input used identically to produce 
merchandise for domestic  and export markets  will necessarily have the same effect on domestic 
prices and export prices and therefore necessarily permit a proper comparison. Rather, we find that 
whether the exporter's domestic sales permit a proper price comparison with the export price is a 
questio n that can only be ascertained through an examination of relevant factual circumstances.  
7.2.4.4   Whether the ADC should have examined if the domestic sales of A4 copy paper 
permitted a proper comparison because of the particular market situation  
The parties disa gree with respect to whether the ADC's determination addressed the question 
of whether the disregarded domestic market sales of Indah Kiat and Pindo Deli permitted or not 
"a proper comparison", within the meaning of Article  2.2. Indonesia asserts that the ADC, having 
found a "particular market situation" failed to examine whether , "because of" that situation , domestic 
sales did "not permit a proper comparison" of the export price and the domestic price.148 Australia 
disputes this characterization, arguing tha t a determination that domestic prices are distorted and 
therefore not suitable for use as normal value means that they do not permit a proper comparison.149 
For the reasons explained below, we find that the ADC's determination was inconsistent with 
Article  2.2. 
 Indonesia asserts that the same hardwood fiber is used by Indah Kiat and Pindo Deli to 
manufacture A4 copy paper sold both in the Indonesian domestic market and exported to 
Australia.150 Indonesia notes that:  
The Indonesian producers argued the Commiss ion had no evidence domestic prices 
were distorted and unsuitable for comparison with export prices because the 
Commission had no evidence the alleged distortions impacted differently domestic and 
export prices.151 
Indonesia contends that, beyond acknowledgi ng the argument had been made, the 
Final Report does not address whether the situation in the domestic market actually made any 
difference to the determination of the margin of dumping that would arise from a comparison 
between each individual Indonesian e xporter 's domestic prices and its export prices.152 According to 
Indonesia, "[t]he Commissioner 's report is confined to addressing the question of whether the 
exporter 's domestic prices are different from what they would have been in the absence of the 
government policies" .153  
Australia argued that the appropriate analysis of whether "because of the particular market 
situation … such sales do not permit a proper comparison" requires determining whether the 
domestic sales are "suitable" for establishing a normal value that will provide a "reliable foundation" 
that will "permit" a "proper comparison" with the export price.154 According to Australia, because  
 
147 We note that Article  6.10 of the Anti -Dumping Agreement requires that, as a rule, an investigating 
authority shall determine an individual dumping margin for each exporter.  
148 Indonesia's first written submission, para. 115.  
149 Australia's first written submission, para. 4; closing statement at the first meeting of the Panel, 
paras. 8 -11. 
150 Indonesia's first written submission, paras. 116 -118. 
151 Indonesia's first written submission, para. 116, ( referring to  Sinar Mas Group's  submission  
(29 December 2016 ), (Exhibit IDN -15), p. 2).  
152 Indonesia's first written submission, para. 116.  
153 Indonesia's first written submission, para. 116.  
154 Australia's response to Panel question No. 4 following the second meeting of the Panel, para. 23; 
first written submission, para. 120; and second written submission, para. 168.  
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  Article 2.2 of the Anti -Dumping Agreement or Article VI of the GATT 1994 do not prescribe any 
specific m ethodology  for determining the unsuitability of domestic prices , an investigating authority 
has discretion as to the choice of methodology as long as it evaluates the facts in  an unbiased and 
objective manner , and provides a reasoned and adequate explanati on support ing its 
determination.155 Australia argued that the context provided by Article VI of the GATT 1994, the 
second Ad Note to Article VI:1 of the GATT 1994, and Article s 2.1 and 2.7  of the 
Anti-Dumping  Agreement identify certain characteristics of uns uitability156, including  whether the 
domestic price has been fixed in a manner incompatible with normal commercial practice and/or 
fixed according to criteria which are not those of the marketplace.157  
Thus, according to Australia, in deciding whether the pri ce of A4 copy paper in Indonesia 
would allow a suitable and accurate comparison to ascertain whether the A4 copy paper was to be 
considered as being dumped and to determine the margin of dumping, it was relevant for the ADC to 
consider whether: (a) the dom estic price of A4 copy paper was affected by government intervention 
that distorted costs and prices; and/or (b) the "particular market situation" meant that the domestic 
price of A4 copy paper was fixed in a manner incompatible with normal commercial prac tice; and/or 
(c) the "particular market situation" meant that the domestic price of A4 copy paper was fixed 
according to criteria which were not those of the marketplace.158 Australia claims that this is exactly 
what the ADC did, when it found that, because of the "particular market situation", Indonesian 
domestic sales were not suitable for use in determining normal value.159 Australia identifies relevant 
findings of the ADC t o the effect that the policies of the Government of Indonesia have affected the 
forestry sector and resulted in reduced logs prices; that these policies benefitted the Indonesian 
pulp industry; that the cost of producing pulp was substantially less than a competitive benchmark; 
that the pulp is the largest component for the production of A4 copy paper; that Indonesian A4 copy 
paper producers benefitted from access to cheaper pulp; that Indonesian domestic A4 paper prices 
are artificially low and below compa rable regional benchmarks; that the Government's involvement 
resulted in a distortion of the domestic price for A4 copy paper and that there was a market situation 
in the Indonesian A4 copy paper market.160 
Consistent with Australia's argumentation, which in our view largely equates the analyses of 
"ordinary course of trade" and "permit a proper comparison", the ADC focused on whether the 
domestic sales and domestic prices were suitable for use as the basis for normal value . We consider 
that this approach fai ls to give meaning and effect to the phrase "permit a proper comparison".  As 
set forth in the Final Report, the ADC "found that: there is a market situation in the Indonesian 
A4 copy paper market such that sales in that market are not suitable for use in d etermining a 
price".161 The ADC further found "that there is a particular market situation in Indonesia such that 
domestic selling prices are not suitable for determining normal value".162 We find a deficiency in the 
ADC's  examination in this case because it f ocused exclusively on the domestic sales and domestic 
prices, without taking into account the export prices with which the domestic prices would be 
compared.  In particular, the examination does not address the question whether the domestic prices 
could be properly compared with the export prices despite the effects of the particular market 
situation.  
We observe that the effect of the particular market situation on the Indonesian market for 
A4 copy paper was solely through the decreased cost of purchasing ( or making) pulp, which is an 
important input.163 While we appreciate that the ADC's determination of market situation in respect 
of A4 copy paper sold in Indonesia accounted for a variety of fact -specific circumstances, we find 
that the salient aspect of the  determination was that the price of A4 copy paper in Indonesia was 
 
155 Australia's second written submission, para. 170.  
156 Australia's first writte n submission, paras. 133 -139.  
157 Australia's first written submission, paras. 133-144, (referring to Appellate Body Report, 
US – Hot-Rolled Steel , paras. 140 -141); second written submission, paras. 171 -176; and response to Panel 
questions Nos. 22 and 23 fo llowing the second meeting of the Panel, paras. 112 -120. 
158 Australia's first written submission, para s. 133-143; second written submission, paras. 171 -172; and 
response to Panel questions Nos. 22 and 23 following the second meeting of the Panel, paras. 112 -120. 
159 Australia's first written submission, para. 144.  
160 Australia's first written submission, para. 144.  
161 Final Report, (Exhibit IDN -4), section 6.5, p. 36.  
162 Final Report, (Exhibit IDN -4), section 6.9.1, p. 50.  
163 Final Report, (Exhibit IDN -4), section  A2.9.4, pp. 173 -174. 
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  affected by a decrease in the cost of pulp.164 Australia does not dispute that the same pulp was used 
to produce A4 copy paper for sale in the domestic market and in the export market, and w e find no 
evidence in the record to the contrary.165 
We find that Australia did not examine whether domestic sales permitted a proper comparison 
between the domestic prices found to be affected by the decreased cost of pulp with the export 
prices for which t he pulp cost was presumably equally decreased, despite assertions in the 
underlying proceeding which called for such an examination. In reviewing the ADC's determination, 
we are not to conduct a de novo review of the evidence, nor substitute our judgment f or that of the 
investigating authority. As such, we make no determination whether the domestic sales permitted a 
proper comparison of the domestic prices and the export prices. Rather, we conclude that the 
ADC was obligated to undertake the necessary addit ional examination to determine whether, 
because of the particular market situation, the domestic sales of the individual exporters do not 
permit a proper comparison of the domestic prices and the export prices.  
7.2.4.5   Conclusion in respect of "permit a proper co mparison"  
On the basis of the above findings, we determine that the ADC's disregard of Indah Kiat's and 
Pindo Deli's  domestic sales (and consequently of their domestic prices) as the basis for normal value 
was inconsistent with the requirement to examine w hether sales in the exporting country's market 
do not "permit a proper comparison" because of "the particular market situation" in Article  2.2 of 
the Anti -Dumping Agreement.  Specifically, where a particular market situation was found to affect 
domestic market sales prices solely as a result of a decreased cost for an input that was used 
identically to produce merchandise for the domestic and export markets, the investigating authority 
was obligated to assess the effect of the particular market s ituation on the domestic price in relation 
to the effect on the export price when determining whether domestic prices permitted a proper 
comparison with those export prices.  
7.2.5   Conclusion  
For the reasons elaborated above, we find that Indonesia has not establ ished that the ADC 
acted inconsistently with Australia's obligations under Article 2.2 of the Anti -Dumping Agreement 
when it found that a "particular market situation" existed in the Indonesian domestic market for 
A4 copy paper. We further find that Austra lia's measure is inconsistent with Article 2.2, 
first sentence, of the Anti -Dumping Agreement because the ADC disregarded domestic sales of 
A4 copy paper of Indah Kiat and Pindo Deli as the basis for determining normal value without 
properly determining th at such sales did "not permit a proper comparison".  
7.3  Whether the Anti -Dumping Commission's decision not to use the hardwood pulp 
component of Indah Kiat's and Pindo Deli's records in constructing the normal value of 
A4 copy paper is inconsistent with Articl es 2.2.1.1 and 2.2 of the Anti -Dumping Agreement  
7.3.1   Introduction  
The core issue raised by Indonesia's claim is whether the ADC acted inconsistently with 
Australia's obligations under Article  2.2.1.1, first sentence, of the Anti -Dumping Agreement and 
Article  2.2 of the Anti -Dumping Agreement by disregarding Indah Kiat and Pindo Deli 's recorded  
costs of hardwood pulp in constructing the normal value for those producers.166 We recall that after 
having found a "particular market situation" to exist in the Indonesian  A4 copy paper market, the 
ADC proceeded to construct the normal value of A4 copy paper for Indonesian exporters. 
In examining the relevant cost components of A4 copy paper, the ADC found that "the cost of 
producing pulp was substantially less than a compe titive benchmark"167 and that "the actual cost of 
 
164 Final Report, (Exhibit IDN -4), section A2.9.1, p. 165.  
165 Australia's response to Panel question No. 15 following the first meeting of the Panel, para.  103. 
166 We understand Indonesia's claim under Article  2.2 of the Anti -Dumping Agreement to be 
consequential to its claim under Article  2.2.1.1 since Indonesia does not rely on any separate and independent 
arguments as the basis for its claim under Article  2.2. 
167 The "competitive benchmark" is not described in the text of the Final Report. In response to the 
Panel's request to clarify what competitive benchmark the authority was referring to when it stated that "the 
cost of producing pulp was substantially less tha n a competitive benchmark", Australia has not referred the 
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  pulp recorded by exporters in their records does not reasonably reflect a competitive market cost" .168 
On that basis, the ADC considered that the pulp component of Indonesian producers' and exporters' 
records, including Indah Kiat and Pindo Deli, was "unsuitable for determining the cost to make 
A4 copy paper for the purposes of constructing normal values".169 
Indonesia argues that the ADC's rejection of the recorded hardwood pulp costs of Indah Kiat 
and Pindo Deli  is inconsistent with the first sentence of Article  2.2.1.1 because those records were 
in accordance with generally accepted accounting principles  (GAAP)  in Indonesia and reasonably 
reflected the cost associated with the production and sale of A4 copy pape r in Indonesia.170 However, 
Australia argues that the ADC was entitled to reject the relevant costs because, according to 
Australia, the first sentence of Article  2.2.1.1 envisages that , where the circumstances are not 
"normal and ordinary", an investigating authority is not required to calculate costs on the basis of 
the exporter or producer's records even if the two conditions in Article 2.2.1.1 are satisfied.171 
Australia further argues that the ADC found circumstances with regard to Indah Kiat and Pindo Deli 
to be not "normal and ordinary".172 Indonesia contests Australia's characterization of the rationale 
underlying the ADC's rejection of the hardwood pulp costs, arguing that it amounts to ex post facto  
rationalization that should not be considered by the Panel.173 According to Indonesia, the 
investigating authority disregarded the recorded costs because it considered they did not reasonably 
reflect the costs associated with the production and sale of A4 copy paper. In any event, Indonesia 
maintains that the term "normally" found in the first  sentence of Article  2.2.1.1 does not establish a 
separate ground to disregard an exporter's records that reasonably reflect the costs of production 
and sale of the product under consideration.174 
In examining the parties' submissions, we address the factual question of whether the ADC 
reject ed recorded hardwood pulp costs because  they did not reasonably reflect the costs associated 
with the production and sale of A4 copy paper, as Indonesia argues , or whether the ADC disregarded 
those costs on the basis of a different rationale . We address this question in the section that follows, 
before turning to evaluate the merits of Indonesia's claims on the basis of our findings on the 
rationale underlying the ADC's rejection of the hardwood pulp costs. However, before proceeding 
 
Panel to the description of the competitive benchmark on the record of the investigation. However, Australia 
has clarified that the investigating authority was referring to "a number of regional be nchmarks for hardwood 
pulp", which were purchased from RISI and Hawkins Wright. According to Australia, the data sets included: 
domestic prices in Japan, domestic prices in China, prices for hardwood pulp exported from Indonesia to East 
Asia, prices for ha rdwood pulp exported from South America to China, prices for hardwood pulp exported from 
Indonesia to Korea. Australia further clarified that, in establishing whether the exporters' records reflected 
"competitive market costs", additional comparisons were undertaken between the pulp benchmark (used later 
as a substitute for recorded pulp costs) and the exporters' recorded pulp costs. In response to the same 
question from the Panel, Indonesia stated that it believes "the benchmark to which Australia is refer ring is RISI 
and Hawkins Wright". (Australia's response to Panel question No. 27 following the first meeting of the Panel, 
paras. 199 -200; Indonesia's response to Panel question No. 27 following the first meeting of the Panel, p. 22). 
The Final Report ment ions RISI and Hawkins Wright data, and Australia later clarified its answer by referring 
the Panel to the RISI and Hawkins Wright data exhibited with its second written submission. 
(Australia's  response to Panel question No. 7 following the second meeting of the Panel, paras. 43 -44 (referring 
to RISI, hardwood pulp prices in Asia by source (2010 -2015), (Exhibit AUS -26 (BCI)), Hawkins Wright, 
hardwood pulp prices in China by source (December 2002 -August 2016) , (Exhibit AUS -27A (BCI)), Hawkins 
Wright, hardwoo d pulp prices in South Korea by source (December 2002 -August 2016) , (Exhibit AUS -27B 
(BCI)))). The parties therefore share the understanding that "the competitive benchmark" included out -of-
country benchmarks, and we have no reasons to consider otherwise.  
168 Final Report, (Exhibit IDN -4), section 6.9.1, p. 51.  
169 Final Report, (Exhibit IDN -4), section 6.9.1, p. 51.  
170 Indonesia's first written submission, paras. 123 -154. 
171 Australia's first written submission, paras. 182 -200; second written submission, paras. 197-203, 
215, 221 -223, and 226 -234; response to Panel question No. 20(d)  following the first meeting of the Panel, 
paras.  144-158; and responses to Panel question  No. 13 following the second meeting of the Panel, 
paras.  66-81, and question No. 32, paras. 1 55-157. 
172 Australia's first written submission, paras. 202 -221; second written submission, paras. 204 -225; and 
response to Panel question No. 20(c)  following the first meeting of the Panel, paras. 130 -142.  
173 Indonesia's second written submission, para. 72; response to Panel question No. 20(b) following the 
first meeting of the Panel, pp. 20 -21. 
174 Indonesia's second written submission, paras. 56 -71; response to Panel question No. 20(a) following 
the first meet ing of the Panel, pp. 19 -20; and responses to Panel question No. 16 following the second meeting 
of the Panel, paras. 30 -36, and question No. 32, paras. 94 -96. 
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  with this analysis, we first address Australia's contention that Indonesia has conceded that the ADC 
was not required to use Indah Kiat's re corded costs of pulp.175 
According to Australia, Indonesia has conceded "that, rather than using the amounts in the 
records of Indah Kiat for hardwood pulp, there were 'other bases Australia could have taken'" to 
calculate the pulp costs when determining Ind ah Kiat's cost of production of A4 copy paper.176 The 
implication is that Indonesia accepts that the ADC did not have to use Indah Kiat's reported pulp 
costs. Australia asserts that Indonesia made this admission when, in responding to certain Panel 
questions , Indonesia explained that "it would have been less distortive for Australia to have replaced 
the cost of woodchips" rather than the cost of pulp and that "[b]y replacing the cost of woodchips, 
the allegedly distorted input in Indah Kiat 's costs is being a ccounted for while all of Indah Kiat 's other 
costs, which are not affected by the 'particular market situation' remain the same".177  
We understand Indonesia to have made the above statements in the context of its claim under 
Article  2.2 concerning the ADC's  selection of the substitute  for pulp costs, after it had decided to 
disregard Indah Kiat's recorded pulp costs. By making these statements, we do not find that  
Indonesia accepted that the ADC was entitled to disregard Indah Kiat's reported costs of pulp u nder 
the terms of Article  2.2.1.1.178 The factual and legal bases of these two claims are different: under 
its Article  2.2.1.1 claim (which we examine in this section of our Report ), Indonesia challenges the 
ADC's rejection  of Indah Kiat's and Pindo Deli's r ecorded pulp costs, whereas under its Article  2.2 
claim, Indonesia challenges the substitute  for pulp costs selected by the ADC after the recorded 
costs were rejected. We note, furthermore, that Indonesia has clarified that "[t]he discussion 
surrounding how Australia might have calculated a benchmark in a manner consistent with 
Article  2.2 was in tended to explain to the Panel other bases Australia could have taken, but the 
ultimate action Australia took, and its consistency with Australia 's WTO obligations is ultimately what 
is at issue" .179 We therefore conclude that Indonesia's has not conceded th at the ADC was not 
required to use Indah Kiat's recorded costs of pulp.  
7.3.2   The Anti -Dumping Commission's rationale for rejecting the hardwood pulp 
component of Indah Kiat's and Pindo Deli's recorded costs  
Indonesia initially considered that Australia relied on the second condition in Article  2.2.1.1, 
first sentence, to reject the hardwood pulp component of Indah Kiat 's and Pindo Deli's recorded 
costs.180 However, in responding to Indonesia's first written sub mission, Australia explained that the 
ADC relied on a provision of Australia's domestic regulations in its decision to disregard Indah 
Kiat's  and Pindo Deli's recorded costs for hardwood pulp181 and that the provision at issue "does not 
mirror the precise la nguage of the underlying treaty" but implements Australia's treaty 
obligations.182 According to Australia, "[t]he [ADC's] application of subsection 43(2) [of the Customs 
Regulation] was clearly consistent with discarding the amounts in the records kept by th e exporter 
in circumstances that were outside the normal and ordinary".183 Australia submits that "the [ADC] 
found that the amounts for hardwood pulp in the records of Indah Kiat and Pindo Deli did not 
'reasonably reflect competitive market costs' within [th e meaning of] subparagraph 43(2)(b)(ii) 
because they reflected the 'particular market situation' ".184 Australia clarifies that the phrase 
"competitive market costs" found in subsection 43(2) "facilitated the discarding of the distorted 
hardwood pulp componen t … in circumstances that were outside the normal and ordinary 
 
175 Australia's comments on Indonesia's responses to Panel questions Nos. 18 and 35 following the 
second meeting of the Panel, paras. 83 -85. 
176 Australia's comments on Indonesia's responses to Panel questions Nos. 18 and 35 following the 
second meeting of the Panel, para. 84 (referring to Indonesia's response to Panel question No. 30(b) following 
the se cond meeting of the Panel, para. 93).  
177 Indonesia's responses to Panel question No. 18 following the second meeting of the Panel, para. 37, 
and question No. 35, para. 98; Australia's comments on Indonesia's responses to Panel questions Nos. 18 
and 35 follo wing the second meeting of the Panel, para. 83.  
178 As we explain in section 7.4.4, we understand Indonesia's argument regarding the replacement of 
Indah Kiat's woodchips costs to proceed on an arguendo  basis. See fn 317 of this Report.  
179 Indonesia's response to Panel question No. 30(b) following the second meeting of the Panel, 
para. 93. 
180 Indonesia's first written submission, paras. 123 -154. 
181 Australia's response to Panel question No. 20(c) following the first meeti ng of the Panel, para. 131.  
182 Australia's second written submission, para. 210.  
183 Australia's second written submission, para. 214. (underlining omitted)  
184 Australia's second written submission, paras. 217 -218. 
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  circumstances envisaged by the word 'normally' in the first sentence of Article  2.2.1.1 of the 
Anti-Dumping Agreement".185  
Indonesia considers that Australia's characterization of the rationale underlying the 
ADC's  decision to reject the hardwood pulp costs is an " ex post  defence" put forward by Australia 
for the purpose of this dispute.186 According to Indonesia, the ADC's decision to reject the pulp costs 
was "unmistakably made pursuant to the se cond condition of Article  2.2.1.1 of the 
Anti-Dumping  Agreement" because it was expressed in terms that are similar to the language of the 
second condition in the first sentence of Article  2.2.1.1 of the Anti -Dumping Agreement.187 
Furthermore, Indonesia subm its that "Australia applied the phrase 'competitive market costs' to 
mean the costs must, themselves, be reasonable" and draws a parallel between this aspect of the 
ADC's rationale and the basis for the European Union's rejection of the raw material costs of 
Argentinian biodiesel producers in EU – Biodiesel (Argentina) .188 Indonesia also notes that, contrary 
to Australia's  submission, the ADC's decision to reject Indah Kiat's and Pindo Deli's recorded costs 
could not have been based on the term "normally" in the first sentence of Article  2.2.1.1, because 
the word "normally" does not appear in the ADC's determination.189 
In its Final Report, the ADC explained its decision to reject the exporters' records as follows:  
The Commissioner has found that there is a par ticular market situation in Indonesia 
such that domestic selling prices are not suitable for determining normal value under 
subsection 269TAC(1) and normal values must be constructed or determined on the 
basis of third country sales. The Commission constru cted normal values under 
subsection 269TAC(2)(c) and in accordance with sections 43, 44 and 45 of the Customs  
(International Obligations) Regulation 2015 (the Regulations).  
Subsection 43(2) of the Regulations provides that, if an exporter or producer of l ike 
goods keeps records relating to the like goods which are in accordance with generally 
accepted accounting principles in the country of export, and those records reasonably 
reflect competitive market costs associated with the production or manufacture o f like 
goods, then the cost of production or manufacture must be worked out using the 
information in the exporter 's records.  
Neither the Act nor the Regulations prescribe a method for assessing whether an 
exporter 's records reasonably reflect competitive market costs associated with the 
production or manufacture of like goods. When undertaking this assessment, the 
Commission examines a number of factors, including whether the Government 
influenced the prices of any major inputs.  
Appendix 2 sets out the Commission 's findings in respect of a market situation in 
Indonesia . The Commission found that the significant influence of the Government of 
Indonesia (GOI) within the forestry and pulp industries has distorted prices  in the paper 
industry and the paper market in Indonesia.  
In particular , the Commission found that the cost of producing pulp was substantially 
less than a competitive benchmark. Consequently, the Commission considers that the 
actual cost of pulp recorded by exporters in their records does not reasonably reflect a 
competitive market cost . As pulp is proportionally the largest cost component for the 
production of the goods and like goods, the Commissioner considers that the 
exporter 's records do not reasonab ly reflect competitive market costs associated with 
the production or manufacture of like goods . Consequently, the Commission considers 
that this renders this component of Indonesian producers ' and exporters ' records 
 
185 Australia's first written submission, para.  258. 
186 Indonesia's second written submission, para. 72.  
187 Indonesia's response to Panel question No. 20(b) following the first meeting of the Pan el, p. 21.  
188 Indonesia's first written submission, para. 149; second written submission, paras. 69 -71. 
189 Indon esia's response to Panel question No. 20(b) following the first meeting of the Panel, p. 21.  
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  unsuitable for determining the cost to make A4 copy paper for the purposes of 
constructing normal values.190 
Indonesia emphasizes the fact that the word "normally" does not appear in the 
ADC's  determination. However, we do not consider that it can be concluded, on this basis alone, that 
the absen ce of this word or the words "normal and ordinary"191 from the ADC's finding means that 
its rationale was different to the one asserted by Australia. In this regard, we agree with Australia 
that "[t]he question before the Panel is whether the Anti -Dumping Co mmission acted in a manner 
consistent with Australia's obligations under the GATT 1994 and the Anti -Dumping Agreement, and 
not whether it used the precise words and phrases contained in those treaties" .192  
Indonesia further argues that the Commission's deci sion to reject the exporters' recorded 
costs "is unmistakably made pursuant to the second condition of Article  2.2.1.1 of the 
Anti-Dumping  Agreement which states, in part, 'reasonably reflect the costs associated with the 
production and sale of the product  under consideration'" .193 Article  2.2.1.1 provides, in relevant part, 
as follows:  
For the purpose of paragraph 2, costs shall normally be calculated on the basis of 
records kept by the exporter or producer under investigation, provided that such records 
are in accordance with the generally accepted accounting principles of the exporting 
country and reasonably reflect the costs associated with the production and sale of the 
product under consideration.  
We agree with Indonesia that there is a certain similarit y between the wording of the 
second  condition of Article  2.2.1.1, first sentence  ("reasonably reflect the costs associated with the 
production and sale of the product under consideration" ), and the language used by the ADC to 
explain its finding. We note, however, that the basis of the ADC's determination is not focused on 
whether the recorded costs reasonably reflect "costs associated with the production" of A4 copy 
paper, but rather on whether those records reasonably reflect " competitive market  costs ass ociated 
with the production". Thus, the textual similarity between the second condition in the first sentence 
of Article  2.2.1.1 and the ADC's finding does not  imply that the ADC rejected the exporters' records 
because it considered they did not "reasonabl y reflect the costs associated with the production and 
sale of the product under consideration" within the meaning of the second condition in the 
first sentence of Article  2.2.1.1.  
The ADC rejected Indah Kiat's and Pindo Deli's recorded cost of pulp in re liance on 
subsection  43(2) of Australia's Customs (International Obligations) Regulations 2015.194 The text of 
this provision195 is different from the text of Article  2.2.1.1, first sentence. Subsection 43(2) is 
differently structured; the term "normally" is absent and the term "competitive market costs" is used 
instead of the word "costs".196 We note, moreover, that, following the issuance of the Statement of 
Essential Facts, certain exporters contested the ADC's interpretation of subsection 43(2) (b)(ii) 
arguing that it was inconsistent with the Appellate Body's interpretation of Article  2.2.1.1 of the 
 
190 Final Report, (Exhibit IDN -4), section 6.9.1, pp. 50 -51. (fns omitted; emphasis added)  
191 In the course of this proceeding, Australia used the expressions "where the circumstances are not 
normal and ordinary" and "circumstances that were outside the normal and ordinary" to explain the rationale 
used by the ADC for the rejection of Indah Kiat's  and Pindo Deli's costs. See, for example, Australia's first 
written submission, paras. 200 -201, 213, 219, and 258; second written submission, paras. 214 -215, and 220.  
192 Australia's second written submission, para. 207 . (underlining omitted)  
193 Indonesia's response to Panel question No. 20(b) following the first meeting of the Panel , p. 21.  
194 Final Report, (Exhibit IDN -4), section 6.9.1, pp. 50 -51. 
195 Subsection 43(2) of Australia's Customs (International Obligations) Regulations 2015 reads:  
(2) If:  
(a) an exporter or producer of like goods keeps records relating to the like goods; and  
(b) the records:  
(i) are in accordance with generally accepted accounting principles in the country of export; and  
(ii) reasonably reflect competitive market costs associat ed with the production or manufacture of 
like goods;  
the Minister must work out the amount by using the information set out in the records.  
(Extracts of Customs (International Obligations) Regulation 2015, (Exhibit AUS -4), p. 47).  
196 Australia has further explained that it "operates a dualist system" where "treaty obligations are given 
effect via domestic laws and regulations, which may or may not mirror the precise language of the underlying 
treaty". (Australia's response to Panel qu estion No. 23 following the first meeting of the Panel, para. 167).  
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  Anti-Dumping  Agreement in EU – Biodiesel (Argentina)197, which focused specifically on the 
second  condition.  The ADC responded by pointing out that th e exporters' "interpretation of 
subsection  43(2)(b)(ii) fails to account for the difference between the text of Article  2.2.1.1 and the 
words of subsection 43(2)(b)(ii)".198 This, supports the conclusion that the ADC engaged in an 
analysis that was different  from that required under the second condition of Article  2.2.1.1, 
first sentence.199 
Indonesia argues that "Australia applied the phrase 'competitive market costs' to mean the 
costs must, themselves, be reasonable" and that this rationale is similar to the 
European  Union's  "reasonableness test" found to be WTO -inconsistent in EU – Biodiesel 
(Argentina) .200 We note that in the anti -dumping investigation at issue in EU – Biodiesel (Argentina) , 
the EU authorities decided to disregard the recorded cost of soybeans  to calculate the cost of 
production of Argentinian biodiesel because those costs "were found to be artificially lower than the 
international prices due to the distortion created by the Argentine export tax system".201 
The European Union argued that it was entitled to disregard those costs on this basis because the 
second condition in Article  2.2.1.1 envisages that recorded costs could be rejected if they were not 
reasonable.202 The panel, upheld by the Appellate Body, rejecte d the European Union's submissions, 
finding that the second condition of Article  2.2.1.1, first sentence, does not permit the exclusion of 
GAAP -consistent costs simply because they are not considered to be "reasonable" by the 
investigating authority.203 However, the rationale of the ADC's rejection of the recorded costs is 
different. The ADC's determination does not refer to the reasonableness of the costs  as a criterion 
for their rejection. Rather, the ADC grounded its rejection of the recorded costs on its finding that 
the records  did not reasonably reflect competitive market costs.  We, therefore, find that Australia 
did not use  the phrase "competitive market costs" to mean the costs must, themselves, be 
reasonable.  
We note further that, in "assessing whethe r an exporter 's records reasonably reflect 
competitive market costs associated with the production or manufacture of like goods", the 
ADC explained that it examined "whether the Government influenced the prices of any major inputs". 
In the subsequent parag raph, the ADC noted that, in its findings in respect of a market situation in 
Indonesia  in Appendix 2, it established that "the significant influence of the Government of Indonesia 
(GOI) within the forestry and pulp industries has distorted prices in the p aper industry and the paper 
market in Indonesia".204 It follows, that the rejection of pulp costs stemmed from the 
ADC's  determination of the "particular market situation". This is consistent with 
Australia's  explanation that the rejected pulp component of t he recorded costs reflected the 
"particular market situation" in Indonesia's market.  
The ADC went on to state: " [i]n particular , the Commission found that the cost of producing 
pulp was substantially less than a competitive benchmark" .205 In this context, th e ultimate measure 
of whether the pulp component of the expor ters' records was acceptable to the ADC was the 
comparison of the exporters' pulp costs with the competitive  market  benchmark . Therefore, the 
standard the ADC was applying to the records was something other than whether the records 
reasonably reflected the costs  incurred.  
For these  reasons , we disagree with Indonesia that the ADC disregarded  the pulp component 
of Indah Kiat's and Pindo Deli's record s because the records did not reasonably refl ect the costs 
associated with the production and sale of the product under consideration  and we therefore  find 
 
197 Final Report, (Exhibit IDN -4), section 6.9.8.1.1, p. 60.  
198 Final Report, (Exhibit IDN -4), section 6.9.8.1.1, p. 60.  
199 Subsection 43(2) of Australia's Customs (International Obligations) Regulation 2015 is not 
challenged in this dispute. Therefore, it is relevant for our consideration only insofar as it was applied by the 
investigating authority as a basis for the rejection of the pulp component of Indah Kiat's and Pindo 
Deli's  records.  
200 Indonesia's first written submission, para. 149; second written submission, paras. 69 -71. 
201 Panel Report, EU – Biodiesel (Argentina) , para. 7.248.  
202 Panel Report, EU – Biodiesel (Argentina) , paras. 7.194 -7.195.  
203 Panel Report, EU – Biodiesel (Argentina) , para. 7.242;  Appellate Body Report, EU – Biodiesel 
(Argentina) , para. 6.56. 
204 Final Report, (Exhibit IDN -4), section 6.9.1, p. 51.  
205 Final Report, (Exhibit IDN -4), section 6.9.1, p. 51.  
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  that Australia's explanation of the ADC's rationale for disregarding the pulp component of Indah 
Kiat's and Pindo Deli's recorded costs  does not constitute an ex post facto  rationalization.  
7.3.3   Whether the Anti -Dumping Commission rejected the hardwood pulp component of 
Indah Kiat's and Pindo Deli's recorded costs inconsistently with Articles 2.2.1.1 and 2.2 
of the Anti -Dumping Agreement  
Indonesia argue s that Article  2.2.1.1 requires an investigating authority to use a 
producer 's actual costs unless they fail to meet one of  the two express conditions: the records must 
be in accordance with GAAP  in the producer 's home country and must accurately reflect t he cost 
incurred to produce the product under consideration.206 Indonesia claims that Australia's rejection 
of the hardwood pulp component of the records is in breach of this provision since the records of 
Indah Kiat and Pindo Deli were in accordance with GAAP in Indonesia and reasonably reflected the 
cost associated with the production and sale of A4 copy paper in Indonesia.207 In response, Australia 
argues that the circumstances in respect of Indah Kiat 's and Pindo Deli 's pulp records  were not 
"normal and ord inary" since they reflected the particular market situation , and using those records 
would render the use of a constructed normal value inutile.208 In Australia's view,  therefore, the 
ADC rightly discarded the pulp component of the records in reliance on the  term "normally", which 
provides a separate ground to disregard exporters' records in Article  2.2.1.1, first sentence.209 
Australia submits that interpreting the first sentence of Article  2.2.1.1 in a way that requires that 
the costs be calculated on the basis of records whenever the two conditions in Article  2.2.1.1 are 
satisfied renders the word "normally" redundant.210 Indonesia disagrees with this interpretation and 
argues that the only c ircumstances in which an authority is allowed to disregard the records is when 
one of the two explicit conditions is not satisfied.211 In Indonesia's view, even assuming that " the 
word 'normally' means the Anti -Dumping  Agreement allows an investigating autho rity to disregard 
a producer 's recorded costs when circumstances are not normal and ordinary, Australia 's decision 
still is not consistent with Article  2.2.1.1 ".212 Indonesia submits that if the term "normally" provides 
an additional exception for disregardi ng a producer 's records, "that exception has limits and those 
limits are not implicated by the facts of this dispute".213  
 
206 Indonesia's first written submission, paras. 124 and 136 (referring to Appellate Body Report, 
EU – Biodiesel (Argentina) , para. 6.21) . 
207 Indonesia's first written submission, paras. 123 -154. 
208 Australia's first written submission, paras. 207 -208. In this context, Australia argued, in relying on 
the Appellate Body's statements in EU – Biodiesel (Argentina) , that the purpose of determining a constructed 
normal value is to establish an "appropriate proxy for the price of the like product in the ordinary cours e of 
trade in the domestic market of the exporting country when the normal value cannot be determined on the 
basis of domestic sales", and that "costs calculated pursuant to Article 2.2.1.1 … must be capable of generating 
such a proxy". (Australia's first written submission, paras. 202 and 208, fn 216 (referring to Appellate Body 
Report, EU – Biodiesel (Argentina) , para 6.24)).  
209 Australia's first written submission, paras. 204 -208, 215 -216, and 219 (underlining omitted); 
second  written submission, paras. 2 19-221; and response to Panel question No.  20(c) following the first 
meeting of the Panel, paras. 130 and 137 -142. 
210 Australia's first written submission, paras. 187 -192 (underlining omitted); second written 
submission, para. 226; and response to Panel que stion No. 20(d) following the first meeting of the Panel, 
para. 150. 
211 Indonesia's response to Panel question No. 20(a) following the first meeting of the Panel, p. 20; 
second written submission, paras. 56 -60. 
212 At the second meeting of the Panel, when we asked Indonesia whether "assuming for the sake of an 
argument, that the presence of the term 'normally' in Article  2.2.1.1 of the Anti -Dumping Agreement allows an 
investigating authority to disregard producers' recorded costs where the circumstances before  an investigating 
authority are not normal and ordinary and that the Australian Anti -Dumping Commission genuinely relied on 
this ground in disregarding the pulp costs of Indah Kiat and Pindo Deli … the  Australian Anti -Dumping 
Commission's decision to disre gard the pulp costs [was] consistent with Article  2.2.1.1 of the 
Anti-Dumping  Agreement", Indonesia responded "yes, it was" and made some additional clarifications. 
(Indonesia's response to Panel question No. 16 at the second meeting of the Panel). Later, however, Indonesia 
clarified in writing that even on the basis of such interpretation, it would still maintain that Australia's rejection 
of the hardwood pulp component of the records was inconsistent. (Indonesia's response to Panel question 
No. 16 followi ng the second meeting of the Panel, para. 30; comments on Australia's response to Panel 
question No. 32 following the second meeting of the Panel, para. 53). We therefore proceed to rely on the 
most recent position of Indonesia elaborated in writing.  
213 Indonesia's response to Panel question No. 16 following the second meeting of the Panel, para. 36.  
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The main legal question raised by the parties' submissions is whether the term "normally" 
in the first sentence of Article  2.2.1.1 provides a separate basis  to disregard  an exporter's records , 
and, if so, whether the ADC's decision to disregard the pulp component of the records was 
inconsistent with relying on that legal basis.  In order to answer this question, we believe we need 
to exami ne how the first sentence of Article  2.2.1.1 is intended to operate.  We recall that 
Article  2.2.1.1 , first sentence  provides  as follows:  
For the purpose of paragraph 2, costs shall normally be calculated on the basis of 
records kept by the exporter or prod ucer under investigation, provided that such records 
are in accordance with the generally accepted accounting principles of the exporting 
country and reasonably reflect the costs associated with the production and sale of the 
product under consideration.  
The first sentence of Article  2.2.1.1 establishes that an investigating authority "shall 
normally" use the records kept by the exporter as the basis for the calculation of costs of production, 
when those records satisfy two conditions: first, they must be " in accordance with the generally 
accepted accounting principles of the exporting country"; and second, they must "reasonably reflect 
the costs associated with the production and sale of the product under consideration". It follows, 
and it is undisputed by the parties, that the obligation to "normally" use the records kept by the 
exporter, does not apply when either of the two conditions is not satisfied. In such a situation, an 
investigating authority may use another source of data as the basis for the calc ulation of an 
exporter's cost of production.  
The term "normally" is defined as "under normal or ordinary conditions; as a rule , ordinarily "; 
"in a normal manner, in the usual way ".214 This term modifies the verb "shall be calculated" and, 
thus, qualifies th e obligation on the investigating authority to follow certain behaviour, i.e. to 
calculate the costs on the basis of an exporter's records. We agree with the panels  in China – Broiler 
Products  and in EU – Biodiesel (Argentina)  that the term "normally " suggests  that the obligation to 
use the records kept by an exporter to calculate the costs admits of derogation under certain 
circumstances .215  
In examining the function of the adverb "normally" in the sentence, we find persuasive 
Australia's posi tion that  Indonesia's reading of Article  2.2.1.1, first sentence, as requiring that the 
exporters' records must be used unless one (or both) of the conditions in the first sentence of 
Article  2.2.1.1 are not satisfied  would render the word "normally" redun dant.216 If 
Indonesia's  interpretation were to be accepted,  the first sentence of Article  2.2.1.1 would have the 
same meaning  with or without  the word "normally ", which would be  inconsistent with the principle 
that "interpretation must give meaning and effec t to all the terms of a treaty ".217  
We recall further Indonesia's argument that "[b] y including the word 'provided ' the drafters 
intentionally were conditioning application of the rule in Article  2.2.1.1  [] to the two conditions that 
followed ".218 Indonesia f inds support for its argument in the panel's statement in China – Broiler  
Products  (Article  21.5 – US) that the "use of the term 'normally ' in a legal obligation indicates a rule 
 
214 Oxford Dictionaries online, definition of " normally", 
https://www.oed.com/view/E ntry/128277?redirectedFrom=normally  (accessed 17 September 2019).  
215 Panel Report,  China – Broiler Products , para. 7.161 (referring to Appellate Body Report, US – Clove 
Cigarettes , para. 273) (fns  omitted); Panel Report,  EU – Biodiesel (Argentina) , para. 7.227. We note that the 
Appellate Body has stated that:  
Given the reference to "normally" in the first sentence of Article  2.2.1.1, we do not exclude that 
there might be circumstances other than those in the two condition s set out in that sentence, in 
which the obligation to base the calculation of costs on the records kept by the exporter or 
producer under investigation does not apply.  
(Appellate Body Report, Ukraine – Ammonium Nitrate , para. 6.87; see also Appellate Body  Report, 
EU – Biodiesel (Argentina) , fn 120 ). 
216 Australia's first written submission, paras. 187-192 (underlining omitted);  second written 
submission, para s. 197 (referring to Indonesia's response to Panel question No. 20 at the first meeting of the 
Panel and response to Panel question No. 20(a) following the first meeting of the Panel, p. 20)  and 226; 
response to Panel question No. 20(d) following the first meeting of the Panel, para. 150 . 
217 Appellate Body Report, US – Gasoline , DSR  1996:I, p.  21. 
218 Indonesia's second written submission, para. 59.  
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  from which derogations are permitted subject to the conditions set out in the legal provision ".219 We 
note in this respect that the panel did not state that derogations are permitted only subject to the 
conditions set out in the legal provision, nor did the panel engage in further analysis of the term 
"normally". Therefore, we do not think the panel's statement supports Indonesia's argument.  
Like Indonesia, China argues that the flexibility derived from the word "normally" must be 
confined to the exceptions specified in Article  2.2.1.1, first sentence.220 China finds support for thi s 
argument in the reasoning of the Appellate Body in US – Clove Cigarettes , where the Appellate Body 
found that while the obligation was qualified with the adverb "normally" , an importing Member could  
depart from that obligation  based on the explicit derog ation provided for in paragraph 5.2 of the 
Doha Ministerial Decision .221 China argues that the Appellate Body did not suggest that there were 
other bases for derogation from the rule except for the one specified explicitly in the provision.222 
We note that the  Appellate Body's reasoning was specific to Article  2.12 of the Agreement on 
Technical Barriers to Trade and p aragraph 5.2 of the Doha Ministerial Decision , which relate to the 
timing of the publication of technical regulations223 – a matter that is quite di fferent from the 
obligation to use an exporter's records to calculate the costs. In our view, the meaning of the term 
"normally" in Article  2.2.1.1, first sentence, must be ascertained in light of the specific context of 
the Anti -Dumping Agreement. We cons ider that the context of the term "normally" found in 
Article  2.2.1.1, first sentence, suggests that a different interpretation is appropriate.   
We note the text of the Anti -Dumping Agreement contains five sentences that use the words 
"provided that" and an obligation introduced by the verb "shall". However, we have identified that 
only two of the five sentences use the word "normally" in addition to the words "provided that"224, 
whereas the other three sentences condition the respective obligations on t he circumstances 
introduced by the words "provided that" without qualifying the obligations by the term "normally".225 
In light of this context, we consider that the term "normally" in Article  2.2.1.1 was used by the 
drafters deliberately to introduce a diff erence to the meaning of the sentence and cannot be reduced 
to a mere reference to the conditions that follow the words "provided that", as argued by Indonesia. 
Rather, the term "normally", in our view, indicates that even where an exporter's records satis fy the 
two explicit conditions in Article 2.2.1.1, first sentence, there are circumstances in which the 
authority may depart from its obligation to use those  records – an obligation that is operative only 
when the two explicit conditions are fulfilled.  
While Australia argues that the presence of the word "normally" in Article  2.2.1.1, 
first sentence, means that " where the circumstances are not normal and ordinary, the investigating  
authority is not required to calculate costs on the basis of records kept b y the exporter or  producer 
under investigation, even if the two conditions in Article  2.2.1.1 are satisfied "226, and Indonesia 
disagrees with this proposition227, we do not believe that th is dispute requires us  to define precisely 
under what circumstances an i nvestigating authority would be allowed to depart from the obligation 
to use the exporter's records on the basis of the term "normally".  
As we already noted, the obligation to "normally" use the records kept by the exporter, 
becomes operative when both ex plicit conditions are satisfied : the "records are  in accordance with 
the generally accepted accounting principles of the exporting country  and reasonably reflect the 
costs associated with the production and sales of the product under consideration".  It follows that, 
to rely on the flexibility provided by the term "normally", the investigating authority has to consider 
whether the records satisfy the two explicit conditions and establish that, although the records are  
in accordance with GAAP  of the exporting  country  and reasonably reflect the costs associated with 
the production and sale of the product under consideration , it nonetheless finds a compelling reason, 
 
219 Indonesia's response to Panel question No. 20(a) following the first meeting of the Panel, p. 20  
(referring to Panel Report, China – Broiler  Products  (Article  21.5 – US), para. 7.29) . 
220 China's third -party submission, para. 63.  
221 China's third -party submission, para. 62 (referring to Appellate Body Report, US – Clove Cigarettes , 
paras. 273 and 275).  
222 China's third -party submission, para. 62.  
223 Appellate Body Report, US – Clove Cigarettes , para s. 269-275. 
224 Article  2.2.1.1 (first sentence), and footnote 2 of the Anti -Dumping Agreement . 
225 Article  2.2, Article  2.2.1.1 (second sentence ), and footnote  11 of the Anti -Dumping Agreement . 
226 Australia's first written submission, para. 194. (underlining omitted)  
227 Indonesia's second written submission, para. 61; response to Panel question No. 16 following the 
second meeting of the Panel, paras. 30 -36. 
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  distinct from the two explicit conditions, to disregard them. If the investigating authority wer e 
permitted to rely on the term "normally" to disregard the records without giving any consideration 
to the two explicit conditions, this would render those conditions in Article  2.2.1.1, first sentence, 
unnecessary. In such a case, the first sentence  of Article 2.2.1.1 could simply read "[f]or the purpose 
of paragraph 2, costs shall normally be  calculated on the basis of the records kept by the exporter 
or producer under investigation ".228 As Australia points out, the word "normally" has to be given 
meaning and effect.229 By the same token, the two explicit conditions must also be given meaning 
and effect. We conclude that in relying on "normally", the investigating authority should give 
mean ing to the whole of the obligation in Article  2.2.1.1, first sentence, and should therefore 
examine whether the records satisfy the two explicit conditions and provide a satisfactory 
explanation as to why, nonetheless, it finds compelling reasons to disreg ard them.  
We find further support for the above understanding of the obligation in Article  2.2.1.1, first 
sentence,  in the reasoning of the panel in Ukraine – Ammonium Nitrate.  In that dispute, Ukraine 
relied on the term "normally" in the first sentence o f Article  2.2.1.1 to defend its investigating 
authority's decision to disregard the producers' recorded gas costs because of the perceived 
distortions in the Russian domestic market for gas.230 The panel rejected Ukraine's submission, 
finding that it was bas ed on ex post facto  rationalization, in part because the investigating authority 
had not made a finding that both the first and second conditions of Article  2.2.1.1 were satisfied 
before deciding to reject the recorded costs .231 In our view, this line of rea soning suggests that the 
panel in Ukraine – Ammonium Nitrate  similarly considered that, to the extent that the word 
"normally" allows for the possibility of rejecting exporters' or producers ' recorded costs, the 
investigating authority must give considerat ion to the whole of the obligation in  the first sentence of 
Article  2.2.1.1 , including the two explicit conditions .  
With these considerations in mind, we now turn to examine the ADC's determination  to 
establish whether the ADC properly relied on the flexi bility provided by the term "normally" in 
disregarding the hardwood pulp component of Indah Kiat's and Pindo Deli's recorded costs . We note 
that there is no specific finding in the Final Report regarding the consistency of Indah Kiat's and 
Pindo Deli's rec orded pulp costs with GAAP  in Indonesia.232 The parties have also not pointed us to 
any such explicit finding made by the ADC in the Final Report.  
As regards the second condition, we note that Australia argues that "[t]he [ADC] did not 
explicitly find that t he cost of hardwood pulp recorded by Indah Kiat and Pindo Deli did not 
'reasonably reflect the costs associated with the production and sale of the product under 
consideration', as stated in the second condition of Article  2.2.1.1" .233 Australia also does not argue 
that the ADC actually determined that the records of Indah Kiat and Pindo Deli "reasonably reflect 
the costs associated with the production and sale of the product under consideration", and we do 
not see any explicit finding to this effect i n the Final Report.  
Indonesia points out that, in respect of Indah Kiat, the ADC's verification team found that 
"the pulp costs (as part of the raw material costs) recorded in Indah Kiat 's [cost to make and sell 
(CTMS )] spreadsheet for A4 photocopy paper r eflect the actual costs incurred".234 As far as Pindo 
Deli is concerned, we note that "the verification team did not conduct an on -site verification of [its] 
[CTMS ] data". Nevertheless, the verification team compared this data to that of other exporters and 
found it to be "comparable".235  
These statements from the verification reports reveal that the ADC performed some analysis 
that is potentially relevant to determining whether the second condition of Article  2.2.1.1, first 
sentence, was satisfied. However, w e do not understand these statements found in the verification 
 
228 See also Indonesia's response to Panel q uestion No. 32 following the second meeting of the Panel, 
para. 96.  
229 Australia's first written submission, paras. 189 and 192; second written submission, para. 202.  
230 Panel Report, Ukraine – Ammonium Nitrate , paras. 7.72 -7.75 and 7.79 -7.80. 
231 Panel Report , Ukraine – Ammonium Nitrate , para. 7.80.  
232 Final Report, (Exhibit IDN -4), section 6.9, pp. 50 -65. 
233 Australia's second written submission, para. 211. (underlining omitted)  
234 Indonesia's first written submission, para. 153 (referring to Indah Kiat's Verifi cation Report, 
(Exhibit  IDN-9), section 4.3).  
235 Indonesia's first written submission, para. 153; Pindo Deli's Verification Report, (Exhibit IDN -10), 
section 4.1.  
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  reports to constitute definitive findings of the ADC, but rather merely the ADC's initial exploration of 
the completeness and accuracy of the cost data. The preliminary character of the content s of the 
verification report s is confirmed by the titles of their final sections, including "Normal value – 
Preliminary assessment " or " Preliminary  Dumping Margin " and the  statement on the first pages: 
"[t]his report and the views or recommendations contai ned therein will be reviewed by the case 
management team and may not reflect the final position of the Anti -Dumping Commission" .236 
Furthermore, it is uncontested that in the investigation at issue, some of the recommendations made 
by the verification teams were not followed by the ADC in its final determination. For example, 
although the verification team was "satisfied" that the prices paid in domestic sales of A4 copy paper 
are suitable for assessing the normal value237, the ADC ultimately decided to constru ct normal value.  
Finally, we recall that the ADC explained that , when undertaking the assessment "whether 
an exporter 's records reasonably reflect competitive market costs associated with the production or 
manufacture of like goods", "the [ADC] examines a  number of factors, including whether the 
Government influenced the prices of any major inputs".238 We note that the ADC's reasoning in the 
Final Report leading to the rejection of Indah Kiat's and Pindo Deli's recorded pulp costs focused on 
government -induc ed distortions in the pulp costs in the paper market in Indonesia.239 The relevant 
section of the Final Report does not contain any finding regarding the accuracy of the exporters' 
records.240  
Having carefully reviewed the Final Report of the ADC, we find that the ADC did not establish 
that Indah Kiat's and Pindo Deli's records were GAAP -consistent and reasonably reflected costs 
associated with the production and sale of A4 copy paper . The ADC reject ed the pulp cost component 
of their records  for other reasons . Thus, the ADC, in its analysis, did not give effect to the whole of 
the obligation in Article  2.2.1.1, first sentence, including the two explicit conditions. In light of  our 
above reasoning regarding the operation of the first sentence of Article  2.2.1.1, first sentence, the 
ADC's reliance on the term "normally" was inconsistent with Australia's obligations under that 
provision. Accordingly, we find that the ADC acted inc onsistently with Australia 's obligations under  
Article  2.2.1.1 when it disregarded the recorded hardwood pulp costs of Indah Kiat and Pindo Deli 
in the A4 copy paper investigation.  
As noted in our introduction to these findings, Indonesia also claims that the ADC's decision 
to disregard the recorded hardwood pulp costs of Indah Kiat and Pindo Deli is inconsistent with 
Article  2.2 of the Anti -Dumping Agreement. Indonesia asks the Panel to make this finding "because 
in constructing the normal value for the In donesian producers under investigation, Australia did not 
calculate the cost of production for A4 copy paper on the basis of the records kept by those producers 
even though the records were in accordance with [GAAP]  and reasonably reflected the actual cost  
of production of A4 copy paper, and because Australia therefore  failed to properly calculate the cost 
of production and properly construct the normal value for those producers".241 We have already 
established above that the ADC acted inconsistently with Article 2.2.1.1 when it rejected the 
hardwood pulp component of Indah Kiat's and Pindo Deli's records. As we understand it, Indonesia 
has not provided any basis for its Article  2.2 claim that is separate and independent from its claim 
under Article  2.2.1.1 of  the Anti -Dumping Agreement and, in that sense, Indonesia's claim under 
Article  2.2 is purely consequential. In this light, we do not believe it is necessary to make any findings 
on Indonesia's claim for the purpose of resolving this dispute. Accordingly, we exercise judicial 
economy and decline to rule on the merits of Indonesia's claim under Article  2.2 of the 
Anti-Dumping  Agreement.  
7.3.4   Conclusion  
We find that Australia's measure is inconsistent with Article  2.2.1.1, first sentence, of the 
Anti-Dumping Agre ement because the ADC has not established that both the first and second 
conditions in the first sentence of Article  2.2.1.1 of the Anti -Dumping Agreement were satisfied when  
 
236 Indah Kiat's Verification Report, (Exhibit IDN -9), sections 7 and 8, and p. 1; Pindo Deli's  Verification 
Report, (Exhibit IDN -10), sections 7 and 8, and p. 1.  
237 Indah Kiat's Verification Report, (Exhibit IDN -9), section 7; Pindo Deli's Verification Report, 
(Exhibit  IDN-10), section 7.  
238 Final Report, (Exhibit IDN -4), section 6.9.1, p. 51.  
239 Final Report, (Exhibit IDN -4), section 6.9.1, pp. 50 -51. 
240 Final Report, (Exhibit IDN -4), section 6.9.1, pp. 50 -51. 
241 Indonesia's first written submission, para. 181. (emphasis added)  WT/DS529/R  
 
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  rejecting the pulp component of Indah Kiat's and Pindo Deli's records  on the basi s of the term 
"normally"  and therefore has failed to give effect to the whole of the obligation  in that provision . 
Because  Indonesia's claim under Article  2.2 of the Anti -Dumping Agreement that the ADC 
has not properly calculated the "cost of production" o f A4 copy paper for Indah Kiat and Pindo Deli 
is based entirely on the ADC's  rejecti on of  the hardwood pulp component of their records , it is 
consequential to its claim under Article  2.2.1.1, and we therefore  decline to make any findings.  
7.4  Whether the Anti -Dumping Commission constructed the "cost of production" of 
A4 copy paper for Indah Kiat and Pindo Deli in a manner inconsistent with Article  2.2 of 
the Anti -Dumping Agreement  
7.4.1   Introduction  
Indonesia submits th at the ADC acted inconsistently with Australia's obligations under 
Article  2.2 of the Anti -Dumping Agreement by substituting the actual cost of hardwood pulp recorded 
in Indah Kiat's and Pindo Deli's records with prices of exports of hardwood pulp made by Brazilian 
and South American producers to China and Korea.242 According to Indonesia, the use of 
third-country export prices as a proxy for the actual costs of pulp of the Indonesian producers was 
inconsistent with the requirement in Article  2.2 to calculate  the "cost of production in the country of 
origin".243 In particular, Indonesia maintains that the adjustments made to the export price 
benchmarks used as a proxy for costs did not result in the ADC using the cost of production in 
Indonesia  to construct the normal value of A4 paper.244 Moreover, Indonesia argues that the 
benchmarks were not adjusted for different levels of profit to reflect the respective situations of 
Indah Kiat and Pindo Deli.245 Finally, Indonesia argues that the benchmarks were not appropriat e 
for deriving the cost of pulp in Indonesia because they were based on unreliable indicative data, 
which was misrepresented in the ADC's Final Report as "verified actual transaction prices".246 
Indonesia also argues that the ADC could have replaced the cost  of woodchips rather than pulp costs  
in constructing Indah Kiat's cost of production of A4 copy paper  and that would result in a less 
trade -distortive benchmark.247 
Australia argues that the ADC acted consistently with Australia's obligations under Article  2.2 
because there were no available domestic prices or import prices of pulp in Indonesia that could 
have been used to substitute the actual costs of pulp.248 Australia clarifies that the only available 
domestic prices of pulp were confidential and therefore could not be used, and import prices of pulp 
would likely be affected by the identified market distortions.249 Australia argues that the ADC was 
entitled to use the pulp benchmark to determine the full cost of pulp since the obligation to calculate 
"cost of production in the country of origin" , as used in Article  2.2 of the Anti -Dumping Agreement , 
is broader than the obligation to use costs recorded in the records under Article  2.2.1.1.250 According 
 
242 Indonesia's first written submission, paras. 155, 164, and 166; secon d written submission, para. 75; 
and opening statement at the second meeting of the Panel, para. 71.  
243 Indonesia's first written submission, paras. 164 and 167; opening statement at the second meeting 
of the Panel, para. 71.  
244 Indonesia's first written subm ission, paras. 155 and 168; second written submission, paras. 74 -75; 
and response to Panel question No. 29 following the first meeting of the Panel, p. 24.  
245 Indonesia's opening statement at the second meeting of the Panel, para. 71; responses to Panel 
question No. 9 following the second meeting of the Panel, paras. 26 and question No. 30, paras. 91 -93; and 
comments on Australia's response to Panel question No. 33 following the second meeting of the Panel, 
paras.  54-57. 
246 Indonesia's opening statement at the second meeting of the Panel, para. 70; responses to Panel 
question No. 9 following the second meeting of the Panel, paras. 23 -24 and question No. 29, paras.  88-89. 
247 Indonesia's responses to Panel question No. 18 follo wing the second meeting of the Panel, para. 37 
and question No. 35, paras.  97-98. 
248 Australia's first written submission, paras. 222 -228 (referring to Final Report, (Exhibit IDN -4), 
sections 6.9.2.2, A4.3, A4.3.1, A4.3.2, and A4.5.1, pp. 52, and 230 -232).  
249 Australia's first written submission, paras. 225 -227. 
250 Australia's response to Panel question No. 26 following the first meeting of the Panel, paras. 196 -198 
(referring to Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.73); second written su bmission, 
paras.  259-260, and fn 315 (referring to Appellate Body Reports, Canada – Dairy ( Article  21.5 – New Zealand 
and US II) , para. 102; US – Carbon Steel (India) , para. 4.352;  US — Upland Cotton ( Article  21.5 - Brazil) , 
paras.  426-428; and Panel Repor t, US – Upland Cotton ( Article  21.5 – Brazil) , para. 10.170); and  responses to 
Panel questions Nos. 14 and 15 following the second meeting of the Panel, paras. 82 -100. 
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  to Australia, although based on external sources, the pulp ben chmark used in the construction of 
normal value was adjusted to ensure that it was suitable to arrive at the cost of production of A4  copy 
paper in Indonesia .251 Australia submits that the ADC was not obliged to adjust the pulp benchmark 
to reflect the level  of profit252, and that the data used for the pulp benchmark was reliable.253  
We begin by addressing the key threshold question that is raised by the parties' submissions, 
namely, whether the ADC was entitled, under the terms of Article  2.2 of the 
Anti-Dumpin g Agreement, to replace the actual costs of pulp of the Indonesian A4 copy paper 
producers with a value derived from third-country  export prices of pulp to China and Korea.  
7.4.2   Whether the Anti -Dumping Commission was entitled to replace the recorded pulp 
costs of Indah Kiat and Pindo Deli with adjusted third -country export prices of pulp  
Article  2.2 of the Anti -Dumping Agreement provides:  
When there are no sales of the like product in the ordinary course of trade in the 
domestic market of the exporting country or when, because of the particular market 
situation or the low volume of the sales in the domestic market of the exporting country, 
such sales do not permit a proper comparison, the margin of dumping shall be 
determined by comparison with  a comparable price of the like product when exported 
to an appropriate third country, provided that this price is representative, or with the 
cost of production in the country of origin plus a reasonable amount for administrative, 
selling and general cost s and for profits.254  
The expression "cost of production in the country of origin" in this provision has been 
understood as "a reference to the price paid or to be paid to produce something within the country 
of origin".255 Normally, and as reflected in the o bligation set out in the first sentence of 
Article  2.2.1.1, the cost of production in the country of origin should be calculated on the basis of 
cost information from an exporter's own records. However, as explained by the Appellate Body in 
EU – Biodiesel  (Argentina) : 
In circumstances where the obligation in the first sentence of Article  2.2.1.1 to calculate 
the costs on the basis of the records kept by the exporter or producer under 
investigation does not apply, or where relevant information from the expor ter or 
producer under investigation is not available, an investigating authority may have 
recourse to alternative bases to calculate some or all such costs.256  
We recall that the ADC did not use Indah Kiat's and Pindo Deli's pulp costs to calculate their 
respective costs of production of A4 copy paper for the purpose of constructing normal value. 
We have found in the previous section that in disregarding Indah Kiat's and Pindo Deli's costs, the 
ADC acted inconsistently with the first sentence of Article  2.2.1.1. Accordingly, in the light of the 
above Appellate Body statement from EU – Biodiesel (Argentina) , with which we agree, there was 
no legal basis for the ADC to have used third -country export prices of pulp as a proxy for Indah 
Kiat's and Pindo Deli's pu lp costs when constructing normal value of A4 copy paper under the terms 
of Article  2.2. It follows that the ADC's use of Brazilian and South American export prices of pulp to 
China and Korea as a starting point for the calculation of the costs of pulp in Indonesia was 
inconsistent with Article  2.2. 
 
251 Australia's first written submission, paras. 228 -229 (referring to Final Report, (Exhi bit IDN -4), 
sections 6.9.2.2, A2.9.2.3, A4.1, A4.2, A4.3.3, A4.5.1, A4.5.2, pp. 52, 167, and 230 -233), 232 -240, 
and 245-246; second written submission, paras. 235 -260; and response to Panel question No. 11 following the 
second meeting of the Panel, paras. 49-61. 
252 Australia's response to Panel question No. 33 following the second meeting of the Panel, 
paras.  158-177; comments on Indonesia's responses to Panel questions Nos. 9, 10, 29 and 30 following the 
second meeting of the Panel, paras. 60 -61, and 130 -148. 
253 Australia's closing statement at the second meeting of the Panel, paras. 9 -12; comments on 
Indonesia's responses to Panel questions Nos. 9, 10, and 29 following the second meeting of the Panel, 
paras.  53-58. 
254 Fn omitted.  
255 Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.69.  
256 Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.73. (fn omitted)  
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Having concluded that the ADC was not entitled, under Article  2.2, to use third -country 
export prices of pulp as a basis for determining the cost of production of A4 copy paper in Indonesia, 
we note that a panel  has "the discretion to address only those arguments it deems necessary to 
resolve a particular claim".257 In this particular case, we do not consider that we need to address all 
of the arguments presented by Indonesia as to why the use of the pulp benchmark  was inconsistent 
with Article  2.2. However , to assist the parties in  resolv ing their dispute, we find it useful to address 
Indonesia's submissions concerning the absence of relevant profit adjustments to the pulp 
benchmark  and the ADC's decision not to re place woodchips costs instead of pulp costs for Indah 
Kiat. We understand that Indonesia's arguments regarding these issues proceed by assuming 
arguendo  that even if the ADC were allowed to replace some of the exporters' costs in constructing 
their cost of  production of A4 copy paper in Indonesia , the ADC's use of the specific pulp benchmark  
it selected was still inconsistent with the requirement to calculate the "cost of production" under 
Article  2.2. For the purposes of our subsequent analysis, we therefo re will similarly examine whether, 
even assuming that the ADC was allowed to replace some of the exporters' costs by out -of-country 
information, its use of the pulp benchmark was nonetheless inconsistent with Article  2.2. However, 
before moving on to this analysis, we address Australia's contention that Indonesia has conceded in 
this proceeding that the export pulp benchmark applied by the ADC was the proper amount to use 
for the hardwood pulp component of the cost of production of A4 copy paper.  
Austr alia argues Indonesia has conceded that the pulp benchmark was the proper amount 
to use as a substitute for Indah Kiat's and Pindo Deli's pulp costs "because Indonesia has 
acknowledged that the prevailing export price of hardwood pulp was the proper amount  to use for 
the hardwood pulp component of the 'cost of production'" and because "Australia has demonstrated 
that the 'pulp benchmark' used by the Anti -Dumping Commission was virtually identical to that 
prevailing export price".258 While it is true that Indo nesia originally argued that Australia could have 
used the export price of Indonesian pulp to derive the cost of pulp in Indonesia259, the arguments 
of Indonesia have evolved in the course of this proceeding. In response to the Panel's request to 
confirm the  understanding that " Indonesia seems to accept that the export price of Indonesian pulp 
could have been used as a suitable amount for the pulp costs to arrive at the cost of production of 
A4 copy paper in Indonesia" , Indonesia clarified that  this understan ding is "not correct".260 
Therefore, we find that Indonesia has not conceded that the pulp benchmark was the proper amount 
to use for the hardwood pulp component of Indah Kiat's and Pindo Deli's cost of production of 
A4 copy paper.  
7.4.3   Whether the absence of adjustments to the pulp benchmark for different levels of 
profit is inconsistent with Article  2.2 of the Anti -Dumping Agreement  
Indonesia argues that the pulp cost benchmark used to replace Indah Kiat's and Pindo Deli's 
actual pulp c osts was incorrect because it included profit amounts that did not reflect the specific 
circumstances of each company, including "the fact that the Indonesian producers are integrated or 
affiliated with pulp producers".261 In particular, Indonesia maintains that, for Indah Kiat, the pulp 
benchmark should not have included profit because it was an integrated company, while for Pindo 
Deli, the profit component of the benchmark should have been removed or adjusted .262  
Australia responds that subtracting an amount  for profit from the pulp benchmark would 
have meant that the cost of production of A4 copy paper derived for Indah Kiat and Pindo Deli would 
not have reflected the full cost of production of A4 copy paper in Indonesia and would not have been 
an "appropria te proxy for the price of the like product in the ordinary course of trade in the domestic 
market of the exporting country when the normal value cannot be determined on the basis of 
 
257 Appellate Body Reports, EC – Fasteners  (China) , para. 511;  EC – Poultry , para. 135; and India – 
Solar Cells , para . 5.15. 
258 Australia's opening statement at the second meeting of the Panel, para. 101 (referring to 
Indonesia's  opening statement at the first meeting of the Panel, para. 49; Australia's closing statement at the 
first meeting of the Panel, paras. 26 -29; an d second written submission, paras. 241 -249).  
259 Indonesia's opening statement at the first meeting of the Panel, para. 49.  
260 Indonesia's response to Panel question No. 29 following the second meeting of the Panel, para. 88.  
261 Indonesia's opening statement at the second meeting of the Panel, para. 71.  
262 Indonesia's responses to Panel questions Nos. 30(a) and (b) following the second meeting of the 
Panel, paras. 91 -92; comments on Australia's response to Panel question No. 33 following the second  meeting 
of the Panel, paras. 55 -57. 
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  domestic sales".263 In Australia's view, the pulp benchmark was appropriate to use because of its 
consistency with another exporter's costs of pulp, which were found not to be distorted.264 Moreover, 
Australia points to the fact that neither the exporters, nor the Government of Indonesia requested 
that the ADC deduct an amount for p rofit from the pulp benchmark in the course of the 
investigation.265  
After finding that "the actual cost of pulp recorded by exporters in their records [did] not 
reasonably reflect a competitive market cost"266, the ADC constructed the cost of production of 
A4 copy paper for Indah Kiat and Pindo Deli using "a pulp cost benchmark that better reflects the 
competitive market cost of pulp".267 The ADC explained that the domestic prices of pulp of the 
cooperative Indonesian exporters were considered to be affected by  government influence and 
therefore unsuitable268; that it was not possible to use cost data from other Indonesian pulp 
producers to replace the rejected costs of Indah Kiat and Pindo Deli because the only cost data 
available to the ADC pertained to a differ ent producer and was confidential269; and that appropriate 
import price information was lacking, and would also likely have been affected by government 
influence.270  
The Final Report describes the benchmark as "consisting of quarterly import pulp prices into 
China and Korea based on an average CIF price for bleached eucalyptus kraft wood originating from 
Brazil and South America".271 The data used to derive the benchmark prices was generated by 
two paper industry consultants contracted by the ADC to provide pric e information - RISI and 
Hawkins Wright.272  
Indonesia has described the benchmark using various expressions including "the cost of 
producing pulp in South America and Brazil"273 and "a pulp price in Brazil and South America".274 
Australia objects to Indonesia's  descriptions of the benchmark and considers them to be incorrect in 
light of the ADC's description of the benchmark in the Final Report.275 We recall that the ADC did not 
use the CIF price benchmark as the relevant cost proxy. Rather, the CIF price was the starting basis  
for deriving the cost substitute. In the course of the investigation, the ADC made certain adjustments 
to the CIF benchmark for Indah Kiat and Pindo Deli. These included adjustments that subtracted 
relevant amounts of ocean freight and inland transport costs276, which we understand to have been 
associated with the exports from Brazil and South America. As Indonesia has pointed out, 
"[r]emoving ocean freight … results in a reference price FOB Brazil or South America as opposed to 
 
263 Australia's response to Panel question No. 33 following the second meeting of the Panel, 
paras.  158-159 (referring to Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.24, Panel Reports, 
EU – Biodiesel (Argentina) , para. 7.233; Thailand – H-Beams , para. 7.112; and US – Softwood Lumber V , 
para. 7.278). Australia originally understood Indonesia to argue that, after making an adjustment for profit to 
the pulp benchmark, the ADC should have used the cost of pulp reflected in Indah Kiat's records as the 
hardwood pulp component of the cost of production of A4 copy paper for both Indah Kiat and Pindo Deli. 
(Australia's response to Panel question No. 33 following the second meeting of the Panel, paras. 162 -167). 
Howev er, Indonesia later clarified that this was not a correct reflection of its position. (Indonesia's comments 
on Australia's response to Panel question No. 33 following the second meeting of the Panel, para. 54). In 
examining the issue of the adjustment for profit, we will therefore refrain from addressing Australia's 
arguments as to why Indah Kiat's and Pindo Deli's recorded costs were not suitable to use in the construction 
of the cost of production of A4 copy paper.  
264 Australia's response to Panel question  No. 33 following the second meeting of the Panel, para. 161 
(referring to Final Report, (Exhibit IDN -4), section 6.9.2.2, p. 52).  
265 Australia's response to Panel question No. 33 following the second meeting of the Panel, 
paras.  168-175. 
266 Final Report, (E xhibit IDN -4), section 6.9.1, p. 51.  
267 Final Report, (Exhibit IDN -4), section A4.1, p. 230.  
268 Final Report, (Exhibit IDN -4), section A4.3.1, p. 230.  
269 Final Report, (Exhibit IDN -4), section A4.5.1, p. 232.  
270 Final Report, (Exhibit IDN -4), section A4.3.2, p p. 230 -231. 
271 Final Report, (Exhibit IDN -4), sections A4.2 and A4.3.3, pp. 230 -231. 
272 Final Report, (Exhibit IDN -4), section A4.5.1, p. 232.  
273 Indonesia's opening statement at the first meeting of the Panel, para. 49.  
274 Indonesia's response to Panel question No. 28(a) following the first meeting of the Panel, p. 22.  
275 Australia's second written submission, paras. 237 -240. 
276 Final Report, (Exhibit IDN -4), sections 6.9.8.1.3 and A4.4, pp. 62 and 231; Australia's first writ ten 
submission, paras. 238 and 240.  
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  CIF China and Korea".277 Thus, when Indonesia refers to the "pulp price in Brazil and South America", 
we understand it to refer to the already adjusted benchmark.  
The ADC also made other adjustments to the pulp benchmark. In particular, it adjusted the 
benchmarks use d for Indah Kiat and Pindo Deli to reflect the verified proportion of pulp consumed 
in the production of A4 copy paper.278 For Indah Kiat, which  produced pulp itself and therefore used 
wet pulp in its production process, the ADC converted  the benchmark from a dry pulp price to a wet 
pulp price.279 The ADC further deducted an amount for selling, general and administrative expenses 
from Indah Kiat's pulp benchmark .280 It is not disputed that the ADC did not adjust the pulp 
benchmark for profit to reflect the respec tive situations of Indah Kiat and Pindo Deli.281 
Turning to Indonesia's submissions concerning the absence of an adjustment for profit, we 
will first examine Indonesia's arguments  regarding the ADC's analysis in relation to Indah Kiat and 
will then turn to e xamine Indonesia's arguments  in relation to Pindo Deli.   
7.4.3.1   The adjustment for profit to the pulp benchmark for Indah Kiat  
Indonesia contests the inclusion of profit in the pulp benchmark for Indah Kiat because it is 
an integrated paper producer, and "the pro duction of pulp is merely an intermediate stage in [its] 
paper production process".282 Therefore, Indonesia submits that the ADC should have subtracted 
profit from the "pulp benchmark" for Indah Kiat, and the failure to make this adjustment renders 
the ADC's  establishment of the facts not proper and not unbiased and objective pursuant to 
Article  17.6(i) of the Anti -Dumping Agreement.283 
On this basis , we proceed to examine the facts relating to the inclusion of profit in the pulp 
benchmark that were before the investigating authority when it made the determination. In its 
submissions, Indonesia has brought to our attention  section 4.3, "Integrated processes", of the 
Verification Report for Indah Kiat , which  states that "[t]he verification team was able to ascert ain 
that pulp is transferred to the photocopy paper manufacturing division at actual cost, and therefore, 
the verification team is satisfied that the pulp costs (as part of the raw material costs) recorded in 
Indah Kiat 's CTMS spreadsheet for A4 photocopy paper reflect the actual costs incurred" .284 This 
excerpt of the Verification Report confirms that the ADC had evidence before it that Indah 
Kiat's  process of production of A4 copy paper was integrated and that the transfer of pulp between 
the manufacturing divisions of Indah Kiat was made without the inclusion of profit, at actual cost.  
Australia explains that neither the exporters, nor the Government of Indonesia requested 
that the ADC deduct an amount for profit from the pulp benchmark in the course of th e 
investigation.285 According to Australia, such a request was necessary in order for the ADC to have 
 
277 Indonesia's first written submission, para. 168.  
278 Final Report, (Exhibit IDN -4), section 6.9.8.1.4, p. 62; Australia's first written submission, 
paras.  236-237 and 240.  
279 Final Report, (Exhibit IDN -4), sections 6.9.8. 1.3, A4.4 and A4.5.1, pp. 61, and 231 -232; 
Australia's  first written submission, para. 238; and Indonesia's first written submission, para. 168.  
280 Final Report, (Exhibit IDN -4), section 6.9.8.1.3, p. 62; Australia's first written submission, paras. 238 
and 240; and Indonesia's first written submission, para. 168. Although Australia argues that the ADC 
subtracted the amount for selling, general and administrative expenses from Pindo Deli's benchmark, we have 
not been able to identify that deduction in the te xt of the Final Report.  
281 Indonesia's opening statement at the second meeting of the Panel, para. 71; responses to Panel 
question No. 9 following the second meeting of the Panel, para. 26 and question No. 30, paras.  91-93; 
Australia's response to Panel que stion No. 33 following the second meeting of the Panel, paras. 158 -177. 
282 Indonesia's response to Panel question No. 30(a) following the second meeting of the Panel, 
para. 91. 
283 Indonesia's response to Panel question No. 30(a)  following the second meeting of the Panel, 
para. 91; comments on Australia's response to Panel question No. 33 following the second meeting of the 
Panel, para. 55.  
284 Although Indonesia pointed to Indah Kiat's Verification Report in the context of discussing the 
accuracy of the exporte rs' recorded costs, we consider it to be also relevant for the purposes of our 
examination of this specific issue. (See Indonesia's first written submission, para. 153 (referring to 
Indah  Kiat's  Verification Report, (Exhibit IDN -9), section 4.3)).  
285 Austr alia's response to Panel question No. 33 following the second meeting of the Panel, 
paras.  168-175. 
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  been required to make the adjustment. Australia finds support for its view in the following statement 
made by the panel in US – Coated Paper (Indonesia)286: 
What an investigating authority must do in conducting the necessary analysis for the 
purpose of arriving at a proper benchmark will vary depending on the circumstances of 
the case, the characteristics of the market being examined, and the nature, quantity,  
and quality of the information supplied by petitioners and respondents, including any 
additional information the investigating authority seeks so that it may base its 
determination on positive evidence on the record.287  
We note that the panel in US – Coate d Paper (Indonesia)  dealt with an issue that is different 
from the one before us, namely, how an investigating authority should arrive at a benchmark for 
the purpose of calculating the amount of a subsidy in terms of benefit under Article  14(d) of the 
SCM Agreement. It is not clear to us that the considerations relating to the selection of a benchmark 
under that provision should be the same as those guiding an investigating authority's determination 
of the "cost of production in the country of origin" under  Article  2.2 of the 
Anti-Dumping  Agreement.288 Having said that, we do not understand the above excerpt to limit the 
analysis that an investigating authority must undertake for the purpose of establishing a subsidy 
benchmark under Article  14(d) of the SCM Ag reement to issues raised in requests made by 
interested parties, when the information supplied by the respondents and other positive evidence 
on the record identify a specific need for an adjustment of the benchmark. In our view, that same 
limitation canno t be found in Article  2.2 of the Anti -Dumping Agreement  either . Rather, as we see 
it, it follows from the obligation in Article  2.2 that it is incumbent on the investigating authority to 
make all adaptations that are necessary, in the light of the facts be fore it, to arrive at the "cost of 
production in the country of origin".289  
We recall Australia's own explanation that the "adaptations [made to the pulp benchmark] 
were in response to evidence obtained during the investigation as a result of the verificati on of 
Indonesian exporters, and in response to submissions made by [Sinar Mas Group ] and the 
Government of Indonesia during the investigation".290 In the circumstances where the record of the 
investigation revealed that the transfer of pulp between the divis ions of Indah Kiat happens at actual 
cost, we do not consider relevant whether the request for the adjustment for profit was made by 
interested parties or not. In any case, while a request for such an adjustment was not made in clear 
and explicit terms, th e exporters, in a submission in response to the Statement of Essential Facts, 
complained to the ADC that:  
[It had] used benchmark purchase  prices of dry hardwood pulp in sheets, when the 
hardwood pulp (LBKP) used by Indah Kiat is self-produced  wet pulp which is obviously 
of much lower cost . It is totally inappropriate  to use a benchmark purchase price for dry 
hardwood pulp in sheets when the hardwood pulp used by Indah Kiat in its A4 copy 
paper production is self -produced  wet pulp going directly into paper production .291  
We find that , in the light of the outcome of the ADC's verification, the emphasi zed words can 
be reasonably understood as pointing to the inappropriateness of using unadjusted purchase prices 
for an integrated producer such as Indah Kiat.  
Australia makes several additional arguments in response to Indonesia's challenge of the 
absence of an adjustment for profit. First, Australia argues that subtracting an amount for profit 
from the pulp benchmark "would have meant that the cost of production of A4 copy paper derived 
for Indah Kiat and Pindo Deli would not have reflected the full cost of production of A4 copy paper 
in Indonesia for Indah Kiat and Pindo Deli" and would not have been an "appropriate proxy for the 
 
286 Australia's response to Panel question No. 33 following the second meeting of the Panel, 
paras.  172-173 (referring to Panel Report, US – Coated Paper (Ind onesia) , para. 7.36).  
287 Panel Report, US – Coated Paper (Indonesia) , para. 7.36.  
288 We note that the panel and Appellate Body in Ukraine – Ammonium Nitrate  held a similar view. 
(Panel Report, Ukraine – Ammonium Nitrate , para. 7.102; Appellate Body Report, Ukraine – Ammonium 
Nitrate , para. 6.118).  
289 Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.73.  
290 Australia's response to Panel question No. 33 following the second meeting of the Panel, para. 169.  
291 Sinar Ma s Group's submission (29 December 2016), (Exhibit IDN -15), p. 6. (bold type original; 
italics  added)  
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  price of the like product in the ordinary course of trade in the domestic market of the exporting 
country when the normal value cannot be determined on the basis of domestic sales".292 Second, 
Australia submits that the pulp benchmark was appropriate to use because of its consistency with 
the costs of pulp  of another exporter under investigation, PT Riau Andalan Kertas .293 Third, Australia 
counters Indonesia's argument that "the production of pulp is merely an intermediate stage in the 
paper production process"294 by arguing that Indonesian producers of A4 copy paper do not devote 
all of their hardwood pulp to A4 copy paper p roduction but also export pulp in significant quantities 
and that the prevailing export price is a key factor in determining the volume of paper production.295  
We note that the Final Report provides no explanation as to why the ADC did not subtract 
profit f rom the pulp benchmark used as a substitute for Indah Kiat's recorded pulp costs or why the 
adjustments had to be limited by the circumstances Australia refers to in the above three arguments. 
In light of the absence of any such explanations, and given the  facts on the record of the investigation 
discussed above, we find that the ADC's failure to adjust the level of profit included in the pulp cost 
benchmark used for Indah Kiat meant that the cost of production of A4 copy paper constructed for 
Indah Kiat wa s inconsistent with Australia's obligations under Article  2.2 of the 
Anti-Dumping  Agreement.  
7.4.3.2   The adjustment for profit to the pulp benchmark for Pindo Deli  
We will now consider whether the replacement of Pindo Deli's pulp costs with the pulp 
benchmark rais es similar concerns. Indonesia assert s that "Australia did not remove profit from its 
calculation  [of the pulp benchmark]  and, therefore, its establishment of the facts [] would not be 
proper pursuant to Article  17.6(i) ".296 Indonesia argues that "Pindo Deli  obtains pulp from affiliated 
parties, including Indah Kiat, and there is no evidence it did not do so in arm 's length transactions 
in the ordinary course of trade" .297 On this basis, Indonesia submits that "using export prices that 
include profit is not rep resentative of Pindo Deli 's cost of production in Indonesia" and that "Australia 
should have used whatever benchmark it determined for Indah Kiat and made adjustments for 
whatever mark -up Indah Kiat added to its cost for its sales to Pindo Deli".298 In clari fying its argument 
at a later stage, Indonesia explained that "profit must be subtracted from the benchmark for Pindo 
Deli's purchases in an amount that constitutes the actual mark -up Indah Kiat charged Pindo Deli".299 
In Indonesia's view, "[d]oing anything else would not merely be removing the effects of the 
'particular market situation', it would be distorting commercial reality" .300  
As the complaining party in this proceeding, Indonesia bears the  initial burden of 
demonstrating  inconsistency of Australia's measure with Article  2.2 with regard to the adjustment 
for profit to Pindo Deli's benchmark.301 In other words, Indonesia must present a " prima facie  
case … based on 'evidence and legal argument' … in relation to each of the elements of the claim ".302 
Importantly, "[t] he 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 clai med inconsistency of the measure with 
that provision ".303 In our view, the arguments presented by Indonesia in respect of the lack of 
adjustment for profit to Pindo Deli's benchmark  do not clearly explain the import of the challenged 
aspect of the measure an d the basis for the claimed inconsistency of Australia's measure with 
 
292 Australia's response to Panel question No. 33 following the second meeting of the Panel, 
paras.  158-159 (referring to Appellate Body Report, EU – Biodies el (Argentina) , para. 6.24, Panel Reports, 
EU – Biodiesel (Argentina) , para. 7.233; Thailand – H-Beams , para. 7.112; and US – Softwood Lumber V , 
para. 7.278). (underlining omitted)  
293 Australia's response to Panel question No. 33 following the second meetin g of the Panel, para. 161.  
294 Indonesia's response to Panel question No. 30(a) following the second meeting of the Panel, para.  91. 
295 Australia's comments on Indonesia's responses to Panel questions Nos. 9 and 30 following the 
second  meeting of the Panel, p aras. 134 -139. 
296 Indonesia's response to Panel question No. 9 following the second meeting of the Panel, para. 26.  
297 Indonesia's response to Panel question No. 30 (b) following the second meeting of the Panel, para.  92. 
298 Indonesia's response to Panel ques tion No. 30 (b) following the second meeting of the Panel, para. 92.  
299 Indonesia's comments on Australia's response to Panel question No. 33 following the second meeting 
of the Panel, para. 57.  
300 Indonesia's response to Panel question No. 30 (b) following the second meeting of the Panel, para. 92.  
301 See Appellate Body Report, EC – Hormones , para. 98.  
302 Appellate Body Report, US – Gambling , para. 140 (referring to Appellate Body Report, US – Wool 
Shirts and Blouses , p. 16, DSR 1997:I, 323, at 336) . (emphasi s original)  
303 Appellate Body Report, US – Gambling , para. 14 1. 
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  Article  2.2 and, in that respect, are insufficient for Indonesia to establish its prima facie  case 
regarding this specific aspect of the claim.  
Indonesia has argued both that the profit  in the pulp benchmark for Pindo Deli must be 
subtracted  or removed  and that it should have been adjusted . We have not been able to deduce 
from Indonesia's arguments which specific kind of adjustment Indonesia considers the ADC had to 
make. To the extent I ndonesia argues that the profit needed to be removed from the pulp benchmark 
for Pindo Deli, we find this argument to be in contradiction with Indonesia's own submission that 
Pindo Deli obtains pulp from affiliated parties, and that there is no evidence it  did not do so in 
arm's length transactions .304 It follows from Indonesia's explanation that Pindo Deli's cost of pulp is 
the price at which it obtains pulp from affiliated parties. If the pulp purchase transactions between 
Pindo Deli and its affiliates took  place in accordance with normal commercial practices, as Indonesia 
claims, we fail to see  why the price at which Pindo Deli obtained pulp would not be profitable for 
Pindo Deli's suppliers. In other words, we are unable to see why the cost of pulp for Pin do Deli (price 
it paid for pulp) would not include the profit component, and therefore why the profit component 
would need to be removed from the substituted pulp benchmark. Furthermore, to the extent 
Indonesia argues that the level of profit needed to be adjusted in the pulp benchmark for Pindo Deli, 
we do not see why the adjustment should relate to the "mark-up Indah Kiat added to its cost for its 
sales to Pindo Deli " in the circumstances where, as Indonesia itself explained, Pindo Deli buys pulp 
from Ind ah Kiat and another company, Lontar.305 Indonesia has not provided any explanation 
regarding this point.  We further note that Indonesia has not argued that the issue of profit 
adjustment was brought to the ADC's attention by interested parties.  
In the absence of a clear and convincing explanation from Indonesia as to why and how the 
ADC had to make an adjust ment for profit to Pindo Deli's benchmark, in light of the circumstances 
of this specific investigation, we find that Indonesia has not established that the absence of an 
adjustment for profit to the pulp benchmark used for Pindo Deli in the ADC's determin ation is 
inconsistent with the requirement to calculate the "cost of production in the country of origin" under 
Article  2.2 of the Anti -Dumping Agreement.  
7.4.4   Whether the Anti -Dumping Commission acted inconsistently with Article  2.2 of the 
Anti-Dumping Agreeme nt when it replaced Indah Kiat's pulp costs with the pulp 
benchmark based on third -country export prices instead of  replacing woodchips costs  
Indonesia argues that Article  2.2 of the Anti -Dumping Agreement requires the investigating 
authority to calculate  the cost of production for the producer under investigation in Indonesia, and 
that by choosing to replace the pulp costs rather than woodchips costs for Indah Kiat, Australia failed 
to fulfil that requirement.306 Indonesia argues that, even if the ADC neede d to replace distorted 
costs, it should have replaced Indah Kiat's cost of woodchips (direct input into production of pulp) 
rather than pulp costs themselves.307 The substitution of Indah Kiat's cost of pulp, in Indonesia's 
view, also resulted in the substit ution of "other costs associated with manufacturing pulp, including 
electricity, water etc. that were not affected by the 'particular market situation '".308 Indonesia points 
out that the ADC had Indah Kiat's woodchips costs on the record of the investigation .309 According 
to Indonesia, "[b]y replacing the cost of woodchips, the allegedly distorted input in Indah Kiat's costs 
[would be] accounted for while all of Indah Kiat's other costs, which are not affected by the 'particular 
market situation' [would] remain  the same".310  
 
304 Indonesia's response to Panel question No. 30 (b) following the second meeting of the Panel, para. 92.  
305 Indonesia's first written submission, fn 70.  
306 Indonesia's responses to Panel questions Nos. 18 and 35 following the second meeting of the Panel, 
paras. 37, and 97 -98. 
307 Indonesia's responses to Panel question No. 18 following the second meeting of the Pa nel, para. 37 
and question No. 35, para. 98.  
308 Indonesia's response to Panel question No. 35 following the second meeting of the Panel, para. 98.  
309 Indonesia's response to Panel question No. 18 following the second meeting of the Panel, para. 37 
(referring  to Attachment G6 to the Exporter's Questionnaire Response of Indah Kiat, (Exhibit IDN -28 (BCI))). 
See also Indonesia's second written submission, para. 80.  
310 Indonesia's response to Panel question No. 35 following the second meeting of the Panel, para. 98 .  
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Australia acknowledges that the ADC had on its record the cost of woodchips used by Indah 
Kiat in the production of pulp.311 However, Australia submits that it could only determine the value 
and volume of pulpwood, which is an input into production of woodchips, for one month.312 Australia 
argues  that nothing in the Anti -Dumping Agreement or Article  2.2 required the ADC to replace 
woodchips costs rather than pulp costs.313 Australia points out that, where costs are not calculated 
on the basis of the records of the exporter or producer, Article  2.2 does not specify precisely what 
evidence an authority may resort to.314 On this basis, Australia submits that it is irrelevant whether 
the ADC could have replaced woodchips costs instead of pulp costs.315 Additionally, Australia argues 
that the pricing data was available to construct the pulp benchmark.316  
We note that, in challenging this specific aspect of the ADC's determination, i.e. the 
ADC's  choice to replace the cost of the main input into the produc tion of A4 copy paper (pulp) rather 
than the cost of the input into production of the main input (woodchips), Indonesia proceeds by 
assuming arguendo  that the ADC was allowed to replace Indah Kiat's recorded costs which were 
affected by the distortion resu lting from the "particular market situation".317 For the purposes of our 
analysis, we will proceed to address the argument on the same basis.318 We note further that 
Indonesia has made this argument pursuant to Article  2.2 and not Article  2.2.1.1. So, we are n ot 
asked to examine whether the ADC acted inconsistently with Article  2.2.1.1 by rejecting Indah 
Kiat's  recorded pulp costs  instead of woodchips costs. Instead , we examine whether, taking into 
account the specific circumstances of Indah Kiat, the external pulp benchmark that the ADC utilized 
to replace Indah Kiat's  cost of making pulp as a cost of making paper, was inconsistent with the 
requirement to use the "cost of production in the country of origin" under Article  2.2.  
We recall that in EU – Biodiesel (Argentina),  the Appellate Body explained that under certain 
circumstances the investigating authority may have recourse to information other than that 
contained in the exporter's records to construct the cost of production but even in those 
circumstances it remains bound by the obligation to derive the cost of prod uction "in the country of 
origin":  
In circumstances where the obligation in the first sentence of Article  2.2.1.1 to calculate 
the costs on the basis of the records kept by the exporter or producer under 
investigation does not apply, or where relevant info rmation from the exporter or 
producer under investigation is not available, an investigating authority may have 
recourse to alternative bases to calculate some or all such costs. Yet, Article  2.2 does 
not specify precisely to what evidence an authority may  resort. This suggests that, in 
such circumstances, the authority is not prohibited from relying on information other 
than that contained in the records kept by the exporter or producer, including in -country 
and out -of-country evidence. This, however, does  not mean that an investigating 
authority may simply substitute the costs from outside the country of origin for the "cost 
of production in the country of origin". Indeed, Article  2.2 of the 
 
311 Australia's opening statement at the second meeting of the Panel, paras. 53 -54 (referring to 
Attachment G6 to the Exporter's Questionnaire Response of Indah Kiat, (Exhibit IDN -28 (BCI))).  
312 Australia's response to Panel question No. 19 following the s econd meeting of the Panel, 
paras.  105-108. 
313 Australia's response to Panel question No. 34 following the second meeting of the Panel, paras. 179 
and 181.  
314 Australia's response to Panel question No. 34 following the second meeting of the Panel, 
paras.  182-184 (referring to Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.73).  
315 Australia's response to Panel question No. 34 following the second meeting of the Panel, para. 181.  
316 Australia's response to Panel question No. 34 following the second me eting of the Panel, para. 180.  
317 Indonesia argues that "[b]y replacing the cost of woodchips, the allegedly distorted input in Indah 
Kiat's costs [would be] accounted for while all of Indah Kiat's other costs, which are not affected by the 
'particular mark et situation' [would] remain the same" . (Indonesia's response to Panel question No. 35 
following the second meeting of the Panel, para. 98). We understand from this argument, that for the recorded 
cost of woodchips to be replaced, that component of the rec ords had to be rejected under Article  2.2.1.1. It 
follows that, for the purposes of this argument, Indonesia has also assumed arguendo  that the ADC could have 
rejected the recorded woodchips costs of Indah Kiat instead of the cost of making pulp.  
318 We note  that because our reasoning proceeds on an arguendo  basis, it  is without prejudice to 
whether Article  2.2.1.1, first sentence , allows the investigating authority to disregard the  recorded  costs where 
those are found to be affected by the "particular market situation" or distorted, and whether Article  2.2 allows 
the investigating authority to replace distorted costs in constructing "the cost of production in the country of 
origin".  
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  Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT 1994 m ake clear that the 
determination is of the "cost of production […] in the country of origin". Thus, whatever 
the information that it uses, an investigating authority has to ensure that such 
information is used to arrive at the "cost of production in the co untry of origin". 
Compliance with this obligation may require the investigating authority to adapt the 
information that it collects.319 
It follows from the above explanation, that where the investigating authority uses 
information other than that contained i n the records kept by the exporter or producer to construct 
the cost of production, it has to ensure that it adapts the information appropriately. Although we 
agree with Australia that Article  2.2 does not specify precisely to what evidence an authority ma y 
resort in constructing the cost of production, the words "in the country of origin" define the 
parameters of the investigating authority's inquiry.320 The investigating authority is required by 
Article  2.2 to arrive at the "cost of production in the countr y of origin". By virtue of this requirement, 
the investigating authority shall consider available alternatives for replacing recorded costs.  In 
particular, we consider that the investigating authority is obligated to, as much as possible, use 
replacement i nformation that conforms to the requirement to use "the cost of production in the 
country of origin" for the exporter or producer under the investigation.  
Turning to the specific circumstances of the investigation, we recall that in the course of its 
analysis of the situation in A4 copy paper market in Indonesia, the ADC identified the source of the 
distortion in the timber market:  
[It] considered that the primary source of any distortion in the A4 copy paper market 
would likely be within the Indonesian fo restry sector because forestry and timber supply 
have been a primary focus of [the] policies and programs  [of the Government of 
Indonesia] .321 
The ADC proceeded to quantify the distortion in the timber market (but not in the pulp or 
paper market):  
The Commi ssion quantified the distortion in the Indonesian log market (see 
section  A2.9.4.1 above) and is satisfied that the significant distortions found in that 
assessment impact on the pulp and paper industries such that domestic sales of A4  copy 
paper are unsui table for use in determining normal value under 
subsection  269TAC(1).322 
The ADC  did not find , and Australia has not argued , that replacing Indah Kiat's cost of 
woodchips rather than the cost of producing pulp would not have corrected the identified distorti on. 
Rather, with respect to the possibility of replacing woodchips costs, Australia stated that "[e] ven if 
other potential methods were available to calculate the "cost of production [of  A4 copy paper] in 
[Indonesia]" in respect of Indah Kiat and Pindo Del i, nothing in the  Anti-Dumping Agreement 
required the use by the Anti -Dumping Commission of a particular  methodology ".323 As we have 
already explained above, we disagree with Australia and consider that, assuming arguendo  that 
Article  2.2 allows the investigating authority to replace distorted costs in constructing "the cost of 
production in the country of origin", this prov ision also requires the investigating authority to 
consider available alternatives for replacing recorded costs  so as to use the costs that are  unaffected 
by the distortion  to the extent possible.  
The circumstances of the investigation, in our view, called  for the ADC to consider an 
alternative to replacing Indah Kiat's cost of producing pulp with the pulp benchmark which replaces 
all the costs  used in producing pulp with external information. We note the ADC's above findings to 
the effect that the source o f the distortions was in Indonesia's timber market. Although Australia 
argued that the ADC was only able to determine the cost data for pulpwood  (input into production 
of woodchips) for one month, we do not find this relevant to deciding whether the cost o f woodchips  
 
319 Appellate Bo dy Report, EU – Biodiesel (Argentina) , para. 6.73. (fns omitted)  
320 Appellate Body Report, Ukraine – Ammonium Nitrate , para. 6.83.  
321 Final Report, (Exhibit IDN -4), section A2.9.2.4, p. 168.  
322 Final Report, (Exhibit IDN -4), section A2.9.6.8, p. 185.  
323 Austra lia's response to Panel question No. 34 following the second meeting of the Panel, para. 179.  
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  (input into production of pulp) could have been replaced. In this respect, we recall that Indah Kiat 
produces pulp itself and later transfer s it to the paper manufacturing division324 and we note that 
Indah Kiat's data relating to the value of wo odchips consumed in the production of pulp  was available 
on the ADC's record  for the whole investigation period .325 Furthermore, while Australia has argued 
that pricing data was available for the pulp benchmark326, we note that the ADC's Final Report also 
contains information about the Malaysian woodchips trade data, which Australia used to quantify the 
distortions in the Indonesian log market.327 In light of the evidence on the ADC's record and the 
ADC's own findings regarding the source of the distortion, we fi nd that the ADC should have 
considered using a replacement cost for woodchips in combination with Indah Kiat's other costs for 
producing pulp which were not found  to be affected by the distortion  (labour, energy, etc.).  If the 
ADC had undertaken such analy sis, it should have explained its choice of the final benchmark in light 
of this alternative. The Final Report, however, contains no such explanation.  
We are careful not to substitute our own judgment for that of the ADC as to what costs could 
have been fe asibly utilized on the basis of the information before it. However, we recall that pursuant 
to the affirmative obligation under Article  2.2 to use the "cost of production in the country of origin", 
it is incumbent upon the investigating authority to explor e the alternative methodologies that would 
allow it to arrive at "the cost of production in the country of origin" by utilizing those components of 
the producer's costs that are unaffected by the distortion, assuming arguendo  that Article  2.2 allows 
for re placement of costs distorted by the effects of a particular market situation.  
Given the facts on the record of the investigation, and in light of the absence of any 
explanation from the ADC as to why it did not replace the cost of woodchips and utilize Indah 
Kiat's  other costs of producing pulp internally when constructing Indah Kiat's cost of production of 
A4 copy paper, we find that the ADC acted inconsistently with Australia's obligations under Article  2.2 
of the Anti -Dumping Agreement.  
7.4.5   Conclu sion 
We find that Australia's measure is inconsistent with Article  2.2 of the 
Anti-Dumping  Agreement because, having improperly rejected the pulp component of Indah Kiat's 
and Pindo Deli's records, the ADC had no basis to use Brazilian and South American e xport prices of 
pulp to China and Korea for the calculation of Indah Kiat's and Pindo Deli's pulp costs when 
constructing the cost of production of A4 copy paper in Indonesia.  
We further find that Australia's measure is inconsistent with Article  2.2 of th e 
Anti-Dumping  Agreement because, despite having before it the evidence indicating that Indah Kiat 
is an integrated producer and obtains pulp at its cost, the ADC failed to provide a reasoned and 
adequate explanation as to why it did not subtract profit fr om the pulp benchmark used to replace 
Indah Kiat's recorded pulp costs in constructing the cost of production of A4 copy paper for Indah 
Kiat. 
We find that Indonesia has not established that the ADC acted inconsistently with 
Australia's  obligations under Article 2.2 of the Anti -Dumping Agreement when it did not adjust the 
 
324 Indah Kiat's Verification Report, (Exhibit IDN -9), section 4.3.  
325 Attachment G6 to the Exporter's Questionnaire Response of Indah Kiat, (Exhibit IDN -28 (BCI)). While 
the attachment contains the terms "Raw Material", the parties agreed that these words refer to woodchips. 
(Indonesia's response to Panel question No. 18 following the second meeting of the Panel, para. 37; 
Australia's  opening statement at the second meeting of the Panel, paras. 53 -54). As explained in 
paragraphs  3.10-3.12 of Annex A -1, Exhibit IDN -28 (BCI) does not contain volume data for woodchips 
consumed in the production of pulp by Indah Kiat in 2015. The ADC's record before us does not reflect th at 
such data would not have been available to the ADC. We further note that at the second meeting of the Panel 
and in subsequent responses to Panel's questions and comments on Indonesia's responses, Australia had an 
opportunity to explain why the ADC chose  to replace the pulp costs rather than woodchips  costs in constructing 
Indah Kiat's cost of production of A4 copy paper. Notably, Australia has not argued that it did not replace the 
woodchips  costs because volume data for woodchips was lacking. Rather, Au stralia submitted that nothing in 
the Anti -Dumping Agreement required the ADC to use a particular methodology in constructing the cost of 
production of A4 copy paper for Indah Kiat and therefore it was not relevant whether the ADC could have 
replaced the w oodchips costs rather than the pulp costs. ( Australia's response to Panel question No. 34 
following the second meeting of the Panel, paras. 179 -181). 
326 Australia's response to Panel question No. 34 following the second meeting of the Panel, para. 180.  
327 Final Report, (Exhibit IDN -4), section A2.9.4.1, pp. 174 -175. WT/DS529/R  
 
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  pulp benchmark used to replace Pindo Deli's recorded pulp costs for profit in constructing the cost 
of production of A4 copy paper for Pindo Deli.  
Finally, we find that Australia's measur e is inconsistent with Article  2.2 of the 
Anti-Dumping  Agreement because the ADC failed to provide a reasoned and adequate explanation 
as to why it did not replace the cost of woodchips and utilize Indah Kiat's other costs of producing 
pulp internally when  constructing Indah Kiat's cost of production of A4 copy paper, assuming 
arguendo  that the ADC w as allowed to replace distorted costs.  
7.5  Whether Australia has calculated and imposed anti -dumping duties in excess of the 
margins of dumping permitted by Article  2 of the Anti -Dumping Agreement and therefore 
acted inconsistently with the chapeau  of Article  9.3 of the Anti -Dumping Agreement and 
Article  VI:2 of the GATT 1994  
Indonesia argues that Australia acted inconsistently with  the chapeau  of Article  9.3 of the 
Anti-Dumping Agreement by calculating and imposing anti -dumping duties in excess of those 
permitted by Article  2 of the Anti -Dumping Agreement as a result of its WTO -inconsistent calculation 
of the normal value of A4 copy paper of Indah Kiat and Pindo Deli .328 We note that both parties 
agree that Indonesia's claims under Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 of 
the GATT 1994 are dependent on our findings on the merits of Indonesia's claims concerning 
consistency of the ADC's determination  of normal value with Article  2 of the Anti -Dumping 
Agreement.329 In response to the Panel 's question regarding whether a finding under Article  9.3 
would still be necessary to resolve the dispute, if the Panel were to find an inconsistency under 
Article  2.2 and/or 2.2.1.1 of the Anti -Dumping Agreement, Indonesia stated that "the Appellate Body 
has determined in a number of disputes that a finding under Article  9.3 is required even when other 
inconsistencies were found under Article  2".330 Having reviewed the findings of the Appellate Body 
Indonesia has referred us to, we note that, in all those cases, the Appellate Body has made findings 
under Article 9.3 in addition to the findings under Article  2 of the Anti -Dumping Agreement without 
stating that a finding under Article  9.3 is required when a panel has found the challenged measures 
to be inconsistent with Article  2.331  
We recall that we have found ab ove that Australia acted inconsistently with its obligations 
under Article  2.2.1.1 of the Anti -Dumping Agreement when the ADC disregarded the hardwood pulp 
component of Indah Kiat and Pindo Deli in the construction of normal value. We have also found 
that Australia acted inconsistently with Article  2.2 of the Anti -Dumping Agreement when the ADC: 
(i) disregarded domestic sales of A4 copy paper of Indah Kiat and Pindo Deli as a basis for normal 
value because of the existence of a "particular market situation"  without properly examining whether 
the domestic sales nonetheless "permitted a proper comparison"; and (ii) failed to construct "the 
cost of production in the country of origin" for Indah Kiat and Pindo Deli by using a third -country 
pulp cost benchmark wh en it was otherwise not entitled to, without making any adjustments for 
profit as regards Indah Kiat  and without considering the alternative of replacing Indah Kiat's 
woodchips costs instead of pulp costs . Indonesia's claims under Article  9.3 of the 
Anti-Dumping  Agreement and Article  VI:2 of the GATT 1994 are contingent upon the findings we 
have made in relation to Article  2.2.1.1 and 2.2, and, in that sense, they are consequential. 
Accordingly, we do not believe that additional findings under Article  9.3 o f the 
Anti-Dumping  Agreement and Article  VI:2 of the GATT 1994 are necessary for the resolution of this 
dispute. We therefore decide to exercise judicial economy and decline to rule on the merits of 
Indonesia's claims under Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 of the 
GATT  1994.  
 
328 Indonesia's first written submission, paras. 170 -177, fns 139 and 140; second written submission, 
para. 81.  
329 Australia's first written submission, para. 265; Indonesia's response to Panel qu estion No. 31(a) 
following the first meeting of the Panel, p. 24.  
330 Indonesia's response to Panel question No. 31(b) following the first meeting of the Panel, pp. 24 -25 
(referring to Appellate Body Reports, EU – Biodiesel (Argentina) , para. 7.5; US – Zeroing (EC) , para. 263(a)(i); 
and US – Zeroing (Japan) , para. 190(c)).  
331 Appellate Body Reports, EU – Biodiesel (Argentina) , paras. 6.90-6.113, and 7.5; US – Zeroing (EC) , 
paras. 123 -135, and 263(a)(i); and US – Zeroing (Japan) , paras. 148 -156, 166 and 190(c).  WT/DS529/R  
 
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  7.5.1   Conclusion  
For the reasons elaborated above, we decline to make findings as to whether Australia has 
acted inconsistently with the chapeau  of Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 
of the GATT  1994 by virtue of having calculated and imposed  anti-dumping duties in excess of the 
dumping margin as established under Article  2 of the Anti -Dumping Agreement.  
8  CONCLUSIONS AND RECO MMENDATION  
Regarding Australia's measure imposing anti -dumping duties on certain Indonesian exporters 
of A4 copy paper, as set forth in Anti -Dumping Notice No. 2017/39 dated 18 April 2017 accepting 
the recommendations and the reasons for the recommendations set out i n the Final Report, we  
conclude:  
a. Indonesia has not established that the ADC acted inconsistently with Australia's obligations 
under Article  2.2 of the Anti -Dumping Agreement when it found that a "particular market 
situation" existed in the Indonesian domes tic market for A4 copy paper;  
b. Australia's measure is inconsistent with Article  2.2, first sentence, of the 
Anti-Dumping  Agreement because the ADC disregarded domestic sales of A4 copy paper 
of Indah Kiat and Pindo Deli as the basis for determining normal v alue without properly 
determining that such sales did "not permit a proper comparison";  
c. Australia's measure is inconsistent with Article  2.2.1.1, first sentence, of the 
Anti-Dumping  Agreement because the ADC has not established that both the first and 
second conditions in the first sentence of Article  2.2.1.1 of the Anti -Dumping Agreement 
are satisfied when  rejecting the pulp component of Indah Kiat's and Pindo Deli's records 
on the basis of the term "normally"  and therefore has failed to give effect to th e whole of 
the obligation  in that provision ; 
d. Australia's measure is inconsistent with Article  2.2 of the Anti -Dumping Agreement 
because, having improperly rejected the pulp component of Indah Kiat's and Pindo Deli's 
records, the ADC had no basis to use Bra zilian and South American export prices of pulp 
to China and Korea for the calculation of Indah Kiat's and Pindo Deli's pulp costs when 
constructing the cost of production of A4 copy paper in Indonesia; because, despite having 
before it the evidence indica ting that Indah Kiat is an integrated producer and obtains pulp 
at its cost, the ADC failed to provide a reasoned and adequate explanation as to why it did 
not subtract profit from the pulp benchmark used to replace Indah Kiat's recorded pulp 
costs in cons tructing the cost of production of A4  copy paper for Indah Kiat;  and because 
the ADC failed to provide a reasoned and adequate explanation as to why it did not replace 
the cost of woodchips and utilize Indah Kiat's other costs of producing pulp internally when 
constructing Indah Kiat's cost of production of A4 copy paper, assuming arguendo  that the 
ADC were allowed to replace distorted costs ; and 
e. Indonesia has not established that the ADC acted inconsistently with Australia's obligations 
under Article  2.2 of the Anti -Dumping Agreement when it did not adjust the pulp 
benchmark used to replace Pindo Deli's recorded pulp costs for profit in constructing the 
cost of production of A4 copy paper for Pindo Deli.  
We decline to decide whether Australia's measur e is also inconsistent with the requirement to 
calculate the "cost of production in the country of origin" under Article  2.2 of the 
Anti-Dumping  Agreement  because the ADC has disregarded the hardwood pulp component of Indah 
Kiat's and Pindo Deli's records in constructing the cost of production of A4 copy paper in Indonesia 
and whether Australia has acted inconsistently with Article  9.3 of the Anti -Dumping Agreement and 
Article  VI:2 of the GATT 1994 by virtue of having calculated an d imposed  anti-dumping dut ies in 
excess of the dumping margin as established under Article  2 of the Anti -Dumping Agreement .  
Under Article  3.8 of the DSU, in cases where there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima fa cie to constitute a case of 
nullification or impairment. We conclude that, to the extent that the measure at issue is inconsistent WT/DS529/R  
 
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  with the Anti -Dumping Agreement, it has nullified or impaired benefits accruing to Indonesia under 
that agreement.  
Pursuant to Article  19.1 of the DSU, we recommend that Australia bring its measure into 
conformity with its obligations under the Anti -Dumping Agreement.  
Indonesia requests that the Panel exercise its discretion under the second sentence of 
Article  19.1 of the DSU to "suggest ways in which Australia should implement the recommendations 
and rulings of the DSB to bring its measures into conformity with the Anti -Dumping Agreement and 
GATT 1994".332 Indonesia considers that the measures at issue should be withdrawn.333 
We note that Article  19.1 of the DSU allows, but does not require, us to suggest ways in which 
the Member concerned could implement the Panel's recommendations. Furthermore, under 
Article  21.3 of the DSU, the implementation of DSB recommendations and rulings i s left, in the 
first instance, to the discretion of the implementing Member.334 We therefore deny 
Indonesia's  request.  
__________  
 
332 Indonesia's first written submission, para. 185.  
333 Indonesia's first written submission, para. 184.  
334 Panel Reports, US – Shrimp II (Viet Nam) , para. 8.6; EU – Footwear (China) , para. 8.12; 
EC – Fasteners (China) , para. 8.8; and US – Hot-Rolled S teel, para. 8.11.