WT/DS603/ R 
 
26 March  2024 
(24-2547) Page: 1/103 
  Original: English  
 
  
AUSTRALIA  – ANTI -DUMPING  AND COUNTERVAILING  DUTY  MEASURES  
ON CERTAIN  PRODUCTS  FROM  CHINA  
REPORT OF THE PANEL  
 
 
 WT/DS603/R  
 
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  TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  14 
1.1   Complaint by China  ................................ ................................ ................................ ... 14 
1.2   Panel establishment and composition  ................................ ................................ ..........  14 
1.3   Panel proceedings  ................................ ................................ ................................ ..... 14 
1.3.1   General  ................................ ................................ ................................ ................  14 
1.3.2   Working procedures concerning Business Confidential Information  ................................  15 
1.3.3   Preliminary ruling request  ................................ ................................ .......................  15 
1.3.4   Agreed Procedures for Arbitration under Article  25 of the DSU  ................................ ...... 15 
2   FACTUAL ASPECTS  ................................ ................................ ................................ ..... 16 
2.1   The measures at issue  ................................ ................................ ...............................  16 
2.2   The underlying proceedings  ................................ ................................ .......................  16 
2.2.1   Wind towers  ................................ ................................ ................................ ..........  17 
2.2.1.1    Original investigation (Investigati on 221)  ................................ ...............................  17 
2.2.1.2    Five-year expiry review (Continuation 487)  ................................ .............................  17 
2.2.1.3    Administrative review in relation to TSP  ................................ ................................ .. 17 
2.2.2   Stainless steel sinks  ................................ ................................ ...............................  17 
2.2.2.1    Original investigation (Investigation 238)  ................................ ...............................  17 
2.2.2.2    First interim review in relation to SCEA  ................................ ................................ .. 18 
2.2.2.3    Second interim review in relation to SCEA  ................................ ..............................  18 
2.2.2.4    Interim review in relation to Yingao  ................................ ................................ ....... 18 
2.2.2.5    Five-year expiry review (Continuation 517)  ................................ .............................  19 
2.2.2.6    Administrative review in relation to Primy and Zhuhai Grand  ................................ ..... 19 
2.2.3   Railway wheels original investigation (Investigation 466)  ................................ .............  19 
3   PARTIES'  REQUESTS FOR FINDINGS AND RECOMMENDATIONS  ................................  19 
4   ARGUMENTS OF THE PARTIES  ................................ ................................ ...................  20 
5   ARGUMENTS OF THE THIRD PARTIES  ................................ ................................ ........  20 
6   INTERIM REVIEW  ................................ ................................ ................................ ...... 20 
7   FINDINGS  ................................ ................................ ................................ .................  20 
7.1   Treaty interpreta tion and standard of review  ................................ ................................  20 
7.1.1   Treaty interpretation  ................................ ................................ ..............................  20 
7.1.2   Standard of review  ................................ ................................ ................................ . 20 
7.2   Expiry of measures and Australia's challenges under Article  6.2 of the DSU  .......................  21 
7.2.1   Main party arguments  ................................ ................................ ............................  21 
7.2.1.1    Expiry of measures  ................................ ................................ ..............................  21 
7.2.1.2    Article  6.2 of the DSU  ................................ ................................ ..........................  26 
7.2.2   Approach to expiry  ................................ ................................ ................................ . 27 
7.2.3   Australia's claims under Article 6.2 of the DSU  ................................ ...........................  30 
7.3   Wind towers  ................................ ................................ ................................ ............  32 WT/DS603/R  
 
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  7.3.1   AD claim 3 under Article  2.2.1.1 of the Anti -Dumping Agreement: rejection of  
exporters' costs  ................................ ................................ ................................ ...............  32 
7.3.1.1    Legal framework  ................................ ................................ ................................ . 32 
7.3.1.2    Main party arguments  ................................ ................................ ..........................  33 
7.3.1.3    Expiry  ................................ ................................ ................................ ...............  34 
7.3.1.4    Evaluation  ................................ ................................ ................................ ..........  36 
7.3.2   AD claim 1 under Article  2.2 of the Anti -Dumping Agreement: costs of production  
in the country of origin  ................................ ................................ ................................ ..... 39 
7.3.2.1    Legal framework  ................................ ................................ ................................ . 39 
7.3.2.2    Main party arguments  ................................ ................................ ..........................  40 
7.3.2.3    Expiry  ................................ ................................ ................................ ...............  41 
7.3.2.4    Evaluation  ................................ ................................ ................................ ..........  42 
7.3.3   AD claim 5.c under Article  2.2.1.1 of the Anti -Dumping Agreement: "manner" and 
"circumstances" of rejection of exporters' costs  ................................ ................................ .... 43 
7.3.3.1    Main party arguments  ................................ ................................ ..........................  43 
7.3.3.2    Expiry  ................................ ................................ ................................ ...............  44 
7.3.3.3    Evaluation  ................................ ................................ ................................ ..........  44 
7.3.4   AD claim 6.a under Article  2.4 of the Anti -Dumping Agreement: fair comparison  .............  44 
7.3.4.1    Legal framework  ................................ ................................ ................................ . 44 
7.3.4.2    Main party arguments  ................................ ................................ ..........................  45 
7.3.4.3    Expiry  ................................ ................................ ................................ ...............  46 
7.3.4.4    Evaluation  ................................ ................................ ................................ ..........  46 
7.3.5   AD claim 7 under Articles  2.2 and 2.2.2 of the Anti -Dumping Agreement  .......................  46 
7.3.5.1    Legal framework  ................................ ................................ ................................ . 46 
7.3.5.2    AD claim 7.a: Profits not based on "actual data"  ................................ ......................  47 
7.3.5.2.1    Main party arguments  ................................ ................................ .......................  47 
7.3.5.2.2    Expiry  ................................ ................................ ................................ .............  48 
7.3.5.2.3    Evaluation  ................................ ................................ ................................ ...... 48 
7.3.5.3    AD claim 7.c: Inconsistency in "like products" determination  ................................ ..... 49 
7.3.5.3.1    Main party arguments  ................................ ................................ .......................  49 
7.3.5.3.2    Expiry  ................................ ................................ ................................ .............  50 
7.3.5.3.3    Evaluation  ................................ ................................ ................................ ....... 50 
7.3.6   AD claim 8 under Article  9.3 of the Anti -Dumping Agreement and Article VI:2 of  
the GATT 1994: collection of duties in excess of the margin of dumping  ................................ .. 52 
7.3.6.1    Main party arguments  ................................ ................................ ..........................  52 
7.3.6.2    Evaluation  ................................ ................................ ................................ ..........  52 
7.4   Stainless steel sinks  ................................ ................................ ................................ .. 53 
7.4.1   AD claim 3 under Article  2.2.1.1 of the Anti -Dumping Agreement: rejection  
of exporters' costs  ................................ ................................ ................................ ...........  53 
7.4.2   AD claim 4 under Articles 2.2.1.1 and 2.2.1 of the Anti -Dumping Agreement:  
use of cor rect "costs" in the ordinary -course -of-trade test  ................................ ......................  53 
7.4.2.1    Legal framework  ................................ ................................ ................................ . 53 WT/DS603/R  
 
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  7.4.2.2    Main party arguments  ................................ ................................ ..........................  54 
7.4.2.3    Expiry  ................................ ................................ ................................ ...............  56 
7.4.2.4    Evaluation  ................................ ................................ ................................ ..........  58 
7.4.3   AD claim 1 under Article  2.2 of the Anti -Dumping Agreement: costs of production  
in the country of origin  ................................ ................................ ................................ ..... 58 
7.4.4   AD claim 2 under Articles  2.2 and 2.2.1 of the Anti -Dumping Agreement:  
use of correct "costs" in the ordinary -course -of-trade test  ................................ ......................  59 
7.4.4.1    Main party arguments  ................................ ................................ ..........................  59 
7.4.4.2    Expiry  ................................ ................................ ................................ ...............  60 
7.4.4.3    Evaluation  ................................ ................................ ................................ ..........  61 
7.4.5   AD claim 6.a under Article 2.4 of the Anti -Dumping Agreement: due allowance  
to ensure a fair comparison  ................................ ................................ ...............................  62 
7.4.5.1    Main party arguments  ................................ ................................ ..........................  63 
7.4.5.2    Expiry  ................................ ................................ ................................ ...............  63 
7.4.5.3    Evaluation  ................................ ................................ ................................ ..........  64 
7.4.6   AD claim 6.b under Article 2.4 of the Anti -Dumping Agreement  ................................ .... 64 
7.4.6.1    AD claim 6.b.i: VAT adjustment ................................ ................................ .............  64 
7.4.6.1.1    Main party arguments  ................................ ................................ .......................  64 
7.4.6.1.2    Expiry  ................................ ................................ ................................ .............  65 
7.4.6.1.3    Evaluation  ................................ ................................ ................................ ....... 67 
7.4.6.1.3.1    Whether the ADC failed to provide a reasoned and adequate explanation  
that the differences in VAT recoverability affected price comparability  ................................ ...... 67 
7.4.6.1.3.2    The methodology applied by the ADC to calculate the VAT adjustment  ..................  68 
7.4.6.2    AD claim 6.b.ii: differences relating to accessorie s ................................ ...................  70 
7.4.6.2.1    Main party arguments  ................................ ................................ .......................  70 
7.4.6.2.2    Evaluation  ................................ ................................ ................................ ....... 72 
7.4.6.2.2.1    Treating accessories purchased from third -party suppliers differently from  
accessories produced internally by t he exporting producer  ................................ .....................  72 
7.4.6.2.2.2    Failure to use actual accessory costs to calculate adjust ment ...............................  73 
7.4.6.3    AD claim 6.b.iii: comparison of export models to other export models  .........................  76 
7.4.6.3.1    Main party arguments  ................................ ................................ .......................  76 
7.4.6.3.2    Evaluation  ................................ ................................ ................................ ....... 77 
7.4.7   AD claim 7.a under Article 2.2.2 of the Anti -Dumping  Agreement: profits not based on 
"actual data"  ................................ ................................ ................................ ...................  78 
7.4.7.1    Main party arguments  ................................ ................................ ..........................  78 
7.4.7.2    Expiry  ................................ ................................ ................................ ...............  79 
7.4.8   AD claim 8 under Article  9.3 of the Anti -Dumping Agreement: collection of duties  
in excess of the margin of dumping  ................................ ................................ ....................  79 
7.4.8.1    Main party arguments  ................................ ................................ ..........................  79 
7.4.8.2    Evaluation  ................................ ................................ ................................ ..........  80 
7.4.9   CVD claims 2 and 3 under Articles  1.1(b)  and 14(d) of the SCM  Agreement:  
use of out of country benchmark  ................................ ................................ .......................  80 
7.4.9.1    Main party arguments  ................................ ................................ ..........................  80 WT/DS603/R  
 
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  7.4.9.2    Expiry  ................................ ................................ ................................ ...............  82 
7.4.10    CVD claim 4 under Articles 1.2 and  2.1(c) of the SCM  Agreement: specificity 
determination of Program  1 ................................ ................................ ...............................  83 
7.4.10.1    Main party arguments  ................................ ................................ .......................  83 
7.4.10.2    Expiry  ................................ ................................ ................................ ..............  85 
7.4.11    CVD claim 5 under Articles  11.2 and 11 .3 of the SCM Agreement: initiation of 
investigation for Program 1  ................................ ................................ ...............................  85 
7.4.11.1    Main party argum ents ................................ ................................ ........................  85 
7.4.11.2    Expiry  ................................ ................................ ................................ ..............  88 
7.5   Railway wheels ................................ ................................ ................................ .........  89 
7.5.1   AD claim 3 under Article  2.2.1.1 of the Anti -Dumping Agreement: rejection of  
exporters' costs  ................................ ................................ ................................ ...............  89 
7.5.1.1    Main party arguments  ................................ ................................ ..........................  90 
7.5.1.2    Evaluation  ................................ ................................ ................................ ..........  91 
7.5.2   AD claim 1 under Article  2.2 of the Anti -Dumping Agreement: costs of production  
in the country of origin  ................................ ................................ ................................ ..... 92 
7.5.2.1    Main party arguments  ................................ ................................ ..........................  92 
7.5.2.2    Evaluation  ................................ ................................ ................................ ..........  93 
7.5.3   AD claim 5.d under Articles 2.2 and 2.2.1.1 of the Anti -Dumping Agreement: the  
"manner and circumstances" of rejectio n of exporters' costs  ................................ ..................  94 
7.5.3.1    Main party arguments  ................................ ................................ ..........................  94 
7.5.3.2    Evaluation  ................................ ................................ ................................ ..........  95 
7.5.4   AD claim 6.a under Article  2.4 of the Anti -Dumping Agreement  ................................ .... 95 
7.5.4.1    Main party arguments  ................................ ................................ ..........................  95 
7.5.4.2    Evaluation  ................................ ................................ ................................ ..........  96 
7.5.5   AD claim 7.b under Article 2.2.2 of the Anti -Dumping Agreement: profits not actually 
realized in the domestic market  ................................ ................................ .........................  96 
7.5.5.1    Main party arguments  ................................ ................................ ..........................  96 
7.5.5.2    Evaluation  ................................ ................................ ................................ ..........  97 
7.5.6   AD claim 8 under Article  9.3 of the Anti -Dumping Agreement: collection of  
duties in excess of the margin of dumping  ................................ ................................ ...........  99 
7.5.6.1    Main party arguments  ................................ ................................ ..........................  99 
7.5.6.2    Evaluation  ................................ ................................ ................................ ..........  99 
7.6   Whether to issue findings and recommendations for expired aspects  
of the anti -dumping and countervailing duty orders  ................................ ............................  100 
8   CONCLUSIONS AND RECOMMENDATIONS  ................................ ...............................  101  
 
 WT/DS603/R  
 
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  LIST OF ANNEXES  
ANNEX  A 
PANEL DOCUMENTS  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  4 
Annex  A-2 Additional Working Procedures concerning  Business Confidential Information  11 
Annex  A-3 Interim Review  13 
ANNEX B  
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Integrated executive summary of the arguments of China  25 
Annex  B-2 Integrated executive summary of the arguments of Australia  41 
ANNEX C  
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  C-1 Integrated executive summary of the arguments of Brazil  60 
Annex  C-2 Integrated executive summary of the arguments of Canada  62 
Annex  C-3 Integrated executive summary of the arguments of the European  Union  63 
Annex  C-4 Integrated executive summary of the arguments of Japan  67 
Annex  C-5 Integrated executive summary of the arguments of Mexico  70 
Annex  C-6 Integrated executive summary of the arguments of Norway  72 
Annex  C-7 Integrated executive summary of the arguments of the Russian Federation  75 
Annex  C-8 Integrated executive summary of the arguments of the United Kingdom  80 
Annex  C-9 Integrated executive summary of the arguments of the United  States  83 
 
  WT/DS603/R  
 
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  CASES CITED IN THIS REPORT  
Short Title  Full Case Title and Citation  
Australia – Anti-Dumping 
Measures on Paper  Panel Report, Australia – Anti-Dumping Measures on A4 Copy Paper , 
WT/DS529/R  and Add.1, adopted 28  January  2020 
China – Broiler Products  Panel Report, China – Anti-Dumping and Countervailing Duty Measures on 
Broiler Products from the United States , WT/DS427/R  and Add.1, adopted 
25 September  2013, DSR 2013:IV, p. 1041  
China – HP-SSST (Japan) / 
China – HP-SSST (EU)  Appellate Body Reports, China – Measure s Imposing Anti -Dumping Duties on 
High-Performance Stainless Steel Seamless Tubes ("HP -SSST") from Japan / 
China – Measures Imposing Anti -Dumping Duties on High -Performance 
Stainless Steel Seamless Tubes ("HP -SSST") from the European  Union , 
WT/DS454/AB/R  and Add.1 / WT/DS460/AB/R  and Add.1, adopted 
28 October  2015, DSR  2015:IX, p. 4573  
EC – Bananas III 
(Article  21.5 – Ecuador II) / 
EC – Bananas III 
(Article  21.5 – US) Appellate Body Reports, European  Communities – Regime for the 
Importation, Sal e and Distribution of Bananas – Second Recourse to 
Article  21.5 of the DSU by Ecuador , WT/DS27/AB/RW2/ECU , adopted 
11 December  2008, and Corr.1 / European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of 
the DSU by the United  States , WT/DS27/AB/RW/USA  and Corr.1, adop ted 
22 December  2008, DSR  2008:XVIII, p. 7165  
EC – Tube or Pipe Fittings  Appellate Body 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 
Egypt – Steel Rebar  Panel Report, Egypt – Definitive Anti -Dumping Measures on Steel Rebar from 
Turkey , WT/DS211/R , adopted 1  October  2002, DSR 2002:VII, p.  2667 
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)  Appellate Body Report, European  Union – Anti-Dumping Measures on Imports 
of Certain Fatty Alcohols from Indonesia , WT/DS442/AB/R  and Add.1, 
adopted 29  September  2017, DSR  2017:VI, p. 2613  
EU – PET (Pakistan)  Appellate Body Report, European  Union – Countervailing Measures on Certain 
Polyethylene Terephthalate  from Pakistan , WT/DS486/AB/R  and Add.1, 
adopted 28  May 2018, DSR 2018:IV, p.  1615 
Indonesia – Chicken 
(Article 21.5 – Brazil)  Panel Report, Indonesia – Measures Concerning the Importation of Chicken 
Meat and Chicken Products  – Recourse to Article 21.5 of the DSU by Brazil,  
WT/DS484/RW  and Add.1, circulated to WTO Members 10  November  2020, 
appealed 17  December  2020 
Korea – Dairy  Appellat e Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R , adopted 12  January  2000, DSR 
2000:I, p.  3 
Thailand – Cigarettes 
(Philippines) (Article 21.5 – 
Philippines II)  Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from the 
Philippines  – Second Recourse to Article 21.5 of the DSU by the Philippines , 
WT/DS371/RW2  and Add.1, circulated to WTO  Members 12  July 2019, 
appealed 9  September  2019 
Ukraine – Ammonium 
Nitrate  Appellate Body Report, Ukraine – Anti-Dumping Measures on Ammonium 
Nitrate , WT/DS493/AB/R  and Add.1, adopted 30  September  2019, 
DSR 2019:X, p. 5227  
Ukraine – Ammonium 
Nitrate  Panel Report, Ukraine – Anti-Dumping Measu res 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, DSR 2019:X, p. 5339  
US – Anti-Dumping 
Methodologies (China)  Panel Report, United  States – Certain Methodologies and Their Application to 
Anti-Dumping Proceedings Inv olving China , WT/DS471/R  and Add.1, adopt ed 
22 May 2017, as modified by Appellate Body Report WT/DS471/AB/R, DSR 
2017:IV, p.  1589 
US – Carbon Steel (India) 
(Article 21.5 – India)  Panel Report, United  States – Countervailing Measures on Certain Hot -Rolled 
Carbon Steel Flat Products from India – Recourse to Article 21.5 of the DSU 
by India , WT/DS436/RW  and Add.1, 15  November  2019, mutually agreed 
solution reported  
US – Clove Cigarettes  Appellate Body Report, United  States – Measures Af fecting the Production and 
Sale of Clove Cigarettes , WT/DS406/AB/R , adopted 24  April 2012, 
DSR 2012:XI, p.  5751 
US – Countervailing 
Measures (China)  Panel Report, United  States – Countervailing Duty Measures on Certain 
Products from China , WT/DS437/R  and Add.1, adopted 16  January  2015, as 
modified by Appellate Body Report WT/DS437/AB/R, DSR  2015:I, p.  183 WT/DS603/R  
 
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  Short Title  Full Case Title and Citation  
US – Pipes and Tubes 
(Turkey)  Panel Report , United States – Countervailing Measures on Certain Pipe and 
Tube Products from Turkey , WT/DS523/R  and Add. 1, circulated to 
WTO Members 18  December  2018, appealed 25  January  2019 
US – Tariff Measures 
(China)  Panel Report, United  States – Tariff Measures on Certain Goods from China , 
WT/DS543/R  and Add.1, circulated to WTO Members 15  September  2020, 
appealed 26  October  2020 
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) 
(Article  21.5 – Japan)  Appellate Body Report, United  States – Measures Relating to Zero ing and 
Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan , 
WT/DS322/AB/RW , adopted 31  August  2009, DSR 2009:VIII, p.  3441 
 WT/DS603/R  
 
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  EXHIBITS REFERRED TO IN THIS REPORT  
Exhibit  Short Title (if any)  Description/Long title  
AUS-11 Continuation 517 initiation 
notice  Notice of initiation of the expiry review of the anti -dumping 
and countervailing duty measures on stainless  steel sinks 
exported from China (Anti -Dumping Notice No.  2019/86)  
(3 July 2019) 
AUS-13 Investigation 238 Komodo  
Hong Kong 
Limited 's questionnaire 
response  Komodo Hong Kong Limited 's response to q uestionnaire in 
the investigation into the alleged dumping and 
subsidization of stainless steel sinks exported from China  
(dated 5  May 2014, published 21  May 2014)  
AUS-14 Investigation 238 
Zhuhai  Grand's 
questionnaire  response  Zhuhai Grand 's response to questionnaire in the 
investigation into the alleged dumping and subsidization of 
stainless steel sinks exported from China (16 May 2014)  
AUS-15 Investigation 238 
Primy 's questionnaire 
response  Primy's r esponse to questionnaire in the investigation into 
the alleged dumping and subsidization of stainless steel 
sinks exported from  China  (published 20  May 2014)  
AUS-49 Investigation 238 statement 
of essential facts  Statement of essential facts of the investi gation into the 
alleged dumping and subsidization of stainless steel sinks 
exported from China (23  December  2014)  
AUS-70 Investigation 193  
(aluminium zinc coated 
steel) final report  Final report of the investigation into the alleged 
subsidization of zinc coated steel and aluminium zinc 
coated steel exported from China 
(Anti-Dumping  Commission Report No.  193) (dated 
28 June 2013, published 5  August  2013)  
AUS-75 (BCI)  Investigation 221 final 
report, appendix 2  "Steel 
Price Uplift"  Final report of the investigation into the alleged dumping of 
wind towers exported from China and Korea, appendix 2 
"Steel Price Uplift"  (Anti-Dumping  Commission Report 
No. 221) (dated 21  March  2014, published 16  April 2014)  
AUS-81 (BCI)  Continuation 517 
Zhuhai  Grand verification 
visit report, p.  25 and 
attachment  Report of verification visit to Zhuhai Grand in the expiry 
review of the anti -dumping and countervailing duty 
measures on stainless steel sinks exported from China, 
p. 25 and attachment  
CHN-2 Investigation 238 final report  Final report of the investigation into the alleged dumping 
and subsidization of stainless steel sinks exported from 
China (Anti -Dumping  Commission Report No.  238) (dated 
19 February  2015, published 26  March  2015)  
CHN-3 Investigation 466 final report  Final report of the investigation into the alleged dumping of 
railway wheels exported from China and France  
(Anti-Dumping  Commission Report No.  466) (dated 
1 March  2019, published 16  July 2019)  
CHN-4 Investigation 221 final  report  Final report of the investigation into the alleged dumping of 
wind towers exported from China and Korea 
(Anti-Dumping  Commission Report No.  221) (dated 
21 March  2014, published 16  April 2014)  
CHN-5 Investigation 221 initiation 
notice  Notice of initiation of the investigation into the alleged 
dumping of wind towers exported from China and Korea 
(Anti-Dumping Notice No.  2013/68 ) (28 August  2013) 
CHN-6 Investigation 221 findings 
notice  Notice of findings in relation to the investigation into the 
alleged dumping of wind towers exported from China and 
Korea (Anti-Dumping  Notice No.  2014/33 ) (16 April 2014)  
CHN-7 Continuation 487 initiation 
notice  Notice of initiation of the expiry review  of the anti -dumping 
measures on wind towers exported from China and Korea 
(Anti-Dumping Notice No.  2018/115) (16  July 2018)  
CHN-8 Continuation 487 findings 
notice  Notice of findings of the expiry review of the anti -dumping 
measures on wind towers exporte d from China and Korea 
(Anti-Dumping  Notice No.  2019/33 ) (27 March  2019) 
CHN-9 ADRP Review 2019/100 
review proposal  notice  Notice of ADRP  proposal to conduct administrative review 
of the minister's decision in the expiry review of the 
anti-dumping measures on wind towers exported from 
China and Korea, in relation to TSP (8  May 2019)  
CHN-10 ADRP Review 2019/100 
minister's decision notice  Notice of minister's decision following the 
ADPR's  administrative review of the continuation of the 
anti-dumping measures on wind towers exported from 
China and Korea, in relation to TSP (dated 8  July 2020, 
published 9  July 2020)  WT/DS603/R  
 
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  Exhibit  Short Title (if any)  Description/Long title  
CHN-12 Investigation 238 initiation 
notice  Notice of initiation of the investigation into the alleged 
dumping and subsidization of stainless steel sinks exported 
from China (Anti -Dumping  Notice No.  2014/20) 
(18 March  2014)  
CHN-13 Investigation 238 
termination notice  Notice of ter mination of part of the investigation into the 
alleged subsidization of stainless steel sinks exported from 
China (Anti -Dumping  Notice No.  2015/16) 
(19 February  2015)  
CHN-14 Investigation 238 findings 
notice  Notice of findings in relation to the investig ation into the 
alleged dumping and subsidization of stainless steel sinks 
exported from China ( Anti Dumping  Notice No.  2015/41) 
(26 March  2015)  
CHN-15 Review 352 initiation notice  Notice of initiation of the interim review of the 
anti-dumping measures on stainless steel sinks exported 
from China by SCEA ( Anti-Dumping  Notice No.  2016/53 ) 
(16 May 2016)  
CHN-16 Review 352 findings notice  Notice of findings in relation to the interim review of the 
anti-dumping measures on stainless steel sinks exported 
from China by SCEA ( Anti-Dumping Notice No. 2016/107 ) 
(dated 17  November  2016, published 21  November  2016)  
CHN-17 Review 352 final report  Final report of the interim review of the anti -dumping 
measures on  stainless steel sinks exported from China by  
SCEA (Anti -Dumping  Commission Report No.  352) (dated 
October  2016, published 21  November  2016)  
CHN-18 Review 459 initiation notice  Notice of initiation of the interim review of the 
anti-dumping measures on sta inless steel sinks exported 
from China by SCEA (Anti -Dumping  Notice No.  2017/187) 
(21 December  2017)  
CHN-19 Review 459 findings notice  Notice of findings in relation to the interim review of the 
anti-dumping measures on stainless steel sinks exported 
from China by SCEA (Anti -Dumping  Notice No.  2018/75) 
(dated 14  June 2018, published 15  June 2018)  
CHN-20 Review 461 initiation notice  Notice of initiation of the interim review of the 
anti-dumping measures on stainless steel sinks exported 
from China by Ying ao (Anti -Dumping  Notice No.  2018/24) 
(12 February  2018)  
CHN-21 Review 461 findings notice  Notice of findings in relation to the interim review of the 
anti-dumping measures on stainless steel sinks exported 
from China by Yingao (Anti -Dumping Notice No. 2018/143) 
(dated 9  October  2018, published 12  October  2018)  
CHN-22 Review 459 final report  Final report of the interim review of the anti -dumping 
measures on stainless steel sinks exported from China by 
SCEA (Anti-Dumping  Commission Report No.  459) (dated 
April 2018, published 15  June 2018)  
CHN-23 ADRP Review 2020/124 
review proposal notice  Notice of ADRP proposal to conduct administrative review 
of the minist er's decision in the expiry review of the 
anti-dumping and countervailing duty measures on 
stainless steel sinks exported from China, in relation to 
Primy and Zhuhai Grand (6  April 2020)  
CHN-24 ADRP  Review 2020/124 
minister's decision notice  Notice of minister's decision following the 
ADPR's  administrative review of the continuation of the 
anti-dumping measures on stainless steel sinks from China, 
in relation to Primy and Zhuhai Grand (dated 3  July 2020, 
published 8  July 2020)  
CHN-26 Investigation 466 initiation 
notice  Notice of initiation of the investigation into the alleged 
dumping and subsidization of railway wheels exported  from 
China and the alleged dumping of railway wheels exported 
from Franc e (Anti -Dumping  Notice No.  2018/59) 
(18 April 2018)  
CHN-27 Investigation 466 
termination notice  Notice of termination of the investigation into the alleged  
subsidization of railway wheels exported from China 
(Anti-Dumping  Notice No.  2019/12 ) (24 January  2019)  
CHN-28 Investigation 466 findings 
notice  Notice of findings in relation to the investigation into the 
alleged dumping of railway wheels exported from  China 
and France ( Anti-Dumping  Notice No. 2019/30 ) (dated 
12 July 2019, published 16  July 2019)  
CHN-29 Customs Act 1901, Part XVB  Customs Act 1901 (Commonwealth), Part XVB  WT/DS603/R  
 
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  Exhibit  Short Title (if any)  Description/Long title  
CHN-30 ADRP Review 2019/100 
conference summary  Summary of ADRP  conference with ADC members in 
relation to the administrative review of the 
minister's  decision in the expiry review of the anti -dumping 
measures on wind towers exported from China and Korea , 
in relation to TSP (dated 19 June 2019, published 
1 July 2019)  
CHN-31 Continuation 487 final report   Final report of the expiry review of the anti -dumping 
measures on wind towers exported from China and Korea 
(Anti-Dumping  Commission Report  No. 487) (dated 
12 March  2019, published 27  March  2019) 
CHN-32 ADRP  Review 2019/100 
report  ADRP's report of the administrative review of the 
minister's  decision in the expiry review of the anti -dumping 
measures on wind towers exported from China and Korea , 
in relation to TSP (ADRP  Report No.  100) (dated 
April 2020, publis hed 9  July 2020)  
CHN-33 Investigation 198 (h ot rolled 
plate steel ) final report  Final report of the investigation into the alleged  dumping of 
hot rolled plate steel exported from China, Indonesia, 
Japan, Korea, and Chinese Taipei and the alleged 
subsidiz ation of hot rolled plate steel exported from China 
(Anti-Dumping  Commission Report No.  198) (dated 
16 September  2013, published 5 February  2014) 
CHN-35 Investigation 238 
Zhuhai  Grand verification 
visit report  Report of verification visit to Zhuhai Grand in the  
investigation into the alleged dumping and subsidization of 
stainless steel sinks exported from China  (dated 
September  2014, published 2 October  2014) 
CHN-36 Continuation 517 final report  Final report of the expiry review of the anti -dumping and 
countervailing duty measures on stainless steel sinks 
exported from China (Anti -Dumping  Commission Report 
No. 517) (dated February  2020, published 
28 February  2020)  
CHN-38 Customs Amendment 
Regulations 2005 (No. 8) 
and Explanatory Statement  Customs Amendment Regulations 2005 (No.  8) 
(Commonwealth), Select Legislative Instrument 2005 
No. 265 (23  November  2005), and Explanatory Statement 
to the Customs Amendment Regulations 20 05 (No.  8) 
(28 November  2005)  
CHN-42 ADC, Dumping and Subsidy 
Manual  (2013), p. 43  ADC, Dumping and Subsidy Manual  (December  2013), 
p. 43 
CHN-43 Investigation 238 Primy 
verification visit report  Report of verification visit to Primy in the investigation into 
the alleged dumping and subsidization of stainless steel 
sinks exported from China  (dated September  2014, 
published 2  October  2014)  
CHN-46 (BCI)  Continuation 517 
Primy's  response to 
statement  of essential facts  Primy's response to the statement of essential facts in the 
expiry review of the anti -dumping and countervailing duty 
measures on stainless steel sinks exported from China 
(19 December  2019)  
CHN-47 ADRP R eview 2020/124 
report  ADRP's re port of the administrative review the 
minister's  decision in the expiry review of the anti -dumping 
and countervailing duty measures on stainless steel sinks 
exported from China, in relation to Primy and Zhuhai  Grand 
(ADRP  Report No.  124) (dated June  2020, published 
8 July 2020)  
CHN-48 (BCI)  Investigation 466 Masteel 
verification visit report, 
appendix 3 "Domestic 
Sales", tab "(b) Profit"  Report of verification visit to Masteel  in the investigation 
into the alleged dumping and subsidization of railway 
wheels exported from China and the alleged dumping of 
railway wheels exported from France, appendix 3 
"Domestic Sales", tab "(b) Profit"  
CHN-51 Review 461 final report  Final repor t of the interim review of the anti -dumping 
measures on stainless steel sinks exported from China by 
Yingao (Anti -Dumping  Commission Report No.  461) (dated 
September  2018, published 12  October  2018) 
CHN-52 Continuation 517 findings 
notice  Notice of findin gs in relation to the expiry review of the 
anti-dumping and countervailing duty measures on 
stainless steel sinks exported from China 
(Anti-Dumping  Notice No.  2020/003 ) (dated 
27 February  2020, published 28 February  2020) WT/DS603/R  
 
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  Exhibit  Short Title (if any)  Description/Long title  
CHN-53 (BCI)  Investigation 466 Masteel 
verification visit report, 
appendix 2 "CTMS", tab "(a) 
CTMS"  Report of verification visit to Masteel in the investigation 
into the alleged dumping and subsidization of railway 
wheels exported from China and the alleged dumping of 
railway wheels exported from France, appendix 2 "CTMS", 
tab "(a) CTMS"  
CHN-54 (BCI)  Investigation 466 Masteel 
verification visit report, 
appendix 2 "CTMS (Final 
with uplift)", tab "(a) CTMS"  Report of verification visit to Masteel  in the investigation 
into the alleged dumping and subsidization of railway 
wheels exported from China and the alleged dumping of 
railway wheels exported from France, appendix 2 "CTMS 
(Final with uplift)", tab "(a) CTMS"  
CHN-59 Investigation 238 
considera tion report  Report of consideration of the application for the 
anti-dumping and countervailing duty measures on 
stainless steel sinks exported from China 
(Consideration  Report No.  238) (dated 11  March  2014, 
published 18  March  2014)  
CHN-60 CBSA statement o f reasons, 
attached to Investigation 
238 application  CBSA's statement of reasons concerning the making of final 
determinations with respect to the dumping and 
subsidization of certain stainless steel sinks originating in 
or exported from China (9  May 2012) , submitted  to ADC as 
"Attachment  C-1-1.1.1" to the application for anti -dumping 
and countervailing duty measures on stainless steel sinks 
exported from China (18 March  2014)  
CHN-90 (BCI)  Continuation 517 Primy's 
response to statement of 
essential facts, table 6 
"accessories adjustment"  Primy's response to the statement of essential facts in the 
expiry review of the anti -dumping and countervailing duty 
measures on stainless steel sinks exported from China , 
table 6 "accessories adjustment"  
 WT/DS603/R  
 
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  ABBREVIATIONS USED IN THIS REPORT  
Abbreviation  Description  
304 SS CRC  304 stainless steel cold -rolled coil  
AD claims  China's claims under the Anti -Dumping Agreement  
ADC Anti-Dumping Commission  
ADRP  Anti-Dumping Review Panel  
ADRP Review 2019/100  administrative review of the minister's decision in the expiry review of the 
anti-dumping measures on wind towers exported from China and Korea, in 
relation to TSP  
ADRP Review 2020/124  administrative review of the minister's decision in the expiry review of the 
anti-dumping and countervailing duty measures on stainless steel sinks 
exported from China, in relation to Primy and Zhuhai Grand  
Anti-Dumping Agreement  Agreement on Implementation of Article VI of the General Agreement on 
Tariffs and Trade 1994 
BCI business confidential information  
CBSA  Canadian Border Services Agency  
Continuation 487  expiry review of the anti -dumping measures on wind towers exported from 
China and Korea  
Continuation 517  expiry review of the anti -dumping and countervailing duty measures on 
stainless steel sinks exported from China  
CTMS  cost to make and sell goods  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
f.o.b.  free on board  
GAAP  generally accepted accounting principles  
GATT 1994  General Agreement on Tariffs and Trade 1994  
Investigation 198  original investigation into the alleged  dumping of hot rolled plate steel 
exported from China, Indonesia, Japan, Korea, and Chinese Taipei and the 
alleged subsidization of hot rolled plate steel exported from China  
Investigation 221  original investigation into the alleged dumping of wind tower s exported from 
China and Korea  
Investigation 238  original investigation into the alleged dumping and subsidization of stainless 
steel sinks exported from China  
Investigation 466  original investigation into the alleged dumping and subsidization of railway 
wheels exported from China and the alleged dumping of railway wheels 
exported from France  
Jiabaolu  Zhongshan Jiabaolu Kitchen & Bathroom Products Co. Ltd.  
Jigang  Shandong Iron and Steel Company Limited, Jinan Company  
Masteel  Maanshan Iron & Steel Co Ltd  
MCC model control code  
MEPS  MEPS (International) Ltd.  
Primy  Primy Corporation Limited ; or 
Zhuhai Primy Kitchen & Bathroom Co., Ltd . 
Program 1  Stainless steel received at less than adequate remuneration ; or Raw Materials 
Provided by the Government at Less than Fair Market Value  
Review 352  first interim review of the anti -dumping measures on stainless steel sinks 
exported from China by SCEA  
Review 459  second interim review of the anti -dumping measures on stainless steel sinks 
exported from China by SCEA  
Review 461  interim review of the anti -dumping measures on stainless steel sinks exported 
from China by Yingao  
Rhine  Rhine Sinkwares Manufacturing Ltd . Hui Zhou  
SCM Agreement  Agreement  on Subsidies and Countervailing Measures  
SCEA  Shengzhou Chunyi Electrical Appliances Co. Ltd.  
SG&A  administrative, selling and general costs  
SIE state invested enterprise  
stainless steel sinks  deep drawn stainless steel sinks  
TSP Shanghai Taisheng Wind Power Equipment Co. Ltd.  
Valdunes  MG-Valdunes SAS  
VAT value -added tax  
WTO World Trade Organization  
Yingao  Guangdong Yingao Kitchen Utensils Co. Ltd.  
Zhuhai Grand  Zhuhai Grand Kitchenware Co. Ltd.  WT/DS603/R  
 
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  1  INTRODUCTION  
1.1  Complaint by China  
1.1.  On 24 June 2021, China requested consultations with Australia pursuant to Article  4 of the 
Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU ) and 
Article  XXII of the General  Agreement  on Tariffs and Trade 1994 (GATT 1994), Article  17 of 
the Agreement  on Implementation of Article  VI of the General  Agreement  on Tariffs and Trade 1994 
(Anti-Dumping  Agreement)  and Article  30 of the  Agreement  on Subsidies and Countervailing 
Measures ( SCM Agreement ) with respect to the measures and claims set out below.1 
1.2.  Consultations were held on 11 August  2021. 
1.2  Panel establishment and composition  
1.3.  On 13 January  2022, China requested the establishment of a panel pursuant to Articles  4.7 
and 6 of the DSU , Article XXIII:2 of the  GATT  1994, Article  17.4 of the Anti-Dumping  Agreement  
and Article  30 of the SCM Agreement  with standard terms of reference.2 At its meeting on 
28 February  2022, the Dispute Settlement  Body ( DSB) established a panel pursuant to the request 
of China in document WT/DS 603/2 , in accordance with Article  6 of the DSU.3 
1.4.  The Panel 's terms of reference are the following:  
To examine, in the light of the relevant provisions of the covered agreements cited b y 
the parties to the dispute, the matter referred to the DSB by China in document 
WT/DS 603/2 and to make such findings as will assist the DSB  in making the 
recommendations or in giving the rulings provided for in those agreements.4 
1.5.  On 5 September  2022, the parties agreed that the panel would be composed as follows:  
Chairperson:  Ms Elaine FELDMAN  
 
Members:   Mr Luis M. CATIBAYAN  
   Ms Silvia  Lorena HOOKER ORTE GA 
 
1.6.  Argentina, Brazil, Canada, the European  Union , India, Japan, the Republic of Korea, Malaysia, 
Mexico, Norway, the Russian Federation, Singapore, Switzerland, Chinese Taipei, 
the United  Kingdom, 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  
1.7.  After consultation with the parties, the Panel adopted its Working Procedures5 and time table on 
21 October  2022.  The Panel periodically updated its  timetable throughout the dispute.   
1.8.  The Panel held an organi zational meeting with the parties on 12 October  2022. The Panel held 
a first substantive meeting with the parties on 7 and 8  March  2023. A session with the third parties 
took place on 8 March  2023.  At the parties'  request, the meeting was  held in a hybrid format, 
allowing delegates of the parties and third parties to participate either in person or remotely.6 The 
Panel held a second substa ntive meeting with the parties on 1 and 2  August  2023. At the 
parties'  request, the second substantive meeting was also held in a hybrid format.7 
 
1 Request for consultations by China, WT/DS603/1 (China's consultation request) . 
2 Request for the establishment of a panel by China, WT/DS603/2 (China's panel request) . 
3 DSB, Minutes of the meeting held on 28  February  2022, WT/DSB/M/461, para. 2.4. 
4 Constitution note of the Panel, WT/DS603/3.  
5 Working Procedures of the Panel (Annex A -1). 
6 Panel communication s to the parties and third parties ( 17 February  2023). 
7 Panel communication to the parties (3 July 2023).  WT/DS603/R  
 
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  1.9.  On 23 October  2023, the Panel issued the descriptive part of its Report to the parties.  The 
parties submitted  comments on the descriptive part on 6 November  2023. The Panel issued its 
Interim Report to the parties on 8 December  2023. The parties submitted comments on the 
Interim  Report on 21 December  2023 and commented on each other 's responses on 
19 January  2024. The Panel issued its Final Report to the parties on 16 February  2024. 
1.3.2   Working procedures concerning Business Confidential Information  
1.10.  After consultation with the parties, the Panel adopted Additional Working Procedures 
concerning Business Co nfidential Information (BCI)  on 21 October  2022.8  
1.3.3   Preliminary ruling  request  
1.11.  On 16 December  2022, after China had already submitted its first written submission,  
Australia  requested  a preliminary ruling , arguing that certain challenged measures were outside the 
Panel 's terms of reference due to their expiry  before the date of the Panel’s establishment . China 
submitted its response on 4  January  2023. Australia submitted its  comments on China 's response 
on 12 January  2023. On 13 January  2023, Australia submitted its first written submission. In its first 
written submission, Australia made further comments on China 's response and requested that the 
Panel find that certain of China 's other claims are also outside the Panel 's terms of reference  due to 
their expiry  before the date of the Panel’s establishment . Australia also argued that certain of 
China 's claims were outside the Panel 's terms of reference due to the failure of China 's panel request 
to satisfy the requirements of Article  6.2 of the DSU.   
1.12.  On 12 January  2023, the Panel invited the third parties to comment on Australia 's preliminary 
ruling request in their written submissions.  Subsequently, certain third parties  commented on the 
issues raised in Australia 's request for a preliminary ruling in their third party submissions of 
27 January  2023.  By letter dated 10  February  2023, China informed the Panel that it wished to  
respond to matters raised in Australia 's further comments on China 's response to the preliminary 
ruling request , other  arguments made in Australia 's first written submission , as well as the 
comments of the third parties  on the terms of reference issues , including making a first response to 
those comme nts in China 's oral statement at the first meeting of the parties.  On 13  February  2023, 
the Panel informed the parties that it would not rule on any terms -of-reference issues raised by 
Australia until after the first meeting with the parties, to allow Chin a to have an opportunity to 
address such issues in its oral statement at the first meeting.  
1.13.  The Panel posed questions regarding these issues to the parties at and after the 
first substantive meeting. Following the first meeting, the Panel initially declin ed to set a date for 
the parties ' filing of their second written submissions because the Panel wished, if reasonably 
possible, to resolve Australia 's terms -of-reference challenges before the parties made such 
submissions  and thus limit the issues the parti es needed to address . Despite efforts to do so, the 
Panel considered that it could not reasonably rule on such issues without further input from the 
parties. Thus, the Panel thereafter set a deadline for the filing of the parties ' second written 
submission s. The Panel posed additional questions regarding these issues to the parties at and after 
the second substantive meeting. In light of the complexity of  the issues raised by 
Australia 's terms -of-reference arguments , the Panel ultimately deferred ruling  on 
Australia 's arguments pertaining  to the expiry of measures and Article  6.2 of the DSU  until the 
issuance of its Report . 
1.3.4   Agreed Procedures for Arbitration under Article  25 of the DSU  
1.14.  On 28 April 2022, Australia and China notified to the DSB their  mutual agreement, "pursuant 
to Article  25.2 of the [DSU,] to enter into arbitration under Article  25 of the DSU to decide any 
appeal from any final panel report as issued to the parties"9 in this dispute. In its Working 
Procedures, the Panel took " note o f the Agreed Procedures for Arbitration under Article  25 of the 
DSU in this dispute notified by the parties on 28  April 2022 (WT/DS603/4 ) and of the joint requests 
of the parties to the Panel formulated therein ".10 
 
8 Additional Working Procedures of the Panel concerning Business Confidential Information (Annex A -2). 
9 Agreed Procedures for Arbitration under Article  25 of the DSU, WT/DS 603/4. (fn omitted ) 
10 Working Procedures of the Panel, para. 34.  WT/DS603/R  
 
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  2  FACTUAL ASPECTS  
2.1  The measures at issue  
2.1.  China 's panel request identifies the challenged measure s as: 
1 With respect to wind tower s  
By way of notices dated 14  April 2014, the Parliamentary Secretary to the Minister for 
Industry of Australia imposed final anti-dumping  duties in respect of wind towers 
imported into Australia from China. The imposition of the duties was based on the 
findings and recommendations reported to the Parliamentary Secretary in Anti-dumping  
Commission Report No. 221 – Dumping of Wind Towers Exported from the 
People 's Republic of China and the Republic of Korea (21  March  2014) .  
The specific legal instruments that imposed those duties, and other l egal instruments 
that were subsequently published with respect to those instruments, are set out in the 
Appendix. The measures at issue include those specific legal instruments and all 
annexes, amendments, modifications, replacements, implementing acts or related 
measures in connection with those legal instruments.  
2 With respect to [deep drawn stainless steel sink s (stainless steel sinks)]   
By way of notices dated 19  March  2015, the Parliamentary Secretary to the Minister for 
Industry and Science of Australia imposed final anti-dumping  and countervailing duties 
in respect of stainless steel sinks imported into Australia from China. The imposition of 
the duties was based on t he findings and recommendations reported to the 
Parliamentary Secretary in Anti-dumping  Commission Report No. 238 – Alleged 
Dumping of Deep Drawn Stainless Steel Sinks Exported from the People 's Republic of 
China and Alleged Subsidisation of Deep Drawn Sta inless Steel Sinks 
(19 February  2015) .  
The specific legal instruments that imposed those duties, and other legal instruments 
that were subsequently published with respect to those instruments, are set out in the 
Appendix. The measures at issue include tho se specific legal instruments and all 
annexes, amendments, modifications, replacements, implementing acts or related 
measures in connection with those legal instruments.  
3 With respect to railway wheel s  
By way of notices dated 12  July 2019, the Minister for Industry, Science and Technology 
of Australia imposed final anti-dumping  duties in respect of railway wheels imported 
into Australia from China. The imposition of the duties was based on the findings and 
recommendations reported to the Minister in Anti-dumping  Commission Report No. 466 
– Alleged Dumping of Certain Railway Wheels Exported from the People 's Republic of 
China and France (1  March  2019) .  
The specific legal instruments that imposed those duties are set out in the Appendix. 
The measures at is sue include those legal instruments and all annexes, amendments, 
modifications, replacements, implementing acts or related measures in connection with 
those legal instruments.11 
2.2  The underlying proceedings  
2.2.  As indicated in the section  immediately above, Chin a challenges Australia 's measures 
concerning a series of  anti-dumping /countervailing duties proceedings  with respect to three different 
products , i.e. wind towers , deep drawn s tainless steel sinks (stainless steel sinks) , and railway 
wheels. China challenges anti-dumping  measures in each of the three.  Stainless steel sinks is the 
 
11 China 's panel request , pp. 1-2. (emphasis  original)  WT/DS603/R  
 
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  only one of the three with respect to which China also challenges  countervailing  measures . We briefly 
set out the basic facts relating to such proceedings below.  
2.2.1   Wind towers  
2.2.1.1   Original investigation (Investigation 221)  
2.3.  On 28  August  2013, the Australian Anti-dumping  Commission (ADC)  initiated an investigation 
into the alleged dumping of wind towers from China and Korea (Investigation 221).12 It examined 
alleged dumping in an investigation period from 1  January  2012 to 30  June 2013, with injury 
assessed for the period  starting 1  January  2008.13 Shanghai Tai sheng  Wind Power Equipment  Co. 
Ltd. (TSP), a Chinese firm, participated in the investigation. TSP was the only exporter of the product 
under investigation from China.14 The ADC issued its findings in this investigat ion in a report dated 
21 March  2014.15 On 16  April 2014, the relevant parliamentary secretary accepted the findings and 
conclusions in the report and imposed anti-dumping  measures on TSP at the rate of 15% and on all 
other exporters from China at the rate of 15.6%.16 
2.2.1.2   Five-year expiry review (Continuation 487)  
2.4.  On 16  July 2018, the ADC initiated a five -year expiry review  concerning the anti-dumping  
measures imposed on wind towers from China and Korea ( Continuation 487 ).17 The ADC issued its 
findings in a report dated 12  March  2019.18 On 25  March  2019, the relevant minister accepted the 
findings in the  report .19 As a result, the anti-dumping  measures were continued in relation to exports 
from TSP at the rate of 6.4%. The in formation and calculation methodology pertaining to TSP were 
used to calculate a new dumping duty rate of 10.9% for all other Chinese exporters.20 
2.2.1.3   Administrative review in relation to TSP 
2.5.  On 8 May 2019, an administrative review proceeding concerning the de cision  to continue the 
measures against TSP was initiated .21 The Anti-Dumping  Review Panel ( ARP) issued its findings in a 
document dated April  2020.22 As a result of this review, in a notice dated 8  July 2020, the decision 
was taken to revoke the anti-dumping  measures as against TSP, effective 17  April 2019.23 The 
measures in relation to all other Chinese exporters remained in place at the margin assessed in the 
expiry  review.  
2.2.2   Stainless steel sinks 
2.2.2.1   Original investigation (Investigation 238)  
2.6.  On 18  March  2014,  the ADC initiated an investigation into the alleged dumping and 
subsidi zation of stainless steel sinks from China ( Investigation 238 ). The investigation examined 
alleged dumping and subsidi zation in an investigation period from 1  January  2013 to 
31 December  2013, with injury assessed for the period starting 1  January  2009.24 Multiple  Chinese 
companies participated in the investigation by submitting their financial data and other relevant 
 
12 Investigation 221 initiation notice (Exhibit CHN -5). 
13 Investigati on 221 final report  (Exhibit  CHN-4), p. 6. 
14 Investigation 221 final report  (Exhibit  CHN-4), pp. 9 and 32.   
15 Investigation 221 final report  (Exhibit  CHN-4).  
16 Investigation  221 findings  notice  (Exhibit  CHN-6). 
17 Continuation 487 initiation  notice  (Exhibit  CHN-7).  
18 Continuation 487 final report  (Exhibit  CHN-31).  
19 Continuation 487 findings notice  (Exhibit  CHN-8). 
20 Continuation 487 findings notice  (Exhibit  CHN-8); Continuation 487 final report  (Exhibit  CHN-31), 
p. 39 ("[t]he Commission established an export price for uncooperative and all other exporters under 
subsection  269TAB(3), based on verified information from TSP Shanghai. The Commission established a normal 
value under subsection  269TAC(6), having regard to information verified w ith TSP Shanghai, but exclusive of 
any favourable adjustments. In addition, uplift to plate steel has been based on all plate steel purchased from 
Chinese suppliers by TSP Shanghai for both domestic and exported wind towers during the inquiry per iod").  
21 ADRP Review 2019/100 review proposal  notice (Exhibit  CHN-9). 
22 ADRP Review 2019/100 report  (Exhibit  CHN-32).  
23 ADRP Review 2019/100 minister's decision notice  (Exhibit  CHN-10).  
24 Investigation 238 initiation notice  (Exhibit  CHN-12). WT/DS603/R  
 
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  information as interested parties in the investigation.25 Due to  the number of exporters who 
responded, the ADC chose to limit the number of exporters individually examined to three. The 
three  exporters were Zhuhai Grand Kitchenware Co. Ltd . (Zhuhai Grand ), Primy Corporation Limited . 
(Primy ), and Zhongshan Jiabaolu Kitchen & Bathroom Products  Co. Ltd . (Jiabaolu ). On 
19 February  2015, the ADC issued its final report in this investigation.26 The countervailing duty  
investigation was terminated with respect to the exporters Primy and Jiabaolu on the basis that the 
amounts of subsidy with respect to each of them were de minimis .27  
2.7.  In a notice dated 26  March  2015, the relevant parliamentary secretary accepted the findings 
in the final report .28 As a result, anti-dumping  measures were imposed with respect to expor ters 
from China. The ADC assigned individual dumping margins of 12.5% to Zhuhai  Grand , 5% to Primy, 
and 15.4% to Jiabaolu . The dumping margin of eight residual exporters not included in the 
examination  was determined to be  10.4%. Uncooperative and all other exporters from China were 
assigned a dumping margin  of 49.5%.29 In the same decision, margins of subsidization were 
calculated as 3.3% for Zhuhai  Grand, 3.4% for the residual exporters, and 6.4% for uncooperative 
and all  other exporters from China. Anti-dumping  duties were imposed on Primy and Jiabaolu  at a 
rate of the  respective dumping margins, and co mbined anti-dumping  and countervailing duties were 
imposed on Zhuhai Grand  at an individual rate of 12.5%, on residual ex porters at a rate of 10.7%, 
and on uncooperative and all other exporters from China at a rate of 52.6%.30  
2.2.2.2   First interim review in relation to SCEA  
2.8.  On 16  May 2016, the ADC initiated an interim review31 concerning the measures imposed on 
stainless steel sinks from China, as it related to the exporter Shengzhou Chunyi Electrical Appliances 
Co. Ltd. (SCEA)  (Review 352 )32 As a result of a notice dated 17  November  2016, 
SCEA 's anti-dumping  and countervailing  measures were revised. The revised  dumping margin for 
SCEA  was 34.13% and its revised subsidization margin  was 20.03% (a combined anti-dumping  duty 
and countervailing duty  rate of 34.33%).33  
2.2.2.3   Second interim review in relation to SCEA  
2.9.  On 21  December  2017, the ADC initiated a second interim review concerning the measures 
imposed on stainless steel sinks from China, as it related to the same exporter as before, SCEA  
(Review 459 ).34 As a result of a notice dated 14  June 2018, the anti-dumping  and countervailing 
measures were again revised for SCEA . The revised dumping margin  for SCEA  was 8% and its revised 
subsidization margin  was 1% (a combined anti-dumping  duty and countervailing duty  rate of 8%).35  
2.2.2.4   Interim review in relation to Yingao  
2.10.  On 12  February  2018, the ADC initiated an interim review concerning the measures imposed 
on stainless steel sinks from China, as it related to the exporter Guangdong Yingao Kitchen Utensils 
Co. Ltd . (Yingao ) (Review 461 ).36 In a notic e dated  9 October  2018, the anti-dumping  measures 
 
25 Investigation 238 final report (Exhibit  CHN-2), pp. 30-33.  
26 Investigation 238 final report  (Exhibit  CHN-2).  
27 Investigation 238 termination notice  (Exhibit  CHN-13). 
28 Investigation 238 findings notice  (Exhibit  CHN-14).  
29 Investigation 238 findings noti ce (Exhibit  CHN-14).  
30 Investigation 238 findings notice  (Exhibit  CHN-14).  
31 Australia explains that "in certain circumstances an affected party may seek a review by the ADC of a 
dumping duty notice, a countervailing duty  notice, or an undertaking (interim review). An interim review may 
concern the 'variable factors ' – the normal v alue, export price, non -injurious price, or the amount of the 
countervailing subsidy, and may be in relation to a particular exporter or exporters generally" . (Australia's  first 
written submission, para. 142).  
32 Review 352 initiation notice  (Exhibit  CHN-15). 
33 Review 352 findings notice  (Exhibit  CHN-16).  
34 Review 459 initiation notice  (Exhibit  CHN-18). 
35 Review 459 findings notice  (Exhibit  CHN-19).  
36 Review 461 initiation notice  (Exhibit  CHN-20). This document contains a date of 12  February  2017, 
but late r documents appear to clarify that it was instead 12  February  2018. (See e.g. Review 461 findings 
notice  (Exhibit  CHN-21)). WT/DS603/R  
 
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  were revised for Yingao. The ADC assigned a zero dumping margin and a countervailable subsidy 
margin of 0.4%.37  
2.2.2.5   Five-year expiry review (Continuation 517)  
2.11.  On 3 July 2019, the ADC initiated a five -year expi ry review  concerning the anti-dumping  and 
countervailing measures imposed on stainless steel sinks from China  (Continuation 517 ).38 In a 
notice dated 27  February  202039, as a result of Continuation 517, varying anti-dumping  and 
countervailing  duties were continued against exporters from China .40  
2.2.2.6   Administrative review in relation to Primy and Zhuhai  Grand  
2.12.  On 6 April 2020, an administrative review proceeding was initiated concerning the rates at 
which the relevant minister  had decided to continu e the anti-dumping  measures as against Primy 
and Zhuhai  Grand , at the request of those companies.41 In a notice dated 3  July 2020, the relevant 
minister affirmed the ADRP's  recommendations to continue the anti-dumping  measures as against 
Primy  and Zhuhai  Grand  at the rates imposed in Continuation 517.42 The anti-dumping  measures 
that were continued with respect to all other exporters from China were also unaffected by this 
review.  
2.2.3   Railway wheels  original investigation (Investigation 466)  
2.13.  On 18  April 2018, the ADC initiated an investigation into the alleged dumping of railway 
wheels from China and France, and the alleged subsidization of railway wheels from China 
(Investigation  466). The investigation examined the alleged dumping and subsidizatio n in an 
investigation period from 1  January  2017 to 31  December  2017, with injury assessed for the period 
starting 1  January  2014.43 Maanshan Iron & Steel Co Ltd . (Masteel ), being the only exporter of the 
product under investigation during the investigatio n period from China, participated in the 
investigation by submitting its financial data as a cooperative exporter.44 On 24  January  2019, the 
countervailing duty  investigation was terminated on the basis that the amounts of subsidy with 
respect to Masteel a nd "all other" exporters from China were de minimis .45 The ADC issued its 
findings and conclusions in a final report  dated 1  March  2019.46  
2.14.  In a notice dated 12 July 2019, the relevant parliamentary secretary accepted the findings 
and conclusions in the final report . As a result , anti-dumping  measures were imposed with respect 
to Masteel and all other exporters from China at the rate of 17.4%.47 
3  PARTIES'  REQUESTS FOR FINDINGS AND RECOMMENDATIONS  
3.1.  China  requests that the Panel find that the challenged measure s are inconsistent with 
Australia 's obligations under  the GATT  1994, the Anti-Dumping  Agreement , and/or the 
SCM Agreement , as applicable . China further requests, pursuant to Article  19.1 of the DSU, that the 
Panel recommend that Australia bring its measures into conformity with its WTO obligations.  
3.2.  Australia requests that the Panel rule that many  of China's  claims are outside the Panel's  terms 
of reference. Further, to the extent that the Panel does not find that China's  claims are outside its 
 
37 Review 461 findings notice  (Exhibit  CHN-21). 
38 Continuation 517 initiatio n notice (Exhibit  AUS-11).  
39 Continuation 517 findings notice  (Exhibit  CHN-52).  
40 Continuation 517 findings notice  (Exhibit  CHN-52); Continuation 517 final report  (Exhibit  CHN-36).  
41 ADRP Review 2020/124 review proposal notice  (Exhibit  CHN-23).  
42 ADRP Review 2020/124 minister's decision notice  (Exhibit  CHN-24). See also ADRP Review 2020/124 
report  (Exhibit  CHN-47). 
43 Investigation 466 initiation notice  (Exhibit  CHN-26). 
44 Investigation 466 final report (Exhibit  CHN-3), p.  22. 
45 Investigation 466 termination notice  (Exhibit  CHN-27). 
46 Investigation 466 final report (Exhibit  CHN-3). 
47 Investigation 466 findings notice  (Exhibit  CHN-28), p.  2; Investigation 466 final report 
(Exhibit  CHN-3), pp. 25-26. WT/DS603/R  
 
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  terms of reference , Australia requests that the Panel reject China 's claims in this dispute in their 
entirety.  
4  ARGUMENTS OF THE PARTIES  
4.1.  The arguments of the parties are reflected in their executive summaries, provided to the Panel 
in accordance with paragraph  24 of the Working Procedures adopted by the Pan el (see Annexes  B-1 
and B -2). 
5  ARGUMENTS OF THE THIRD PARTIES   
5.1.  The arguments of Brazil, Canada, the European  Union, Japan, Mexico, Norway, the 
Russian  Federation, the United Kingdom, and the United  States  are reflected in their 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, C-7, C-8, and C -9). Argentina, India, the 
Republic  of Korea, Malaysia, Singapore,  Switzerland,  Chinese Taipei, and Viet Nam  did not provide 
the Panel with a third -party written submission  or a written version of any oral statement .  
6  INTERIM REVIEW  
6.1.  The requests made at the interim review stage as well as the Panel's discussion and dispo sition 
of those requests are set out in Annex A -3. 
7  FINDINGS  
7.1  Treaty  interpretation and standard of review   
7.1.  This dispute concerns claims raised by China  under the Anti-Dumping  Agreement , the 
SCM Agreement , and the GATT 1994. We briefly recall below the applicable provisions on treaty 
interpretation and standard of review.  
7.1.1   Treaty interpretation  
7.2.  Article  3.2 of the DSU provides that the dispute settlement system serves to clarify the existing 
provisions of t he covered agreements "in accordance with customary rules of interpretation of public 
international law". It is generally accepted that such customary rules include those codified in 
Articles  31 and 32 of the Vienna Convention on the Law of Treaties.  
7.3.  Article 17.6(ii) of the Anti-Dumping  Agreement directs us to the same customary rules of treaty 
interpretation, and further provides:  
[T]he panel shall interpret the relevant provisions of the Agreement in accordance with 
customary rules of interpretation of pu blic international law. Where 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 interpretations.  
7.1.2   Standard of review  
7.4.  Article  11 of the DSU sets out a general standard of review for panels, providing, in relevant 
part, that:  
[A] panel should make an objective assessment of the matter before it, including an 
objective assess ment of the facts of the case and the applicability of and conformity 
with the relevant covered agreements[.]  
7.5.  In addition to Article  11 of the DSU, Article  17.6(i) of the Anti-Dumping  Agreement provides 
that in disputes under the Anti-Dumping  Agreement:  WT/DS603/R  
 
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  [I]n its assessment of the facts of the matter, the 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 an d the 
evaluation was unbiased and objective, even though the panel might have reached a 
different conclusion, the evaluation shall not be overturned[.]  
7.6.  Thus, Article  17.6(i) is explicit that in carrying out its objective assessment, the Panel is barred 
from conducting a de novo  review of the facts. Instead, we are directed to "determine whether the 
authorities' establishment of the facts was proper", and "whether their evaluation of those facts was 
unbiased and objective" . 
7.7.  As to the universe of relevant fac ts whose "establishment" and "evaluation" by the authority 
we must assess, Article  17.5(ii) of the Anti-Dumping  Agreement provides that we are to "examine 
the matter based upon … the facts made available in conformity with appropriate domestic 
procedures t o the authorities of the importing Member" . 
7.8.  Although the SCM Agreement  does not contain a similar provision, Members have declared that 
disputes arising from anti-dumping  and countervailing duty measures should be resolved in a 
consistent manner.48 
7.2  Expiry of measures and Australia's challenges under Article  6.2 of the DSU  
7.9.  In this section, we examine Australia's claims that certain measures are expired and provide a 
general analytical framework that we will apply to assess expiry. We also address 
Australia's  challenges under Article  6.2 of the DSU in this section. We further  note two points 
surrounding terminology at the outset. First, for ease of reference, we refer to the stages of the 
imposition and admini stration of anti -dumping and countervailing duty  orders  (e.g. investigations, 
interim reviews, expiry  reviews, and administrative reviews) as "segments". The segments comprise 
"proceedings" more generally.  Second, the parties use the term "expiry review" as referring to 
segments referenced in Article  11.3 of the Anti -Dumping Agreement and Article 21.3 of the 
SCM Agreement,  which are sometimes referred to as "sunset" reviews. We adopt the term "expiry 
review" in this Report.  The parties use the term "interim review" as refer ring to reviews refer enced  
in Article  11.2 of the Anti-Dumping  Agreement and Article  21.2 of the SCM Agreement . We adopt 
that term in this Report as well.  
7.10.  The parties' arguments on these subjects, and particularly those surrounding expiry, are 
extensive. Issues surrounding expiry first arose in Australia 's preliminary ruling request. This request 
concerne d the alleged expiry of countervailing measures in the stainless steel sinks proceeding s 
related to one subsidy program me called "Stainless steel received at less than adequate  
remuneration " or " Raw Materials Provided by the Government at Less than Fair Ma rket Value " 
(Program  1). In its first written submission, Australia offered additional arguments concerning the 
alleged expiry of certain other anti-dumping  measures in the stainless steel sinks  and wind towers  
proceedings, along with challenges made under Article  6.2 of the DSU . As China responded to such 
challenges in its own submissions, and further clarified to what segments its challenges pertained, 
Australia subsequently raised additional arguments surrounding the alleged expiry of measures and 
additional challenges  under A rticle 6.2 of the DSU . The summary of party arguments below 
separates arguments concerning expiry and challenges under Article  6.2 of the DSU.  
7.2.1   Main party arguments  
7.2.1.1   Expiry of measures  
7.11.  Australia  requests, in its preliminary ruling request, "that the Panel i ssue a preliminary ruling 
that all of China's  claims contained in Section  B.2 of its request for the establishment of a panel  
[(China's p anel request)], concerning 'countervailing measures,'  fall outside the Panel's  terms of 
 
48 Declaration on Dispute Settlement Pursuant to the  Agreement on Implementation of Article  VI of the 
General  Agreement on Tariffs and Trade 1994 or Part V of the  Agreement on Subsidies and Countervailing 
Measures.  WT/DS603/R  
 
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  reference"  because they relate to measures that have expired.49 Australia notes that the claims "are 
focused exclusively  on 'the countervailing measures  … only with regard to alleged Program  1 – Raw 
Materials Provided by the Government at Less than Fair Market Value'  in the  Stainless St eel Sinks 
investigation ".50 Australia asserts  that the "measures challenged by China associated with 
'Program  1' were terminated on 27  March  2020 – two years prior to the establishment of this Panel 
on 28 February  2022" .51 Australia argues that this is so because:  (a) China only challenges the 
countervailing measures with respect to Program  1; (b) at that time the five -year expiry review 
supers eded the original investigation as the legal basis for the countervailing measures; and (c)  in 
the expiry review all countervailing duties  with respect to Program  1 were terminated. Australia 
further notes that China's  claims vis-à-vis Program  1 are only brought on an as-applied  basis.52 
Australia argues that the termination of such measures, and particularly the fact that such measures 
were terminated before the Panel's  establishment, means  that the measures are outside the 
Panel's  terms of reference .53 Australia also claims that no benefits to China are being impaired by 
the expired  countervailing  measures.54 
7.12.  China  responds  that, in its view, the preliminary ruling request  does not raise an issue going 
to the Panel's  jurisdiction or terms of reference . In this context, China notes that Australia does not 
challenge the panel request's  delineation of the relevant measures or claims in any relevant way, 
and instead argues that  the countervailing  measure  on stainless steel sinks with regard to Program  1 
does not exist.55 
7.13.  China further argues that, contrary to Australia's  assertions, the relevant countervailing  
measure challenged in this proceeding is still in effect. China asser ts that the relevant measure here 
is the original "countervailing duty notice"56 dating from 2015 imposing countervailing duties  on 
stainless steel sinks from China – an order that included countervailing duties  imposed specifically 
with respect to Program  1 – and continues to be the relevant measure even after the most recent 
expiry review that Australia mistakenly argues replaced the original measure.57 This is so, in 
China's  view, because the expiry review  merely changed the amount  of the countervailing duties  
imposed with respect to Program  1, and did not affect in any way the character  of the legal measure,  
i.e. the countervailing duty  order , itself in place against China with respect to Program  1.58 China 
further contends that, in genera l, under Australian law an expiry review does not terminate the basis 
on which anti -dumping or countervailing duty measures are in place, but, rather, such reviews 
continue it and are thus linked to the original investigation. China argues that Australian domestic 
courts have expressly explained this linkage.  China argue s that the measure was not just the 
countervailing duty amount, but also the manner of calculating the duties and the methodology used 
to do so, which, according to China, were applied consi stently throughout the relevant segments, 
including the expiry review, and continue to be applied. China also submit s that in cases where a 
respondent could impose duties on the goods  from the complaining Member in a manner that may 
give rise to materially  similar WTO inconsistencies that are alleged in the dispute, this may provide 
a basis for making findings with respect to the challenged measure.59  
 
49 Australia's preliminary ruling request, para. 1. Australia clarifies that it "is requesting that the Panel 
exclude from its terms of reference, China's  claims under sections  B.2.1 – B.2.5 of the [ China's p anel 
request])" . (ibid. fn 1). 
50 Australia's preliminary ruling request, para. 2. (emphasis  original)  
51 Australia's preliminary ruling request, para. 2. (emphasis  original)  
52 Australia's preliminary ruling request, paras. 21-22. 
53 Australia's preliminary ruling request, paras.  8-9. See also Australia 's opening statement at the first 
meeting of the Panel , paras. 25-26. 
54 Australia's preliminary ruling request, para. 3. 
55 China's response to Australia's request for a preliminary ruling, paras.  6-14. 
56 The word "notice" used by China in its response to the  preliminary ruling request is a term under 
Australian law that refers to an instrument imposing anti -dumping or countervailing duties. (China's  response 
to Australia's request for a preliminary ruling, paras. 18 -24 (referring to Customs Act 1901, Part XVB  
(Exhibit  CHN-29)). 
57 China's response to Australia's request for a preliminary ruling, paras. 23-24. 
58 China's response to Australia's request for a preliminary ruling, para. 2 1. 
59 China's response to Australia's request for a preliminary ruling, paras. 2 2-23, 33 and 56 ; opening 
statement at the first meeting of the Panel , paras. 15 -18; second written submission, paras. 37 -39, 40 -41, and 
44; response to Panel question No. 7, para. 22, and No. 70 , paras. 69 and 70 . China also argues that the 
ADC's practices in other proceedings that are not the subject of this dispute support the conclusion that even if 
a certain subsidy programme were assigned a zero countervailing duty rate in a particular segment, that 
 WT/DS603/R  
 
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  7.14.  China notes that the expiry review  found that subsidization was likely to recur with respect to 
Program  1, and specifically continued the effect of the original countervailing duty  order with respect 
to that program me.60 China contends that Program  1 would be within the scope of future expiry 
reviews and would simply consist of a re-determination of the amount of subsidization.61 China also 
notes that, without the amount of subsidization attributable  to Program  1 in the original 
investigation, the amo unt of subsidization for the sampled companies would have been de minimis , 
and thus the countervailing duty order would never have existed without the original findings with 
respect to Program  1.62 
7.15.  Australia counters  that the mere possibility that Program  1 might become countervailable in 
the future is an insufficient reason to make findings with respect to the now -expired countervailing  
measures, and would render any such findings an inappropriate advisory opinion.63 Australia further 
argues that:  (a) China's contention is incorrect that no countervailing duties  would have been 
imposed had it not been for countervailing duties  attributable  to Program  1 in the original 
investigation because uncooperative exporters would still have been assigned countervailin g duty 
rates even in the absence of Program  164; (b) China attempts to broaden its claims with respect to 
the countervailing  measure in order to save them from Australia's  challenge, thus improperly 
converting its claim s from as  applied claim s to as such c laims (because China is essentially basing 
the violation on the possibility that Australia might assign subsidy margins to Program  1 in the 
future)65; (c) China mischaracterizes Article  21.1 of the SCM Agreement ; and (d)  China assigns too 
much significance  to the legal effect of the "notice" under Australian law.66 
7.16.  Australia  also argues that all of China's  claims  under the Anti -Dumping Agreement (AD claims)  
relating to the wind towers  and stainless steel sinks  original investigation are outside the 
Panel's  terms of reference. Australia asserts that original investigations and expiry reviews are 
distinct processes with different objectives both under WTO law and Australian law. Australia thus 
argues that the imposition of duties following  the original  investigation, and the continuation  of 
duties following the expiry review s – in which the ADC performed new calculations of normal values 
and export prices – were distinct and separate measures, with the latter superseding the former.67 
Australia also con tends that even if the Panel finds that the original measure s are not expired and 
makes findings  with respect to them, the Panel should decline to make recommendations under 
Article  19.1 of the DSU with respect to them.68 
 
subsidy programme  still remains within the scope of, and will be examined in, subsequent segments  
(China's  closing statement at the first meeting of the Panel , para. 8(a). See also China's  response to Australia's 
request for a preliminary ruling,  paras.  57-72). 
60 China ass erts that the expiry review found that Program  1 was a countervailable subsidy. 
(China's  response to Australia's request for a preliminary ruling, para. 36 (quoting Continuation 517 final report 
(Exhibit CHN -36), p. 107) ). Australia asserts that any mentio n in the  final report of the expiry review  stating 
that Program  1 was a countervailable subsidy was a typographical error. (Australia's comments on 
China's  response to a preliminary ruling request , para. 25). China further asserts in this context that the expiry 
review  "continue[d]" the original order, and that "Australia's  use of the word 'continuation'  is coterminous with 
the 'continued  imposition  of the duty'". (China's  response to Australia's request for a preliminary ruling, 
para. 17 (quoting  Article  21.1 of the SCM Agreement) (emphasis added by China) ). 
61 China's response to Panel question No. 9. China also claims that examples taken from other ADC 
proceedings reveal a dministrative practices that support China's  position in this context. (China's response to 
Australia's request for a preliminary ruling, paras.  57-72). 
62 China's response to Australia's request for a preliminary ruling, paras.  49-56. China later indicated  
that if Program  1 had not erroneously been found to be a subsidy , then there would have been no 
countervailing duties placed on the 15  companies that participated in the original investigation, and no expiry 
review would have been possible with respect to  Program  1. (China's second written submission, para.  59).  
63 Australia's comments on China's response to  a preliminary ruling request , para. 5.  
64 Australia's comments on China's response to a preliminary ruling request, paras. 29 -30; response to 
Panel question No. 49.  
65 Australia's comments on China's response to a preliminary ruling request, paras. 34-35. 
66 Australia's comments on China's response to a preliminary ruling request, paras. 3 7-38.  
67 Australia's  first written submission, paras.  58-63. We note that the Europe an Union, as a third party, 
generally agrees with Australia that an expiry review replaces the original order. (European Union's response to 
third-party question No. 3.a ). Japan  and the United States  consider the question as nuanced and must be 
evaluated o n a case -by-case basis. (Japan's response to third -party question No. 3.a; United States' response 
to third -party question No. 3.a ). Australia refers to the panel report  in US – Pipes and Tubes  (Turkey)  as being 
an example of a panel refusing to rule on an  expired measure in a factually similar case.  (Australia's  first 
written submission, paras.  67-69). 
68 Australia's  first written submission, paras. 74 -77, 131-134 and 138 .  WT/DS603/R  
 
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  7.17.  According to China, the expiry of a measure alone is not dispositive of whether a panel can 
address the claims with respect to that measure. China asserts that there is contextual support for 
this proposition in the DSU, and that the Appellate Body has recognized that repeal of a measure 
does not necessarily constitute a satisfactory settlement of the relevant matter. China further 
contends that even if the measures are "expired", they still have "effects", and thus in that scenario 
the Panel should recommend that the effects be removed. Th ese effects, according to China, are the 
continued application of WTO -inconsistent methodologies and practices, including , with respect to 
stainless steel sinks  specifically, the inclusion of Program  1 in the scope of the countervailing duty  
order.69 China argues that because expiry reviews do not address all the issues that an original 
investigation addresses, operate according to different strictures, and can rely on previous findings 
of dumping and subsidization to continue a n anti-dumping  or counte rvailing duty order, " [i]t follows 
that any such determination of past dumping and subsidisation must have been WTO consistent in 
order for the continuation of a duty to be WTO consistent" .70 
7.18.  China also rejects Australia's assertion that China's panel requ est "unambiguously states that 
it is only challenging the countervailing measures associated with Program  1".71 China contends that 
the measures are set out in section A of its panel request , which "include[s] a connected set of 
measures, evidenced in inst ruments including those identified at Nos. 8 to 23 of the Appendix of the 
panel request" .72 Nor, according to China, does  section B limit the measures at  issue, as this section 
rather  "presents the grounds on which the measures are in violation of WTO provisions and are 
nullifying or impairing the benefits that would otherwise accrue to China under the covered 
agreements" .73 Those legal grounds are, according to China, that the ADC's m ethodology of 
assessing Program  1, which led to imposition of countervailing duties , was inconsistent with the 
SCM Agreement , and that the methodology "has continued legal, and practical or operational 
effect" .74 At the first meeting China also emphasized that it was challenging "one indivisible, 
continuous measure", although China subsequently contended that this statement was in error and 
that China was challenging "one indivisible, continuous set of measures in each respect".75 
7.19.  Although China does not ac cept that the measures expired, China also argues that the 
measures, even if they had expired in a legal sense, have continued operational and practical  effect. 
With respect to the countervailing duties  on stainless steel sinks , China contends that if it had not 
been for the subsidy margin attributed to  Program  1 in the original investigation, then no 
countervailing duties  would have been imposed  with respect to the 15  exporters that participated in 
the original investigation, and no co ntinuation of the duties would have been possible under an 
expiry review. Thus, according to China, there exists "a clear factual chain established between the 
original erroneous findings relating to Program  1, and the current duties" .76  
7.20.  In its responses to questions following the first meeting , China clarifie s that, with respect to 
the wind towers  and stainless steel sinks  proceedings , it seeks findings and recommendations for all 
claims made for the original investigations and expiry reviews, and with re spect to the stainless steel 
sinks proceedings the interim review s as well. China sought no findings with respect to the wind 
towers administrative review that resulted in TSP being excluded from the wind towers AD order.  
For the railway wheels  proceedings,  China seeks findings and recommendations only with respect to 
the original investigation.77 China specifies that the ADC's  WTO-inconsistent conduct in the original 
investigations remains unchanged and unaltered in subsequent segments , and thus  the latter 
segments have not changed the essence of the original WTO -inconsistent determinations by the 
ADC.78 China  further argues that its legal claims extend to the entirety of the anti -dumping and 
 
69 China's response to Panel question No. 40.  
70 China's opening statement at the first meeting of the Panel, para. 29. See also , generally , 
ibid. paras.  23-28. 
71 Australia's preliminary ruling  request , para. 20.  
72 China's opening statement at the first meeting of the Panel, para.  12. 
73 China's opening  statement at the first meeting  of the Panel , para. 12.  
74 China's opening statement  at the first meeting of the Panel , para. 12 (fns omitted) . See also 
China's  comments on Australia's preliminary ruling request, especially , paras. 18 –48. 
75 China's opening  statement at the first meeting of the Panel, para. 14; second written submission, 
para. 45 and fn 54 . 
76 China's opening statement at the first meeting of the Panel , para. 22. China also expresses concern 
that if Australia's  position on these issues is accepted, it becomes unclear how a WTO Member could challenge 
a reviewed or extended measure.  (China's opening statement at the first meeting of the Panel , paras. 19 -22). 
77 China's response to Panel question No. 37.  
78 China's responses to Panel question N o. 37, para. 114; question No. 38, para. 118(a); and 
question  No. 57 , para. 147.  WT/DS603/R  
 
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  countervailing proceedings included in China's panel r equest, and that the violations alleged in the 
original investigations are inherent in the measures.79  
7.21.  In its second written submission , Australia  argues that China has advanced new claims under 
Article 11.2 of the Anti-Dumping  Agreement  and Article 21.2 of the SCM Agreement  related to 
interim reviews.80 Australia also argues that, following the first substantive meeting, China has 
attempted to redefine the measures at issue as a connected series of measures constituting one 
overarching measure, although China has not advanced sufficient evidence to estab lish such a 
measure.81 With respect to China's CVD claims, Australia also stresses that the ADC would 
investigate Program  1 in a future countervailing duty proceeding if it were presented with evidence 
that it was a subsidy.82 Also, according to Australia,  China failed to mention the wind towers  expiry 
review in its first written submission with respect to any claim except AD claim 6.a , and also failed 
to make reference to the stainless steel sinks interim reviews or expiry review in advancing multiple 
claims.83 Australia submits that raising additional  claims at a late stage  is contrary to the 
paragraph  3(1) of the Panel 's Working Procedures and is fundamentally unfair to Australia.84 
7.22.  In its  response to Panel questions and in its  second written submission,  China clarifies that 
its submission is that the measure is an "indivisible, continuous set of measures  in each respect ".85 
China  also argues that the measures it challenges are methodologies applied by the ADC in the 
original investigations and then carrie d through the subsequent segments such as interim reviews 
and expiry reviews.86 In this regard, China argues  in its second written submission87 and responses 
to Panel questions88 that the measures all continue to have the same essence . China  also stresses 
that this dispute remains amenable to findings and recommendations even if the measures are found 
to have expired.89  
7.23.  China also asserts that the Panel must make findings with re spect to the investigations in 
each case they are challenged because the investigations and other segments such as expiry reviews 
form parts of a continuous measure, i.e. an anti-dumping  or countervailing duty  order, and reaffirms 
that the original investi gations ' errors are "foundational " in nature.90 In particular, China argues that 
if the alleged errors in the original investigation had not occurred then the injury assessment in the 
stainless steel sinks countervailing duty investigation, for example, wo uld have involved a smaller 
group of exporters since, in China's view, individually investigated firms would have been excluded 
from the countervailing duty order altogether owing to the de minimis subsidization  margins they 
should have received.91 China further rejects Australia's  argument that China's claims as against any 
segments of the proceedings are in violation of the Panel's Working Procedures.92  
7.24.  Australia  counters that China's references to  the "essence " of the challenged measures is 
legally irrelevant. Australia also argues that the re were relevant factual differences in the 
ADC's  findings and methodologies between the investigations and expiry reviews .93 Australia also 
asserts that , in a hypothetical dispute,  if all the measures are with in the panel's terms of reference 
and not expired, and there were no change s in methodology between the investigations and expiry 
reviews, then the panel could make findings with respect to the expiry reviews.94 
 
79 China's response to Panel question No. 3, para. 8.  
80 Australia 's second written submission , para. 7. 
81 Australia 's second written submission , paras. 34-35 and 77 -86. 
82 Australia 's second written submission , para. 46.  
83 Australia 's second written submission , paras. 131 -132.  
84 Australia's second written submission, paras. 133 -134; see also comments on China's response to 
Panel question No. 95.  
85 China's  response to Pan el question No. 98, para. 165;  second written submission, para. 45. 
86 China's second  written submission , paras. 24 -25, 27 -41, and 44-48. 
87 China 's second written submission , para. 55.  
88 China 's response to Panel question No.  69.  
89 China 's second written submission , paras. 64 -97.  
90 See e.g. China's response to Panel question No. 70, para. 65 .  
91 China's response to Panel question No. 73.  
92 China's response to Panel question No. 95.  
93 Australia's response to Panel question No. 69.  
94 Australia's response to Panel question No. 70. WT/DS603/R  
 
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  7.2.1.2   Article  6.2 of the DSU  
7.25.  Australia  argues that  China's  AD claims relating to the wind towers  and stainless steel sinks 
expiry review s are outside the Panel's  terms of reference  by virtue of Article  6.2 of the DSU. 
Specifically with respect to wind towers, A ustralia notes that although the introductory parts of 
China's  first written submission  set out two claims explicitly related to segments subsequent to  the 
stainless steel sinks investigation, China appears to direct  additional claims  against the wind towers 
expiry review in a later section of its first written submission.95  
7.26.  Australia further recalls the Appellate Body's guidance that " [i]dentification of the treaty 
provisions claimed to have been violated is 'always necessary' and 'a minimum prerequisite'  if the 
legal basis of the complaint is to be presented at all".96 Australia thus contends that, w ith respect to 
both wind towers and stainless steel sinks,  critically, the panel request fails to cite Article  11.3 of 
the Anti-Dumping  Agreement.97 Australia  contends that the panel in EU – Footwear  (China)  correctly 
determined that no claims under Article  2 of the Anti-Dumping  Agreement  can be made unless a 
panel's  jurisdiction over an expiry review is first established  via a claim under Article  11.3, which 
serves as a "gateway" provision to challenging expiry reviews.98 Australia recalls that original 
investigations and expiry reviews are distinct proceedings governed by different legal standards.99 
Australia further co ntrasts this situation with at least one previous panel proceeding in which China 
challenged determinations made in the course of an expiry review but premised such claims on a 
violation of Article  11.3.100 Australia cites other panel proceedings in which challenges under 
Article  2 were accompanied by citations in the panel requests to Article  11.3 where an investigating 
authority's  conduct in five -year expiry reviews was at issue.101  
7.27.  Australia also raises s imilar challenges with respect to: (a) China's claims vis-à-vis the 
stainless steel sinks interim reviews, citing the absence of a reference to Article  11.2 of the 
Anti-Dumping  Agreement and Article  21.2 of the SCM Agreement  in the panel request; and 
(b) China's CVD claims with respect to the stainless steel sinks expiry review, citing the absence of 
a reference to Article  21.3 of the SCM Agreement  in the panel request.102 
7.28.  Australia also contends that, even if China had cited Article  11.3, the anti-dumping  duties on 
TSP and the ADRP's report on the administrative review in relation to TSP in the wind towers 
proceedings are outside the Panel's  terms of reference  because the duties on TSP have been revoked 
pursuant to the administrative review.103 Thus, even if TSP's  anti-dumping  duties and the 
ADRP's  report  are within its terms of reference  and the Panel makes findings with respect to them, 
in Australia's  view, th e Panel should at minimum decline to issue recommendations with respect to 
them.104  
7.29.  Australia further asserts  that China's  claim under Article  2.4 of the SCM Agreement  falls 
outside the Panel's  terms of reference because China failed to cite Article  2.4 of  the SCM Agreement  
in its panel request.105  
7.30.  China  argues that " continued imposition of duties is based on the original investigations, 
reports and notices, all of which are particularised in our panel request" .106 Further, China asserts 
that claims based on  Article  2 of the Anti-Dumping  Agreement  are not confined to original 
investigations, but relate to "the entirety of the measure at issue", including the expiry reviews  in 
 
95 Australia's  first written submission, para. 528 (referring to China's first written submission, 
paras.  35 and 272 -279). 
96 Australia's first written submission, para. 80 (quoting Appellate Body Report, Korea – Dairy , 
para. 124).  
97 Australia's  first written submission, paras.  80-87 and 95.  
98 Australia's  first written submission, paras.  96-98.  
99 Australia's  first written submission, paras.  88-90. 
100 Australia's  first written submission, paras.  91-94.  
101 Australia's  first written submission, para. 99 and 135-136. We note that the European Union and 
Japan, as third parties, generally agree with Australia's position in this context. (European Union's re sponse to 
third-party question No. 1; Japan's response to third -party question No. 1 ). 
102 Australia 's second written submission , paras. 4.c , 7, and 124 -129.  
103 Australia's  first written submission, paras.  102-106.  
104 Australia's  first written submission, pa ras. 106 and 528 -529. 
105 Australia's  first written submission, paras.  657-658 and 662 -663. 
106 China's opening statement at the first meeting of the Panel , para. 30.  WT/DS603/R  
 
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  which a dumping margin is calculated , and the requirements of Article  2 are applicable to those 
reviews.  Thus, in China's vi ew, it is unnecessary to cite Article  11.3 in order to bring an Article  2 
claim.107 China observes that Article  11.3 allows for expiry reviews, but it is still not the basis for 
China's claims; that basis is, rather, Article  2. China also argues that the pa nel report in EC – 
Footwear (China)  made an Article  2 finding and then made consequential findings under Article  11.3, 
which indicates that the panel considered Article  2 to apply directly to the expiry review in 
question.108 China also contends that by Aus tralia's logic, in order to challenge conduct in an original 
investigation it would be necessary to cite Articles 5 and 6 of the Anti-Dumping  Agreement .109 China 
also applies these same general arguments to reject Australia's  claims that it was necessary fo r 
China's panel request  to cite Article  11.2 of the Anti-Dumping  Agreement and Article 21.2 of the 
SCM Agreement  in order to challenge interim  reviews, and also Article  21.3 of the SCM Agreement  
in order to challenge expiry reviews.110 China also confirms t hat it makes no claims under 
Articles  11.2 and 11.3 of the Anti-Dumping  Agreement, or under Articles 21.2 and 21.3 of the 
SCM Agreement .111  
7.31.  China agrees with Australia that the anti -dumping measures with respect to TSP are expired 
following the administrative review.112  
7.32.  China further asserts that its panel request  adequately cites Article  2.4 of the SCM Agreement  
by including language that is similar thereto.113 
7.2.2   Approach to expiry  
7.33.  As the above section illustrates, the parties' arguments surroundin g expiry of measures and 
Article  6.2 of the DSU are extensive and have evolved over time.  
7.34.  The Panel is of the view that  issues surrounding the expiry of challenged measures arise 
primarily due to two circumstances. First, multiple procedural segments have  already occurred in 
the wind towers  and stainless steel sinks  proceedings.114 With respect to wind towers , there has 
been an original investigation , an expiry review , and an administrative review . In stainless steel 
sinks, there has been an original investigation, three interim reviews, and an expiry review. In its 
submissions, China challenges certain aspects of Australian anti-dumping  and countervailing duty  
orders (e.g. dumping margin calculations, determination of subs idy benefit, etc) with respect to all 
the segments enumerated in the preceding two sentence s, with the exception of the wind towers 
administrative review .115 Second,  with respect to the majority of claims, China alleges that the 
challenged conduct by the AD C first appeared in the original investigations and was then repeated 
in later segments .  
7.35.  Against this background, Australia argues that  the only non -expired measures are the wind 
towers and stainless steel sinks expiry reviews, and the railway wheels inve stigation;  the other 
measures arising from pre -expiry -review segments are expired. This expiry occurred , in 
Australia's  view, in one of two general ways.  The first pertains to both AD claims and CVD claims . 
That is , Australia considers that the expiry  reviews superseded and supplanted all preceding 
segments , including the original  investigations . In this context, Australia notes that the ADC 
re-calculated all Chinese exporters' dumping and subsidy margins  in the expiry  reviews. Australia 
thus argues that China's claims (whether regarding anti-dumping  or countervailing measures) as 
they pertain to the superseded segments (i.e. original investigations and interim reviews) are outside 
the Panel's terms of reference. The s econd pertains  to China's CVD  claims which operate as against 
Program  1. Australia argues that the measures have expired because the ADC found that Program  1 
 
107 See e.g. China 's response to Panel question No.  65. 
108 China's opening statement at the first meeting of the Panel , paras. 30 -34.  
109 China's response to Panel question No. 5.  
110 See e.g. China 's response to Panel question No.  65.  
111 China's response to Panel question No.  65, para. 13. China refers to these articles as "procedural " 
provisions. (China's response to Panel question No. 65, para. 12). 
112 China's response to Panel question No. 41, para.  129. China notes that multiple previous WTO panels 
have considered both original invest igations and related expiry reviews, including when the expiry review 
occurred before panel establishment. (China's response to Panel question No. 55, paras. 142 -144).  
113 China's opening statement at the first meeting of the Panel, paras. 35 -40. 
114 With resp ect to the railway wheels  proceedings, there has only been an original investigation  that is 
relevant in this dispute , and thus no expiry issues arise.  
115 China's response to Panel question No. 37, para. 116.  WT/DS603/R  
 
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  conferred no benefit to Chinese exporters in the expiry review . In Australia's view, this led to a 
finding by the ADC that Program 1 was no longer a countervailable subsidy, and thus to a termination 
of countervailing measures with respect to Program 1. Australia considers that China's CVD claims 
therefore relate to expired measures and are thus  outside  the Panel's terms of reference . Such 
arguments, if the Panel were to accept them , would mean that China would be able to challenge 
only aspects of the expiry reviews in the wind towers  and stainless  steel sinks  proceedings . Australia 
further argues, in addition , that China cannot challenge the interim or expiry  reviews because the 
panel request  did not cite Articles 11.2 or 11.3 of the Anti-Dumping  Agreement or Articles 21.2 or 
21.3 of the SCM Agreement , and thus the panel request did not satisfy the requi rements of 
Article  6.2 of the  DSU. Such cumulative arguments, if accepted , would remove most of China 's 
claims from our consideration , leaving only claims vis-à-vis the railway wheels  proceedings . Given 
the major impact Australia 's arguments could have on the scope of this dispute, and the systemic 
nature of certain arguments, in this section we articulate our overall approach to the issue of expiry , 
and to Australia's challenges under Article  6.2 of the DSU . 
7.36.  We first recall China's argument  that the alleged errors in the original investigations are 
"foundational" in nature. Thus, from China's perspective, such errors in the original investigation 
"infect" the anti-dumping  or countervailing duty order as it was originally imposed.116 This infection, 
according to China, cannot be remedied by later -in-time segments because such segments merely 
continue the originally flawed order.117 As a result, in China 's view, we should always make findings 
in respect of the original  investigations, a nd refrain from finding that they may have expired. In 
support of this conceptual approach, China argues, in particular, that in the absence of the alleged 
flaws in the original investigations, certain exporters ' subsidization margins  in the stainless stee l 
sinks proceedings  would have been de minimis  (and thus the exporters would have been excluded 
from the scope of the countervailing duty  order altogether) , the injury and causation analyses in the 
CVD investigation would have been different , and there may  not even be a countervailing duty order 
in place today . China also asserts that previous panels and the Appellate Body have observed that 
different segments of anti-dumping  or countervailing proceedings are interrelated.118 
7.37.  We therefore note that China appears  to advocate using a broad counterfactual approach to 
assessing expiry. That is, with respect to any given aspect of the orders, China asks us to envision 
a world in which the alleged WTO inconsistencies never occurred, as sume that this would have 
required the ADC to change its approach to a given issue (e.g. assessment of subsidy benefit) , 
compare that changed counterfactual situation to the situation in the actual world, and then, if 
anything about the anti-dumping  or cou ntervailing duty orders would have been different between 
the two, we could not find that the aspect is expired.  We decline to adopt this approach . Because 
we generally must assess expiry before  we determine whether to issue findings, China appears to 
ask us to assume that violations of WTO law occurred ex ante , assume how Australia would comply 
with any hypothetical findings, and then fashion a counterfactual world based upon those 
assumptions. We, however, consider it inappropriate to either assume violat ions of WTO law before 
they are found to exist or assume how Australia would comply with any findings that we might issue. 
Moreover, even if  China  more simply argue s that the ongoing legal effect of an aspect of an 
anti-dumping or countervailing duty order  should be judged by the fact that other, related aspects  
have continued legal effect, we still consider this approach flawed. This is so because  we consider it 
illogical to assume that simply because certain aspects of anti-dumping  or countervailing duty  orders 
are related119, in that one may change when another changes, that means that all such aspects  
become part and parcel of each other for expiry purposes when only one such aspect  is challenged.120 
 
116 China 's response to Panel question No.  102, para. 209.  
117 We note, however, that the parties agree that TSP was excluded from the wind towers anti-dumping  
order following an administrative review. China does not challenge this administrative review or its result, even 
though the wind towers anti-dumping  order at large remains in place. We consider this inconsistent with the 
notion that the original order as a whole is irreparably "infected" and cannot be remedied by post -investigation 
segments.  
118 Overall, we note that although China argues at times that the segments are interconnected, China 
also raises distinct challenges to certain segments (see AD claims 6.b.ii and 6.b.iii with respect to stainless 
steel sinks, further below, which only pertain to expiry reviews). Thus, we see some tension b etween the 
conception of a single overall anti -dumping or countervailing duty order being the challenged measure and 
China's  ability to discern problems with only specific segments.  
119 We note that China is correct that dumping determinations might affect s ubsequent injury and 
causation analyses in an original investigation.  
120 We agree with China that previous panels have correctly noted that segments of anti-dumping  or 
countervailing  proceedings are related, as they form related stages of administering a p articular anti-dumping  
 WT/DS603/R  
 
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  We therefore  recall that, in this dispute, China challe nges certain aspects of Australian anti-dumping  
and countervailing duty  orders (e.g. dumping margin calculations, determination of subsidy benefit, 
etc), and such claims are only lodged on an as-applied  basis. This observation, in our minds , also 
criticall y undermines China's view that alleged errors committed by an investigating authority in an 
original investigation can never become expired through the application of a new approach taken by 
that investigating authority in a post -investigation segment.121  
7.38.  In light of these considerations, it seems to us that the question of whether a challenged 
aspect of the order is expired is narrower than China envisions. That is, the question of expiry is to 
be assessed with respect to the situation  we observe at presen t, asking whether Australia legally 
applies a particular challenged aspect of the order at present or not. This appears consistent with 
the fact that China only challenges certain, specific aspects of the orders on an as -applied basis. We 
therefore conside r it appropriate to assess expiry on a claim -by-claim basis, focusing  on whether 
the specific, relevant aspects of the orders have expired  (i.e. ceased to have legal effect ) in the 
context of the relevant proceeding s. We therefore disagree with China 's arguments that we cannot 
find any challenged aspect of the orders to be expired and must make findings with respect to the 
original investigations when ever they are challenged.  
7.39.  In order to facilitate  the expiry examination in a manner consistent with the above reasoning,  
the Panel will assess the extent to which the challenged aspect changed as between ; (a) the original 
investigations , (i.e. the segment on which China focusses its challenges) ; and (b) the expiry  reviews , 
i.e. the latest -in-time segments  which determined the anti -dumping and countervailing duty rates 
to which Chinese exporters are currently subject .122 We note that we do not consider the stainless 
steel sinks interim reviews in this context, because they all preceded the stainless steel sinks  expiry 
review.123 For convenience going forward, the Panel will refer to this inquiry as to whether the 
essence  of the relevant aspect changed.  
7.40.  If the essence of a challenged aspect remained unchanged  as between the investigations and 
the expiry reviews, t wo relevant consequences follow. The first is that, if China challenge s the 
investigations and expiry reviews for a given claim, then an argument against one such segment 
functions as an argument against both.  We thus note that, for all claims with respect  to wind towers 
and stainless steel sinks except AD claims 6.b.ii and 6.b.iii, and CVD claim 5, China challenges not 
only the original investigations, but also the expiry reviews and the stainless steel sinks interim 
reviews.124 If there is no essence chang e as between the investigations and expiry reviews, 
 
or countervailing duty  order. See, e.g. Panel  Report, US – Zeroing (Japan) (Article  21.5 – Japan) , para. 7.79 
(characterizing different segments in the administration of a particular anti-dumping  order as being part of a 
single "chai n of assessment") . We see no reason to conclude, however, that this relationship means that a 
particular aspect of an original investigation  can never become expired through subsequent conduct by an 
investigating authority , and we read no previous report cited by China as standing for that categorical 
proposition.  (See e.g. China 's response to Panel question No.  98, para. 171 and fn 94 ). 
121 We recognize China's argument that  an expiry review cannot lead to the expiry of alleged errors 
made by an investigating authority in an original investigation because the expiry review is performed with an 
eye to discerning, on a prospective basis, whether t he expiry of the relevant anti -dumping or countervailing 
duty order would be likely to lead to the continuation or recurrence of dumping, subsidization, and/or injury. 
This, analysis, according to China, is essentially based on the analyses of such issues performed by the 
investigating authority in an original investigation. We note, however, that  China makes no claims under 
Article  21.3 of the SCM Agreement or Article 11.3 of the Anti -Dumping Agreement that the ADC improperly 
continued the overall anti -dumping or countervailing  duty order s. We further note that : (a) the ADC's injury 
findings are not challenged in this dispute ; (b) as far as Program 1, specifically, is concerned, the ADC 
assigned no countervailing duties to Program 1 as a result of the expir y review ; and (c) the ADC recalculated 
and replaced all dumping margins in the expiry reviews.  Thus, we  ultimately  fail to see how the continuation of 
the order s as a result of the expiry reviews  supports th e Chinese argument that the legal effect of more 
specific relevant aspects of the orders continues . 
122 We recall that in the expiry reviews the ADC re -calculated anti-dumping  and countervailing duty 
rates for all Chinese exporters.  
123 We further note that each interim review addressed  only one exporte r, and thus the interim reviews 
are more limited in scope than the investigation  and expiry reviews, which addressed all relevant exporters. 
Thus, the interim reviews could not have meaningfully superseded the preceding investigation  with respect to 
export ers not subject to the interim review s.  
124 See, especially,  China's response s to Panel question  Nos. 37 and  69.  WT/DS603/R  
 
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  therefore, then arguments against the investigations would function as against the expiry reviews 
and would be deemed lodged in a timely manner .125  
7.41.  The second consequence  of observing no essence change  is that we consider it within our 
discretion regarding the segment with respect to which we make findings .126 In these circumstances, 
and when faced with this choice, we consider it sufficient and most appropriate to make fin dings 
with respect to the expiry  reviews, these being the latest -in-time segment  and the iteration of the 
anti-dumping  or countervailing duty  order to which Chinese goods are currently subject.  This choice 
also means that we need not specifically address Australia's arguments that the expiry reviews led 
to the expiry of the original investigations and interim reviews, because we do not make findings 
with respect to these segments.  
7.42.  If the essence of a relevant aspect of the order did change  as between the in vestigation and 
the expiry  review, this , in our minds, indicates that the challenged  aspect  of the order present in the 
original investigation  expired (having been effectively replaced by the expiry  review).127 Moreover, 
this will also mean that China, in o rder to effectively challenge the expiry  reviews, must have raised 
arguments specific to that changed aspect  in a timely manner . We note, however, that the essence -
change assessment significantly facilitates, but may not in all cases resolve, the expiry in quiry. This 
is so because, for example, certain challenged aspects of orders may not technically change over 
time, but may still become expired through other means. Moreover, any such expiry analysis will 
ultimately be fact specific.  
7.2.3   Australia's claims un der Article 6.2 of the DSU  
7.43.  In the section immediately above, we articulated our approach to expiry issues in this dispute. 
In light of that approach, we, at this point, address Australia's challenges raised under Article 6.2 of 
the DSU. Australia bases the se challenges on the  Appellate Body's guidance that  "[i]dentification of 
the treaty provisions claimed to have been violated is 'always necessary' and 'a minimum 
prerequisite' if the legal basis of the complaint is to be presented at all".128 
7.44.  First, we note Australia's argument that China cannot challenge the stainless steel sinks  
interim reviews because the panel request did not cite Article  11.2 of the Anti-Dumping  Agreement 
or Article  21.2 of the SCM Agreement . We recall, however, that in the section above, we indicate 
that we will not be examining the interim reviews. Rather, insofar as we examine aspects of the 
orders that are not expired, we will focus our attention and make findings with respect to the expiry 
reviews only.129 As we do not examine th e interim reviews, we consider it unnecessary to address 
these Australian challenges under Article 6.2 of the DSU.  
7.45.  Second, we note Australia 's argument that China cannot bring challenges under the 
SCM Agreement  with respect to the stainless steel sinks expiry review because China's panel request  
failed to cite Article  21.3 of the SCM Agreement . Given our findings in sections 7.4.9, 7.4.10 , and 
7.4.11  below , that China's CVD claims address expired aspects of the stainless steel sinks CVD order,  
we consider it unnecessary to address these Australian challenges under Article  6.2 of the DSU. We 
further consider it unnecessary to address Australia 's argument that China cannot bring a claim 
 
125 Previous panels have included segments of trade remedy proceedings in their terms of reference, 
even when the segment s in question , unlike he re, were not mentioned expressly in the panel request . (See, 
e.g. Panel  Report, US – Anti-dumping  Methodologies (China) , section s 7.3.2 and 7.3.4 ). If, however,  we 
consider that Australia did not have an appropriate opportunity to respond to more specific Chinese arguments 
or evidence with respect to any claim, we address that issue in the appropriate section of this Report . 
126 One panel explained that it would ma ke this decision with reference to the parties'  requests, the 
objectives of dispute settlement and especially securing a positive solution to the dispute, recognizing that the 
panel's  mandate covered both versions of the measure. (Panel Report, Indonesia – Chicken (Article  21.5 – 
Brazil) , appealed 17  December  2020, para. 7.5). See also Panel Report, US – Tariff Measures  (China) , 
appealed 26  October  2020, para. 7.48 (discussing factors that panels consider in determining whether there 
was a change in essence  in certain context ). 
127 This is particularly so with respect to China's  AD claims because, as noted by Australia, in the expiry  
reviews the ADC re -calculated all Chinese exporters' anti-dumping  duty rates. We further recall that all of 
China's  AD claims are brought under, or depend on, Article  2, i.e. dealing with the manner in which the ADC 
calculated dumping margins .  
128 Australia's first written submission, para. 80 (quoting Appellate Body Report, Korea – Dairy , 
para. 124).  
129 See para. 7.41 above . WT/DS603/R  
 
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  under Article  2.4 of the SCM Agreement  because China 's panel request fails to cite Article  2.4 of the 
SCM Agreement  for the same reason . 
7.46.  Finally, we note Australia 's argument th at China cannot bring challenges under the 
Anti-Dumping  Agreement with respect to the stainless steel sinks  and wind towers  expiry reviews  
because China 's panel request  failed to cite Article  11.3 of the Anti-Dumping  Agreement . Australia 
argues  in this context  that the need to cite Article  11.3 of the Anti-Dumping  Agreement arises due 
to its function as a "gateway" provision that allows Article  2 claims to be brought in the context of 
an expiry  review.  We therefore recall that China also brings a challenge under Article  9.3 of the 
Anti-Dumping  Agreement, "because the amount of the anti-dumping  duties imposed by Australia 
exceeds any margins of dumping  that may have been properly established under Article  2 of the 
Anti-Dumping  Agreement and Article  VI:1 of the GATT 1994 ".130 Article  9.3 of the 
Anti-Dumping  Agreement  provides , in relevant part :  
The amount of the anti-dumping  duty shall not exceed the margin of dumping as 
established under Article  2. 
7.47.  Similarly, Article  VI:2 of the GATT 1994 provides, in relevant part:  
In order to offset or prevent dumping, a contracting party may levy on any dumped 
product an anti-dumping  duty not greater in amount than the margin of dumping in 
respect of such product.  
7.48.  Thus, Article  9.3 of the Anti -Dumping Agreement and Article VI:2 of the GATT 1994  set the 
maximum level at which anti-dumping  duties may be levied. We agree with previous WTO dis pute 
settlement reports that t he term "margin of dumping" in Article  9.3 "relates to a margin [of dumping] 
that is established in a manner subject to the disciplines of Article  2 and which is therefore consistent 
with those disciplines ".131 We also agree that an error or inconsistency under Article  2 of the 
Anti-Dumping  Agreement "does not necessarily or automatically mean that the anti-dumping  duty 
actually applied will exceed the correct margin of dumping".132 
7.49.  In light of this discussion of Article 9.3, we therefore recall that all of China's other claims  
raised under the Anti -Dumping Agreement  are brought under Article  2 of the 
Anti-Dumping  Agreement, i.e. they address the manner in which ADC established dumpin g margins. 
Logically, therefore, we would need to assess China's Article  2 claims  (addressing  how dumping 
margins were determined ) in order to assess China's Article  9.3 claim  (addressing whether the 
dumping margins were  determined in a manner inconsistent  with Article  2 and consequently  were 
too high ). We therefore consider that, even assuming that Australia is correct that a formal 
"gateway " provision is required  in order for China to raise challenges vis-a-vis the expiry reviews , 
China 's claim under Article 9.3 function s as such a "gateway" for China 's claims  under  Article  2. That 
being the case, it is unnecessary to require China to have also cited Article  11.3 as an additional 
"gateway ", and thus unnecessary for us to address Australia's claim that Article  11.3 had to be 
included in the panel request.  We further note that because section B.1 of the  panel request directs 
all anti-dumping  claims  (including Article 2 claims)  against all seg ments listed in the appendix  to the 
panel request  "unless otherwise stated" , and the expiry reviews appear in the a ppendix , we do not 
consider that a reference to Article 11.3 was otherwise necessary to  satisfy the requirements of 
Article 6.2 of the DSU .  
7.50.  We further note that, in its first written submission, Australia presents its substantive 
arguments as against the wind towers and stainless steel sinks proceedings in the alternative, to be 
addressed only if the Panel disagrees with Australia's expiry  arguments  and challenges under 
Article  6.2 of the DSU. Consistent with the approach the Panel has adopted  in this section and the 
immediately preceding section , and with the Panel's reasoning in section 7.6 below , insofar as we 
find a challenged aspect of a relevant order to have expired, we will not examine the 
 
130 China 's panel request, section  B(1), para. 8. The request directs this claim against all measures in 
the appendix  to the panel request, which includes the expiry  reviews.  
131 E.g. Pan el Report, EU – Biodiesel (Argentina) , para.  7.359.  (emphasis added)  
132 E.g. Panel Report, EU – Biodiesel (Argentina) , para.  7.363.  WT/DS603/R  
 
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  parties'  substantive arguments pertaining thereto. If we determine that a challenged aspect is not 
expired, we will go on to examine the parties ' substantive arguments.133 
7.3  Wind towers  
7.51.  In this section, we address China's AD claims as against the wind towers proceedings. We 
recall that multiple segments have occurred in the wind towers proceeding, i .e. an original 
investigation, expiry review, and an administrative review.  Thus, we will assess expiry for each claim 
in accordance with the discussion and approach articulated in section 7.2.2 above .  
7.52.  We recall  at this p oint, however, that the parties agree that the wind towers administrative 
review involving TSP resulted in TSP's exclusion from the wind towers AD order. We discern no 
reason to disagree.134 We further note that China pursue s no challenges with respect to  the TSP 
administrative review before th is Panel. We therefore consider the wind towers AD order as expired 
with respect to TSP. Our evaluation of China's claims below , therefore, will ultimately focus on the 
ADC's alleged errors as they impacted the group o f uncooperative and all -others exporters  (TSP was 
the only identified exporter of wind towers to Australia in the investigation and expiry review).  
7.53.  We further note that China numbers its claims (i.e. AD claim 1, AD claim 2 , etc.) in its 
first written subm ission, to track the claims  as they are enumerated in its panel request . Certain 
claims operate with respect to multiple proceedings (e.g. AD claim 1 under Article  2.2 of the 
Anti-Dumping  Agreement is made as against all three proceedings). Both parties have referred to 
China's claims according to this numbering scheme throughout this dispute. We adopt that same 
numbering throughout this Report for convenience. However, our examination of China's claims does 
not follow the numerical order under Ch ina's numbering scheme in one respect. Specifically, we 
address AD  claim 3 (pertaining mainly to Article  2.2.1.1 of the Anti -Dumping Agreement) before 
AD claim 1 (pertaining mainly to Article  2.2 of the Anti -Dumping Agreement). This is so because, in 
our v iew, a discussion of the ADC's rejection of exporters' costs naturally precedes a discussion of 
the surrogate costs selected by the ADC following that rejection.  
7.3.1   AD claim 3 under  Article  2.2.1.1  of the Anti-Dumping  Agreement : rejection of 
exporters' costs   
7.3.1.1   Legal framework  
7.54.  We note that this claim pertains to  Article  2.2.1.1 of the Anti -Dumping Agreement, which 
provides, in relevant part:  
For the purpose of paragraph 2, costs shall normally be calculated on the basis of 
records kept by the exporter or produc er 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.  
7.55.  Article 2.2.1.1 indicates that it operates "for the purpose  of paragraph 2". Thus, this provision 
provides rules for determining costs when an investigating authority  constructs normal value  under 
Article  2.2 or performs the ordinary -course -of-trade test under Article  2.2.1. For clarity and 
convenience, this Report will refer to the two conditions in the first sentence of Article  2.2.1.1, i.e. 
the records kept by the exporter or producer (a) "are in accordance with the generally accepted 
accounting principles of the exporting country" and (b) "reasonably reflect the costs associated with 
the production and sale of the product under consideration" as the "first condition" and the 
"second  condition".  
 
133 Australia's first written submission, sections V and VI. We also note, however, that Article  11.3 of the 
Anti-Dumping Agreement and Article  21.3 of the SCM  Agreement provide the substantive bases for 
complainants to challenge the continuation of anti -dumping and countervailing duty orders occurring as a 
result of an expiry review. Thus, having failed to cite these  provisions in its panel request, China may not and 
does not argue that the anti -dumping and countervailing duty orders at large should not have been continued 
as a result of the expiry reviews. Indeed, such claims would be outside our terms of reference.  
134 See section 7.2.1.2  above ; ADRP Review 2019/100 minister's decision notice  (Exhibit  CHN-10).  WT/DS603/R  
 
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  7.56.  As to the word "normally", the Appellate Body has explained tha t "[g]iven 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 conditions 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 ".135 These appear reasonable observations, and we thus agree  that the word 
"normally" may provide a basis for reject ing exporters' record costs when constructing normal value 
or performing the ordinary -course -of-trade test.  
7.57.  We note the panel 's report in Australia – Anti-dumping  Measures on Paper . In that dispute, 
the panel assessed an almost identical claim by Indonesia that the ADC had violated Article  2.2.1.1 
by rejecting the use of exporters' costs because the costs did not "reasonably reflect competitive 
market costs". In the underlying investigation  in that dispute , the ADC considered  the same statutory 
language as in the underlying proceedings here. The panel found that the ADC had made no finding  
as to whether the second condition had been fulfilled when rejecting exporters' costs. This raised 
the question as to whether the word "normally" in the first sentence of Article  2.2.1.1 provided a 
basis for the ADC to reject the exporters' costs  in the a bsence of a second condition  finding . The 
panel found that it did not because any flexibility that may be provided by the word "normally" would 
only be activated after the investigating authority determines that both of the conditions in the 
first sentence  of Article  2.2.1.1 are fulfilled.136 We agree with the panel 's conclusion in this respect. 
In particular, and without setting out the panel 's reasoning in full, we agree with the panel 's point 
that if the word "normally" could be used to depart from export ers' costs without the investigating 
authority examining whether the two conditions in the first sentence of Article  2.2.1.1 were satisfied, 
this would effectively read out those two conditions from the text of Article  2.2.1.1.  
7.58.  As to this point, we note Australia's argument that:  
[I]f a finding is made that circumstances are not "normal", then going on to make 
findings under the other two circumstances would be redundant. In either case, the 
subsequent findings would be redundant because there was al ready a finding to the 
effect that the obligation to use the exporter's records in the first sentence of 
Article  2.2.1.1 did not apply. Subsequent findings on the other circumstances, whether 
affirmative or negative, could not change that outcome.137 
7.59.  While this argument does have some weight, we disagree that the Australia – Anti-dumping  
Measures on Paper  interpretation of the first sentence of Article  2.2.1.1 lacks any practical value, as 
Australia appears to argue. This is so because the two conditions in the first sentence of 
Article  2.2.1.1 were important enough in the drafters' minds to specifically include as conditions to 
examine, in light of which an investigating authority  would "normally" use the exporters' record 
costs. Thus, it could reasonably be  expected that rejecting exporters' costs, even when both 
conditions are satisfied, would be accompanied by an explanation as to why such rejection is justified 
despite those conditions being satisfied .  
7.60.  Thus, we consider that, in order for an investigatin g authority to rely on any flexibility to 
depart from using exporters ' costs that may be provided by the word "normally " in the first sentence 
of Article  2.2.1.1, the investigating authority must first make affirmative findings as to both the 
first conditi on and the second condition in the first sentence.  
7.3.1.2   Main party arguments  
7.61.  China  makes this claim  with respect to the  wind towers  investigation and expiry review. China 
asserts  that the ADC rejected using the exporters'  costs of production when constructing normal 
values  and instead used non -Chinese surrogate costs  for steel plate and flanges . China claims that, 
 
135 Appellate Body Report, Ukraine – Ammonium Nitrate , para. 6.87 (quoting  Shorter Oxford English 
Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), Vol.  2, p. 1945; 
Appellate  Body Report, US – Clove Cigarettes , para. 273). 
136 Panel Report, Australia – Anti-dumping  Measures on Paper , paras. 7.109 -7.125 . 
137 Australia 's second written submission, para. 164(a). Australia also made other arguments  in support 
of its interpretation of Article 2.2.1.1 , an interpretation that  is different than  the panel's interpretation of t hat 
provision in Australia – Anti-dumping  Measures on Paper . See, e.g. Australia's first written submission, 
paras.  182-191; second written submission, paras. 149 -186. As already stated in this section, however, we 
agree with the panel's interpretation of Article 2.2.1.1 in Australia – Anti-dumping  Measures on Paper .  WT/DS603/R  
 
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  in doing so, Australia violated Article  2.2.1.1 – and, as a result, Articles  2.1 and 2.2 – of the 
Anti-Dumping  Agreement because  the ADC failed to ca lculate relevant costs "on the basis of records 
kept by the exporter or producer under investigation" within the meaning of Article  2.2.1.1. More 
specifically, China argues that  the ADC either did not determine, or wrongly determined, that the 
records kept by the exporters or producers under investigation did not "reasonably reflect the costs 
associated with the production and sale of the product under consideration " within the me aning of  
the "second condition" of the first sentence of Article  2.2.1.1. This is so because, according to China, 
the ADC instead rejected the exporters'  costs because they "did not reasonably reflect competitive 
market costs", within the meaning of applic able Australian law.138 China further asserts that the ADC 
failed to make a finding under the "first condition " of the first sentence of  Article  2.2.1.1  (i.e. that 
"records are in accordance with the generally accepted accounting principles of the exporting  
country ") in the expiry review.139 China also indicates  that even if TSP had been excluded from the 
scope of the order  owing to the most recent administrative review  – and thus the relevant 
anti-dumping  measures are expired with respect to TSP – this is im material because the methods 
used to calculate TSP's normal values were transferred over onto the uncooperative producers in 
the expiry review, and such exporters are still subject to the order.140 
7.62.  Australia  argues that the ADC made a negative finding as to  the second condition  in both the 
investigation and expiry review , albeit not in the express language of Article  2.2.1.1 .141 Australia 
also argues that "China has mischaracterised and misunderstood the application of 
Regulation  180(2)  of the Customs Regulation 1926 and then section  43(2)  of the Customs 
(International Obligations ) Regulation 2015"142 because the requirement that exporters'  costs, in 
order to be used in relevant calculations, must reflect competitive market costs is different from the 
issue to be determined in the second condition in the first sentence of Article  2.2.1.1. Australia 
further asserts that, as discussed in the context of Australia's  arguments vis-à-vis AD claim 1, China 
misunderstood the relevant methodology regarding how the  ADC constructed normal values in the 
investigation , and specifically how the ADC determined the uplift ratio used to alter certain of 
TSP's  costs.143 Australia underlines in this context that the "competitive market costs " test in the 
Australian law only i ndicates that the records of the exporters must be used if they satisfy that and 
other requirements, but says nothing about what should happen if the exporters ' costs do not satisfy 
such criteria. Thus, Australia argues that a finding that costs do not ref lect competitive market costs 
will not represent  an automatic finding to not use such records.144 Australia also asserts that because 
TSP was excluded from the scope of the order as a result of the administrative review following the 
expiry review, the rele vant measures are expired with respect to TSP.145 
7.63.  Australia also argues that there was a change of essence as between the investigation and 
expiry review because the ADC uplifted costs of both steel plate and flanges in the investigation , but 
only uplifted the cost of steel plate in the expiry review.146 
7.64.  China  maintains  that in the original investigation and expiry review  the ADC made no finding 
as to the second condition.147 China also argues that the fact that the ADC uplifted the costs of  steel 
plate and flanges in the investigation but only flanges in the expiry  review does not mean that there 
was a change of essence between the two  segments .148 China also argues that evidence provided 
by Australia in support of its characterizations of ho w the ADC calculated the uplift ratio is flawed.149  
7.3.1.3   Expiry  
7.65.  China's claim concerns the wind towers  original investigation and expiry review. As discussed 
in section 7.2.2 above , the nature of China's claim raises the issue of whether or not the aspect 
 
138 China's  first written submission, section  F.1. 
139 China 's response to Panel question  No. 80, para. 104. 
140 China's response to Panel question No. 41.  
141 Australia 's second written submission, para. 317; response to Panel question No.  78, 
paras . 110-119.  
142 Australia 's first written submission, para. 493.  
143 Australia 's first written submission, para. 494.  
144 Australia 's response s to Panel question No.  77, and No. 78, paras. 75 and 79.  
145 Australia's first written submission , paras. 102-106.  
146 Australia 's response to Panel question No.  69, para. 34.  
147 China's second written submission,  paras. 174 -183.  
148 China 's response s to Panel question No.  69, para. 43, and No. 105.  
149 China 's comments on Australia's response to Panel question No.  74.  WT/DS603/R  
 
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  challenged by China has expired. To address this issue, we will consider whether there was a change 
of essence in the approach taken by the ADC to rejec t exporters ' costs in the investigation and expiry 
review.   
7.66.  In the investigation, t he ADC constructed TSP's  (the only Chinese exporter)  normal value.150 
In so doing, the ADC indicated that:   
In determining the cost of production and the administrative, selling and general costs 
associated with the sale of those goods, the Parliamentary Secretary must have regard 
to factors provided for in Regulation 180.[151] The regulation requires that if an exporter 
keeps records relating to like goods that are in accordance with generally accepted 
accounting principles (GAAP)  in the country of export, and reasonably reflect 
competitive market costs associated with the production or manufacture of like goods, 
the Parliamentary Secretary must work out the  cost of production using information set 
out in the exporter's  records.152  
7.67.  The ADC noted that TSP's  records were maintained in a manner that complied with the 
generally accepted accounting principles (GAAP ) of China.153 The ADC then found that "the cost of  
plate steel and flanges reflected in the records of TSP do not reasonably reflect a competitive market 
cost. … Therefore, for the purposes of constructing a normal value, the Commission considers it 
appropriate to determine the cost of production for wind  towers sold domestically by replacing the 
cost of plate steel and flanges with a competitive market cost" .154 In the expiry  review, the ADC 
again constructed TSP's  normal values155 and replaced TSP's  costs of steel plate  (but not flanges)  
with surrogate cos ts, again finding that TSP 's costs for steel plate did not reflect a competitive 
market cost.156   
7.68.  We consider that there was no change of essence in the ADC 's cost-replacement/uplift 
methodology as between the investigation and expiry review. We note that:  (a) in the investigation 
the uplift was applied to the costs of both steel plate and flanges whereas in the expiry review the 
uplift was applied only to steel plate ; and (b) in the expiry review the uplifted costs were further 
altered with reference to th e Steel Bulletin Board (Platts)  benchmark.157 These differences, however, 
in our view, are immaterial as they do not alter the key aspect of the order  challenged by China , i.e. 
the rejection of TSP 's record costs for at least steel plate based on the notion that they did not reflect 
competitive market costs.158  
7.69.  We further recall that TSP was excluded from the wind towers AD order following an 
administrative review, and thus we will focus on the ADC's alleged errors as they impacted the group 
of uncooperative and all -others exporters.159 We therefore  note that, in determining a normal value 
for uncooperative and all other exporters in the expiry review, the ADC made the following 
statement:  
The Commissio n established a normal value under subsection 269TAC(6), having regard 
to information verified with TSP Shanghai , but exclusive of any favourable adjustments. 
In addition, uplift to plate steel  has been based on all plate steel purchased from Chinese 
 
150 Investigation 221 final report  (Exhibit CHN -4), pp.  33-34. 
151 The speci fic relevant provision is Regulation 180(2)  of the Customs  Regulation  1926. 
Regulation  180(2)  was subsequently replaced by section  43(2)  of the Customs  (International  
Obligations)  Regulation  2015. (China's  first written submission , paras.  162-164). The par ties agree that the 
relevant wording of each is materially the same, although each was in effect during different stages of the 
relevant segments . 
152 Investigation 221 final report  (Exhibit CHN -4), pp.  29-30. (fn added)  
153 Investigation 221 final report  (Exhibit CHN -4), p.  30. 
154 Investigation 221 final report  (Exhibit CHN -4), p.  30. 
155 Continuation 487 final report  (Exhibit CHN -31), p. 32.  
156 Continuation 487 final report (Exhibit CHN -31), p. 33.  
157 See section 7.3.2.3  below  (describing this further adjustment in the expiry review).  
158 We also note that neither China nor Australia consider that the ADC's m ethod of rejecting 
TSP's  relevant costs was materially different as between the investigation and expiry review. Australia indicates 
that in both the investigation and expiry review the ADC issued no second  condition finding in the express 
language of Arti cle 2.2.1.1, but, in both cases, the negative finding was nonetheless evident from  the reports.  
(Australia 's response to Panel question No.  78, paras . 110-119). 
159 See para . 7.52 above .  WT/DS603/R  
 
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  suppl iers by TSP Shanghai for both domestic and exported wind towers during the 
inquiry period.160 
7.70.  We consider that this statement sufficiently indicates that the cost -replacement methodology 
(both with respect to the rejection of TSP's record costs for steel pl ate and the selection of an 
"uplifting" strategy to establish a surrogate cost) for TSP was transferred over onto the 
uncooperative and all other exporters. This is so because the ADC indicated that, in determining the 
uncooperative exporters' normal value s, it had reference to TSP's data, and then summarily indicated 
that it used uplifted steel plate costs, as it had done for TSP. Thus, even if the cost -replacement 
method could be deemed expired vis-à-vis TSP, specifically, owing to its later exclusion fro m the 
scope of the anti -dumping order, that methodology still remains the basis for the uncooperative 
exporters' still -active anti -dumping duty rate.161 
7.71.  We therefore consider that the challenged aspect of the anti-dumping  order has not expired . 
We therefore  will make findings with r espect to this challenged aspect of the order and , as explained 
above,  focus our attention on the expiry review.   
7.3.1.4   Evaluation  
7.72.  In the expiry  review, after deciding to construct normal values for TSP, the ADC noted : 
To determine the cost of production or manufacture, subsection 43(2) of the Regulation 
requires that if:  
• an exporter or producer keeps records relating to like goods that 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 of like goods;  
the Minister must work out the cost of production or manufacture using information set 
out in the exporter or producer 's reco rds.  
In [the final report of Investigation 221] , the Commission found that the cost of plate 
steel and the cost of the flanges reflected in the records of TSP Shanghai did not 
reasonably reflect competitive market costs. The Commission has again examined these 
matters for the purposes of this inquiry.162 
7.73.  The ADC then performed an "Assessment of competitive market costs " and concluded:  
Having determined that the records of TSP Shanghai do not reasonably reflect 
competitive market costs in accordanc e with subsection 43(2)(b)(ii) of the Regulation, 
the Commissioner is not required to work out an amount for the cost of production using 
the information as set out in TSP Shanghai 's records.  
Significant distortions in the plate steel market in China resu lted in an uplift being 
applied to plate steel costs in [the final report of Investigation 221 ] to establish a 
competitive market cost. Given the available evidence indicates that these distortions 
 
160 Continuation 487 final report (Exhibit C HN-31), p. 39. (emphasis added)  
161 Australia asserts that the facts available mechanism under Article  6.8 of the 
Anti-Dumping  Agreement  was us ed to determine uncooperative exporters' normal values. While perhaps true, 
we still see nothing in the ADC's report indicating that it applied the uplifting methodology used for TSP in 
anything other than a mechanical fashion following from the use of thi s method vis-à-vis TSP itself. We 
therefore consider the use of facts available immaterial in this context. Australia confirmed that no facts 
available were used to determine the dumping margins of TSP in the expiry review. (Australia's  response to 
Panel  question No. 75).  
162 Continuation 487 final report (Exhibit CHN -31), p. 32.  WT/DS603/R  
 
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  continue to exist, for this inquiry, the Commission uplift ed the prices of raw material 
steel plate used in the constructed normal value for TSP Shanghai.163  
7.74.  We consider that this clearly indicates that the ADC rejected the costs of steel plate because  
the costs for steel plate were not "competitive market costs ". Indeed, immediately after noting that 
the relevant underlying statutory language  means that "the Commissioner is not required to work 
out an amount for the cost of production using the information as set out in TSP Shanghai 's records ", 
the ADC indicate s that the record costs were rejected for the sole reason that "[s]ignificant 
distortions " in the Chinese steel markets meant that the costs for steel plate were not "competitive 
market costs ".  
7.75.  We consider that the ADC 's conclusion was a non -application of the second condition, i.e. the 
ADC did not reach a finding at all under the second condition . This is so because the consideration 
of whether costs "reasonably reflect competitive market costs " is different from the issue of whether 
the costs reflected in the exporters ' records "reasonably reflect the costs associated with the 
production and sale of the product under consideration ". The latter pertains to the question of 
whether the costs in the exporters ' records reflect those incurred by the exporter. The former 
pertains to the question of whether the costs in the exporters ' records reflect something else, 
i.e. competitive market costs.164 
7.76.  We also recall that the panel in Australia – Anti-dumping  Measures on Paper  addressed the 
same issue with respect to findings made by the ADC – where the ADC rejected exporters ' costs 
because they did not reasonably reflect competitive market costs – and found that, in doing so, the 
ADC did not rely on the second conditio n. The panel so found because it considered that, after 
examining the ADC 's findings and certain other considerations, "the ultimate measure of whether 
the pulp component of the exporters' records was acceptable to the ADC was the comparison of the 
exporte rs' 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 ".165 
7.77.  We note that China refers to  a practice manual of the  ADC that was "operative at the time 
[that] each of th[ e relevant] decisions were made ", and which  provides that:  
Concerning the term "reasonably reflect competitive market costs " for the cost to make 
used in Regulation 180(2), the Commission gives the term "reasonably reflect " the 
following meanings:  
• that the cost to make items are supported by the books of account; and  
• that the costs themselves are "reasonable " i.e. the cost allo cations methods 
used by the exporter in working out those costs are reasonable.  
More generally, the Commission may examine whether the cost to make are those costs 
that would be incurred in a "competitive " market. The term "competitive " in 
Regulation  180(2 ) is given its usual meaning and this can only be known according to 
the case circumstances.  
For example, it may be relevant when examining whether the cost to make reasonably 
reflects competitive market costs to examine the production of other like goods in the 
country of export. A significant variation between the costs shown in the records of the 
exporter or producer concerned when compared with other producers of like goods may 
be an indication that the records do not reasonably reflect costs incurred. Or, contracts 
 
163 Continuation 487 final report (Exhibit CHN -31), p. 33. The ADC later concluded that it "has not 
applied any uplift to the flanges cost component in its normal value calculation ". (ibid. p. 35).  
164 Australia appears to draw a distinction at times between: (a) the ADC 's conclusion that 
exporters ' costs did not reflect competitive market costs, which Australia argues is no finding under the 
second  condition; and (b) the ADC's noting of distortions in the Chinese steel markets, which may underlie the 
conclusion described in (a), but on their own can form the basis for a negative findings as to the 
second  condition. This does not appear to be a meaningful distinction, as ne ither focusses on the costs actually 
incurred by the exporter.   
165 Panel Report, Australia – Anti-dumping  Measures on Paper , para. 7.106. (emphasis original)  WT/DS603/R  
 
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  entered into for long term supply can be relevant when deciding that the price under 
those contracts is a normal competitive market price.166 
7.78.  China argues that this excerpt demonstrates that  when the ADC rejects exporters' costs 
because they d o not reflect competitive market costs, it amounts to a misapplication of the 
second  condition of Article  2.2.1.1 . We note that t he practice manual does indicate that the term 
"reasonably reflect competitive market costs " can include an examination of "whether the cost to 
make items are supported by the books of account ". This examination appears similar to the 
second  condition of Article  2.2.1.1. However, the excerpt above further  indicates that the ADC may 
also examine "whether the cost to make are those costs that would be incurred in a 'competitive ' 
market ". This is the determination made by the ADC, and, as explained further  above  in this section , 
this determination is  materially different from the language of the second condition.167 
7.79.  We therefore conclude that the ADC did not make a  negative finding under the 
second  condition of Article  2.2.1.1  in the expiry review.168 We also find that the ADC did not make 
an affirmativ e finding under the second condition in the expiry review. This is despite the presence 
of certain language in the ADC's report suggesting that such a finding may have been possible. 
Specifically, the ADC  stated  that "[t]he Commission is satisfied that the  information provided by TSP 
Shanghai is accurate and reliable for the purpose of ascertaining the variable factors applicable to 
its exports of the goods" .169 Both parties indicated that this was not a second condition  finding.  
Australia, in particular, in dicated that this statement was for purposes of Article  6.6 of the 
Anti-Dumping  Agreement, i.e. it was the ADC satisfying itself "as to the accuracy of the information" 
obtained from the exporter, but not specifically finding that the costs " reasonably ref lect the costs 
associated with the production and sale of the product under consideration " for purposes of 
Article  2.2.1.1 . Although we agree with Australia that there is likely "overlap" between these 
two inquiries, we ultimately do not see a compelling r eason to disturb the parties' shared 
understanding that this statement pertain s to the accuracy of TSP's  information, generally, rather 
than the accuracy of the costs for purposes of normal value construction , specifically .170 
 
166 China 's first written submission, para. 203 (quoting ADC, Dumping and Subsidy Manual  (2013) , p. 43 
(Exhibit CHN -42)) (emphasis omitted ). We recall that the relevant wording of Regulation 180(2)  of the 
Customs  Regulation  1926 (mentioned in this  exhibit ) and se ction 43(2)  of the Customs  (International  
Obligations)  Regulation  2015 (mentioned  in the expiry review  report ) is materially the same. See fn 151 
above . 
167 China also cites an explanatory statement accompanying the amendment to Regulation 180(2)  that 
introduced the relevant "competitive market costs" language. This notes the introduction of the language and 
concludes:  
The amending Regulations substitute paragraph 180(2)(b)(ii) to prescribe that the Minister only 
has to use the records relating to the like goods if they reasonably reflect competitive market costs 
associated with the production or manufacture of like goods. This ensures that the relevant records 
are only taken into account if they reas onably reflect competitive market costs and not just actual 
costs.  
(China's first written submission, para. 163 (quoting Customs Amendment Regulations 2005 (No. 8) and 
Explanatory Statement  (Exhibit CHN -38), pp. 8 -9)) (emphasis added by China).  See also 
Australia's  response to Panel question No. 77, paras. 70 -73 (discussing the explanatory statement).  
We do not consider this demonstrates that the "competitive market costs" test is the same as the 
inquiry under the second condition of Article  2.2.1.1. Indee d, the italicized language in the excerpt above  itself 
seems to suggest they are different, cumulative inquiries.  
168 We also note that the ADC's findings in the expiry review for stainless steel sinks and in the 
investigation  for railway wheels  (discussed i n the sections addressing AD claim 3 for these two proceedings, 
further below)  are consistent with our conclusions in this section  regarding the relationship between the 
"competitive market costs" standard and  the second condition of Article  2.2.1.1 . 
169 Continuation 487 final report (Exhibit CHN -31), p. 29.  
170 China's response to Panel question No. 80, para. 112; Australia's response to Panel question No.  80, 
para. 143. The parties' positions, and our conclusion, is the same with respect to the ADC's stat ement in the 
investigation that "[v]erification of TSP 's information submitted in its questionnaire response showed that 
domestic sales and domestic CTMS calculations were reasonably complete, relevant and accurate" . 
(Investigation 221 final report  (Exhibi t CHN -4), p. 33 ). WT/DS603/R  
 
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  7.80.  In light of the for egoing, we find that  there was no basis for departure from using TSP 's record 
costs for steel plate in constructing  normal value  in the wind towers expiry review .171 We therefore 
find that the ADC acted inconsistently with Article  2.2.1.1  in that segment .172  
7.3.2   AD claim 1 under  Article  2.2 of the Anti-Dumping  Agreement : costs of production in 
the country of origin   
7.3.2.1   Legal framework  
7.81.  This claim pertains to Article  2.2 of the Anti-Dumping  Agreement , which  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 costs and for profits.173  
7.82.  The expression "cost of production in the country of origin" in Article  2.2 has been understood 
as "a reference to the price pai d or to be paid to produce something within the country of origin".174 
The Appellate Body has further explained that Article  2.2 
do[es] not preclude the possibility that the authority may also need to look for such 
information from sources outside the count ry. The reference to "in the country of origin", 
however, indicates that, whatever information or evidence is used to determine the 
"cost of production", it must be apt to or capable of yielding a cost of production in the 
country of origin. This, in turn,  suggests that information or evidence from outside the 
country of origin may need to be adapted in order to ensure that it is suitable to 
determine a "cost of production" "in the country of origin".175 
7.83.  We agree with this Appellate Body analysis. W e note  at this time  that Australia argues that it 
would be unnecessary for the Panel to rule on China 's claim under Article  2.2 if the Panel finds a 
violation of Article  2.2.1.1.176 China argues that the Panel can and should address this claim  even if 
the Panel find s a violation  under Article  2.2.1.1.177 We recall that China makes similar Article  2.2.1.1 
claims and Article  2.2 claims vis-à-vis the wind towers, stainless steel sinks, and railway wheels 
proceedings. We consider it most appropriate, under the circumstanc es of this dispute, to make 
findings as to this claim regardless of whether or not a violation of Article  2.2.1.1 is found in the 
context of any of the three proceedings. This is so mainly because we consider the disciplines of 
 
171 The parties also agree that there was no first  condition finding in the expiry review. 
(Australia's  response to Panel question No.  78, para. 116; China 's response s to Panel question No s. 69 and 
80). We agree. Thus, even if there had been an affirmative second  condition  finding, the ADC would still not 
have been entitled to depart from using TSP's  costs.  
172 China also claims violations of Articles 2.1 and 2.2  of the Anti-Dumping  Agreement and Article VI :1 
of the GATT 1994  in this context.  (China's first written submission, section F.1 ). We discern no independent 
basis on which to find violations of these provisions. T he Panel declines to make findings as to these claims as 
it would not be helpful in reso lving the dispute.  
173 Fn omitted ; emphasis added . 
174 Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.69. 
175 Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.70 (fns omitted). We recall  that Australia 
generally  argues that the limited information on the record of the relevant proceedings prevented the ADC 
from making further adjustments to the surrogate costs, and that, at times, it was the non -responsiveness of 
the exporters or the Chinese Government to requests for in formation that produced a record with limited 
information. We agree with the Appellate Body, however, that "it is for the investigating authority to determine 
normal value consistently with Article  2.2 when domestic sales cannot be used ". (Appellate Body R eport, 
Ukraine – Ammonium Nitrate , fn 419. ) We also note that Australia has explained that in none of the relevant 
investigations or expiry reviews did the ADC use the facts available mechanism under Article  6.8 of the 
Anti-Dumping Agreement  to determine n ormal value of examined exporters. (Australia's response s to 
Panel  question No s. 12 and 75). We therefore find this argument by Australia immaterial as to all 
three  proceedings.  
176 Australia 's response to Panel question No. 12.  
177 China 's response to Panel question No. 12.  WT/DS603/R  
 
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  Articles  2.2.1.1 and 2.2 to be distinct, and we consider that issuing finding s with respect to both this 
claim  and China's other claims under Article  2.2.1.1  would be helpful in terms of resolution of this 
dispute.178 
7.3.2.2   Main party arguments  
7.84.  China  makes this claim with respect to the wind towers investigation and expiry review.179 
China argues that in these two segments the ADC rejected TSP's  costs of production when 
determining normal values, and instead used surrogate costs.180 These surrogate costs were  
"uplifted" costs for steel plate and flanges.  China claims that, in doing so, Australia violated 
Article  2.2 – and, as a result, Articles  2.1 and 2.2.1.1 – of the Anti-Dumping  Agreement  because  the 
ADC used costs that were not "the cost of production in the country o f origin" within the meaning of 
Article  2.2. More specifically, China claims that the costs used were specifically chosen by the ADC 
because they were meant to not represent the costs of production in China, and that the ADC made 
no material effort to adap t such costs so that they could reasonably be considered "the cost of 
production in [China]".181 China cites the Appellate  Body reports in EU – Biodiesel  (Argentina)  and 
Ukraine  – Ammonium  Nitrate  in support of its arguments in this context.182  
7.85.  Australia  contends that China misunderstands how the ADC calculated the ratio used to uplift 
TSP's relevant costs of production . Australia asserts that "China alleges that the ADC compared 
Chinese plate steel prices with Korean and Chinese Taipei plate steel prices to  work out a percentage 
difference. This is simply factually incorrect. The ADC compared plate steel  prices in  China  with an 
unadjusted normal value for plate steel in China  from a previous investigation to work out the 
relevant percentage difference"  which was then used to uplift TSP's relevant costs.183 In this context, 
Australia underlines that the Panel may not rely on publications of the Australian Government that 
postdat e the original investigation to interpret the ADC's  findings in the original investigation, as 
China does.184 Australia also contends that it was the Chinese Government 's failure to respond to 
questionnaire inquiries that led the ADC to rely on price inform ation on steel plate from another 
investigation.185  
7.86.  Australia contends there was a change of essence in respect of this aspect as between the 
original investigation and the expiry review because in the expiry review the ADC used a benchmark 
to further adjust the investigation 's uplifted prices.186 Australia further asserts  that China appear ed 
to make only certain claims with respect to the wind towers  expiry review  in one part of its  
first written submission , but contradicts itself by directing this claim against the expiry review 
elsewhere in its first written submission.187 
7.87.  Australia also argues that if the Panel were to find a violation of Article  2.2.1.1  under 
AD claim 3, then it would not be necessary or desirable to also issue findings with respect to this 
Chinese claim . This is not, in Australia's view, because this claim is consequential to 
China's  AD claim 3 under  Article  2.2.1.1 . Rather, in Australia's  view, it is because  the Panel  would 
already have made a finding of error with respect  to an aspect of the ADC's decision that forms a 
predicate for its assessments of the facts and issues presented with respect to this claim .188 
 
178 We recognize that panels ma y differ in their approach to this issue under the unique circumstances 
they face. Compare Panel Report, EU – Biodiesel (Argentina) , paras.  7.255 -7.260  (making findings on a similar 
Article  2.2 claim after it had found a violation of Article  2.2.1.1) with Panel Report, Australia – Anti-dumping  
Measures on Paper , para. 7.133 (finding a consequential violation of Article  2.2 based on an underlying 
Article  2.2.1.1 violation).  
179 China 's response to Panel question No.  37, table 1.  
180 China 's first written submission, paras.  76-95.  
181 China's  response to Panel question No.  69, paras. 49-53. 
182 China 's first written submission, paras.  96-119.  
183 Australia's  first written submission, para. 503. (emphasis  original)  See also Australia's  first written 
submission, paras.  504-506 and 510 -512 (containing relevant statements of the ADC ); response to 
Panel  question No.  74.  
184 Australia's  first written submission, paras.  505 and 513 -515 (referring to ADRP Review 2019/100 
conference summary (Exhibit  CHN-30)). 
185 Australia's  first written submission, paras.  507-509.  
186 Austra lia's response to Panel question No.  69, para. 35.  
187 Australia's  first written submission, paras.  517-518.  
188 Australia 's response to Panel question No. 12.  WT/DS603/R  
 
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  7.88.  China  responds that, contrary to Australia's position , the ADC did use steel plate price data 
from Korea and Chinese Taipei, and compared that data  to Chinese steel plate prices , to calculate 
the uplift ratio. China stresses that explanations provided in subsequent Australian administrative 
procedure s support China's position, and that Australia's explanations are inconsistent with  certain 
statements made by the ADC. Also, China asserts that the main piece of evidence Australia relies 
on to support its position ( a confidential appendix to the investig ation report189) does not actually  
support Australia's position. Moreover, according to China, even if Australia were correct in its factual 
assertions surrounding this issue, it would not matter because the normal values  of the Chinese 
company in the prior  investigation Australia alleges were used to calculate the uplift ratio had been 
constructed using non -Chinese costs. Moreover , in China's view, even if one were to accept that the 
ADC only used data from China to calculate the uplift ratio as Australia c laims, the uplift ratio would 
still have resulted in a fictional cost of production for TSP and thus could still not be considered to 
be a cost of production in the country of origin for purposes of Article  2.2.190 China also asserts  that 
in the wind towers  expiry review the ADC used an additional non -Chinese benchmark to further 
adjust  relevant costs, thus further demonstrating the ADC's non -compliance with Article  2.2 in that 
segment .191  
7.89.  China also asserts  that a violation of Article  2.2.1.1 would also result in a violation of 
Article  2.2, but considers  that the Panel should still make findings with respect to this claim even if 
a violation of Article  2.2.1.1 is found . China indicates that such an approach has been followed in 
other disputes.192  
7.3.2.3   Expiry  
7.90.  China's claim concerns the wind towers  original investigation and expiry review. As discussed 
in section 7.2.2 above , we will address first the issue of whe ther or not the aspect challenged by 
China has expired . In this regard , we shall consider whether there was a change of essence in the 
approach taken by the ADC to select surrogate costs as between  the original investigation and expiry 
review.  
7.91.  In the investigation t he ADC constructed TSP's  normal value.193 In doing so, the ADC 
"consider[ed] it appropriate to determine the cost of production for wind towers sold domestically 
by replacing the cost of plate steel and flanges with a competitive market cost" .194 A competitive 
market cost for steel plate and flanges was obtained using information from a different Australian 
investigation, i.e.  an investigation into hot rolled plate steel from China , Indonesia, Japan , Korea, 
and Chinese Taipei (Investigation 198 ). As explained by the ADC, "[t]he competitive market  cost 
was established using verified domestic selling prices in China for plate steel from  
[Investigation  198]. These prices were then compared to the unadjusted normal values established 
in [Investigation  198]. The differences in these prices were then applied to the cost of steel plate 
and flanges for TSP" .195  
7.92.  In the expiry review, the ADC again constructed TSP's  normal value196 and replaced 
TSP's  costs of steel plate ( but not flanges) with surrogate costs.197  
[To replace the costs the ADC ] indexed the uplifted costs from [the final report of 
Investigation 221] by reference to movements in the Steel Bulletin Board (Platts) 
benchmark  from the original investigation period in [the final report of Investigation  
221] to the current inquiry period. The Commission selected Flat Products / Plate CFR 
East Asia / East Asia import CFR $ / ton  (which is reported on Cost and Freight (CFR) 
terms in USD per tonne) as its benchmark because it is comprised of non -China import 
 
189 Investigation 221 final report, appendix 2 "Steel Price Uplift"  (Exhibit  AUS-75). 
190 China's response to Panel question No. 11; second written submission, paras. 145 -149. 
191 China's second written submission, paras. 151 -152.  
192 China's response to Panel question No. 12  (referring to Appellate Body Reports, EU – Biodiesel 
(Argentina) , para. 6.23; Ukraine – Ammonium Nitrate , para. 6.89). 
193 Investigation 221 final report  (Exhibit CHN -4), pp.  33-34. 
194 Investigation 221 final report  (Exhibit CHN -4), p.  30. 
195 Investigation 221 final report  (Exhibit CHN -4), pp.  33-34. 
196 Continuation 487 final report  (Exhibit CHN -31), p. 32.  
197 Continuation 487 final report (Exhibit CHN -31), pp. 33-35. WT/DS603/R  
 
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  prices , and is therefore likely to be the most representative of competitive plate steel 
prices in the region.198  
7.93.  We further recall that TSP was excluded from the wind towers AD order following an 
administrative review, and th us we will focus on the ADC's alleged errors as they impacted the group 
of uncooperative and all -others exporters.199 We therefore further recall that , as explained in 
paragraph  7.70 above , we found that the cost -replacement methodology (both with respect to the 
rejection of TSP's record costs for steel plate and the selection of an "uplifting" methodology to 
establish a surrogate cost) for TSP was transferred over o nto the uncooperative and all other 
exporters. Thus, even if the uplifting methodology could be deemed expired vis-à-vis TSP, 
specifically, owing to its later exclusion from the scope of the anti-dumping  order, that methodology 
remains the basis for the un cooperative exporters ' still-active anti-dumping  duty rate.200 
7.94.  We consider that there was no change of essence in the ADC 's uplifting methodology in the 
investigation and expiry review. We acknowledge that: (a) in the investigation the uplift was applied 
to both steel plate and flanges whereas in the expiry review the uplift was applied only to flanges; 
and (b) in the expiry review the uplifted costs were further altered with reference to the 
Steel Bulletin  Board (Platts) benchmark . These minor differences  in the approaches between the 
original investigation and the expiry review are not , in our view, material enough to alter the key 
aspect s of the order challenged by China, i.e. the uplifting of TSP 's costs with reference to data that 
(a) was not TSP 's and  (b) was not  further adjust ed.  
7.95.  We therefore consider that the challenged aspect of the anti-dumping  order has not expired . 
We thus will make findings with r espect to this challenged aspect of the order and , as explained 
above,  focus our attention on the expiry review.   
7.3.2.4   Evaluation  
7.96.  As noted in the section immediately above , in the expiry review , the ADC rejected TSP 's record 
costs for steel plate, instead using  surrogate costs for these production inputs  by uplifting 
TSP's costs. We first note, therefore, th at the parties disagree as to how the ADC calculated the ratio 
used to uplift TSP's costs . The parties agree that data for this purpose were taken from 
Investigation  198, a temporally overlapping  Australian investigation of hot rolled plate steel from 
China, Indonesia, Japan,  Korea, and Chinese Taipei.201 The ADC stated in the wind towers  
investigation that "[a] competitive market cost for plate steel was established using verified domestic 
selling prices in C hina for plate steel from [Investigation  198]. These prices were then compared to 
the unadjusted normal values  [for plate steel] established in [Investigation 198] . The difference in 
these prices was then applied to the purchase cost of plate steel as refl ected in TSP 's records ".202 
China argues that the normal values were those taken from Korea and Chinese Taipei.  Australia  
argues that the normal values were taken from the Chinese producer Shandong Iron and Steel 
Company Limited, Jinan Company (Jigang ). In short, the parties disagree on the source of some  of 
the data used to uplift TSP's costs  (i.e. a Chinese entity  Jigang or non -Chinese entities from Korea 
and Chinese Taipei).  
7.97.  This disagreement is potentially relevant because, if the ADC used Jigang's normal value 
(rather than Korean and Chinese Taipei entities' normal values) to calculate the uplift  ratio, along 
with "verified domestic selling prices for plate steel", this might suggest that  the result of the uplift 
could be deemed to be a "cost of production in the country of origin" (because only data taken from 
Chinese sources  were used to uplift TSP's costs ). Upon closer examination, though, w e consider this 
disagreement  moot. This is because we agree with China that even if Australia's factual 
characterizations surrounding this issue were correct , the ADC did  not reasonably demonstrate that 
the surrogate costs would represent a cost of production in China for TSP.  We rea ch this conclusion 
because the ADC fails to provide any explanation as to how  the price at which a company that is not 
 
198 Continuation 487 final report (Exhibit CHN -31), pp. 33-34. (italics original; underlining added)  
199 See para . 7.52 above .  
200 China's first written submission , paras. 83 and 112.  
201 Investigation 198 (hot rolled plate steel) final report (Exhibit CHN -33). 
202 Investigation 221 final r eport (Exhibit CHN -4), p. 30.  (emphasis added)  WT/DS603/R  
 
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  TSP (whatever WTO Member in which it may be located)  sells steel plate, when compared to other 
selling  prices for steel plate, yields  a referent for TSP's steel plate costs.203 
7.98.  This error, in our view, was exacerbated in the expiry review, in which the ADC further 
adjusted the previously established uplifted costs with reference to the  Steel Bulletin Board (Platts) 
benchmark . We recall that the benchmark was specifically chosen "because it is comprised of 
non-China import prices , and is therefore likely to be the most representative of competitive plate 
steel prices in the region" .204 We consider it plain that the use of "non -Chinese import pr ices" would 
move the already "uplifted" costs further away from what TSP's cost s of production in China were. 
Australia  has not pointed to any adjustments the ADC performed to such prices to adapt them to 
TSP's  circumstances in China in either the investig ation or expiry review, and we discern none.205 
While we note that the ADC explored other potential methodologies to replace TSP's costs in the 
expiry review, the ADC's explanations as to why it rejected alternative methods provide no insight 
into why no fu rther adjustments to the uplifted costs would have been  needed for purposes of 
Article  2.2.206 
7.99.  On this basis, we find that the ADC acted  inconsistently with the practice of an unbiased and 
objective  investigating authority with respect to Article  2.2 of the Anti-Dumping  Agreement  by using 
uplifted TSP's steel plate costs for the purpose of constructing normal value, and then transferring 
that methodology over onto the ADC's calculation of normal valu es for the uncooperative and all 
other exporters207, without  a reasoned and adequate explanation as to why the uplifted costs, 
without any adjustments to adapt such uplifted costs to TSP's circumstances, represented a cost of 
production in China for TSP .208 
7.3.3   AD claim 5.c under  Article  2.2.1.1  of the Anti-Dumping  Agreement : "manner " and 
"circumstances" of rejection of exporters' costs  
7.3.3.1   Main party arguments  
7.100.   China  claims that Australia violated Article s 2.1, 2.2, 2.2.1.1  of the Anti -Dumping Agreement 
and Article  VI:1 of the GATT 1994  due to  the "manner" and "circumstances" in which the ADC 
rejected the use of TSP's  costs when constructing normal value  in the wind towers  investigation and 
expiry review.209 China  asserts that this claim is different from its other cl aims under Articles  2.2 
and 2.2.1.1 because this claim "focusses on what the investigating authority did after it rejected the 
exporter's  record costs of plate steel and flanges" and specifically "challenges the rationality of the 
'cost difference'  used by  the investigating authority to 'uplift'  the exporter's  record costs for plate 
steel and flanges for the purposes of the calculation of the exporter's  costs of production".210 In 
China's  view, the process by which the ADC "uplifted" the exporter's  costs of production was neither 
 
203 The ADC chose to use information from Investigation 198 because the investigation concerned steel 
plate, its period of investigation overlapped with that of the wind towers investigation, and information on its 
record had been verified. (Investigation 221 final report  (Exhibit CHN-4), pp. 29 -30 and 33 -34). 
204 Continuation 487 final report (Exhibit CHN -31), p. 34.  (emphasis added)  
205 We note Australia's argument that " it would be nonsensical  – through the choice of reference data 
under Article  2.2 – to reintroduce the very same distortions that the ADC legitimately excluded under 
Article  2.2.1.1" . (Australia's second written submission , para. 197). We reject this argument because, even if 
Australia's argument is true in principle, in neither the investigation nor expiry review does the ADC offer a 
reasoned and adequate explanation, as to why making no adjustments  to the uplifted costs was necessary to 
avoid reverting to the distortions it sought to avoid. We consider it unnecessary to address China's additional 
argument that Jigang's normal values could not be used to  create costs of production in China at all because its 
normal values were construct ed using Chinese export prices  for coking coal. (China's second written 
submission, para. 145(d)).  
206 Continuation 487 final report (Exhibit CHN-31), pp. 34 -35. The ADC also made certain adjustments 
to the normal value at large. See Investigation 221 final report  (Exhibit CHN -4), p. 34  (noting changes to 
SG&A, financing costs, and other costs deemed necessary for a "fair comparison") ; Continuation 487 final 
report (Exhibit  CHN-31), p. 37  (noting changes deemed necessary for a "fair comparison") . We discern no way 
in which these adjustments, however, were made for the purpose of adapting the uplifted costs, specifically, to 
TSP's  circumstances in China.  
207 See para. para. 7.52 above . 
208 China also claims violations of Articles  2.1 and 2.2.1.1  of the Anti-Dumping  Agreement, and 
Article  VI of the GATT 1994  in this context.  (China's first written submissi on, section E.1 ). We discern no 
independent basis on which to find violations of these provisions. T he Panel declines to make findings as to 
these claims as it would not be helpful in resolving the dispute.  
209 China's  first written submission, para. 14.  
210 China's  first written submission, para. 261. (emphasis  original)  WT/DS603/R  
 
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  unbiased nor objective. Further, according to China, the determination was not based on positive 
evidence and the ADC provided no reasoned or adequate explanation to justify this cost adjustment. 
China notes that the period of invest igation in Investigation 198  – i.e. the other investigation from 
which the ADC took the surrogate costs used to replace TSP's costs – had a different, albeit 
overlapping, period of investigation than the wind towers  investigation . Moreover, with  respect to  
the expiry review, China asserts that the Steel Bulletin Board (Platts) benchmark  used to adjust the 
already -uplifted surrogate costs from the original investigation was similar to TSP's steel costs during 
the expiry review's  period of investigation , and thus there should have logically been no need to 
adopt modified and uplifted surrogate costs at all for purposes of the expiry review.211 
7.101.   Australia  asserts that this claim , insofar as it relates to the obligation for using costs of 
production in the country  of origin, is subsumed under China's AD claim  1 under Article  2.2, and, 
insofar as it relates to the second condition of Article  2.2.1.1, it lacks a legal basis.212 Australia  also 
argues  that China misunderstands the ADC's  findings in this context .213 Australia asserts that since 
this claim is duplicative of China's  other claims , the expiry issues  arising with respect to those claims 
apply equally to this claim.214 
7.3.3.2   Expiry  
7.102.   In the section im mediately below, we find this claim effectively subsumed under 
China's  AD claims  1 and 3 under Articles  2.2 and 2.2.1.1 , and  we therefore make no additional 
findings here. The expiry issue is thus moot.  
7.3.3.3   Evaluation  
7.103.   In this claim, China asks the Panel to find that in the wind towers  investigation the ADC 
improperly  used surrogate costs of production  taken from a different investigation and time period, 
and in the expiry review further adjusted th ose costs with a benchmark that furth er modified  the 
already -inaccurate costs. We recall, however, that we have already found that Australia violated 
Articles  2.2.1.1 and 2.2 by improperly rejecting TSP's  relevant  costs and then failing to adapt the 
chosen surrogate costs  such that they could  be considered costs of production in China.215 We 
consider that those conclusions already address the key underlying concerns in China's claim here, 
i.e. the propriety of using "uplift ed" costs as surrogate costs of production  for TSP in constructing 
norma l value . Here, China asks us to state the same conclusion in a different manner. We therefore 
consider that we need not separately consider this claim and decline to make any additional findings 
with respect to it.  
7.3.4   AD claim 6.a under Article  2.4 of the Anti-Dumping  Agreement : fair comparison   
7.3.4.1   Legal framework  
7.104.   Article  2.4 of the Anti-Dumping  Agreement provides:  
 
211 China's  first written submission, paras.  261-279 and 297 -306.  
212 Australia's  first written submission, paras.  522-525; response to Panel question  No. 1 6; 
second  written submission, paras. 204 -214.  
213 Australia's  first written submission, para.  520.  
214 Australia 's response to Panel question No.  69, para. 36. 
215 See discussions surrounding AD claims 1 and 3 above.  WT/DS603/R  
 
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  A fair comparison shall be made between the export price and the normal value. This 
comparison shall be made at the same level of trade, normally at the ex -factory level, 
and in respect of sales made at as nearly as possible the same time. Due allowance 
shall be made in each case, on its merits, for differences which affect price 
comparability, including differences in conditions and terms of sale, taxation, levels of 
trade, quantities, physical characteristics, and any other differences which are also 
demonstrated to affect price comparability.7 In the cases referred to in paragraph  3, 
allowances for costs, including duties and taxes, incur red between importation and 
resale, and for profits accruing, should also be made.  If in these cases price 
comparability has been affected, the authorities shall establish the normal value at a 
level of trade equivalent to the level of trade of the constru cted export price, or shall 
make due allowance as warranted  under this paragraph. The authorities shall indicate 
to the parties in question what information is necessary to ensure a fair comparison and 
shall not impose an unreasonable burden of proof on th ose parties.  
7 It is understood that some of the above factors may overlap, and authorities shall ensure that they 
do not duplicate adjustments that have been already made under this provision.  
7.3.4.2   Main party  arguments  
7.105.   China  recalls that, when constructing nor mal values in all three challenged proceedings, 
including the wind towers proceedings , the ADC used costs that were different from the costs actually 
incurred by the exporters in manufacturing the product under consideration. China argues that the 
ADC's  cost substitution methodology to determine constructed normal values generated relevant 
disparities between the normal value and the export price because:  
a. On the one hand, actual export prices were formulated by the Chinese exporters on the 
basis of their knowledge and understanding of the production of those goods in China, the 
actual costs of production in China, and the exporters' desired profit for producing and 
selling those products from China to customers in other countries; and  
b. On the other ha nd, constructed normal values were calculated by the ADC on the basis of 
unrealistic and inflated costs of production, which did not reflect the recorded cost of the 
exporters nor the cost of production in China as the country of origin.216 
7.106.   China argues tha t such disparities represent differences affecting price comparability under 
Article  2.4, because by using costs higher than an exporter's  record costs in constructing normal 
value, the ADC imputed a price -setting variable of which the exporter was not cog nisant and thus 
necessarily did not take into account when making export sales.217 China submits that absent any 
due allowances to account for these disparities218, the comparison between the normal value as 
constructed and the export price in each of the th ree investigations was not a "fair comparison" 
under Article  2.4.219  
7.107.   China, however, asserts that if the Panel were to find violations of Article  2.2, 2.2.1, 
and 2.2.1.1, then there would be no need for the Panel to address this claim.220 
7.108.   Australia  argues t hat China's  claim under Article  2.4 is "entirely, and impermissibly, 
premised on China's  disagreement with Australia's  construction of normal value, and not on any 
failure to make due allowances under Article  2.4".221 Australia argues that there is no textu al basis 
to challenge the ADC's  normal value calculation under Article  2.4. Australia thus rejects 
China's  position that Australia's  cost substitution resulted in a difference between normal value and 
export price that required an adjustment under Article  2.4. In Australia's  view, Article  2.4 is only 
concerned with making appropriate adjustments which are unrelated to the construction of normal 
value pursuant to Article  2.2, because Article  2.4 presupposes that the normal value and export 
 
216 China's  first written submission, paras.  326 and 336 ; opening statement at the first meeting  of the 
Panel , paras. 89 and 90.  
217 China's  first written submission, paras.  332-333 and 335.  
218 China's  first written submission, paras.  327-331. 
219 China's  first w ritten submission, paras.  15(a), 322,  324 and 327.  
220 China 's second written submission, paras. 279-280. 
221 Australia's  first written submission, paras.  314, 318, and 413. See also ibid. paras.  532-535.  WT/DS603/R  
 
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  price have already  been established.222 Australia agrees that the Panel need not proceed to an 
analysis under Article  2.4 if China succeeds on AD claims 1 and 3 .223 
7.3.4.3   Expiry  
7.109.   In the section immediately below,  we find it unnecessary to examine the substance of this 
claim . We therefore consider an expiry analysis moot.  
7.3.4.4   Evaluation  
7.110.   The issue before us under AD claim 6.a is to determine whether the ADC's conduct is 
consistent with the practice of an unbiased and objective investigating authority by not  making an 
adjustment under Article  2.4 to account for the difference between the export price and the normal 
value generated by the alleged use of non -Chinese surrogate costs to construct normal value . China 
claims  that the ADC bears an obligation under Article  2.4 to make due allowance for differences 
affecting price comparability, including those stemming from the ADC's allegedly inappropriate use 
of non -Chinese surrogate costs for normal value calculation purpose .224 The parties agree that the 
practical implica tion of China' s AD claim 6.a, if successful, is to reverse the methodology used to 
construct normal value.225 The parties disagree, however, as to whether such a reversing is 
prescribed or permitted under the Anti-Dumping  Agreement.226  
7.111.   We begin by considering the relationship between China's AD claim 6.a under Article  2.4, 
and its claims under Articles  2.2 and 2. 2.1.1. Although Article  2.4 contains obligations separate and 
distinct from those contained in Articles  2.2 and 2.2.1.1, the adjustment s China requests in the 
present case are essentially the same as those requested  under the Articles  2.2 and 2.2.1.1 claim s, 
i.e. to construct normal value using  the exporters' costs of production in China . Thus, 
China's  AD claim 6.a under Article  2.4 is, in essence , an additional or secondary course of action to 
address the same underlying issue stemming from the ADC's use o f alternative data for normal value 
calculation.  In their responses to a question from the Panel, both parties agreed that there is no 
need for the Panel to review this claim separately if the Panel were to find a breach under Articles  2.2 
and 2.2.1.1 (AD claims 1 and 3).227 With respect to the expiry review , we have found with respect 
to AD claim 1,  above , that the ADC acted inconsistently with Article  2.2 by using TSP's  uplifted costs 
from the original  investigation,  which were adjusted according to a benchmark that excluded Chinese 
data, but not adjusted to TSP 's circumstances in China . We have also found with respect to 
AD claim 3, above , that the ADC acted inconsistently with Article  2.2.1.1 because there was no basis 
for the ADC to reject the export er's record costs for steel plate in constructing normal value  under 
the circumstances of the expiry review .  
7.112.   In light of these findings , we consider it unnecessary  to examine further whether the ADC 
also failed to conduct a fair comparison under Article  2.4 by making adjustment to account for the 
differences generated through the use of surrogate costs in the expiry review . 
7.3.5   AD claim 7 under Article s 2.2 and 2.2.2  of the Anti-Dumping  Agreement  
7.3.5.1   Legal framework  
7.113.   Article  2.2 of the Anti-Dumping Agreement  provides that : 
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 o f the exporting country , 
 
222 Australia's  first written submission, para. 328; second written submission, paras. 216, 218 , and 221.  
223 Australia's response to Panel question No. 20, para. 40. 
224 China's response to Panel question No. 20, paras. 74 –75. 
225 Australia's response to Panel question No. 21, para. 44; Australia's second written submission, 
paras.  216 and 220 ; and  China's opening statement at the first meeting of the Panel, para. 93.  
226 China's opening statement at the first meeting of the Panel, para. 93; Australia's second written 
submission, paras. 220 and 221.  
227 Australia's response to Panel question No. 20, para. 40; China's response to Panel question No. 20, 
para. 77; opening statement at the first meeting  of the Panel , para. 97; and  second w ritten submission, 
para. 279. WT/DS603/R  
 
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  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 representa tive, or with the 
cost of production in the country of origin plus a reasonable amount for administrative, 
selling and general costs and for profits.228 
7.114.   Article  2.2.2 of the Anti-Dumping Agreement  provides that : 
For the purpose of paragraph 2, the amounts f or administrative, selling and general 
costs and for profits shall be based on actual data pertaining to production and sales in 
the ordinary course of trade of the like product by the exporter or producer  under 
investigation. When such amounts cannot be d etermined on this basis, the amounts 
may be determined on the basis of:  
(i) the actual amounts incurred and realized by the exporter or producer in question in 
respect of production and sales in the domestic market of the country of origin of the 
same gene ral category of products;  
(ii) the weighted average of the actual amounts incurred and realized by other exporters 
or producers subject to investigation in respect of production and sales of the like 
product in the domestic market of the country of origin;  
(iii) any other reasonable method, provided that the amount for profit so established 
shall not exceed the profit normally realized by other exporters or producers on sales 
of products of the same general category in the domestic market of the country of 
origin.  
7.115.   The chapeau  of Article  2.2.2 imposes a general obligation on an investigating authority to 
use "actual data pertaining to production and sales in the ordinary course of trade" when determining 
amounts for SG&A and profits for the purpose of calcula ting constructed normal value.  Only "[w]hen 
such amounts cannot be determined on this basis" may an investigating authority proceed to employ 
one of the other three methods provided in subparagraphs (i) -(iii). Thus an investigating authority, 
when determin ing SG&A and profits under Article  2.2.2, must first attempt to make such a 
determination using the "actual data pertaining to production and sales in the ordinary course of 
trade".  
7.116.   Similarly, subparagraphs (i) and (ii) also express a preference for actua l data, whereas 
subparagraph (iii) permits an investigating authority to use "any other reasonable method", subject 
to the condition that the amount for profit so established shall not exceed the profit normally realized 
by other exporters or producers on sales of products of the same general category in the domestic 
market of the country of origin.  
7.3.5.2   AD claim 7.a: Profits not based on "actual data"   
7.3.5.2.1   Main party arguments  
7.117.   China  argues that the ADC arrived at incorrect amounts  for profit in the wind t owers original 
investigation and expiry review  by determining a profit rate with reference to actual cost and sales 
data in the  ordinary course of trade , but then applying that profit rate to the cost of production and 
administrati ve, selling and general costs (SG&A ) incorporating non -record and non -Chinese 
surrogate costs which had been "uplifted" .229 
7.118.   China argues that the chapeau  of Article  2.2.2 imposes a general obligation on an 
investigating authority to use "actual data pertain ing to production and sales in the ordinary course 
of trade" when determining amounts for SG&A and profits.230 China contends that the "uplifted cost 
base" used to calculate the amount of profit included costs of production that were not the 
 
228 Fn omitted.  
229 China's  first written submission, paras.  16(a), 395 and 397.  
230 China's  first written submission, paras.  402-404 (referring to, inter alia, Appellate  Body Reports, 
EC – Tube or Pipe Fittings , para. 97; China  – HP-SSST  (Japan)  / China  – HP-SSST  (EU), para. 5.25).   WT/DS603/R  
 
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  exporter's  actual data.231 In China's view, the ADC's  methodology is incapable of rendering an 
amount for profit "based on actual  data pertaining to production and sales in the ordinary course of 
trade … by the exporter or producer under investigation" as required by Arti cle 2.2.2.232  
7.119.   Australia  notes that China does not challenge the profit rates  used by the ADC .233 Australia 
argues that the constructed cost base reflected the "correct" costs of the exporter, and thus using 
them for profit determination would be consistent with using "actual data pertaining to production 
and sales" within the meaning of Article  2.2.2.234 Further, Australia argues that this claim is 
derivative of China's  AD claims 1 and 3 and should be rejected for the reasons set forth in 
Australia's  responses to those claims.235  
7.120.   China  disagrees with Australia that its claims under the chapeau  of Article  2.2.2 are 
derivative of its AD claims 1 and 3. In China's view, Article  2.2.2 is prescriptive of the method that 
must be followed in order to calculate the amounts for profit "[f]or the  purpose of paragraph 2 ".236  
7.3.5.2.2   Expiry  
7.121.   China's claim concerns  the wind towers  investigation and expiry review .237 As discussed in 
section 7.2.2  above,  the nature of China's claim raises the issue of whether or not the aspect 
challenged by China has expired. To address this issue, we will consider whether there was a change 
of essence in the approach taken by the ADC to calculate profit under Article  2.2.2 as between the 
investigation and expiry review.  
7.122.   In both segments , TSP was the only investigated Chinese exporter and the ADC uplifted 
TSP's costs.  Against that background, China makes the same claim  here vis-à-vis both segments, 
i.e. the ADC applied a profit rate to TSP's uplifted  cost data, thus violating the chapeau  of 
Article  2.2.2 because such costs were not " actual data pertaining to production and sales in the 
ordinary course of trade of the like product by t he exporter or producer  under investigation ". 
Australia does not contest that the ADC applied a profit rate to the TSP's uplifted costs in both 
segments and we see no reason to doubt this shared understanding by the parties.  We therefore 
consider that ther e was no change of essence as between the two segments,  and thus no expiry of 
this aspect of the order. We will thus proceed to examine this claim and focus on the expiry review.  
7.3.5.2.3   Evaluation  
7.123.   As indicated in the section above, China claims that the ADC appl ied a profit rate to uplifted 
cost data in the wind towers  proceedings238; Australia does not contest these facts.  All that the 
parties contest is whether the uplifted data could be considered "actual data pertaining to production 
and sales in the ordinary course of trade of the like product by the exporter or producer  under 
investigation " within the meaning of the chapeau  of Article  2.2.2.  
7.124.   We recall that TSP was excluded from the wind towers AD order following an administrative 
review, and thus we  will focus on the ADC's alleged errors as they impacted the group of 
uncooperative and all -others exporters.239 Thus,  so far as TSP  is concerned,  China's  claim addresses 
an expired aspect of the anti-dumping  order . Furthermore, we have found in section  7.3.1.3  above 
that the uplift methodology was effectively transferred over to the uncooperative exporters. In this 
regard, the ADC stated in section 6.6.1 of its expiry review report  that: 
The Commission established a normal value [for uncooperative and all other exporters] 
under subsection 269TAC(6), having regard to information verified with TSP Shanghai, 
 
231 China's  first written submission, para. 416. 
232 China's  first written submission, paras.  397, 401, 413 -414, and 416 -418. China also claims violations 
of Articles  2.1 and 2.2 of the Anti-Dumping  Agreement and Article  VI:1 of the GATT 1994.  
(China's  second  written submission, para. 304).  
233 Australia's  first written submission, paras.  542-543. 
234 Australia's  first written submission, para. 544; second written submission, para. 329.  
235 Austral ia's first written submission, paras.  538, and 543 -544.  
236 China's second written submission, para. 306. 
237 China's response s to Panel question Nos. 37 and 69.  
238 China's  first written submission, paras.  16(a), 395, and 397.  
239 See para . 7.52 above.  WT/DS603/R  
 
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  but exclusive of any favourable adjustments. In addition, uplif t to plate steel has been 
based on all plate steel purchased from Chinese suppliers by TSP Shanghai for both 
domestic and exported wind towers during the inquiry period.240  
7.125.   However, it is not clear to us from the above extract whether the ADC applied the profit rate 
to these uplifted data , specifically, in order to help determine the uncooperative exporters ' normal 
value . China argues that the profit determination made with respect to TSP was "automatically 
applied to the determination of the amount for pr ofit for all other exporters", "both in the original 
investigation and in the subsequent expiry review ".241 We note, however, that China has not pointed 
to any  specific statement  in the paragraph above or elsewhere in the expiry review report  to the 
effect that the uplifted cost data were used as part of any relevant profit determination  for the 
uncooperative and all other exporters . Rather, all the above excerpt indicates is that the ADC had 
"regard to information verified with TSP " more generically.  Accord ingly,  we find that China has failed 
to make a prima facie  case that the ADC applied a profit rate to the uplifted cost data in the expiry 
review .242  
7.3.5.3   AD claim 7.c : Inconsistency in "like products" determination  
7.3.5.3.1   Main party arguments  
7.126.   China  argues that the A DC's normal value calculation in the wind towers  investigation and 
expiry review  contained an internal inconsistency with respect to Articles  2.1 and 2.2, on the one 
hand, and Article  2.2.2, on the other hand.243 China  claims that the ADC applied the profit 
methodology under the chapeau  of Article  2.2.2, which requires sales of the lik e product in the 
ordinary course of trade to calculate profit, after having previously concluded that it had to construct 
a normal value because of the lack of "relevant" sales in the domestic market.244 China argues that 
the ADC failed to provide any adequ ate or reasoned explanation to justify the contradictory findings 
that there was both an "absence of relevant sales of like goods on the domestic market"245 for the 
purpose of Article  2.2, and an existence  of such domestic sales of like product for calculating the 
amount of profit under Article  2.2.2 chapeau .246 China argues that Article  2.6 provides a uniform 
definition of "like product" for all provisions under the Anti-Dumping  Agreement . Accordingly, in 
China's  view, an investigating authority may not find a particular product to be a like product for the 
purposes of Article  2.2.2, but not a like product for the purpose of Article  2.2.247 According to China, 
if an investigating authority determined that the re were no sales of the like product on the domestic 
market in the ordinary course of trade for purposes of Article  2.2, then the investigating authority 
would be barred from determining the amounts for profit using the Chinese exporter's domestic 
sales of  those same products under the chapeau  of Article  2.2.2.248 China contends that the 
ADC's  decision to construct a normal value under Article  2.2 and its decision to use the chapeau  of 
Article  2.2.2 to calculate profit as part of that construction exercise a re therefore evidently  
incompatible. China also contends that, in the expiry  review , after TSP raised this issue with the 
ADC, the ADC responded that it had found domestic sales in the ordinary course of trade  of the like 
product such that it could apply the method provided  in the chapeau  of Article  2.2.2, although the 
ADC still used a constructed normal value, citing lack of "relevant" sales on the domestic market.249  
 
240 Continuation 487 final report (Exhibit CHN -31), p. 39. See also ibid. p. 34, where it is stated that 
"TSP Shanghai 's steel plate cost s have been uplifted accordingly in its cost to make data".  
241 China's first written submission, para. 415 (referring to Investigation 221 final report 
(Exhibit  CHN-4), p. 34; Continuation 487 final report (Exhibit CHN -31), p. 39 ). 
242 In so concluding, we note that it may appear somewhat odd to find that that ADC violated 
Article  2.2.1.1 in uplifting TSP 's costs and then failing to adapt them properly under Article  2.2, but still find 
that they reflect "actual data pertaining to produc tion and sales in the ordinary course of trade of the like 
product by the exporter or producer under investigation " within the meaning of the chapeau of Article  2.2.2.  
Regarding China's claims under Articles  2.1 and 2.2 of the Anti-Dumping  Agreement and Ar ticle VI:1 of the 
GATT 1994, we discern no independent basis on which to find violations of these provisions. We thus decline to 
make findings as to these claims as it would not be helpful in resolving the dispute.  
243 China's  first written submission, para. 455; second written submission, para. 323. 
244 China's  first written submission, paras.  441-442. 
245 Investigation 221 final report (Exhibit CHN -4), p. 33.   
246 China's first written submission, para. 454. 
247 China's  first written submission, para. 447. 
248 China's  first written submission, para. 453. 
249 China's  first written submission, para. 453. WT/DS603/R  
 
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  7.127.   Australia  argues that China has failed to make a prima  facie case of inconsistency.250 
Australia argues that in the expiry review the ADC did not reframe its position in the original 
investigation.  According to Australia, the ADC found in the original investigation that there was an 
absence of relevant sales of like goods on the domestic market in China for determining normal 
values. Australia asserts that the ADC similarly determined in the expiry review that the domestic 
sales were not "relevant sales " for the purposes of determining normal value.251 In response to a 
question from the Panel, Australia clarified that although the ADC found in both segments  that there 
were sales on the domestic market in the ordinary course of trade, those sales were not considered 
to be relevant sales for the purpose  of Article  2.2.252 
7.3.5.3.2   Expiry  
7.128.   China's claim concerns the wind towers  investigation and expiry review.253 As discussed in 
section 7.2.2  above,  the nature of China's claim raises the issue of whether or not the aspect 
challenged by China has expired. To address this issue, we will consider whether there was a change 
of essence  in the approach taken by the ADC to determine whether sales of the like product occurred 
for purposes of Article s 2.2 and 2.2.2 as between the investigation and expiry review.  
7.129.   We consider that there was no change of essence as between the investigation a nd expiry 
review. In both segments, the ADC  constructed TSP's normal value because , in its view, there were 
no "relevant" domestic sales to use to establish a normal value.254 The ADC also considered that 
there were sales of the like product for purposes of  determining a level of profit in both segments.255 
We thus recall that TSP was excluded from the wind towers AD order following an administrative 
review, and thus we will focus on the ADC's alleged errors as they impacted the group of 
uncooperative and all -others exporters.256 As noted  in section  7.3.1.3  above, TSP's  data were used 
as a basis for determining the normal value for the non -cooperating and all -other exporters in the 
expiry review .257 We consider that the ADC's explanation for how this  was accomplished, and 
specifically referencing the uplifting of TSP's steel prices, indicates that the construction approach 
used for TSP was effectively transferred over onto the uncooperative exporters  (because the point 
of uplifting  costs was to construct normal value) . We therefore consider that the relevant aspect of 
the order has not expired. We thus make findings with respect to th is claim and, in doing so, we 
focus on the expiry review.  
7.3.5.3.3   Evaluation  
7.130.   China's AD claim 7.c is premised on an alleged internal inconsistency in the ADC's normal 
value determination in both the original investigation and the expiry  review . As discussed in the 
section  immediately above , we will focus our analysis on the expiry review . We will refer to the 
ADC's  determination in the original investigation where necessary, and where the ADC refers to its 
own original findings during the course of the expiry revie w.  
7.131.   According to China, on the one hand, the ADC found that there was an absence of relevant 
sales of like products on the domestic market in China for determining normal values. On the other 
hand, the ADC determined the profit component of the constructed nor mal value on the premise 
that TSP's domestic sales  of wind towers were domestic sales of the like product in the ordinary 
course of trade.258 
7.132.   In response to a Panel question, China indicated that its claim of "internal inconsistency" can 
be understood as containing two claims in the alternative , i.e. a breach of Article  2.2 for resorting 
to constructed normal value where the conditions for doing so were not met because there were 
 
250 Australia's  first written submission, paras.  545 and 549 ; response s to Panel question No. 29, 
para. 85, and No. 30, para. 87. 
251 Australia's  first written submission, para. 547. 
252 Australia's response to Panel question No. 29, para. 83. 
253 China's response s to Panel question Nos. 37 and 69.  
254 See Investigation 221 final report  (Exhibit CHN -4), pp.  33-34; Continuation 487 final report 
(Exhibit  CHN-31), p. 3 6.  
255 See Investigation 221 final report  (Exhibit CHN -4), p. 34; Continuation 487 final report 
(Exhibit  CHN-31), p. 36.  
256 See para . 7.52 above .  
257 See also Continuation 487 final report (Exhibit CHN -31), p. 3 9. 
258 China's second written submission, para. 319. WT/DS603/R  
 
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  sales of the like product  in the ordinary course of trade in the domestic marke t; and in the 
alternative, a breach of the chapeau  of Article  2.2.2 for calculating profit using data pertaining to 
domestic sales where it was determined that there were no sales of the like product in the ordinary 
course of trade on the domestic market .259 Thus, China's claim essentially turns on a factual 
question: did the ADC determine (a) that there were sales of the like product in the ordinary course 
of trade on the domestic market, or (b) that there were no sales of the like product in the ordinary 
course of trade on the domestic market?  
7.133.   In the expiry review, the ADC stated that :  
The Commission notes that wind tower sales are project driven and differ in their 
technical properties between projects. As such, the Commission considers that each 
wind tow er is a unique product and that, because of the many variables and differences 
in technical specifications which would affect proper comparison, it is not possible to 
accurately adjust domestic prices to make them comparable with export prices.  
Therefore,  the Commission is of the view that there is an absence of sales  of like goods 
in the market of the country of export that would be relevant for the purposes of 
determining a price under subsection 269TAC(1).260 
7.134.   The ADC further stated that :  
[W]hilst wind towers may vary from project to project and have different technical 
properties, they nevertheless are like goods. However, these differences mean that 
there are no relevant sales  of like goods on the domestic market to enable matching to 
the goods e xported to Australia.261 
7.135.   The statements of the ADC that "there are no relevant sales of like goods" and "there is an 
absence of sales of like goods in the market of the country of export" suggest that the ADC found 
that there were no sales  of the like produ ct in the ordinary course of trade in the domestic market. 
In response to a Panel question, however, Australia clarified that while there were sales of the like 
product in the domestic market, these sales were not considered "relevant" sales.262 
Australia's  position finds support in the ADC's statement in the investigation that "domestic sales of 
like goods in China and Korea are not relevant and suitable  to compare to export sales".263 In the 
expiry review, the ADC also stated that "[t]he Commission observes that, having established that 
like goods are sold in the domestic market, there is no basis for derogating from subsection 45(2) 
of the Regulation" .264 For this reason, we accept Australia's  position that the ADC determined  that 
there we re sales of the like product in the domestic market. Accordingly, the factual premise of 
China's claim under the chapeau  of Article  2.2.2 fails. We focus instead on China's claim under 
Article  2.2.  
7.136.   Australia's defence to China's claim under Article  2.2 boils down to a distinction  that the ADC 
seems to have made between (a) the existence of sales  of the like product  and (b) the existence of 
relevant  sales of the like product . Article  2.2, however, makes no such distinction; it only refers to 
"sales" of the "like product ".265 
7.137.   Article  2.2 permits an investigating authority to resort to two alternative methods for 
determining normal value in two mutually exclusive situations: first, where there are no sales of the 
like product in the domestic market; second, whe re such sales do not permit a proper comparison, 
either because of the particular market situation, or because the volume of the sales was low. In the 
present case, we accept  Australia's position that the ADC determined that there were sales of the 
like pr oduct on the domestic market . Accordingly , the ADC could not have properly relied on the first 
 
259 China's response to Panel question No. 28, para. 98; second written  submission, para. 318. 
260 Continuation 487 final report (Exhibit CHN -31), p. 32.  
261 Investigation 221 final report (Exhibit CHN -4), p. 29.  
262 Australia's response to Panel question No. 29, para. 83. 
263 Investigation 221 final report (Exhibit CHN -4), p. 29.  
264 Continuation 487 final report (Exhibit CHN -31), p. 3 6. 
265 We posed additional questions to Australia with respect to this issue. In response, Australia refer red 
the Panel to paragraphs 545 -549 of its first written submission, which do not address these questions.  
(Australia's response to Panel question No. 29 (b), para. 85). WT/DS603/R  
 
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  criterion to justify resort to the alternative method of determining normal value. That leaves the 
second criterion, namely, where such sales do not permit a proper comparison, either because of 
the particular market situation, or because the volume of the  sales was low.  It is clear from the 
record that the ADC concluded that the domestic sales did not permit a proper comparison with 
export sales. However, the ADC did not determine  that the domestic sales failed to  permit a proper 
comparison because the vol ume of the sales was low, or because of a particular market situation.  
In particular, with respect to the latter,  the ADC stated in the expiry review report  that: "[n]either 
of those circumstances (being the composition of the Australian industry or the me thod of 
ascertaining normal value in circumstances of a particular market situation in the country of export) 
are relevant to the present inquiry ".266  
7.138.   Thus, the ADC  determined that the domestic sales did not permit a proper comparison with 
export sales on the basis of  a "relevance" test that has no basis in Article  2.2. In doing so , the ADC 
resorted to a constructed normal value in a manner inconsistent with that provision .267  
7.3.6   AD claim  8 under  Article  9.3 of the Anti -Dumping Agreement and Article VI:2 of the 
GATT 1994 : collection  of duties  in excess  of the margin of dumping   
7.139.   The applicable legal framework for this claim has already been set forth in section  7.2.3  
above.   
7.3.6.1   Main  party  arguments  
7.140.   China  asserts  that Australia has collected anti-dumping  duties on the basis of margins of 
dumping that were inflated as a result of the alleged WTO -inconsistencies challenged in China's other 
AD claims. 268 China claims that, as a result, Australia has collected anti-dumping  duties in excess 
of the margins of dumping that would have been "properly established"  under Article  2, contrary to 
Article  9.3 of the Anti-Dumping  Agreement  and Article  VI:2 of the GATT  1994.269 
7.141.   Australia  argues that China's claim  under Article  9.3 is purely consequential , and that it must 
fail given that the ADC's  calculation of relevant dumping margins was consistent with Article  2 of the 
Anti-Dumping  Agreement .270 
7.3.6.2   Evaluation  
7.142.   To the extent that we have found above that the ADC acted inconsistently with the provisions 
of Article  2, we consider that China has established, as a matter of fact,  that the dumping margins 
were improperly  inflated through  the use of uplifted , surrogate  costs in the  expiry review . As the 
ADC made clear in its report , the surrogate  costs it used were "significantly higher" than the costs 
in the exporter's records duri ng the relevant period. The  use of  inflated costs  thus lead to an increase 
in the dumping margin  in this case .271 We note that Australia does not argue otherwise. Rather, 
 
266 Continuation 487 final report (Exhibit CHN -31), p.  50. The ADC made a similar finding in the original 
investigation, where it stated that "[g]iven the finding that normal values cannot be determined under 
s.269TAC(1), the Commission considers that the assessment of whether a market situation exists in the 
Chinese domestic market to be redundant. …  As outli ned in the previous chapter of this report, the Commission 
did not consider it necessary to undertake an assessment of the market situation claims" . (Investigation 221 
final report (Exhibit CHN -4), pp. 29 and 33. ) 
267 China also claims violations of Article s 2.1 and 2.2  of the Anti-Dumping  Agreement and Article  VI:1 
of the GATT 1994  in this context. (See China's first written submission, section H.1 ). We discern no 
independent basis on which to find violations of these provisions. T he Panel declines to make f indings as to 
these claims as it would not be helpful in resolving the dispute.  
268 See for example, China's  first written submission, para. 338; opening statement at the first meeting 
of the Panel, para. 111; and response s to Panel question No. 17, para. 62, No. 19, para. 68, No. 23, para . 94, 
and No 110, paras. 240 and 246.  
269 China's  first written submission, paras.  458 and 459-480. See also China's second written 
submission, para. 325. 
270 Australia's  first written submiss ion, paras.  165, 344 -345, and 474 ; second written submission, 
para. 230. 
271 In this regard, we note that the ADC also concluded in the expiry review report  that: 
The benchmark indicates that competitive market steel prices were significantly higher during t he 
manufacturing period than the costs set out in the exporter 's records. Therefore 
 WT/DS603/R  
 
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  Australia appears to treat the success of China's claim under Article  9.3 as dependent  on the other 
underlying claims under the Anti -Dumping Agreement.  In the absence of any rebuttal from Australia, 
this in our view establish es prima facie  that the anti-dumping  duties imposed by the ADC exceeded 
the margins of dumping  that would have been e stablished had the authorities acted consistently 
with Article  2.  
7.143.   Accordingly, we uphold China's claim  that Australia acted inconsistently with Article  9.3 of 
the Anti-Dumping  Agreement  and Article VI:2  of the GATT 1994 . We also recall that, in so finding, 
the underlying violations of Article 2 that we have found apply to  the uncooperative and  all-others 
rate that was determined with reference to the TSP's normal values , given TSP's exclusion from the 
wind towers AD order  following the administrative review.272 
7.4  Stainless steel sinks  
7.144.   In this section, we address China's AD and CVD claims as against the stainless steel sinks 
proceedings. We recall that multiple segments have occurred in the stainless steel sinks proceedings, 
i.e. an original investigation, three interim reviews, and an e xpiry review. Thus, we will assess expiry 
for each claim in accordance with the discussion and approach articulated in section 7.2.2 above . 
The only  exceptions to this are AD claims 6.b.ii and 6.b.iii, which are directed only as against the 
expiry review.  
7.145.   We also note that the numbering of China's claims, and the order in which we address them, 
has already been described in paragraph 7.53 above . 
7.4.1   AD claim 3 under Article  2.2.1.1  of the Anti-Dumping  Agreement : rejection of 
exporters' costs  
7.146.   Under AD claim 3, China argues that the A DC improperly rejected exporters' records as the 
basis on which to determine exporters' costs of production under Article 2.2.1.1 in order to determine 
normal value. We recall that China 's AD claim 4 is predicated on the notion that in using surrogate 
costs for 304 stainless steel cold -rolled coil (304 SS CRC ) improperly chosen under Article  2.2.1.1  
to perform the ordinary -course -of-trade  test (which is used to help determine normal value) , 
Australia violated Article  2.2.1. We thus consider that China 's AD claim 3 is most effectively and 
efficiently addressed in conjunction with AD claim 4 . We turn to that claim immediately below .  
7.4.2   AD claim 4 under Article s 2.2.1.1 and  2.2.1  of the Anti-Dumping  Agreement : use of 
correct  "costs" in the ordinary -course -of-trade  test  
7.4.2.1   Legal framework  
7.147.   This claim pertains to Article  2.2.1 of the Anti-Dumping  Agreement , which  provides:  
Sales of the like product in the domestic market of the exporting country or sales to a 
third country at prices below per uni t (fixed and variable) costs of production  plus 
administrative, selling and general costs may be treated as not being in the ordinary 
course of trade by reason of price and may be disregarded in determining normal value  
only if the authorities determine th at such sales are made within an extended period of 
time in substantial quantities and are at prices which do not provide for the recovery of 
all costs within a reasonable period of time. If prices which are below per unit costs at 
the time of sale are abo ve weighted average per unit costs for the period of 
investigation, such prices shall be considered to provide for recovery of costs within a 
reasonable period of time.273  
 
TSP Shanghai 's steel plate costs have been uplifted accordingly in its cost to make data. The 
Commission 's index methodology and workings can be found at Confidential Attachment 4.  
(Continuation 487 final report (Exhibit  CHN-31), p. 3 4) 
272 See para . 7.52 above .  
273 Fns omitted . WT/DS603/R  
 
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  7.148.   The parties agree that the word "costs" in the context of Articles 2.2 and 2.2.1.1 s hould be 
interpreted consistently with the word "costs" in Article  2.2.1.274 Thus, if the ADC selects costs  in a 
manner that is inconsistent with Article  2.2 or 2.2.1.1, and if the ADC used the same costs in the 
ordinary -course -of-trade test in the context of Article  2.2.1, it necessarily leads to a violation of that 
article as well.  We agree.  The panel in Ukraine – Ammonium Nitrate  interpreted this article in a 
similar way. In that dispute, the panel noted that "Ukraine used the surrogate price of gas, rather 
than the reported gas cost, first, to identify the below -cost sales, and second, to assess whether the 
below -cost sales exhibited the characteristics set out in the first sentence of Article  2.2.1".275 The 
panel then reasoned:  
[W]e note that Article  2.2.1.1 applies to "[p]aragraph 2". The reference to 
"[p]aragraph  2" covers not just Article  2.2 but also Article  2.2.1. The panel in 
EC – Salmon (Norway) recognized that the rules for calculating the costs used in a 
determination under Article  2.2.1 are found in Article  2.2.1.1. It would follow, in our 
view, that costs used in the ordinary -course -of-trade test under Article  2.2.1 must be 
consistent with Article  2.2.1.1. Further, if we were to accept Ukraine's  argume nts, we 
would essentially be concluding that the investigating authority was free to disregard 
the specific rules under Article  2.2.1.1 when calculating the cost of production used for 
the purposes of the ordinary -course -of-trade test under Article  2.2.1. However, there is 
nothing in the text of Article  2.2.1 or Article  2.2.1.1 to support such a view. Such an 
interpretation is also likely to create systemic problems as in conducting their 
ordinary -course -of-trade test under Article  2.2.1 investigating autho rities would be free 
to use a cost of production calculated inconsistently with Article  2.2.1.1, thereby 
frustrating the very purpose of this test.276 
7.149.   We agree with this reasoning. Moreover, we co nsider that the general thrust of this  reasoning  
also applies  with respect to an underlying violation of Article  2.2. Indeed, if the costs used in the 
ordinary -course -of-trade test under Article  2.2.1 were not costs in the country of origin, then it is 
not clear how such costs could be properly used to determine bel ow-cost sales by the exporter which 
is, of course, in the country of origin.  
7.150.   The legal framework for Article 2.2.1.1 appears in section  7.3.1.1  above. 
7.4.2.2   Main party arguments  
7.151.   China  makes this claim with respect to the stainless steel sinks  original investigation, interim 
reviews and expiry review. China considers that this claim is dependent on AD claim 3  raised under 
Article  2.2.1.1 , discussed further above .277 China notes that in these segments  the ADC used 
non-Chinese surrogate costs, rather than the Chinese exporters'  costs of production, in  constructing 
normal values and/or  determining whether sales made by the relevant exporters were made in the 
ordinary course of trade  for purposes of assessing whether such sales were below -cost.278 China 
argues that having wrongfully reject ed the exporters'  costs of production , contrary to  Article  2.2.1.1, 
the ADC also violated Article  2.2.1 by subsequently using non -Chinese surrogate costs in the 
ordinary -course -of-trade test.279 China contends that the violation of Article  2.2.1 also resulted in 
an inconsistency with Articles  2.1 and  2.2.280  
7.152.   China claims that  Australia violated Article  2.2.1.1 of the Anti-Dumping Agreement  because  
the ADC failed to calculate relevant costs "on the basis of records kept by the exporter or producer 
under investigation" within the meaning of Article  2.2.1.1. T his is so because, according to China, 
the ADC instead rejected the exporters'  costs because they "did not reasonably reflect competitive 
 
274 Australia's  first written submission, para.  408; China's first written submission, paras. 145 and  247. 
275 Panel Report, Ukraine – Ammonium Nitrate , para.  7.114.  
276 Panel Report, Ukraine – Ammonium Nitrate , para. 7.116.  (fn omitted)  
277 China 's response to Pan el question No. 2.  
278 China 's response to Panel question No. 37,  and No.  69, para.  61; annex A  to China's  responses to 
Panel questions after the second meeting of the Panel . 
279 China 's first written submission, para. 247. 
280 China 's first written submission, paras.  246-250. China also claims a violation of Article  VI:1 of the 
GATT 1994.  WT/DS603/R  
 
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  market costs" within the meaning of applicable Australian law , which, in China's view, is a 
misapplication of the seco nd condition in the first sentence of Article 2.2.1.1 .281  
7.153.   Australia  agrees with China that the ADC used surrogate costs for 304 SS CRC in performing 
the ordinary -course -of-trade test in the original investigation and expiry review, and in constructing 
normal value in the original investigation.282 Australia further agrees that this claim  is dependent on 
whether Australia  violat ed Article  2.2.1.1 .283 
7.154.   With respect to the investigation, Australia  argues that the ADC  acted consistently with 
Article 2.2.1.1 because the ADC  made a negative finding as to the second condition  in the 
investigation .284 According to Australia,  "[t]he ADC determined that the exporters'  records did not 
adequately capture the cost of 304 SS CRC, and as a result, the ADC deci ded to adjust the 
exporters'  recorded costs for 304 SS CRC in order to construct normal value" .285 Australia stresses 
that the ADC's  findings for purposes of the second condition of Article  2.2.1.1 were not made on the 
basis that the exporters'  records did not reflect "competitive market costs".286 Rather, according to 
Australia, the ADC acknowledged that it needed to make findings specifically with respect to the 
strictures of the second condition of Article  2.2.1.1287, and then did so by finding that the 
exporter's  records reflected 304 SS CRC costs that were distorted by the Chinese 
Government's  interventions in the steel market.288 Australia explains that:  
[T]he ADC determined not to employ the 304 SS CRC costs in the exporters'  records 
not because the costs themselves  were unreasonable, but because the ADC had 
determined that the recorded costs did not reasonably  reflect  the actual  304 SS CRC 
costs associated with the production and sale of the product under consideration. In 
other words, the ADC determined under the second condition of Article  2.2.1.1 that the 
exporters'  records did not reasonably reflect the exporters'  costs because the records 
were not an accurate and reliable reflection of the costs actually incurred in the 
production and sale of stainless steel sinks.289  
7.155.   Australia also indicates that the Chinese Government  refused to provide certain information 
to the ADC  regarding the operation of the steel market in China, which led the ADC to rely on 
information reasonably available to it in  its analyses in this context.290  
7.156.   With respect to the expiry review, Australia  argues that China has not made a prima  facie 
case with respect to this segment. This is so, in Australia's view, because in the investigation there 
was a negative finding for th e second condition in Article  2.2.1.1 whereas in the expiry review there 
was a positive finding under both the first and the second conditions . Therefore , according to 
Australia,  in the expiry review , the ADC relied on the flexibility provided by the word "normally " in 
the first sentence of Article  2.2.1.1 in rejecting the exporters ' 304 SS CRC costs.291 Australia 
considers that because China never recognized this change of essence it did not make  a prima facie 
case with respect to the expiry review.292 Australia also asserts that there were other relevant 
differences as between the investigation and expir y review. Specifically,  Australia contends that, 
although the ADC used North American and European 304  SS CRC costs as surrogate costs in both 
segments, the ADC used surrogate costs for constructing normal value and performing the 
ordinary -course -of-trade test in the original investigation, but only used surrogate costs for the 
ordinary -course -of-trade test in the expiry review.293 Australia also indicates that the ADC obtained 
 
281 China 's first written submission, section  F.1.  
282 Australia's response to Panel question No. 69,  para. 22.   
283 Australia 's first written submission, para. 409; response to Panel question No. 2.  
284 Australia 's second written submission , para. 241.  
285 Australia 's first written submission, para. 363; second written submission , para. 241 ; and response 
to Panel question No. 78, paras. 85 -91.  
286 Australia 's first written submission, para. 364. 
287 Australia 's first written submission, para. 365. 
288 Australia 's first written submission, para. 366.  
289 Australia 's first written submission, para. 367 (e mphasis original) . See also ibid. paras.  374-380.  
290 Australia 's first written submission, paras.  353-361 and 374.  
291 Australia's response s to Panel question No. 69, para.  24, and No. 78, paras. 106 -108. 
292 Australia's responses to Panel question No. 69, par a. 24, Nos. 100 and 107.  
293 Australia's response to Panel question No. 69, para.  22.  WT/DS603/R  
 
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  its surrogate 304 SS CRC prices from different data sources in the original inves tigation and expiry 
review.294 
7.157.   China  responds that the ADC made no proper finding as to the second condition in either the 
investigation or the  expiry review.295 China also argues that this claim operates with respect to the 
wrongful determination of costs whether or not normal values were constructed in the expiry review, 
and that the ADC made no reference to the term "normally ", as used in Article  2.2.1.1 of the 
Anti-Dumping  Agreement, in its expiry review report.296 China also argues  that in the expiry review 
the ADC used surrogate costs for both constructing normal value and for performing the 
ordinary -course -of-trade test.297 China agrees with Australia that the ADC used a 304 SS CRC price 
obtained from two different sources in the investigation and the expiry  review but disagrees that 
this means that t here was a change of essence between the two  segments .298 
7.158.   We note that both parties indicate that China 's other cl aim under Article  2.2.1.1, discussed 
in the section immediately above, underlies this claim. We agree. Thus, we incorporate the 
parties ' arguments with respect to that claim by reference here.   
7.4.2.3   Expiry  
7.159.   China's claim concerns the stainless steel sinks  original investigation, interim reviews and 
expiry review. As discussed in section 7.2.2 above , we shall first consider whether or not the aspect 
challenged by China has expired. To do so, we shall consider whether there was a change of essence 
in the approach taken by the ADC to reject exporters ' costs as between the investigation and expiry 
review , and do not examine the interim reviews .  
7.160.   In the original  investigation, the ADC constructed certain normal values for investigated 
exporters, and thus had to determine such exporters ' costs of production.299 The ADC noted that 
"Regulation 180(2)  requires that if an exporter keeps records in accordance wit h the appropriate 
GAAP, and those records reasonably reflect competitive market costs associated with the production 
of like goods, then the cost of production must be worked out using the exporter's  records" and that 
"the records of Chinese exporters of t he goods have been kept in accordance with the relevant 
GAAP" .300 This is an affirmative finding under the first condition of the first sentence of 
Article  2.2.1.1. The ADC then found "that 304 SS CRC (also supplied in sheet form)  prices in China 
are affect ed by GOC influences in the iron and steel industry, and hence do not reasonably reflect 
competitive market costs, and should be replaced by a competitive market substitute" .301 We 
consider this a clear statement to the effect that the ADC rejected the use of exporters ' 304 SS CRC 
record costs because they did not reasonably reflect a competitive market cost.302 We further note 
 
294 Australia's responses to Panel question No. 78, para. 25 (table).  
295 China's second written submission, paras. 174 -183; comments on Australia's responses to 
Panel  question No. 69, para. 19, Nos. 80 and 100; and responses to Panel question Nos.  69, 80, 100  and 107.  
296 China 's comments on Australia's response to Panel questio n No.  69, paras. 17-19.  
297 China 's response to Panel question No. 69, para. 61.  
298 China's response to Panel question No. 69, para. 43.  
299 Investigation 238 final report  (Exhibit CHN -2), pp. 39 -43.  
300 Investigation 238 final report (Exhibit CHN -2), p. 42. 
301 Investigation 238 final report (Exhibit CHN -2), p.  42. 304 SS CRC is a key input in the production of 
stainless steel sinks. ( ibid. p. 40). 
302 As discussed in section 7.3.1.4  above , this was not a finding under the second condition of the first 
sentence of Article  2.2.1.1. We discern nowhere else where the ADC issued any finding  under the second 
condition , whether affirmative or negative.  We note that Australia argues that , while not made expressly in the 
language of Article 2.2.1.1, a negative finding under the second condition is evident in the report. Australia 
submitted that  the ADC understood that it had to make a finding under the second condition of Article  2.2.1.1, 
as evidenced by the ADC 's statement that:  
However, the Commissioner does not consider this ability to amend costs is limited to situations 
where costs are not reasonably reflective of 'competitive market costs ', but also where  costs do 
not reasonably reflect the costs associated with the production and sale of the goods or like goods 
in general. In such cases, these costs do not 'reasonably reflect the costs associated with the 
production and sale of the product under considera tion' as provided for by Article  2.2.1.1.  
(Investigation 238 final report  (Exhibit CHN -2), p. 146 )  
We ultimately find such statement s immaterial because they do not amount to findings under the 
second condition.  (Australia's second written submission, paras. 238 -244; responses to Panel question No. 61, 
para. 194, and No. 78, paras. 85 -91).  WT/DS603/R  
 
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  that the ADC used the surrogate costs not only to construct certain normal values, but also to 
perform the ordinary -course -of-trade test.303  
7.161.   In the expiry review, the ADC again rejected exporters ' costs of 304 SS CRC for purposes of 
performing the ordinary -course -of-trade  test, but not in constructing normal values because  no 
normal values were constructed.304 In doing so, the ADC found  – under the first condition of the first 
sentence of Article  2.2.1.1 – that the relevant exporters ' records were kept in accordance with the 
GAAP of China.305 The ADC also stated that "[t]hrough the verification of each exporter 's production 
data, the Comm ission found that the stainless steel production costs in each exporter 's production 
records were a reasonable reflection of the price paid to their stainless steel suppliers. To this extent, 
the Commission is satisfied that the cost of production records reasonably reflect s the costs 
associated with the production of like goods ".306 We consider this to be , on its face,  a clear 
affirmative second condition finding under the first sentence of Article  2.2.1.1  with respect to 
stainless steel costs . China argues  that it is not an affirmative second condition finding because 
"[t]he second condition does not ask whether any one or other of an exporter 's actual invoiced and 
paid-for costs is a 'reasonable reflection of the price paid '".307 In our view, however, the accurate 
reflection in exporters' records of the costs actually paid for certain production inputs is precisely 
upon what the second condition of Article  2.2.1.1 focuses. In sum, in the expiry review the ADC 
made affirmative findi ngs under both the first and second conditions of the first sentence of 
Article  2.2.1.1. The ADC then went on to again reject exporters ' 304 SS CRC record costs because , 
in its view,  they did not reasonably reflect competitive market costs .308  
7.162.   We consider that there was a change of essence in the approach taken by the ADC as 
between the investigation and expiry review. We first note that in the investigation, the ADC used 
surrogate costs for constructing normal values and performing the ordinary -course -of-trade test. In 
the expiry  review, the ADC used surrogate costs only in performing the ordinary -course -of-trade  
test (the ADC did not construct normal values in the expiry review).  In the context of this claim, 
however, this difference is immaterial because a violation of Article 2.2.1.1 may occur  in rejecting 
the exporters record costs whether this is done for purposes of selecting costs to use in normal valu e 
construction or for performing the ordinary -course -of-trade test.309 
7.163.   We also note that i n the investigation, there was an affirmative findin g under the first 
condition, but no finding under the second condition. In the expiry review, there were affirmative 
findings under both the first and second conditions. This change is material because, as discussed 
in section  7.3.1.1, this means that in the investigation, the ADC was unable to rely on any flexibility 
afforded by the word "normally " in the first sentence of Article  2.2.1.1 to reject 
exporters ' 304 SS CRC costs; but in the expiry review, the ADC could potentially rely on such 
flexibility. We therefore find that the ADC 's approach to rejecting exporters ' 304 SS CRC record costs 
in the original investigation has expired, having been replaced by the appro ach taken in the expiry 
review.310 In the next section, we will therefore focus on the approach taken by the ADC in the expiry 
review and, in particular, examine whether China has raised specific arguments, in a timely manner, 
vis-à-vis that approach.  
 
303 Investigation 238 final report (Exhibit CHN -2), pp. 39 -43 and 207 -219.  
304 Continuation 517 final report (Exhibit CHN -36), pp. 61, 65, 67, 70 -71, 73, and 107.  
305 See Continuation 517 final report (Exhibit CHN -36), p. 50 (noting "[f]or the purpose of this inquiry, 
the Commission is satisfied that the p roduction records of all of the selected exporter complied with 
section  43(2)(b)(i) of the Regulation in so far that they were kept in accordance with generally accepted 
accounting principles in the country of export ").  
306 Continuation 517 final report (Exhibit CHN -36), pp.  50-51.  
307 China 's comments on Australia 's response to Panel question No.  80, para. 69. (emphasis original)  
308 Continuation 517 final report (Exhibit CHN -36), pp.  51-53. The ADC stated "[i]n light of the ab ove 
finding that the production costs of stainless steel incurred by Chinese exporters of the goods do not 
reasonably reflect competitive market costs for that input, the Commission has considered how best to 
determine what a competitive market substitute price for this input in China should be, having regard to all 
available information ".  
309 See China's p anel request, para. B.1.3 (referring to  the "determination of normal value" with respect 
to AD  claim 3).  
310 We decline to make fin dings with respect to the approach taken in the original investigation. See 
section 7.6 below .  WT/DS603/R  
 
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  7.4.2.4   Evaluation  
7.164.   We recall Australia 's argument that China did not make a prima facie case with respect to 
the expiry review because China bases its arguments on an incorrect factual predicate, i.e. that the 
ADC failed to make a ny finding under  the second condition of  the first sentence of Article  2.2.1.1  in 
the expiry review .  
7.165.   In light of Australia 's argument, we recall the manner in which China has challenged the 
expiry review in this proceeding. At no point before the second substantive meeti ng did China  discuss 
the second  condition affirmative finding in the expiry review. China had predicated this claim , rather,  
on the notion that there was no proper second  condition finding.  Indeed, even after the second  
meeting, China adhered to its positi on that there was no affirmative second  condition finding.311 As 
discussed in the above section, this is incorrect . We therefore consider that China has not established 
a factual basis for its claim.  
7.166.   We also find that, even if China had acknowledged the affirmative second  condition finding 
when China first specifically addressed this finding at the second meeting312, this, in our minds, 
would have been too late for China to make  a viable argument against the expiry review.  Panels, of 
course, consider arguments submitted throughout the proceedings.313 However, introducing a new 
line of argumentation so late in this proceeding would raise due process concerns in our minds.314 
The Working Procedures of the Panel reflect the basic structure of the proceeding as envisioned by 
the DSU, i.e. a first phase in which the parties present the facts of their cases and their arguments 
(first written submission s and first meeting), and a second phase in which parties present rebuttals 
(second written submissions and second meeting).315 If China could introduce an entir ely new 
argument in the second phase as to why the ADC violated Article  2.2.1.1, Australia would not be 
provided a meaningful opportunity to respond to, and reasonably develop, its position against such 
an argument. As explained in section 7.3.1.1  above , any argumentation based on the ADC making 
both affirmative first and second condition findings would present a new argument because in that 
case the issue arises as  to whether the word "normally " present ed a basis to reject 
exporters ' relevant costs for purposes of conducting the ordinary -course -of-trade test. Under 
China's  argument of non -compliance, any flexibility offered by the word "normally " is never 
triggered.  
7.167.   In light of the for egoing, we find that China has failed to make a prima facie case that the 
ADC acted inconsistently with Article s 2.2.1.1 or 2.2.1 in the context of  AD claims 3 or 4.316 We 
therefore also note that we need not address or resolve the parties' arguments concerning whether 
the word "normally" could have provided a basis for departing from using exporters' record costs.  
7.4.3   AD claim 1 under  Article  2.2 of the  Anti-Dumping  Agreement : costs of production in 
the country of origin  
7.168.   Under AD claim 1, China argues that the ADC selected surrogate costs that did not represent 
the costs of production in the country of origin under Article 2.2 of the Anti -Dumping Agreem ent in 
order to determine the margin of dumping. We recall that China's AD claim 2 is predicated on the 
notion that Australia violated Article  2.2.1 in using surrogate costs for 304 SS CRC  to perform the 
ordinary -course -of-trade test (which is used to help  determine normal value and thus the margin of 
dumping), costs that were  improperly chosen under Article  2.2. We thus consider that 
 
311 See China's first written submission , section F.1 ; second written submission, section  F.1.a; response s 
to Panel question Nos. 62, 79, 80, 100, 106, 107; and comments on Australia's  responses to Panel 
question  No. 69, para.  19, No. 78, para.  56(c), and No. 100, paras. 116 -117. See also footnote 5 to 
question  No. 80(a) in the Panel's  questions sent to the parties before the second substantive meeting.  
312 See footnote 5 to question No. 80(a) in the Panel's questions sent to the parties before the second 
substantive meeting.   
313 Appellate Body Report,  Korea – Dairy , para. 139; Panel Report,  China – Broiler Products , para. 6.74.  
314 Australia also argues that it would be too late to advance such arguments. (Australia 's second 
written submission , para. 130). 
315 Working Procedures  of the Panel , para. 3. 
316 We also make no findings with respect to the other provisions that China alleged had been violated in 
the context of AD claims 3 and 4, i.e. Articles  2.1 and 2.2 of the Anti -Dumping Agreement and Article  VI:1 of 
the GATT 1994. (See China's first written su bmission, sections F.1 and F.2 ). We discern no independent  basis 
on which to find violation of these provisions.   WT/DS603/R  
 
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  China's  AD claim 1 is most effectively and efficiently addressed in conjunction with AD claim 2. We 
turn to that claim immed iately below.  
7.4.4   AD claim 2 under  Article s 2.2 and 2.2.1  of the Anti-Dumping  Agreement : use of 
correct "costs" in the ordinary -course -of-trade  test  
7.169.   The applicable legal framework for this claim has already been set forth in 
sections  7.3.2.1 and 7.4.2.1  above.  
7.4.4.1   Main party arguments  
7.170.   China  makes this claim with respect to the s tainless steel sinks original investigation, interim 
reviews, and expiry review.317 China  notes  that Article  2.2.1 of th e Anti-Dumping  Agreement  
provides that "sales of the like product in the domestic market of the exporting country" may be 
treated as outside the ordinary course of trade  if such sales are below -cost. China asserts that the 
word "costs" as used in Article  2.2.1 refers to  the "costs of production in the country of origin" as 
that term is used in Article  2.2. China therefore further recalls that the ADC, in the stainless steel 
sinks investigation, used surrogate costs  for 304 SS CRC , rather than the exporters'  costs, in 
determining whether sales made by the relevant exporter were made in the ordinary course of trade  
for purposes of assessing whether such sales were below -cost. China argues, therefore, that because 
the ADC used surrogate costs which were not costs of producti on in China, and used those same 
surrogate costs in the ordinary -course -of-trade test performed under Article  2.2.1, Australia violated 
Article  2.2.1.318 China stresses, however, that in its view this claim is not dependent on any other 
claim s China makes.319 
7.171.   China argues that the ADC acted inconsistently with Article  2.2 of the 
Anti-Dumping  Agreement because in the relevant segments  the ADC rejected using the 
exporters'  costs for 304 SS CRC when determining normal values, and instead used non -Chinese 
surroga te costs  from Europe and North America .320 China claims that, in doing so, Australia violated 
Article  2.2 of the Anti-Dumping Agreement  because  the ADC used costs that were not "the cost of 
production in the country of origin" within the meaning of Article  2.2. More specifically, China claims 
that the costs used were specifically chosen by the ADC because they were meant to not represent 
the costs of production in China, and that the ADC made no material effort to adapt such costs so 
that they could reasonab ly be considered "the cost of production in [China]". China cites the 
Appellate  Body reports in EU – Biodiesel  (Argentina)  and Ukraine  – Ammonium  Nitrate  in support of 
its arguments in this context.321  
7.172.   Australia agrees with China that "the cost of producti on to be used for the OCOT assessment 
under Article  2.2.1 must meet the same disciplines as those applicable to the cost of production in 
the country of origin under Article  2.2 and the rules regarding the use of exporters'  records in 
Article  2.2.1.1" .322 In light of such observations, Australia concludes that this claim is dependent on 
China's  other Article  2.2 claim, discussed in the section immediately above , insofar as this claim 
concerns the stainless steel sinks investigation . With respect to the int erim and expiry reviews, 
Australia submits that for AD claim 2 China cannot have made a prima facie  case because it has not 
addressed the differences in the ADC's  ordinary -course -of-trade assessment between the 
investigation and the interim and expiry revi ews, or advanced any separate arguments .323  
7.173.   Australia, however, asserts that the ADC acted consistently with Article 2.2. Australia  argues  
that the ADC had to use non -Chinese surrogate data due to the distortions in the Chinese steel 
 
317 See e.g. China's responses to Panel question Nos. 37 and 69 ; annex A  to China's responses to 
Panel  questions after the second meeting of the  Panel.  
318 China 's first written submission, paras.  132-146. China argues, as a consequence, Australia violated 
Articles  2.1, 2.2, and 2.2.1.1.  (ibid. para. 8). 
319 China comme nts on Australia's response to Panel question No. 69, para. 20. 
320 China 's first written submission, paras.  76-95; response to Panel question No. 69 ; and annex A  to 
China's responses to Panel questions after the second meeting of the Panel .  
321 China 's first wri tten submission, paras.  96-119. China also claims violations of Articles  2.1 
and 2.2.1.1 of the Anti -Dumping Agreement and Article  VI:1 of the GATT 1994.  
322 Australia 's first written submission, para. 408.  
323 Australia 's first written submission, para. 410; responses to Panel question No. 5, paras. 1 -2, and 
No. 69, paras. 27 -28.  WT/DS603/R  
 
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  market caused by government involvement.324 Australia further contends  that the ADC selected the 
costs after consider ing multiple different potential surrogate costs and decided on the selected 
sources , after  unsuccessful attempts to secure relevant information from the Chinese 
Government.325 Australia specifically indicates that the ADC rejected using other benchmarks 
because, inter alia, some of them  included Chinese steel data and others  – particularly those from 
other Asian countries – were likely distorted by the prevalence of Chinese steel in the region.326 
Australia argues that the ADC actively sought to adjust these data  but could not do so in ce rtain 
ways because the Chinese Government and the exporters failed to provide information to the ADC.327 
Australia underlines  that the ADC used the chosen information in an attempt to avoid reintroducing 
the same market distortions it had identified in the Chinese steel markets.328 Australia claims that 
the ADC adjusted the costs by adding, as appropriate, delivery costs and slitting costs for 
304 SS CRC depending on the exporters' circumstances.329  
7.174.   In response to a question from the Panel, Australia also arg ued that there were differences 
between the investigation and expiry review , with which China did not engage,  because in the 
investigation the ADC used the price of North American and European prices for 304 SS CRC  
published by MEPS  (International)  Ltd. (M EPS), a steel market data company, whereas in the expiry 
review the ADC used prices for North American and European 304 SS CRC published by Steel 
Business Briefing Ltd.330 Australia further notes that in the original investigation the ADC used 
surrogate cos ts for constructing normal values and for performing the ordinary -course -of-trade test, 
but in the expiry review the ADC only used surrogate costs for conducting the 
ordinary -course -of-trade test because no normal values were constructed in the expiry revi ew.331  
7.175.   China  responds that the ADC's adjustments for delivery and slitting costs were insufficient 
to render a cost of production in China.332 China also indicates that in the expiry review the ADC 
used surrogate costs both for constructing normal value and  for performing the 
ordinary -course -of-trade test.333 Moreover, China indicates that even if the ADC used different data 
sources to obtain the surrogate costs in the investigation and expiry review, this is immaterial 
because the essence of the challenged m ethodology is the use of out -of-country data and the lack 
of appropriate adjustments to reflect the cost in the country of origin.334 
7.4.4.2   Expiry  
7.176.   China 's claim concerns the stainless steel sinks  original investigation, interim reviews, and 
expiry review.335 As discussed in section 7.2.2 above,  we will address first the issue of whether or 
not the aspect challenged by China has expired . In this regard , we shall consider whether there was 
a change of essence in the approach taken by the ADC to select surrogate costs as between the 
original investigation and expiry review , and do not examine the interim reviews .  
7.177.   We first recall that, per our discussion su rrounding expiry with respect to AD claim 4, above, 
the ADC used surrogate costs in constructing normal value and performing the 
ordinary -course -of-trade  test in the investigation, but only in performing the 
ordinary -course -of-trade test in the expiry revi ew. We do not ultimately consider this change to be 
material in this specific context, however. This is so because both parties agree, as do we, that costs 
that represent the costs of production in the country of origin, within the meaning of Article 2.2, 
must be used in performing the ordinary -course -of-trade test under Article 2.2.1. Thus, use of 
 
324 Australia 's first written submission, paras.  387-391. 
325 Australia 's first written submission, paras.  392-397. 
326 Investigation 238 final report  (Exhibit CHN -2), pp. 212 -215.  
327 Australia's  first written submission, paras.  399-402. 
328 Australia's second written submission, para. 254. 
329 Australia's  first written submission, paras.  404-405; response to Panel question No. 69, para.  25. 
Australia also argues that if t he Panel were to find a violation under AD claim 3 , then it would not be necessary 
or desirable to also issue findings with respect to AD claim  1. (Australia 's response to Panel question No. 12 ). 
This argument is moot, however, as we have found no violatio n under AD claim 3 for the stainless steel sinks  
proceedings . 
330 Australia's response to Panel question No. 69, para. 25 (referring to Investigation 238 final report 
(Exhibit CHN -2), pp. 42 and 217 ; Continuation 517 final report  (Exhibit CHN -36), p. 54). 
331 Australia 's response to Panel question No. 69, para. 22. 
332 China 's response to Panel question No. 69, para. 54.  
333 China 's response to Panel question No. 69, para. 61.  
334 China's resp onse to Panel question No. 69, para. 43(b).  
335 China's response s to Panel question Nos. 37 and 69.  WT/DS603/R  
 
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  surrogate costs in performing the ordinary -course -of-trade test is sufficient, in our view, to examine 
whether such costs comported with the standards in Article  2.2 for purposes of examining whether 
there is a violation of Article 2.2.1.336  
7.178.   We also recall that, i n the investigation, to select a surrogate cost for 304 SS CRC, the ADC 
"determined that the most reasonable option available is a MEPS -based average pri ce for 
304 SS CRC using the monthly reported MEPS North American and European prices alone (excluding 
the Asian price). This was calculated using the monthly reported data for the investigation period 
available from MEPS" .337 The ADC then explained that it "compared:  the benchmark MEPS European 
and North American average 304 SS CRC prices; to verified purchase prices actually incurred by 
Chinese exporters of deep drawn stainless steel sinks when purchasing this input to arrive at an 
individual percentage dif ference between the benchmark and purchases prices, which was then be 
applied to the stainless steel costs recorded in the exporters'  records" .338  
7.179.   The ADC made two adjustments to the surrogate  costs depending on the circumstances of 
the exporters : (a) the ADC added to the MEPS benchmark price "the verified annual weighted 
average delivery cost of 3 04 SS CRC from one selected exporter … to arrive at a per tonne 
304 SS CRC delivery cost in China "339; and (b) the ADC added a cost for slitting 304 SS CRC  "based 
on the annual average verified price difference between slit and unslit product purchased at the 
same time by the same exporter from the same supplier of slit and unslit stainless steel ".340 This 
latter adjustment was considered necessary because the MEPS benchmark price was for unslit  
304 SS CRC.341 
7.180.   In the expiry review , the ADC again selected North  American and European 304  SS CRC 
prices  as surrogate costs for 304 SS CRC. However, the ADC obtained the prices from a different 
source , i.e. from Steel Business Briefing Ltd.342 The ADC again adjusted for delivery and slitting 
costs.343 
7.181.   We consider that there was no change of essence in the ADC 's approach to surrogate cost 
selection as between the investigation and expiry review. Indeed, the same surrogate costs were 
chosen in each, i.e. European and North American 304 SS CRC prices. The only noteworthy difference 
we discern is that the surrogate  costs were obtained from different sources in the two segments, 
i.e. MEPS in the investigation and Steel Business Briefing Ltd . in the expiry review. This minor 
difference in the approaches between the two segments is not, in our view, material enough to alter 
the key aspect of the order challenged by China, i.e. the selection of European and North American 
304 SS CRC costs to replace exporters ' 304 SS CRC costs with adjustments only made for delivery 
costs and slitting costs.  
7.182.   We therefore consider that th e challenged aspect of the anti-dumping  order has not expired . 
We therefore will make findings with r espect to this challenged aspect of the order and , as explained 
above,  focus our attention on the expiry review.   
7.4.4.3   Evaluation  
7.183.   As indicated in section 7.4.2.3  above , in the expiry review, the ADC rejected 
exporters ' record costs of 304 SS CRC for purposes of conducting the ordinary -course -of-trade test, 
and instead selected surrogate costs for doing so. Those costs were "the average price of grade 
304 [SS] CRC for North America and Europe published by [Steel Business Briefing Ltd .]".344 The ADC 
 
336 See China's panel request , para. B.1.1 (referring generically to  the "determination of the margin of 
dumping" with respect to AD claim 1).   
337 Investigation 238 final report (Exhibit CHN -2), pp.  42-43. This surrogate cost was "the same 
'benchmark ' price considered to be representative of 'adequate remuneration ' for the purposes of determining 
a benefit under Subsidy Program  1 – Raw Materials Provided by the Government at Less t han Fair Market 
Value " for purposes of the countervailing  investigation in the stainless steel sinks  proceedings . (Ibid.  p. 137 ). 
338 Investigation 238 final report (Exhibit CHN -2), p.  43. 
339 Investigation 238 final report (Exhibit CHN -2), p. 219.  
340 Investiga tion 238 final report (Exhibit CHN -2), p. 219.  
341 Investigation 238 final report (Exhibit CHN-2), p. 219.  
342 Continuation 517 final report (Exhibit CHN -36), pp.  53-54.  
343 Continuation 517 final report  (Exhibit CHN -36), p. 54. The  slitting cost adjustment was considered 
necessary because the benchmark price was for unslit  304 SS CRC.   
344 Continuation 517 final report  (Exhibit CHN -36), p. 53.  WT/DS603/R  
 
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  chose this benchmark because it  was the same surrogate cost selected in the original investigation. 
In particular, the ADC considered that the key factors in selecting the surrogate cost remained 
applicable, i.e. it "includes only data related to prices of 304 CRC stainless steel " and "does not 
include any Asian pricing data that may be unreasonable due to the influence of exported Chinese 
304 CRC stainless steel in the region ".345 The ADC further made adjustments for slitting and delivery 
costs, as it had done in the original investigati on.346  
7.184.   In the expiry review, w e note that one party before the ADC argued that: (a) any advantage 
in 304  SS CRC costs that Chinese companies enjoyed were not due to any identified government 
distortions but instead due to other advantages like cheaper elec tricity and nickel; and (b) European 
and North American market conditions were different than those in China. The ADC dismissed these 
arguments simply by noting that significant government  influence was present in the Chinese steel 
industry, and that in th e original investigation the surrogate price was deemed the only reasonable 
one primarily due to the absence of any influence from the Chinese steel markets.347  
7.185.   In our view, the ADC did not, in the expiry review, reasonably demonstrate that the selected 
surrogate costs, even with adjustments to delivery and slitting costs, reflected a "cost of production 
in the country of export " within the meaning of Article  2.2 of the Anti-Dumping  Agreement. Simply 
stated, the ADC never explained why 304 SS CRC costs on t wo different continents 
(i.e. North  America and Europe) represent a cost of production in China  rather than a cost of 
304 SS CRC in Europe and North America. Again, t he ADC selected the surrogate costs largely 
because they were free from influence of Chine se steel market conditions.  Thus, the surrogate costs 
were selected because they are not "distorted " Chinese  costs. But we discern no logical basis on 
which to conclude that this ipso facto makes them (presumably undistorted) Chinese  costs, and the 
ADC never offered a reasoned explanation as to why this would be the case.  
7.186.   On this basis, we find that the ADC acted inconsistently with the practice of an unbiased and 
objective investigating authority with respect to Article  2.2 of the Anti-Dumping  Agreement by failing 
to provide a reasoned and adequate explanation as to why the surrogate costs, with only 
adjustments for delivery and slitting  costs, represented a cost of production in China for the relevant 
exporters. As a result, and because i t used surrogate costs that were not demonstrated to be costs 
of production in the country of origin in conducting the ordinary -course -of-trade test, the ADC 
violated Article  2.2.1.348 
7.4.5   AD claim 6.a  under Article 2.4 of the Anti -Dumping Agreement: due allowa nce to 
ensure a fair comparison   
7.187.   The applicable legal framework for this claim has already been set forth in section  7.3.4.1  
above . 
 
345 Continuation 517 final report  (Exhibit CHN -36), p. 53.  
346 Continuation 517 final report  (Exhibit C HN-36), p. 54. One party before the ADC also argued that 
adjustments should be made to "reflect the same export terms as those received by the manufacturers in 
China ". In response, the ADC indicated that "this has been addressed in its rep lacement methodology ". 
(Continuation 517 final report ( Exhibit CHN -36), p. 55 ). In the original investigation, the ADC also noted that a 
slightly different thickness of steel was used in North America, although the ADC considered that this did not 
inflate the surrogate price because thicker steel was usually cheaper in this context. (Investigation 238 final 
report (Exhibit CHN -2), p. 216). The ADC also dismissed one argument from Jiabaolu that "the percentage 
difference between the 304 SS CRC benchmark and the price of that input incurred by exporters should be 
applied to the revenue generated by exporters in selling scrap stainless steel ". (Investigation 238 final report 
(Exhibit CHN -2), p. 137). 
347 Continuation 517 final report  (Exhibit CHN -36), p. 54.  
348 China also claim s violations of Article s 2.1 and 2.2.1.1 of the Anti-Dumping  Agreement and 
Article  VI:1 of the GATT 1994.  (China's first written submission, sections E.1 and E.2 ). We discern no 
independent basis on which to find violations of t hese provisions. T he Panel declines to make findings as to 
these claims as it would not be helpful in resolving the dispute.  WT/DS603/R  
 
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  7.4.5.1   Main party arguments  
7.188.   China  argue s that the ADC's  cost replacement methodology to determine normal values349 
generated relevant disparities between the normal value and the export price.350 China argues that 
such disparities represent differences affecting price comparability under Article  2.4.351 China 
submits that absent any due allowances by the ADC to account for these disparities352, the 
comparison between the normal value and the export price in each of the investigation  was not a 
"fair comparison" under Article  2.4.353 China, however, asserts that if the Panel were to find 
violations of Article s 2.2, 2.2.1, and 2.2.1.1  under AD claims 1 -4, then there would be no need for 
the Panel to addr ess this claim.354  
7.189.   China argues that the ADC's  failure to adjust for the actual differences in the costs of 
production for domestic sales and export sales resulting from  the use of non -Chinese surrogate costs 
stands in stark contrast to its decision  to make adjustments to ac count for the difference in 
recoverability  of value -added tax (VAT) in the same proceedings . For China, the approach taken by 
the ADC with respect to these two types of adjustments were neither unbiased nor even -handed.355  
7.190.   Australia  argues  that China's  claim under Article  2.4 is "entirely, and impermissibly, 
premised on China's  disagreement with Australia's  construction of normal value, and not on any 
failure to make due allowances under Article  2.4".356 Australia argues that there is no textual basis 
to cha llenge the ADC's  normal value calculation under Article  2.4. Australia thus rejects 
China's  position that Australia's  cost substitution resulted in a difference between normal value and 
export price that required an adjustment under Article  2.4. In Austral ia's view, Article  2.4 is only 
concerned with making appropriate adjustments which are unrelated to the construction of normal 
value pursuant to Article  2.2, because Article  2.4 presupposes that the normal value and export 
price have already been establish ed.357 Australia agrees with China that the Panel need not proceed 
to an analysis under Article  2.4 if China succeeds on AD claims 1 and 3.358 Australia also argues that 
China has lodged no "separate arguments … on the relationship between the application of  the OCOT 
assessment and any failure to make due allowance to ensure a fair comparison ".359 
7.4.5.2   Expiry  
7.191.   China's claim concerns the stainless steel sinks  original investigation, interim reviews and 
expiry review.360 As discussed in section 7.2.2 above,  we shall first consider whether or not the 
aspect challenged by China has expired. To do so, we shall consider whether there was a cha nge of 
essence in the approach taken by the ADC with respect to the need for adjustments to account for 
any difference resulting from the ADC's use of the cost replacement methodology as between the 
investigation and expiry review , and do not examine the i nterim reviews . 
7.192.   In the investigation, the ADC constructed normal values  by using cost s of production 
incorporating surrogate costs.361 However,  in the expiry review, the ADC decided not to construct 
the normal values  for selected exporters  and used instead the data pertaining to the 
 
349 China notes that the ADC calculated normal values on the basis of a domestic price or constructed 
normal value under Article  2.2 using  "a substituted and inflated cost or cost used for the production of subject 
products ". (China's first written submission, para.  324).  
350 China's  first written submission, paras.  326 and 336 ; opening statement at the first meeting  of the 
Panel , paras.  89 and 90.  
351 China's  first written submission, paras.  332-333 and 335.  
352 China's  first written submission, paras.  327-331. 
353 China's  first written submission, paras.  15(a), 322, 324,  and 327.  
354 China's second written submission, paras. 279 -280. 
355 China's  first written submission, paras.  338-342. See section 7.4.6.1.1  below for  China's arg uments 
regarding VAT adjustments. China clarifies  that this lack of evenhandedness is a factor for the 
Panel's  consideration "as part of its standard of review of the investigating authority's  decision in the context of 
Article  2.4". (China's response to P anel question No. 18, para. 63). 
356 Australia's  first written submission, paras.  314, 318, and 413. See also ibid. paras.  532-535.  
357 Australia's  first written submission, para. 328; second written submission, paras. 216, 218 , and 221.  
358 Australia's response of Panel question No. 20, para. 40. 
359 Australia 's response of Panel question No.  69, para.  29.  
360 China's responses to Panel question Nos.  37 and 69.  
361 China's  first written submi ssion, paras.  401 and 417 -418; Investigation 238 final report  
(Exhibit  CHN-2), pp. 43 -44. WT/DS603/R  
 
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  exporters'  recorded sales.362 Thus, the  alleged  need for an adjustment to account for differences 
generated by the use of surrogate costs in constructing normal value did not arise in the expiry 
review.  We therefore consider that there was a  change of  essence as between the original 
investigation  and the expiry review  in this respect. Thus, the specific aspect of the order challenged 
by China, i.e. comparing export price and normal value constructed using surrogate costs without 
proper adjustment, has expired . We decline to issue findings with respect to this aspect of the order 
therefore, per the Panel's reasoning in section 7.6 below.  
7.193.   However, insofar as China's Article 2.4 claim is predicated on the normal value being flawed 
due to the use of surrogate costs in applying the ordinary -course -of-trade  test, we consider that 
there is no change of essence in the ADC's methodology in this respect bec ause the ADC used 
surrogate costs in performing the ordinary -course -of-trade test in both the original investigation and 
expiry review. We therefore will address  China’s claim insofar as it is based on the ADC’s alleged 
failure to make adjustments under Ar ticle 2.4 stemming from the use of surrogate costs in 
performing the ordinary -course -of-trade  test, and, as explained above, focus our attention on the 
expiry review.  
7.4.5.3   Evaluation  
7.194.   Insofar as normal value s calculated in the expiry review being  allegedly  flawed due to the 
use of surrogate costs in applying the ordinary -course -of-trade test, we have found in section  7.4.4 
above  that the ADC acted inconsis tently with Article s 2.2 and  2.2.1 by using surrogate costs  that 
did not represent the cost of production in China  in determining whether sales made by the relevant 
exporter were made in the ordinary course of trade  for purposes of assessing whether such s ales 
were below -cost. We also recall that the parties  agreed that there is no need for the Panel to review 
this claim separately if the Panel were to find a breach under Articles  2.2 and 2.2.1.1.363 For these  
reason s, we consider it unnecessary to make findings on whether the ADC also acted inconsistently 
with Article  2.4 by failing to make adjustment s to account for the differences generated through the 
alleged use of those improperly selected surrogate costs in appl ying the ordinary -course -of-trade  
test. 
7.4.6   AD claim 6.b under Article 2.4 of the Anti-Dumping  Agreement  
7.195.   China claims that, in the stainless steel sinks  proceedings, the ADC breached Article  2.4 in 
three additional respects .364 We will address these in turn.  
7.196.   The applicable legal framework for this claim has already been set forth in section  7.3.4.1  
above.  
7.4.6.1   AD claim 6.b.i : VAT adjustment  
7.4.6.1.1   Main party arguments  
7.197.   China's claim regarding the VAT adjustment is two -fold. First, China argues that the ADC 
failed to provide a reasoned and adequate explanation that differences in VAT recoverability affected 
price comparability.365 Second, China argues that the upward VAT a djustment both misrepresented 
and overstated the actual "extra costs" associated with the difference in VAT recoverability.366 
 
362 Continuation 517 final report (Exhibit CHN -36), pp. 61, 65, 68, 71 and 73. See also 
Australia's  response to Panel question No. 69, para.  31; China's response to Panel question No. 69, p. 107.  
363 Australia's response of Panel question No. 20, para. 40; China's response to Panel question No. 20, 
para. 77; opening statement at the first meeting  of the Panel , para. 97; and  second written submission, 
para. 279. 
364 China raises five points to support its AD claim 6.b in its panel request and in paragraph  15(b) of its 
first written submission. However, in light of the fact that the first and second points concern the same subject 
matter, i.e.  upward adjustment t o account for VAT recoverability; and the third and fourth points concern the 
accessories adjustments, we address this claim in three sections . We note that in its first written submission 
Australia also organi zed its rebuttal in three categories.  
365 China 's first written submission, paras.  350(a) and 353. See also China 's opening statement at the 
first meeting of the Panel, para. 100; response to Panel question No. 27, para. 97(b) ; and second written 
submission, para. 281. 
366 China's  first written submission, para. 356. WT/DS603/R  
 
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  7.198.   Regarding the ADC's conclusion that differences in VAT recoverability affected price 
comparability , China argues that there was no  reference in the investigation report to any record 
evidence show ing that the VAT difference had an effect on price comparability .367 China argues that 
the ADC's  statement  that the difference " should  have an associated effect on export price " shows 
that it s finding was based on "guesswork"368, and "an unsupported and incorrect presumption" .369 
In China's  view, in order to make an adjustment under Article  2.4, the ADC should , as a first step, 
identify and quantify the " actual VAT costs that the exporter would have incurred due to the lower 
VAT refund "370; then, the ADC should have sought information from the exporter as to how or 
whether the actual unrecovered VAT amount impacted the exporter's export pricing decision, and 
how that differed from the exporter 's domestic pricing decision.371  
7.199.   Regarding the method used by the ADC to calculate the amount of the adjustment, China 
argues that the ADC both misrepresented and overstated the actual "extra costs"  associated with 
the actual VAT recoverability difference.372 First, China argues that the ADC's  methodology of 
applying the difference to normal values was incapable of representing the " non-refundable  
value -added  tax (VAT)  expense " associated with the exp ort sales or its impact on price 
comparability.373 In China's  view, to make due allowance "on its merits " under Article  2.4, the due 
allowance should have been made in a way to appropriately capture the differences in the "actual  
liability  incurred  by the company "374, i.e. based on "the extent of the additional tax liability 
expense".375 Second, China contends that, by applying  an 8% VAT adjustment to an inflated normal 
value constructed using surrogate costs which were higher than the exporters' actual costs,  or to a 
sales-based normal value which went through an ordinary -course -of-trade test containing surrogate 
costs, the ADC's  method inflated the actual difference in VAT costs/liability associated with the 
Chinese exporter 's export and domestic sales busine ss.376 
7.200.   Australia  argues that the ADC adopted an upward adjustment to normal values because the 
evidence provided by the exporters such as Zhuhai Grand showed that there was an eight percentage 
point difference between the VAT recoverability for export and domestic sales, which would have 
affected pricing.377 Australia contends that the ADC set out its reasoning on this issue in the 
investigation report , which makes specific relevant reference to Zhuhai Grand's  submissions and the 
ADC's  verification findings.378 Furthermore, Australia argues that the ADC correctly applied the 8% 
upward adjustment to the constructed normal value even though the constructed normal value used 
surrogate costs, because to do otherwise would have reintroduced the distortions that the ADC had 
previou sly excluded in constructing normal value .379 
7.4.6.1.2   Expiry  
7.201.   China's claim concerns the stainless steel sinks  original investigation, interim reviews and 
expiry review.380 As discussed in section 7.2.2 above , we shall first consider whether or not the 
aspect challenged by China has expired. To do so, we shall consider whether there was a change of 
 
367 China's first written submission, paras. 350(a) and 353. See also China's opening statement at the 
first meeting of the Panel, para. 100; response to Panel question No. 27, para. 97(b) ; and second written 
subm ission, para. 281.  
368 China's first written submission, para. 353. 
369 China's second written submission, para. 281. See also China's response to Panel question No. 81 , 
paras. 121 -122. 
370 China's response to Panel question No. 81 , para. 118. 
371 China's respons e to Panel question No. 81 , para. 119.  
372 China's  first written submission, para. 356. 
373 China's  first written submission, para. 355. (emphasis original)  See also China's response to 
Panel  question No. 83, para . 128. 
374 China's  first written submission, para. 354 (referring to Investigation 238 final report 
(Exhibit  CHN-2), p.  149).  See also China's  first written submission, para. 340; second written submission, 
para. 281; response s to Panel question No. 27, para. 97, and No. 81, para. 118. In response to the 
Panel's  question, China argues that the logically correct calculation would be to calculate such amount on the 
export price, being the activity that generated the difference in the recoverable vs non -recoverable VAT and 
the subject of the difference being adjusted. (China's  response to Panel question No. 27, para. 97). 
375 China's  first written submission,  para. 354. 
376 China's  first written submission, paras.  338, 340, 341, 350, and 355-356. 
377 Australia's  first written submission, para. 428. 
378 Australia's  first written submission, para. 430. 
379 Australia's  first written submission, para. 434; second written submission, paras. 276-278. 
380 China's responses to Panel question Nos.  37 and 69.  WT/DS603/R  
 
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  essence in the approach taken by the ADC with respect to the ne ed for adjustments to account for 
any VAT recoverability difference and the ADC's calculation methodology to account for such 
difference as between the investigation and expiry review , and do not examine the interim reviews . 
7.202.   In the stainless  steel sinks investigation, the comparison between normal value and export 
price was carried out on "VAT -free basis". That is to say, the normal value and the export price are 
both net of any VAT when they are compared. Nevertheless, the ADC considered there to be  an 
"expense" or "extra cost" of unrecovered VAT expenses associated with export sales, but not with 
domestic sales.381 The ADC accounted for this perceived difference in taxation as between domestic 
and export sales382 by applying an upward adjustment of 8%  to the unadjusted normal values .383 
In the investigation  report , the ADC states that : 
Zhuhai Grand submitted that there should be no adjustment to normal values to account 
for differences in VAT between export prices and normal values in any case, as both the 
export price and the cost -based normal value (i.e. those calculated under 
s. 269TAC(2)(c)) are VAT -free. 
The Commissioner does not agree with Zhuhai Grand's submission that an adjustment 
for differences in VAT liability between the export and dome stic market is not warranted 
in general, simply because the constructed normal value and export prices being used 
for dumping margin comparison are VAT free.  
The purpose of the adjustment is that, when making the export sale, the company is 
aware of the fa ct that it is unable to recover the full amount of VAT paid on its inputs, 
and that this should have an associated effect on export price whereby the export price 
would be raised to accommodate this extra cost . Consequently, it is logical to upwards 
adjust  the normal value for this 8% difference in taxation , as provided for by 
s. 269TAC(9) of the Act.384 
7.203.   In the expiry review , the ADC also made adjustments for "non -refundable VAT expenses" by 
"[a]dd[ing] an amount for non -refundable VAT expenses  incurred on e xports of the goods to 
Australia" .385 Although this reference is somewhat summary in nature, we consider that it indicates 
that the ADC implicitly  carried forward its reasoning in the original investigation in to the expiry  
review  in order to make what appears to be (and neither party disputes)  the same adjustment to 
normal value for VAT in the expiry review.386  
 
381 Australia's  first written submission, paras.  427-428; China's  first written submission, para. 347; and 
Investigation 238 Primy verification visit report  (Exhibit  CHN-43), section  8.4. See also Investigation 238 
Zhuhai  Grand verification visit report  (Exhibit  CHN-35), p.  19; Investigation  238 Zhuhai  Grand's  questionnaire 
response  (Exhibit  AUS-14), p.  35 (where Zhuhai Grand states "[t]he export of the  subject goods during the 
[period  of investigation ] was subject to refund of VAT of 9%. The export VAT refund is calculated based on the 
[f.o.b.] export price "); Investigation  238 Primy's  questionnaire response  (Exhibit  AUS-15), p.  38 (where Primy 
said "on the exportation of the subject goods during the [period of investigation] Primy was entitled to [a] 
refund of VAT of 9% "); Investigation 238 Komodo Hong Kong Limited's  questionnaire response  
(Exhibit  AUS-13), p.  15 (where Komodo Hong  Kong Limited said "[d]uring the investigation period, the VAT 
refund rate for sink, drainer, tray and clips is 9%; for waste kit is 15%; for cutting board is 13%. Therefore, 
Komodo GZ incurs non -refundable VAT cost (2% -8%) for those Australia sales, as co mpared with the domestic 
sales VAT exclusive price "). 
382 Investigation 238 Primy verification visit report  (Exhibit  CHN-43), section  8.4; Investigation 238 final 
report (Exhibit  CHN-2), pp.  149-150. 
383 During the original investigation, the ADC used construc ted normal values for some models and 
normal values based on domestic sales that passed the ordinary -course -of-trade test, for other models . During 
the expiry review, the ADC did not construct normal values and used sales -based normal values instead. China  
uses the term "unadjusted " in its first written submission, as we understand it, to refer to the normal values 
calculated before the relevant adjustment under consideration have been made, i.e.  in this case the VAT 
adjustment.  
384 Investigation 238 final re port (Exhibit CHN -2), p. 150.  
385 Continuation 517 final report (Exhibit  CHN-36), pp.  62, 66, 69, 71 , and 74.  
386 According to Australia, the ADC identified and applied different rates of VAT liability for the expiry 
review period from 1  July 2018 to 30  June 2019.  (Australia's response to Panel q uestion No. 69, para. 30). See 
also China's comments on Australia's response to Panel question No. 69, para. 23 (arguing that this difference 
does not affect the expiry analysis).  We discern  no other differences in the approach by the ADC to this issue  in 
the expiry review , and the parties direct us to none. The fact that the VAT refund rate may have varied as 
between the original investigation a nd the expiry review does not change our conclusion.   WT/DS603/R  
 
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  7.204.   Accordingly, we consider that there wa s no essence change as between the two segments 
that is relevant to this claim, and that this aspect of the order is not expired. We will thus proceed 
to make findings with respect to it and , we focus our attention on the expiry review.  
7.4.6.1.3   Evaluation  
7.205.   We will address China's claim regarding the VAT adjustment  by examining its two principal 
aspects  in turn. As discussed in the section immediately above, we will focus our analysis on the 
expiry review .  
7.4.6.1.3.1   Whether the ADC failed to provide a reasoned and adequate ex planation that 
the differences in VAT recoverability affected price comparability  
7.206.   The first aspect of China's claim focuses on its assertion that there was no reference in the 
investigation report to any record evidence indicating that the VAT difference h ad an y effect on price 
comparability . China argues that Australia was not able to identify any such evidence when asked 
by the Panel.387 China further argues that the ADC's  statement that the difference " should  have an 
associated effect on export price " shows that its finding was based on "guesswork"388 and 
"an unsupported and incorrect presumption".389  
7.207.   We start with the question of whether the ADC identified and substantiated a difference  in 
VAT recoverability as between the export price and the normal va lue. We note that, while we focus 
our analysis on the expiry review,  as noted in paragraph 7.203  above , we will refer to the 
ADC's  reasoning in the investigation report, because we consider that the ADC implicitly carried 
forward its reasoning with respect to the VAT adjustments in the original investigation into the expiry 
review . We note at first that during the expiry review the ADC identified a di fference related to 
"non-refundable VAT expenses".390 In the original investigation , the ADC identified a difference in 
the unrecovered "amount of VAT paid on its inputs", which "should have an associated effect on 
export price whereby the export price woul d be raised to accommodate this extra cost".391 Australia 
referred to the difference as "costs applicable to exports (non -refundable VAT liability), that [sic] 
were not applicable to domestic sales" .392  
7.208.   It is clear and undisputed that that unrecovered input VAT occurs only when an export sale 
is made. There is, therefore, a clear connection between unrecovered VAT and export sales. 
Accordingly , we consider that the ADC properly identified a difference in VAT recoverability as 
between the domestic sales and the export sales , i.e. the input VAT for the domestic sales which is 
fully recovered  and the input VAT for the export sales which is only partially recovered.393 In 
quantitative terms, the difference is between the VAT on the input for  the production of an export 
sale and the VAT refund , i.e. 9% of the free on board (f.o.b.)  export price. We note that evidence 
on the record indicates  that, with respect to some exporters at least, the VAT refund resulted in  
unrecovered input VAT.394 China has also presented no evidence showing that the input VAT incurred 
in the production of an export sale equals or is less than the VAT refund  realized. W e thus consider 
that the ADC did not act inconsistently with the practic e of an unbiased and objective  investigating 
authority  in concluding that the VAT refund of 9% for export sales is likely to result in a difference 
in VAT recoverability for domestic and export sales.  
7.209.   We next consider the question of whether the ADC acted reasonably in determining that the 
identified difference affected price comparability . Differences in taxation  feature among the 
examples of factors that may affect the price comparability  in Article  2.4. In the investigation, the 
ADC explained that, when making an export sale, exporting producer s were aware of the fact that 
 
387 China 's second written submission, para. 282 (referring to Australia 's response to 
Panel  question  No. 27, para. 78). 
388 China 's first written submission, para. 353. 
389 China 's second written submission, para. 281. 
390 Continuation 517 final report (Exhibit  CHN-36), pp.  62, 66, 69, 71 , and 74.  
391 Investigation 238 final report (Exhibit CHN -2), p. 150.  
392 Australia's response to Panel question No. 83, para. 149. 
393 We note that the A DC did not construct normal values during the expiry review. Thus, the difference 
identified by the ADC pertains to the actual difference in the domestic and export markets.  
394 Komodo  Hong Kong Limited  and Primy provided responses to the questionnaire that referred to 
partial VAT refunds for exported goods. (Investigation  238 Primy's  questionnaire response  (Exhibit AUS -15), 
p. 38; Investigation 238 Komodo Hong Kong Limited's  questionnaire response  (Exhibit AUS -13), p. 15 ). WT/DS603/R  
 
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  they are  unable to recover the full amount of VAT paid on inputs, and would raise the export price 
accordingly to accommodate this extra cost . Thus, the ADC provided an explanation conc erning the 
way in which the identified differences are likely to affect the comparability  of normal value and 
export price.   
7.210.   We acknowledge China's argument that the ADC did not demonstrate that the difference in 
VAT recoverability actually affected  price comparability . In our view, though, it was sufficient for the 
ADC to establish that exporting producers  knew about the differences in  VAT recoverability for their 
export sales and domestic sales , bearing in mind record evidence to this effect .395 We do not consider 
that the mere use of the words  by the ADC  that "should have an associated effect on export price" 
shows that this conclusion was based on guesswork or un supported presumption. Rather, it shows 
that the ADC considered that the evidence available on the record, although not an irrefutable proof, 
support ed a finding that there is a likely possibility  that the VAT difference has an associated effect 
on export price (i.e. resulting in the exporters raising export price)  which is not present on domestic 
sales price . 396 We further note that China has pointed to nothing on the record indicating that the 
exporters would have addressed the cost of unrecovered VAT on export sales in some other manner.  
7.211.   For this reason, we do not consider the ADC's consideration of the matter to be inconsistent 
with Article  2.4.  
7.4.6.1.3.2   The methodology applied by the ADC to calculate  the VAT adjustment  
7.212.   The second aspect of China's claim under Article  2.4 on VAT recoverability concerns the 
methodology applied by the ADC to calculate  the adjustment . We begin by setting out our 
understanding of the factual background concerning the VAT adjustment in the proceedings at issue.  
We recall tha t, while we focus our analysis on the expiry review, as noted in paragraph  7.203  above, 
we will refer to the ADC's reasoning in the investigation report, because we consider that the ADC 
implicitly carried forward its reas oning with respect to the VAT adjustments in the original 
investigation into the expiry review . 
7.213.   The Chinese VAT rate for the product concerned during the period of investigation was 17%. 
When the goods were produced and sold in China, any VAT on input costs was fully recovered , being 
offset against the output VAT charged on sales on the domestic market. When the goods were 
exported, however, the exporters were not able to recover the VAT charged on relevant  inputs by 
offsetting against the output VAT (becau se the export sales were subject to zero per  cent VAT).397 
Instead,  and for stainless steel sinks, specifically,  exporters were entitled to a VAT refund from the 
Chinese tax authorities at a rate of 9%  of the f.o.b.  export price during the original investig ation.398 
Australia has indicated that t he VAT refund rate during the expiry review was different.399  
7.214.   The ADC treated the unrecovered amount of VAT in case of exportation as a "8% difference 
in taxation" , and considered that  "it is logical to upwards adjust the normal value for this 8% 
difference in taxation , as provided for by s. 269TAC(9) of the Act" .400 Australia has referred to the 
difference during these proceedings as "the non -refundable VAT liability for export sales" w hich was 
"a percentage of the export selling price ".401 In the investigation , the ADC used the following formula 
 
395 See fn s 381-382 above . 
396 We recall that the Appellate Body has stated that differences affecting price comparability  include 
any "differences in characteristics of the compared transactions  that have an impact , or are likely to have an 
impact , on the prices of the transactions ". (Appellate Body Report , EU – Fatty Alcohols (Indonesia) , para. 5.22 
(referring to  Appellate Body Report, US – Zeroing (EC) , para. 157)) (emphasis added) . Both parties r eferred to 
this statement of the Appellate Body.  (China 's first written submission, para. 332; Australia 's second written 
submission, para. 273). We recall that our task is to determine whether the ADC's approach was unbiased and 
objective.  
397 China's response to Panel question No. 81, para. 118, where China state s that "the  liability arises 
from inability to offset input VAT, not from the exporting activity itself, which is VAT free ". 
398 Australia's response to Panel question No. 69, para. 30. 
399 Australia's response to Panel question No. 69 , para. 30. China has not  contested 
Australia's  assertion.  
400 Investigation 238 final report (Exhibit CHN -2), p. 150.  
401 Australia's second written submission, para. 277. China disagrees with Australia's description of what 
the ADC did. (China's response to Panel question No. 83, para. 126). WT/DS603/R  
 
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  to work out the adjustment:  "[f.o.b.] normal value X 8% (the amount of VAT that is 
non-refundable) ".402 
7.215.   The ADC also made the following observati ons: 
In its submission in response to the Verification Visit Report, Zhuhai Grand submitted 
that the Commission's methodology applied in the company's Verification Visit Report 
to calculate the upwards adjustment to normal values to account for differences  in VAT 
between the domestic and export markets was mathematically erroneous. Specifically, 
Zhuhai Grand submitted that:  
• the VAT adjustment should be calculated on the 'actual [ f.o.b.] value', meaning 
the actual [f.o.b.] export prices achieved by Zhuhai Gr and in the investigation 
period, rather than the constructed [f.o.b.] normal value with profit included 
(as this would have been the actual liability incurred by the company); and  
• the formula applied by the Commission is incorrect.  
In [the statement of ess ential facts] , the Commission made no changes to the approach 
taken in the company's Verification Visit Report in relation to the above.  
In its response to [the statement of essential facts] , Zhuhai Grand again submitted the 
above points.  
… 
[T]he Commissio ner does not agree with Zhuhai Grand's submission that the VAT 
adjustment should be calculated on actual (achieved) [f.o.b.] export prices. In 
constructing Zhuhai Grand's normal value, it is the Commission's intention to derive a 
normal value for the goods  if they had been sold domestically, and to undertake 
appropriate adjustments to that normal value to account for differences between export 
and domestic sales of those goods if sold at that normal value . It is therefore logical 
that any adjustment applied  to normal value for differences in VAT across markets be 
applied to the full constructed normal value, determining the rate of the adjustment had 
the goods been exported at that normal value.403 
7.216.   China's arguments regarding the ADC's VAT adjustment formula have evolved during the 
Panel proceedings. We understand China's principal argument to be that " the due allowance should 
have been made based on the extent of the additional tax liability expense ".404 More specifically, 
China argues that the VAT adjustment was calculated using the uplifted normal value base, which 
is: (a) different to, and higher than, the actual cost incurred ; and (b) different to, and higher than, 
a normal value reflecting actual  costs in the financial record kept by the Chinese exporter .405 Thus, 
in China's view, the ADC's calculation method inflated the alleged price effect of the cost difference 
between export and domestic sales. China additionally argues that, instead of applyi ng the 8% to 
the normal value, the ADC should have applied the 8% to the export price, exportation "being the 
activity that generated the difference in the recoverable vs non -recoverable VAT and the subject of 
the difference being adjusted"406. Towards the latter part of the proceedings, China argued that, to 
compute the adjustment, the ADC needed to " identify the actual VAT costs that the exporter would 
have incurred due to the lower VAT refund ".407 Regarding China's claim that the VAT adjustment 
inflated th e difference in VAT recoverability, we note that this claim is premised on the ADC's use of 
surrogate costs in the calculation of the constructed normal value and the use of the surrogate costs 
in applying the ordinary -course -of-trade  test.408 China is concerned that a percentage was applied 
 
402 Investigation 238 final report (Exhibit CHN -2), p. 150.  
403 Investigation 238 final report (Exhibit CHN -2), pp. 149-150. (fns omitted)  
404 China's first written submission, para. 354. See also China's first written submission, para. 350(b). 
405 China's response to Panel question No. 17, para. 62. 
406 China's response to Panel question No. 27, para. 97. 
407 China's response to Panel question No. 81, para. 118. 
408 See China's response to Panel question No. 83, para. 127. See also Continuation 517 final report 
(Exhibit  CHN-36), pp.  61, 65, 67, 70 and 7 3, where the ADC stated that, for each selected exporting 
 WT/DS603/R  
 
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  to an inflated normal value base. As discussed in section  7.4.2.3  above , the ADC did not construc t 
normal value in the expiry review. Insofar as China's claim is predicated on the normal value being 
flawed due to the use of surrogate costs in applying the ordinary -course -of-trade test, we have 
found that the ADC acted inconsistently with Article  2.2.1 by using surrogate costs that did not 
represent  the cost of production in China.  In particular, we consider that the  use of these higher 
surrogate costs in applying the ordinary -course -of-trade test would logically lead to the exclusion of 
lower -priced sales from the normal value calculation and conseq uently a higher normal value . We 
note that Australia does not argue otherwise.   
7.217.   Consequently, we uphold China's claim that the ADC acted inconsistently with Article  2.4 by 
applying a percentage to the flawed normal value base  through the use of surrogate c osts in applying 
the ordinary -course -of-trade  test. 
7.218.   Given this finding , we consider  it unnecessary to further consider China's other arguments, 
i.e. whether the ADC should have applied a percentage to the export price , instead of the normal 
value, or wheth er the ADC should have calculated  the actual VAT costs that the exporter would have 
incurred due to the lower VAT refund . 
7.4.6.2   AD claim 6.b.ii : differences relating to accessories   
7.219.   We note that this claim pertains to the ADC's findings in the expiry review only , and thus no 
expiry issues arise with respect to this claim.409 
7.220.   The applicable legal framework for this claim has already been set forth in section  7.3.4.1  
above . 
7.4.6.2.1   Main party arguments  
7.221.   China  claims that the ADC  improperly  calculated the amount of due allowance for accessories 
differently depending on whether the accessory concerned had been produ ced by the exporter or 
was purchased from a third -party supplier410, even though the exporting producer Primy "did not 
differentiate product costing" on that basis.411 China asserts that, in cases where accessories were 
produced by the exporters themselves, a profit margin was added in the adjustment, the profit 
margin being the profit realized by the exporter "on domestic sales of the like goods in OCOT".412 
However, in cases where the exporters purchased accessories from a third party, no such 
ordinary -cours e-of-trade profit margin was added in the adjustment.413 China argues that the ADC 
did not provide any explanation as to why it has treated accessor y costs differently depending on 
whether the accessory concerned had been produced by Primy, or was purchased by Primy from a 
third-party supplier.414 China notes  Australia's argument that the accessories sourced from 
third-party suppliers already incorporat e a profit, and thus no profit should be added . China  rejects 
this argument because it  essentially means that the ADC assumed Primy (a) sold sinks incorporating  
purchased accessories with no profit on th ose accessories ; and (b) sold  sinks incorporating  
self-produced accessories with the same level of profit on th ose accessories as on the overall sink.  
China considers this a nonsensical opinion as to Primy's  business practice  not supported by evidence 
or explained by the ADC .415 China also argues that the ADC 's methodology increased the dumping 
margin.416 
7.222.   Furthermore, China argues that although the ADC had on record the actual costs of 
accessories for each product code417, it failed to calculate a due allowance based on the actual 
 
producers, the ADC has re -examined the volume of sales in ordinary course of trade  using a revised CTMS  
after replac ing each exporter 's reported stainless steel production costs with a suitable competitive market 
substitute .  
409 China's responses to Panel question Nos. 37 and 69.  
410 China 's first written submission, para. 365; second written submission, para. 289. 
411 China 's first written submission, para. 372; second written submission, para. 290. 
412 Continuation 517 final report (Exhibit  CHN-36), p.  59. 
413 China 's first written submission, paras.  15(b) and 362.  
414 China 's first written submission, para. 372. 
415 China 's response to Panel question No. 23, para. 94; second written submission, para. 290. 
416 China's opening statement at the first meeting of the Panel, para. 109. 
417 China's first written submission, para. 373; second written submission, para. 298. WT/DS603/R  
 
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  accessory cost differences.418 China asserts that the ADC instead averaged certain accessory costs 
across a number of different product codes under a model control code (MCC)  to calculate the due 
allowance.419 According to China, this led to a distorted outcome, because the actual "unit 
accessories costs for each product code within one MCC are vastly different".420 China contends that 
the averaging approach misrepresented the accessory cost difference in all cases, by decreasing the 
accessory cost difference in the case of the model with t he most expensive accessory costs, and by 
increasing the accessory cost differences the case of all other models with less expensive accessory 
costs.421 China argues that the ADC failed to provide any defence of the distortive effects of this 
averaging in its expiry review report.422 China thus contends  that the ADC's averaging methodology 
lacks objectivity and is inconsistent with Article  2.4.423 
7.223.   Regarding  the inclusion of a profit margin in the costs of accessories, Australia  agrees with 
China's explanations regarding how the ADC added a profit margin to certain costs of accessories 
produced by exporters, whereas such a profit margin was not added to the c osts of the 
exporter's  purchased accessories. Australia contends, however, that a reasoned and adequate 
explanation for such differential treatment was provided  in the ADC's  expiry review  report  and the 
ADRP's  administrative review report .424 Australia asse rts that the differential treatment was due to 
the fact that the purchase price for accessories purchased from third -party suppliers was considered 
to reflect its full market value inclusive of a profit, to which no profit was added; whereas a profit 
was a dded to the internally produced accessories.425 
7.224.   Regarding the averaging of the costs of accessories across different models, Australia 
explains that the ADC made deductions at the MCC level because the range of design variations 
relating to the stainless steel sinks was very broad. Australia explains th at the MCC structure was 
based on three product specifications , and t hat the ADC determined that the range of accessories 
sold domestically was considerably larger than the range of accessories sold with sinks exported to 
Australia.426 Australia asserts tha t, when making adjustments to account for differences in 
accessories included in different models, the ADC used accessory costs for models within each MCC, 
i.e. the ADC calculated an average cost for accessories across the range of models within each 
MCC.427 Thus, to ensure a fair comparison, Australia explains that the ADC first deducted average 
accessory costs from normal value at the MCC level, and then adjusted normal value upwards by 
the costs of accessories relating to the exported product to Australia , at the accessories level, as 
opposed to the MCC level.428 Australia argues that, even though the methodologies applied for the 
downwards and upwards adjustments for accessories were not identical, the ADC adopted an 
 
418 China's first written submission, para . 363. 
419 China's second written submission, paras. 294 and 298.  
420 China's  first written submission, para. 363; second written submission, para. 294.  
421 China's  first written submission, para. 366. See also China's opening statement at the first meeting 
of the Panel, paras. 110 -111; second written submission, para. 294. 
422 China's second written submission, para. 295. 
423 China's first written submission, para. 374. 
424 Australia's  first written submission, paras.  441-442. 
425 Australia's  first written submission, para. 440 (referring to Continuation 517 final report 
(Exhibit  CHN-36), p.  59); second written submission, para. 284. 
426 Australia's  first written submission, para. 445. The MCC structure contains three broad categories by 
reference to (a)  the number of bowls; (b)  the number of dr ainer boards; and (c)  the total capacity of the sink. 
Under each of the broad categories, there are three or four specific subcategories, namely, 1 bowl, 1 bowl 
(round), 2 bowls, and 2 bowls (round) for the first category, no drainer boards, 1 drainer boar d, and 2 drainer 
boards for the second category, and capacity of 7 to 30 L, 30 to 50 L, and 50 to 70 L for the third category. 
During the expiry review , interested parties claimed, and the ADC acknowledged that:  
[O]utside of the three MCC categories, the r ange of design variations relating to the sinks the 
subject of this inquiry is very broad and the MCC structure relied on in [the statement of essential 
facts]  may not capture the production cost and price variations brought about by market specific 
produc t differences between the goods exported to Australia and like goods sold in China.  
(Continuation 517 final report (Exhibit  CHN-36), p.  19) 
However, the ADC decided not to expand the MCC categories but would capture the differences by 
making adjustment to  the normal value. (See Australia's  first written submission, paras.  445-449 (referring to 
Continuation 517 final report (Exhibit  CHN-36), p.  19)). 
427 Australia's  first written submission, para. 450. 
428 Australia's  first written submission, paras.  450-452. In response to a question from the Panel, 
Australia clarified that when making the upward adjustments, the ADC use d the costs of export accessories at 
accessories level as opposed to the MCC level. (Australia's response to Panel question No. 25, paras. 61 -68). WT/DS603/R  
 
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  "evidence based approach".429 Australia argues that Article  2.4 does not prescribe how adjustments 
are to be calculated, and that the ADC made adjustments that were appropriate in light of the 
evidence before it.430 Australia further asserts  that its adjustments reduced the normal value 
ascertain ed and therefore Primy's dumping margin.431 
7.4.6.2.2   Evaluation  
7.225.   Before proceeding to discuss this claim in substance, we recall the basic factual background. 
In the expiry review, the ADC considered that it had to make a fair comparison between stainless 
steel sinks  sold domestically and those exported to Australia. The ADC noted that accessories sold 
with sinks were not only diverse, generally, but also varied widely as between domestically sold 
sinks and exports to Australia.432 To control for these differences, the  ADC removed accessories 
costs from domestically sold sinks and then added back costs of accessories sold for export to 
Australia. In that fashion, the ADC essentially ended up with domestic sales and exports with the 
same accessory costs (i.e. export acce ssory costs).433 In order to do that exercise, however, the 
ADC needed to determine the costs of domestic and export accessories. The two aspects of this 
claim relate to the ADC 's determinations regarding how to calculate such costs.  
7.226.   That general background being established, we note that this claim contains two aspects: 
(a) the ADC 's differential treatment of levels of profit vis-a-vis accessories purchased from 
third-party suppliers versus those made internally when making adjustments under Artic le 2.4; and 
(b) the ADC 's use of average accessories ' cost in making adjustments under Article  2.4. We  address 
each in turn.  
7.4.6.2.2.1   Treating accessories purchased from third -party suppliers differently from 
accessories produced internally by the exporting produce r 
7.227.   We begin with China's claim that the ADC calculated the amount of the due allowance 
differently depending on whether the accessory concerned had been produced by the exporter or 
was purchased from a third-party supplier  without a reasoned and adequate ex planation .434 Australia 
argues  that a reasoned and adequate explanation for such differential treatment was provided in the  
ADC's expiry review report and the ADRP's administrative review report .435  
7.228.   In the expiry review report , the ADC stated :  
To account f or differences in prices that are driven by the market specific product 
differences between equivalent domestic and Australian MCCs and to achieve a proper 
comparison between the price of like goods and exported goods, the Commission 
considers that an adju stment under section 269TAC(8) is warranted. The value of the 
adjustment has been worked out by calculating the difference in the weighted average 
unit cost of production (excluding accessory costs) between the two markets for each 
relevant MCC and then ad ding to this result each exporter's profit margin (as a 
percentage of cost) realised on domestic sales of like goods in OCOT.  
The Commission notes that the treatment outlined above relates to differences arising 
from each exporters own production activitie s. Where a specification adjustment occurs 
due to features that relate to items which are sold with sinks, but are however sourced 
from third party suppliers, such as accessories, the adjustments do not recognise OCOT 
profit margin.436 
7.229.   We note first that to  calculate the adjustment the  ADC added a profit margin to the costs of 
accessories produced by the exporter itself, but not to  the costs of accessories when they were 
 
429 Australia's response to Panel question No. 25, para. 69.  
430 Australia's  first written submission, para. 454. 
431 Australia's second written submission, para. 289. See also Australia's response to 
Panel  question  No. 25, para. 71.  
432 Continuation 517 final report (Exhibit CHN -36), p. 20.  
433 Australia's response to Panel question No. 25, para. 52. 
434 China's first written submission, para. 372. 
435 Australia's  first written submission, paras.  440-443. 
436 Continuation 517 final report (Exhibit CHN -36), p. 59.  WT/DS603/R  
 
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  purchased from third-party suppliers . Given that Primy sold the sinks and  accessories to the 
customers in a single package437, we consider that the ADC's differential treatment of self -producer 
accessories and purchased accessories is untenable (in the sense that it is inconsistent with the 
practice of an unbiased and objective investigating authority)  absent some justification.  While the 
above statement sets out the ADC's decision  not to add a profit margin to accessories costs when 
they were sourced from third -party suppliers, it does not explain  why the ADC has treated 
accesso ries sourced from third -party suppliers differently.  Australia points us to no other contents 
of the expiry review findings by the ADC that contain any additional explanations as to the reasoning 
behind the ADC 's differential treatment, and we discern none . Australia's argument that the ADC 
applied differential treatment  because  the price for accessories purchased from third -party suppliers 
was considered to reflect its full market value inclusive of a profit, to which no profit needed to be 
added,  therefor e amounts to an ex post facto  explanation . We therefore do not consider it here.   
7.230.   Moreover, we do not consider that a  relevant  explanation was provided  for the 
ADC's  differential treatment in the ADRP's administrative review report . This is a report publis hed 
on 8 July 2020438, produced in the context of the subsequent administrative  review . This report thus 
postdates the expiry review. Accordingly, any explanations by the ADC referred to in this report also 
amount to an ex post facto  explanation , and we similarly decline to consider them in this context.  
7.231.   Consequently, we conclude that the ADC failed to provide a reason ed and adequate 
explanation concerning the differential treatment of accessories produced by the exporter itself and 
accessories sourced from third -party suppliers in its calculation of due allowance.439  
7.232.   In light of the above, we find that the ADC acted inconsistently with the practice of an 
unbiased and objective investigating authority with respect to Article  2.4 of the 
Anti-Dumping  Agreement  by treating accessories purchased by Primy from third -party su ppliers 
differently from accessories produced by Primy without an adequate and reasonable explanation.  
7.4.6.2.2.2   Failure to use actual accessory costs to calculate adjustment  
7.233.   We now turn to China's claim that the ADC failed to make a due allowance based on actual  
accessory cost differences by averaging domestic accessory costs.440 We recall that, when making 
adjustments to account for differences in domestic and export accessories included in different 
models of sinks, the ADC adopted a two -step methodology. As the fi rst step, the ADC calculated an 
average domestic accessories cost from each domestic sales transaction across all the different 
product codes under a particular MCC  on a quarterly basis.  For convenience, we will call this  
"MCC-level average domestic accessories costs ". The ADC deducted this MCC -level average domestic 
accessories costs  from the normal value to arrive at a normal value net of domestic accessories 
costs. Australia calls this step the "downwards adjustment" , and we adopt that ter m here as well .441  
7.234.   As the second step, the ADC calculated  an average export accessories cost, not at an MCC 
level, but at an "accessories level". By accessories level, we understand Australia to mean that the 
ADC used the average costs of the same type of accessories  (such as basket waste, sealing tape, 
clips or bypass kit) provided by the exporter Primy as the costs for a particular type  of accessories, 
rather than to calculate this average at product code level or at MCC level. The ADC then used the 
avera ge accessories costs to arrive at the costs for the different accessories packs (i.e. a combination 
 
437 Continuation 517 Primy's response to statement of essential facts  (Exhibit CHN -46 (BCI)), p. 16.  
438 ADRP Review 2020/124 report  (Exhibit CHN -47). 
439 In any event, we are not persuaded  by Australia's argument during these proceedings that the price 
paid by Primy  for accessories purchased from third -party suppliers reflects its full market value inclusive of a 
profit, to which no profit needs to be added. The "profit" referred to by Australia in this context is the profit 
generated by the third -party supplier, rather than the profit generated by Primy when the accessories were 
resold to Primy's  customers as part of the sinks. (Australia's response to Panel question No. 85, para. 154). 
Australia's  proposition seems to be that a sinks producer like Primy did, and will always, pass on sinks 
accessories purchased from third -party suppliers to their customers at cost, i.e. with no markup. This 
proposition appears to be inconsistent with evi dence on the record, which shows that Primy treated sinks and 
accessories "as one single product in the cost accounting, and the cost of production is calculated together as 
one single product".  (Continuation 517 Primy's response to statement of essential facts (Exhibit  CHN-46 
(BCI)), p.  16). 
440 China's first written submission, para. 363. 
441 Australia's response to Panel question No. 25, para. 52. WT/DS603/R  
 
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  of accessories) that were ultimately sold together with the sinks.442 The ADC then added the 
accessories -pack-level export accessories costs  to the downwards -adjusted value for each domestic 
sales transaction of various product codes within an MCC.443 Australia calls this step the "upwards 
adjustment"444, and we adopt that term here as well . Through these two steps, the ADC effectively 
replaced the domestic acce ssories costs in the normal value with the export accessories costs, and 
then compared this adjusted normal value with the export price.  
7.235.   China's claim pertains to both the first and second steps described  above.445 We note that 
in both of these two steps, the ADC used an averaging methodology to calculate the adjustments 
for differences in accessories. The way in which the ADC averaged the accessory costs in these 
two steps w as different. Nevertheless, the thrust of  China's claim with respect to both steps concerns  
the ADC's use of averaged  accessory costs, rather than the  actual accessory costs  allegedly  available 
to the ADC.  We will therefore  address the use of averaging in both steps together  rather than making 
separate findings with respect to each step  separately . 
7.236.   According to China, the accessory costs for different product codes under a given MCC were 
very different, and thus by averaging out these individual actual differences for each model under 
an MCC, the ADC not only failed to make a due allowance to account for the actual  accessory cost 
differences that it has identified under Article  2.4, but also introduced a distortion in the resulting 
prices.  Thus, China argues that "the ADC did not make a fair compar ison, nor did it apply an 
appropriate due allowance to ensure a fair comparison".446 Australia argues that Article  2.4 does not 
prescribe how adjustments are to be calculated. In Australia's view, the ADC did not act in an 
arbitrary manner in making adjustm ents that were appropriate in light of the evidence before it.447 
The issue before us therefore is whether it is consistent with the practice of an unbiased and objective 
investigating authority to use an average accessories cost across different models  or for different 
accessories types for the purpose of calculating due allowance in the circumstances of the present 
case.  
7.237.   Article  2.4 prescribe s no particular methodology by which investigating authorities must 
satisfy their obligation to ensure a fair comparison . The focus of Article  2.4 is on the means by which 
to ensure the fairness  of the comparison between normal value and export price.448 Whatev er 
methodology an investigating authority employs to calculate a due allowance, that due allowance 
must be calculated on the merits of each individual case and must serve the purpose of accounting 
for the differences  determined to affect price comparabilit y. If the methodology does not serve to 
account for the differences determined to affect price comparability, it does not comport with the 
requirements of Article  2.4.  
7.238.   We thus first note  China's argument that the ADC's averaging methodology failed to  account 
for the actual differences  determined to affect price comparability . In the present case, the ADC 
found that:  
[T]he kinds of accessories offered with sinks was also found to be a price determinant, 
particularly since the range of accessories sold with sinks on the domestic market  in 
China were considerably larger than the range of accessories sold with sinks exported 
to Australia . As a result, the Commission has applied adjustments to normal value to 
account for differences in accessories.449  
7.239.   The differences thus identified by the ADC are actual differences between the ranges, and 
hence the costs of accessories for the domestic sales , on the one hand, and the costs of accessories 
for its comparable export sales in general , on the other hand. The ADC soug ht to address th ese 
difference s by, first, deducting accessories costs from the normal value sales transactions in order 
to reach normal values without accessories costs (after which the ADC added back in export  
 
442 Australia's response to Panel question No. 25, paras. 61 -63. 
443 Australia's  first written submission, paras.  450-452. See also Australia's response to 
Panel  question  No. 25, paras. 62 -63. 
444 Australia's response to Panel question No. 25, para. 52. 
445 China's response to Panel question No. 24, para. 95. 
446 China's response to Panel question No. 109, para. 238. 
447 Australia's  first written submission, para. 450. See also Australia's response to 
Panel  question  No. 25, paras. 69 -71.  
448 Panel Report, Egypt – Steel Rebar , para. 7.333.  
449 Continuation 517 final rep ort (Exhibit CHN -36), p. 20.  WT/DS603/R  
 
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  accessories costs to the normal values). Thu s, in a general sense, the ADC accounted for the 
differences between the domestic and export sales, i.e. different accessories costs. Of course, by 
averaging  costs, the ADC's methodology did not account for the individual and  specific  differences 
as determ ined to affect price comparability with respect to each product code  or each individual 
sales transaction . This result, however, is inherent to the process of averaging.  The question thus 
become s whether the averaging process prevented the resulting comparison between normal value 
and export price from being fair.  The only aspect of China 's arguments that addresses this issue is 
China's  argument that the averaging methodology resulted in distortions in calculating due 
allowances.450 
7.240.   China not es that Primy identified this issue, specifically with respect to the downward s 
adjustment, in its submission to  the ADC during the expiry review:  
The Commission deducted MCC average unit accessory cost from each sales transaction 
for various product codes  within each MCC. Because the unit accessories costs for each 
product code within one MCC are vastly different, such deduction of MCC average unit 
accessories costs would distort the resulting calculated sinks price without accessories. 
Primy, again for th e MCC with the largest IP sales to Australia, 1BWL0DBB, prepared 
Table 5 showing the production quantities within narrower ranges of accessories costs 
for product codes within MCC 1BWL0DBB. It can be seen that [a large percentage]  of 
the production quantit y of various product codes of Primy are with unit accessories costs 
at least [an appreciable percentage]  away from the MCC average developed by the 
Commission, either lower than the MCC average or higher.  
For The [sic.] resulting effect is simply and clea r. For the product codes with actual 
accessories costs at the lower end of the range in Table 5, the Commission has 
significantly over -deducted accessories costs  from the selling prices, and on the other 
hand, for those product codes with actual accessorie s costs at the higher end of the 
range in Table 5, the Commission has significantly under -deducted accessories costs 
from the selling prices . As result, for any given sales transactions for any product code, 
the selling prices after the deduction would be a significantly distortive one, almost 
without exception.  Since after the ordinary course of trade test… will only leave part of 
the domestic sales transactions within this MCC in the calculation of normal value, the 
normal value would be based on a bunch of domestic sales prices distorted after this 
deduction.451 
7.241.   We recognize, as did Primy, that, since  the costs of domestic accessories varied across 
different product codes in an MCC , the ADC's methodology of deducting MCC -weighted -average 
accessory costs from the normal value logically has the distortive effect of over -deducting accessory 
costs from  some product codes and under -deducting them from  other product codes within the MCC.  
China's principal argument  as to why such distortions led to an unfair comparison is that the 
averaging methodology did not correctly reflect the actual difference in accesso ry costs and thus 
increased the dumping margin.452 In response to a question from the Panel as to how the averaging 
methodology increased the dumping margin in the present case, China refers to and elaborates on 
the example of table 5 in Primy's  submission as mentioned above.453 In particular, China argues that 
the use of averaging has the impact of  (a) "excluding domestic products with lower accessory costs "; 
(b) "retaining domestic products with higher accessory costs "; and (c) "comparing domest ic products 
with higher accessory costs with the export price, where adjustment to the domestic product normal 
value for accessories was only based on the average accessory costs for the entire domestic product 
sales within the MCC, instead of using the ac tual, and higher, accessory costs associated with those 
domestic products sold that formed the basis of the normal value comparison, resulting in an 
insufficient 'deduction ' or 'downward adjustment ' to the normal value".454 We note  that table 5 
contained no t only instances  for which the costs are higher than the average, but also instances 
where accessories costs are lower than the average.  In our view, this result is merely a characteristic 
of averaging. We do not consider that an objective and impartial in vestigating authority would 
necessarily refrain from averaging transactions in this manner simply because different results were 
 
450 China 's first written submission, para. 366; second written submission, para. 294. 
451 Continuation 517 Primy's response to statement of essential facts  (Exhibit CHN -46 (BCI)), pp. 1 2-13. 
452 China's opening statement at the first meeting of the Panel , para. 111. 
453 China's response to Panel question No. 110, paras. 239 -243. 
454 China's response to Panel question No. 110, para. 242. WT/DS603/R  
 
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  reached for individual transactions (or even the overall adjustment) than those that would have 
been reached without averaging.  We further note that there is no claim that the averaging 
methodology itself was used in a biased manner against certain data sets but not others.   
7.242.   With respect to the upward s adjustment, China presented Exhibit CHN -90 (BCI)  which 
contained a "table 6 " showing that the "accessory costs used by the Commission " to make the 
upward s adjustment to the normal value  were consistently higher than the actual accessory costs 
for the product exported by Primy to Australia.455 However, China does not explain that it is  the use 
of averaging that leads to this outcome. Furthermore, as mentioned above, we understand 
China's  claim to specifically relate to the use of averaging in both the downward and upward 
adjustments.456 Commenting on table 6, China also states clearly that " Primy 's submission to the 
investigating authority also demonstrated the specific effect of using average  accessory costs as an 
upward adjustment with respect to the export models ".457 We therefore cons ider that China has not 
reasonably explained how this table supports it s claim in this context.458 We further discern no 
additional arguments raised by China against the upward adjustment beyond the general claim that 
the use of averaging leads to distortio ns across averaged data. We would reject this argument here 
for the same reasons as we rejected it with respect to the downward adjustment in the paragraph 
immediately above.  
7.243.   Accordingly, we find that China has failed to demonstrate that the ADC acted inco nsistently 
with Article  2.4 by using an averaging methodology in calculating the adjustments  in this context . 
7.4.6.3   AD claim 6.b.iii : comparison of export models to other export models  
7.244.   We note that this claim pertains to the ADC's findings in the expiry review o nly, and thus no 
expiry issues arise with respect to this claim.459 
7.245.   The applicable legal framework for this claim has already been set forth in section  7.3.4.1  
above . 
7.4.6.3.1   Main party arguments  
7.246.   China  does not dispute that there are differences in physical characteristics between the 
export models and the domestic models for which a due allowance should be made to ensure price 
comparability.460 China argues that for four MCCs exported to Australia (expo rt models)  where there 
were insufficient domestic sales of like goods sold in ordinary course of trade  (domestic models), 
the ADC calculated the normal value using data pertaining to domestic surrogate models with the 
closest physical characteristics under  the MCC hierarchy structure, with an appropriate specification 
adjustment. In making the specification adjustment, China argues, the ADC compared the se export 
models with export models of the MCC containing the domestic surrogate models. China contends 
that the ADC should have compared the export models with the domestic surrogate models that 
formed the basis of the normal value.461 China argues that the ADC therefore improperly calculated 
the due allowance by comparing two export  model costs462, rather than  comparing the cost of an 
export model and its comparable domestic model.463 Using an example to illustrate the 
 
455 China's response to Panel question No. 110, paras. 244 -246 (quoting Continuation 517 
Primy's  response to statement of essential facts  (Exhibit  CHN-46 (BCI)), p.  15; referring to Continuation 517 
Primy's  response to statement of essential facts, table 6 "accessories adjustment" (Exhibit  CHN-90 (BCI)) ). 
456 China’s first written submission, paras. 362, 366, and 373; opening statement at the first meeting of 
the Panel, para. 110; second written submission, paras. 294 and 298; and opening statement at the second 
meeting of the Panel, paras. 82 -84. 
457 China's response to Panel question No. 110, para. 244. 
458 We note that China offers this table for the first time in China 's response to the Panel 's questions 
following the second meeting. (China 's response to Panel question No.  110). We therefore note that insofar as 
China offers this table in an attempt to broaden its arguments against the downward and upward adjustments 
beyond its arguments that the use of averaging itself led to the unfair comparison, w e would  consider  such 
broadened arguments untimely and reject them accordingly. See para. 7.166  above . 
459 China's responses to Panel question Nos. 37 and 69.  
460 China's  first written submission, para. 386. 
461 China's  first written submission, paras.  379-382.  
462 China's  first written submission, para. 387. 
463 China's  first written submission, paras.  381-382. WT/DS603/R  
 
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  ADC's  methodology464, China argues that this methodology had no relevance to the differences 
between the export price of the model concerned and a  normal value  that is necessarily based on 
domestic sales .465 Accordingly, China submits that the ADC's  adjustment was incapable of ensuring 
a fair comparison.466  
7.247.   Regarding the ADC's  adjustment method of comparing export models with export models, 
Australia  accepts China's description and characterization of the events.467 Australia argues that the 
ADC acted consistently with Article  2.4 by carefully considering and properly assessing the 
alternative adjustment methodology requested by Zhuhai Grand.468 
7.248.   We again note that th e parties' arguments with respect to this  claim pertain to the 
ADC's findings in the expiry review only, and thus no expiry issues arise , and no such arguments 
are raised,  with respect to this claim.469 
7.4.6.3.2   Evaluation  
7.249.   We recall that during the  stainless steel sinks  expiry review , the ADC calculated a dumping 
margin for Zhuhai Grand by comparing export price and the normal value based on the 
exporter's  domestic sales of like products within the same MCC. For four MCCs exported to Australia 
(export models)  where there were either n o or insufficient domestic sales of like goods sold in  the 
ordinary course of trade  (domestic models), the ADC calculated the normal value using data 
pertaining to surrogate domestic models with the closest physical characteristics under the MCC 
hierarchy structure, with an appropriate adjustment  for the purposes of Article  2.4. The ADC stated 
that: 
For four other MCCs exported to Australia the Commission is not satisfied that there 
were sufficient domestic sales of like goods sold in OCOT on the basis ther e was an 
absence, or low volume, of sales in the country of export of the identical MCC. For these 
MCCs the Commission is satisfied that there were sufficient domestic sales volumes of 
surrogate models based on the MCCs with the closest physical characteri stics under the 
MCC hierarchy structure. Accordingly, the normal value for these MCCs could be 
determined under section 269TAC(1) with an appropriate specification adjustment 
applied in the manner described at section 7.5 .470 
7.250.   In section 7.10.5  of the expiry  review report , the ADC further stated that : 
In addition to the adjustments outlined in [the statement of essential facts] in relation 
to Zhuhai Grand, the Commission also considers that further adjustments under 
section  269TAC(8)  [of the Customs Act 1901]  are warranted to account for the effect 
on prices brought about by the difference in the amount of stainless steel and other 
market specific product differences between domestic and export MCCs.471 
7.251.   Thus, for four MCCs the ADC determined normal values by us ing surrogate domestic sales 
taken from other MCCs. In light of the differences between the domestic and export MCCs,  the ADC 
identified a need to make certain adjustments. For this purpose , the ADC compared the export 
models of these four MCCs with export  models of the MCC s containing the surrogate domestic 
models.472 It is undisputed that  the ADC actually had the cost data for the domestically sold 
 
464 China's  first written submission, paras.  388-389. 
465 China's first written submission, para. 390. 
466 China's  first written submission, para. 391. 
467 Australia's  first written submission, paras.  460-461. 
468 Australia's  first written submission, para. 463. 
469 See, e.g.  China 's response s to Panel question Nos. 37 and 6 9. 
470 Continuation 517 final report (Exhibit CHN -36), p. 73.  
471 Continuation 517 final report (Exhibit CHN -36), p. 73.  
472 By way of example, call one of these exported MCCs "MCC Exp 1". Note that there are only sufficient 
export sales in MCC Exp 1. In order to determine the normal value for MCC Exp 1 to be compared with the 
export price in MCC Exp 1, the ADC selected another MCC that most resembled the physical characteristics of 
the exported MCC, e.g.  MCC 2, which did have sufficient domestic sales to determine normal value, in addition 
to being exported to Australia. That is to say, there are both domestic sales and export sales in MCC  2. The 
ADC calculated the adjustment to the normal value based on MCC 2 domestic models by comparing the export 
 WT/DS603/R  
 
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  surrogate MCC on the record, but chose to use the cost data for the exported version instead.473 The 
issue bef ore us is whether it is consistent with the practice of an unbiased and objective investigating 
authority to use cost data pertaining to export sales of a MCC to compare with the export sales of a 
surrogate MCC in order to compute an adjustment  to account for the differences in physical 
characteristics between an export sale and a domestic sale.  
7.252.   We answer this question in the negative. We recall that in order for due allowance 
adjustments to be made under Article  2.4, differences affecting pric e comparability must exist 
between two markets. That is, a difference between the price at which the like product is sold in the 
exporting country and that at which the allegedly dumped product is sold in the importing country. 
If there is no difference af fecting the prices of products sold in the markets concerned, no adjustment 
can be made. When making an adjustment in this regard, the due allowance has to be calculated on 
the merits of each individual case and must serve the purpose of accounting for the  differences 
determined to affect price comparability. In other words, the due allowance adjustment must serve 
the purpose of accounting for the differences affecting price comparability in the two markets. In 
the present case, by comparing export models w ith export models, the ADC's  methodology 
necessarily does not serve the purpose of accounting for differences affecting price comparability in 
the two markets . We do not consider that this is consistent with the practice of an objective and 
impartial inves tigating authority.  
7.253.   Accordingly, we find that the  ADC acted  inconsistently with Article  2.4 by comparing  export 
models to export models for purposes of performing a fair comparison as between the normal value 
and export price  for Zhuhai Grand in the stainl ess steel sinks  expiry review.  
7.4.7   AD claim 7.a under Article 2.2.2  of the Anti-Dumping  Agreement : profits not based 
on "actual data"   
7.254.   The applicable legal framework for this claim has already been set forth in section  7.3.5.1  
above . 
7.4.7.1   Main party arguments  
7.255.   China  claims that the ADC calculated both the profit rate as well as the amounts of  the profit 
in the stainless  steel sinks proceedings  by using the cost of production incorporating surrogate 
costs.474 China argues that the chapeau  of Article  2.2.2 imposes a general obligation on an 
investigating authority to use "actual data pertaining to production and sales in the ordinary course 
of tra de" when determining amounts for SG&A and profits.475 China contends that the "uplifted cost 
base" used to calculate the profit rate and/or the amount of profit included costs of production that 
were not the exporter's  actual data.476 Accordingly, in China's  view, the ADC's  methodology is 
incapable of rendering an amount for profit "based on actual  data pertaining to production and sales 
in the ordinary course of trade … by the exporter or producer under investigation" as required by 
Article  2.2.2.477 Conseque ntly, China argues, the ADC also acted inconsistently with the 
requirements of Articles 2.1 and 2.2  of the Anti -Dumping Agreement and Article VI:1 of the 
GATT  1994.478  
7.256.   Australia  argues that the ADC applied a profit rate which was calculated consistently wi th 
Articles  2.2 and 2.2.2 of the Anti-Dumping  Agreement.479 Australia notes that during the 
 
models  of MCC  Exp 1 with the export  models  of MCC 2 "to account for the effect on prices brought about by 
the difference in the amount of stainless steel and other market specific product differences between domestic 
and export MCCs". Thus, and critically, to ac count for differences between MCC Dom 1 (now replaced with 
MCC Dom 2) with MCC Exp 1, the ADC calculated the adjustment by comparing the price of MCC Exp 1 with the 
price of the exported  models  of MCC 2 (MCC Exp 2)  rather than using the price of the domest ically sold models  
of MCC 2 (MCC Dom 2).  (See Continuation 517 final report (Exhibit CHN -36), p. 73). 
473 Australia 's first written submission, para. 461. See also China's first written submission, para. 387 
(referring to ADRP Review 2020/124 report  (Exhibit CHN -47), p. 26 ). 
474 China's  first written submission, paras.  401 and 417 -418; responses to Panel question Nos. 37 and 69.  
475 China's  first written submission, paras.  402-404 (referring to, inter alia, Appellate  Body Reports, 
EC – Tube or Pipe Fittings , para. 97; China  – HP-SSST  (Japan)  / China  – HP-SSST  (EU), para. 5.25).   
476 China's  first written submission, para. 416. 
477 China's  first written submission, paras.  397, 401, 413 -414, and 416 -418. 
478 China's second written submission, para. 304. 
479 Australia's  first written submission, paras.  465-471. WT/DS603/R  
 
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  investigation, the ADC accepted a submission from Zhuhai Grand to use the full cost to make and 
sell the goods  (CTMS)  at issue, for each selected Chinese exporter to calculate the target profit 
rate.480 Australia argues that the relevant exporters raised no relevant objections to the 
ADC's  methodology during the investigation.481 Further, Australia argues that this claim i s derivative 
of China's  AD claims under Articles  2.2.1.1 and 2.2  and should be rejected for the reasons set forth 
in Australia's  responses to those claims.482 
7.257.   China  disagrees with Australia that its claims under the chapeau  of Article  2.2.2 are 
derivative o f its AD claims 1 and 3.483 In China's view, Article  2.2.2 is prescriptive of the method 
that must be followed in order to calculate the amounts for profit "[f]or the purpose of 
paragraph  2".484 
7.258.   In response to a question from the Panel, both parties agreed t hat the ADC did not calculate 
normal value during the interim review for Yingao and the expiry review.485 
7.4.7.2    Expiry  
7.259.   China's claim concerns the stainless steel sinks  original investigation, interim reviews and 
expiry review.486 As discussed in section 7.2.2 above,  we shall first consider whether or not the 
aspect challenged by China has expired. To do so, we shall consider whether there was a cha nge of 
essence in the approach taken by the ADC in calculating profit as between the investigation and 
expiry review , and do not examine the interim reviews . 
7.260.   In the investigation , the ADC calculated both the profit rate a nd the amounts of profit by 
using t he cost of production incorporating surrogate costs.487 However, in the expiry review, the 
ADC decided not to construct the normal values  for selected exporters  and used instead the data 
pertaining to the exporters' recorded sales.488 As such, the ADC had no  reason to calculate profit 
under Article  2.2.2 for any exporters, China points to no instance in which the ADC did so, and we 
discern none. We therefore consider that there was a  change of  essence as between the original 
investigation  and the expiry revie w. Thus, the specific aspect of the order challenged by China, i.e. 
construction of normal value using surrogate costs in the profit determination, has expired . We 
decline to issue findings with respect to this aspect of the order therefore, per the Panel 's reasoning 
in section  7.6 below.  
7.4.8   AD claim 8 under  Article  9.3 of the Anti -Dumping Agreement : collection of duties in 
excess of the margin of dumping  
7.261.   The applicable legal framework for this claim has already been set forth in 
section  7.2.3 above.  
7.4.8.1   Main par ty arguments  
7.262.   China  asserts  that Australia has collected anti -dumping duties on the basis of margins of 
dumping that were inflated as a result of the alleged WTO -inconsistencies challenged in China's other 
AD claims.489 China claims that, as a result, Austra lia has collected anti-dumping  duties in excess of 
 
480 Australia's  first written submission, paras.  467-469. See also Investigation 238 final report  
(Exhibit  CHN-2), p.  43; Investigation  238 statement of essential facts  (Exhibit AUS -49), p. 37.  
481 Australia's  first written submission, paras.  470-471. 
482 Australia's  first written submission, para. 473; second written submission, paras.  298-302. 
483 China's second written submission, para. 306. 
484 China's second written submission, para. 306. 
485 Australia's response to Panel question No. 69, para. 31; China's response to Panel question No. 69, 
p. 107. 
486 China's responses to Panel question Nos.  37 and 69.  
487 China's  first written submission, paras.  401 and 417 -418; Investigation 238 final report 
(Exhibit  CHN-2), pp. 43 -44. 
488 Continuation 517 final report (Exhibit CHN -36), pp. 61, 65, 68, 71 and 73. See also 
Australia's  response to Panel question No. 69, para. 31; China's response to Panel question No. 69, p . 107. 
489 See for example, China's  first written submission, para. 338; opening statement at the first meeting 
of the Panel, para. 111; response s to Panel question No. 17, para. 62, No. 19, para . 68, No. 23, para . 94, and 
No 110, paras. 24 0 and 246.  WT/DS603/R  
 
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  the margins of dumping that would have been "properly established" under Article  2, contrary to 
Article  9.3 of the Anti-Dumping  Agreement  and Article VI:2  of the GATT  1994.490 
7.263.   Australia  argues that China's claim under Article  9.3 is purely consequential, and that it must 
fail given that the ADC's  calculation of relevant dumping margins was consistent with Article  2 of the 
Anti-Dumping  Agreement.491 
7.4.8.2   Evaluation  
7.264.   To the extent that we have found above that the ADC acted inconsistently with the provisions 
of Article  2, we consider that China has established, as a matter of fact, that the dumping margins 
were improperly inflated through the use of surrogate costs in the stainless steel si nks proceedings . 
In this regard, we note that the ADC concluded in the stainless steel sinks expiry review that "[i]n 
each case, application of the [Steel Business Briefing] benchmark price resulted in an increase to 
each exporters' production costs, i.e. the actual stainless steel costs incurred by exporters were 
lower than the benchmark amount" .492 As discussed in section 7.4.2.3  above , the ADC did not use 
the surr ogate costs to construct normal values but it did use these higher surrogate costs in applying 
the ordinary -course -of-trade test, which would logically lead to the exclusion of more lower -priced 
sales from the normal value calculation and consequently a hi gher dumping margin.  We note that 
Australia does not argue otherwise. Rather, Australia appears to treat the success of China's claim 
under Article  9.3 as dependent on the other underlying claims under the Anti -Dumping Agreement.  
In the absence of any rebuttal from Australia, this in our view establishes prima facie  that the 
anti-dumping duties imposed by the ADC exceeded  the margins of dumping  that would have been 
established had the authorities acted consistently with Article  2. 
7.265.   Accordingly, we uphold China's claim that Australia acted inconsistently with Article  9.3 of 
the Anti-Dumping  Agreement  and Article VI:2  of the GATT  1994. 
7.4.9   CVD claims 2 and 3 under Articles  1.1(b)  and 14(d)  of the SCM Agreement : use of 
out of country bench mark493  
7.266.   China brings claims under the SCM Agreement  regarding the ADC's findings in the stainless  
steel sinks proceedings  with respect to one subsidy programme named " Program  1 – Raw Materials 
Provided by the Government at Less than Fair Market Value" ( Program  1). This programme concerns 
the provision of a particular raw material, i.e.  304 SS CRC, used in the production of stainless  steel 
sinks, for less than adequate remuneration by a government or public body .494  
7.4.9.1   Main party arguments  
7.267.   China  claims that, in determining the existence and amount of benefit conferred by  
Program  1, the ADC acted inconsistently with Articles  1.1(b)  and 14(d)  of the SCM Agreement , by 
using a benchmark that did not relate to the prevailing market conditions in the countr y of provision 
(i.e. China)  and rejecting in -country benchmarks without a reasoned and adequate explanation. 
China contends that to justify the rejection of in -country prices, the ADC should have explained how 
identified government interventions , used as t he basis for rejecting in -country prices,  distorted the 
price of 304 SS CRC .495 China argues, in particular:   
 
490 China's  first written submission, paras.  458, 459 -480. See also China's second written submission, 
para. 325. 
491 Australia's  first written submission, paras.  165, 344 -345, and 474; second written submission, 
para. 310. 
492 Continuation 517 final report (Exhibit CHN -36), p. 54 . 
493 We note that China did not pursue  a claim with respect to "CVD claim 1" in its submissions . Thus, we 
begin by addressing China's CVD claims 2 and 3.  
494 See e.g. Investigation 238 final report  (Exhibit CHN -2), pp. 11, 53 , and 137.  
495 China's  first written submission, para. 513. WT/DS603/R  
 
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  a. The ADC's  examination was not based on the evidence on the record of the particular 
investigation but on conclusions it reached in "previous invest igations" concerning different 
products.496 There was no analysis of the market for 304 SS CRC.497  
b. The ADC determined, without justification, that government policy has distorted the 
Chinese domestic market for 304 SS CRC. The ADC referred to concerns expre ssed in 
other investigations about macroeconomic policies and plans relating to the Chinese iron 
and steel industry more generally, rather than specifically about the market for 
304 SS CRC.498 
c. The ADC only made limited adjust ments  to the benchmark, with no consideration of 
prevailing market  conditions in the country of provision, such as price, quantity, 
availability, marketability and other conditions of purchase or sale within China.499 
7.268.   Australia argues that this claim pertains to an expired measure. Australia contends that 
although the ADC used an out -of-country benchmark in the original investigation, the ADC used an 
in-country benchmark in the expiry review. Moreover, Australia asserts  that, unlike in the original 
investigation, in the expiry review the ADC found that Program  1 conferred no benefit on exporters 
and was thus found not to be a subsidy.500  
7.269.   Australia  also argues that during the original investigation, the Chinese Government  did not 
provide a complete response to the government questionnaire.501 According to Australia, the ADC 
therefore had to resort to the evidence available to it , which included substantial evidence that there 
was significant government intervention in the C hinese iron and steel industry that distorted prices 
for various steel outputs.502 Noting the significant  similarities in the raw materials and manufacturing 
processes for these steel outputs and that for 304  SS CRC, the ADC determined there was sufficient 
evidence to show that prices of 304 SS CRC were also distorted. Australia contends that these ADC 
findings were sufficient to allow the ADC to resort to out -of-country benchmarks in its benefit 
analysis.503 Australia asserts that the ADC adopted an out -of-country benchmark that was the best 
available representation of the market -determined price of 304  SS CRC in China. Australia further 
argues that the ADC adjusted this benchmark for prevailing market conditions in China.504 Australia  
further contends  that Article  14 does not require investigating authorities to adopt a particular style 
of analysis or methodology in every investigation.505 
7.270.   China  responds that, in its view, the ADC 's approach of using out -of-country benchmarks to 
evaluate whether exporters obtained goods at less than adequate remuneration  under Program  1 
has not expired. China contends that this is so , in particular , because in the expiry review the ADC 
indicated in its statement of essential facts and in its anti-dumping  findings  that using an 
out-of-country benchmark was an ongoing practice in this context .506 China also asserts that 
Australia provides no evidence that the benchmark used in the expiry review did not continue to be 
an out -of-country benchmark507, but also indicates that the use of a different methodology for one  
exporter in the expiry review did suggest that an out -of-country benchmark methodology had not 
 
496 China's  first written submission, paras.  514-516. 
497 China's  first written submission, paras.  515-516 and 518.  
498 China's  first written submission, para. 520. 
499 China's  first written submission, para. 530. 
500 Australia 's response s to Panel question No.  69, paras. 19 -21, and No. 90; comments on 
China 's response to Panel question No.  97. Australia also argues that the challenged countervailing duty 
measure  as against Program  1 is no longer in effect, and accordingly no benefits accruing to China under the 
WTO Agreements are being impaired.  (Australia's  first written submission, paras.  603 and 606).  Additional 
Australia n arguments pertaining  to expiry in this context have also b een explained in more  detail  in 
section  7.2.1.1  above.  
501 Australia's  first written submission, paras.  594-596 and 610.  
502 In response to the Panel's question, Australia clarified that the ADC did not resort to the facts 
available mechanism set forth in  Article  12.7 of the SCM Agreement , except for uncooperative and all other 
exporters . (Australia's response to Panel  question  No. 34, para. 96, fn  59). 
503 Australia's  first written submission, para. 608. 
504 Australia's second written submission, para. 337. 
505 Australia's second written submission, para. 341. 
506 China 's response to Panel question No.  97.  
507 China 's comments on Austral ia's response to Panel question No.  69, para. 15. WT/DS603/R  
 
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  been used . China stresses that there is no basis  on which to conclude, however, that the use of out -
of-country benchmarks in this context had be en abandoned by the ADC  as a general matter .508  
7.4.9.2   Expiry  
7.271.   China 's claim concerns the stainless steel sinks  original investigation , interim reviews,  and 
expiry revi ew.509 As discussed in section 7.2.2 above , we will address first the issue of whether or 
not the aspect challenged by China has expired. In this regard, we shall consider whether there was 
a change of essence in the approach  taken by the ADC to evaluate the benefit received by exporters 
under Program  1 as between the original investigation and expiry review , and do not examine the 
interim reviews .  
7.272.   In the original investigation, in determining whether a benefit had been conferre d on the 
exporters under Program  1, the ADC co nsider ed the difference between costs incurred by Chinese 
exporters when purchasing 304 SS CRC from state invested enterprises ( SIE or SIEs) and an external 
benchmark . That benchmark was the same benchmark used  in determining costs for constructed 
normal values  and conducting the ordinary -course -of-trade test in the dumping determination , i.e. 
a MEPS -based average price for 304 SS CRC using the monthly reported MEPS North American and 
European prices (excluding the Asian price) ( see section 7.4.4.2  above ).510 
7.273.   In the expiry review  findings , out of the selected investigated exporters, the ADC examined 
Program  1 with respect to two exporters only, i.e. Rhine Sinkwares Manufacturing Ltd . Hui Zhou 
(Rhine ) and Zhuhai Grand.511 The ADC noted that Rhine had provided an updated stainless steel 
purchas e ledger which listed the names of stainless steel suppliers, and the business licences for 
these companies. After examination, the ADC found that Rhine had not benefit ed from Program  1 
because none of its suppliers of stainless steel were public bodies.512 Since the ADC excluded the 
existence of any subsidy benefit on the basis of the absence of public body involvement, the issue 
of benchmarking for the less -than-adequate -remuneration assessment  never arose.  With respect to 
exporter Zhuhai Grand, the ADC st ated that:  
To determine whether Zhuhai Grand had received a benefit from its SIE traders through 
less than fair market value, the Commission compared the selling prices from its SIE 
traders to non -SIE traders  and noted that the prices paid by Zhuhai Grand  to its SIE 
traders were consistently higher than purchases from non -SIE traders.  
The Commission is of the view that purchases of stainless steel via SIE traders did not 
result in a benefit in the form of lower prices being received by Zhuhai Grand. As su ch, 
the Commission does not consider that a benefit under this program has been 
conferred.513  
 
508 China 's comment s on Australia 's response to Panel question No.  90. 
509 China 's comment s on Australia 's response to Panel question No.  90. 
510 Investigation 238 final report (Exhibit CHN-2), p. 219.  As discussed in section 7.4.4.3  above , the 
ADC made limited adjustments to this benchmark.  In resorting to this external benchmark, the ADC considered 
and rejected two internal benchmark options, i.e. private prices from non -SIE 304 SS CRC suppliers, and 
import prices of 304 SS CRC to China.  (Ibid. pp. 207 and 208 ). 
511 Continuation 517 final rep ort (Exhibit CHN -36), p p. 82-83. The countervailing duty investigation had 
previously been  terminated so far as two of these five selected exporters were concerned (Primy and Jiabaolu ). 
(See Investigation 238 final report (Exhibit CHN -2), p. 12). With resp ect to the other exporter, Guangdong 
Cresheen Smart Home Co Ltd , the expiry review report  does not contain any discussion regarding Program  1.  
512 Continuation 517 final report (Exhibit CHN -36), p p. 82-83. 
513 Continuation 517 final report (Exhibit CHN -36), p. 83 . (emphasis added)  In the expiry review the 
ADC also stated that : "[f]or the purpose of this inquiry the benchmark price used for Program  1 and the 
stainless steel cost substitute in relation to section 43(2) of the Regulation relies on the average price of grade 
304 [SS] CRC for North America and Europe published by [Steel Business Briefing Ltd .]" (ibid. p. 53 
(emphasis  added) ). China refers to this statement in support of its assertion that in the expir y review report 
the ADC again relied on an external benchmark in conducting its benefit analysis vis-à-vis Program  1. 
(China's  first written submission, para. 508). We note, however, that the ADC made this statement in the 
context of selecting a surrogate steel price for purposes of the dumping investigation . This statement  was not 
made in the context of the subsidization  findings in the expiry review  and indeed, appears contradicted by the 
ADC's express findings on benefit, discussed above in this section. We therefore consider this statement 
immaterial.  WT/DS603/R  
 
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  7.274.   Thus, while the ADC did assess potential Program  1 benefit for Zhuhai Grand by reference 
to a benchmark  for the less -than-adequate -remuneration assessment , that b enchmark was 
comprised of selling prices from its non -SIE traders. China does not contend that such non -SIE prices 
comprised an out -of-country benchmark .514 Indeed,  Australia has submitted a  BCI exhibit (with 
content taken from Zhuhai Grand 's verification) which is consistent with the conclusion that the ADC 
used an  in-country , rather than external , benchmark .515  
7.275.   We consider that there was a change of essence in the approach taken by the ADC in 
determining whether Program  1 conferred a benefit as between the original investigation and the 
expiry review.  Specifically,  while the ADC did employ an external benchmark for this purpose in the 
original investigation , there is  no evidence that the ADC did so in the expiry review . We therefore 
consider that the approach taken by the ADC in the original investigation regarding the determination 
of benefit for Program  1 has expired. Because China 's claim only pertains to the use of an 
out-of-country benchmark , this claim only pertains to an expired aspect of the order.516 We therefore 
decline to make findings with respect to this claim per our reasoning in section 7.6 below.  
7.4.10   CVD claim 4 under Article s 1.2 and  2.1(c)  of the SCM Agreement : specificity 
determination of Program  1 
7.4.10.1   Main party arguments  
7.276.   China  asserts  that the ADC  determined that Program  1 was de facto specific under 
Article  2.1(c) of the SCM Agreement . China claims that the ADC acted inconsistently with 
Article s  1.2 and  2.1(c)  in the original investigation and the expiry review by failing to:  
a. identify a subsidy programme  with respect to Program  1;  
b. consider whether the purported programme was used by a limited number of certain 
enterprises;  and 
c. consider, either explicitly or implicitly, the extent of diversification of economic activities 
within the jurisdiction of the granting authority, as well as the length of time du ring which 
the subsidy programme has been in operation.517  
7.277.   China  argues that the ADC's  mere reference to Program  1 as a "subsidy program" in its 
findings is insufficient to establish the existence of a subsidy programme for the purposes of 
Article  2.1(c)518, and that any identification of a subsidy program me must be done explicitly rather 
than implicitly.519 China contends that there was no evidence that subsidies had been provided to 
recipients pursuant to a plan or scheme, or that a systematic series of act ions pursuant to which 
financial contributions that confer a benefit had been provided to certain enterprises.520 China also 
argues that the ADC's recognition that 304 SS CRC was a " key input in the manufacture of 
 
514 We recall that China argues that the ADC used an external benchmark to assess benefit for an 
exporter in the statement of essential facts. Because that document  does not constitute the findings of the 
ADC, we do not consider it relevant.  
515 Continuation 517 Zhuhai  Grand verification visit report, p. 25 and attachment (Exhibit  AUS-81 
(BCI) ). China has  not contested that this exhibit demonstrates the in -country nature of the benchmark used in 
the expiry review for Zhuhai Grand.  
516 As we consider the operable question to be whether the ADC currently applies an out -of-country 
benchmark in the stainless st eel sinks countervailing duty order, we reject China's arguments that we should 
consider what group of Chinese exporters would be subject to the order had the ADC not used an 
out-of-country benchmark in the original investigation. This reasoning applies in  equal force to CVD claims 4 
and 5, in that we consider the expiry issues there focus on whether the ADC currently applies an affirmative 
specificity determination for Program  1 in a meaningful legal sense, or currently must apply the original 
initiation d ecision to investigate Program  1 under the countervailing duty order. (See CVD  claims  4 and 5 with 
respect to stainless steel sinks, further below).  
517 China's  first written submission, para. 552. 
518 China's  first written submission, para s. 553 (referring to Panel Report, US – Pipes and Tubes  
(Turkey) , appealed 25  January  2019, para. 7.153 ) and 558.  
519 China's comments on Australia 's response to Panel question No. 113.  
520 China's  first written submissi on, paras.  554-557; second written submission, para s. 357-358; 
comment s on Australia 's responses to Panel question Nos.  91 and 92.  WT/DS603/R  
 
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  downstream products (including deep drawn s tainless steel sinks)"  is not evidence of the actual 
"use" of any programme by a limited number of enterprises.521  
7.278.   China further argues that the ADC's  investigation report does not contain any express or 
implicit reference to an examination of the mandator y factors under Article  2.1(c)，i.e. the extent  
of diversification of economic activities within the jurisdiction of the granting authority, as well as of 
the length of time during which the subsidy programme has been in operation.522  
7.279.   Finally, China contend s that the ADC's  determination that Program  1 was specific was not 
substantiated by positive evidence as is required  by Article  2.4, because the investigation report 
contains no evidence supporting the conclusion that Program  1 was a subsidy programme, or that 
the use of Program  1 was limited to certain enterprises.523 
7.280.   Australia argues  that this claim pertains to an expired measure.  Australia contends that all 
references to Program  1 being a countervailable subsidy in the expiry review  report , including any 
references to the specificity of Program  1, are typographical error s.524 This is so because, in 
Australia 's view, the ADC found in the expiry review that there was no benefit conferred by  
Program  1 to any exporters , and thus it was unnecessary to assess specificity of the subsidy 
programme.525 Australia relatedly asserts that because there was no subsidy found to exist with 
respect to Program  1 in the expiry review, there could not logically have been a specificity finding 
with respect to it.526 
7.281.   Australia also argues that the ADC identified a subsidy programme through a systematic 
series of actions that involved the granting of a financial contribution conferring a benefit, i.e.  the 
provision of 304 SS CRC for less than adequate remuneration  by Guangd ong Metals  and Minerals 
Import  & Export Co., Ltd . to a limited group of particular enterprises engaged in the manufacture of 
downstream products including stainless steel sinks.527 Australia contends that the series of 
transactions were not just the mere pr ovision of financial contributions to certain enterprises, but a 
systematic series of actions that "occurred in the wider context of systemic subsidisation and 
associated policies of the Government of China within the Chinese steel market".528 Australia 
underlines that , in its view,  the systematic series of actions as evidenced by the ADC 's analysis of 
the conferral of a benefit under Program  1 to selected exporters in the investigation was sufficient 
to identify a subsidy program me, and that no further analysis was needed with respect to any other 
entities that may have received financial contributions or associated  benefits under Program  1.529 
Australia also asserts that the identification of a subsidy programme by an investigating authority 
can be done implicitly.530 
7.282.   Regarding the consideration of mandatory factors in Article  2.1(c), Australia argues that 
investigating authorities have significant flexibility as to how they take account of these two 
factors.531 Relying on the panel re port in US – Carbon Steel (India) (Article  21.5 – India) , Australia 
argues that "it can be sufficient for other aspects of a determination to demonstrate that 'account 
was taken' of the matter".532 Australia also argues that the taking account of the two fa ctors need 
 
521 China's  first written submission, para s. 559-560. 
522 China's  first written submission, paras.  562-564; second written submission, para s. 362-364. 
523 China's  first written submission, para. 566. 
524 Australia's request for a preliminary ruling, fn 39; comments on China 's response to the preliminary 
ruling reque st, para. 25. 
525 Australia's first written submission , para. 634.  
526 Australia 's response s to Panel question No.  69, paras. 19 -21, and No. 90 . Additional Australia n 
arguments pertaining  to expiry in this context have also been  explained in more  detail  in section 7.2.1.1  
above . 
527 Australia's  first written submission, para s. 638 and 653 ; second written submission, para s. 367-368. 
528 Australia's second written submission, para s. 369-370. 
529 Australia 's responses to Panel question Nos. 91 -92; comments on China 's response to 
Panel  question  No. 92. 
530 Australia 's response to Panel question  No. 113; comments on China 's response to 
Panel  question  No. 113. 
531 Australia's second written submission, para. 374.  
532 Australia's second written submission, para. 374 (referring to Panel Report, US – Carbon Steel 
(India) (Article  21.5 – India) , para. 7.210 ). WT/DS603/R  
 
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  not be done explicitly .533 Australia considers that the findings of the ADC indicate that the ADC 
adequately took account of both mandatory factors.534  
7.283.   China responds that the ADC, in the expiry review, did in fact make a finding that the 
Program  1 was specific, and any such finding is not, as Australia argues, a typographical error. China 
notes that the ADC stated in the expiry review that Program  1 was a countervailable subsidy, and 
that under Australian domestic law, a subsidy must be specific in order to be countervailable. 
Moreover, in China 's view, in the expiry review the ADC signalled that it had not changed its approach 
to determining the specific ity of Program  1 from the original investigation.535  
7.4.10.2   Expiry  
7.284.   China 's claim concerns the stainless steel sinks  original investigation , interim reviews,  and 
expiry review.536 As discussed in section 7.2.2 above , we wil l address first the issue of whether or 
not the aspect challenged by China has expired. As also explained in that section, we would normally 
start by assessing whether there was a change of essence as between the original investigation and 
expiry review , and do not examine the interim reviews . Here, however, we take a slightly different 
approach in recognition of the fact that, in the expiry review, the ADC found that Program  1 did not 
qualify as a subsidy.  
7.285.   As described in section  7.4.9.2  above , the ADC found that Program  1 conferred no benefit 
on exporters in the expiry review. In order for a subsidy to exist  both in the SCM Agreement  and 
under Austr alian law , there must be both a financial contribution and it must confer a benefit. 
Without a conferral of a benefit, Program  1 does not meet the definition of a subsidy for purposes 
of the expiry review. The existence of a "subsidy " is a prerequisite to finding  that the subsidy is 
specific under both the SCM Agreement  and Australian law.537 Thus, even if there is a finding of 
specificity in the expiry review, it is without legal effect because the finding has no "subsidy " to 
which to attach.538 China points to no other way in which the specificity finding in the expiry review 
has any material relevance under Australian law.539 
7.286.   We therefore consider this aspect of the order expired. Because China's claim pertains to an 
expired aspect of t he order, we decline to make findings with respect to this claim per our reasoning 
in section 7.6 below.  
7.4.11   CVD claim 5 under Articles  11.2 and 11.3  of the SCM Agreement : initiation of 
investigation  for Program 1  
7.4.11.1   Main party arguments  
7.287.   China  claims that the ADC acted inconsistently with Articles  11.1, 11.2, and 11.3 of the 
SCM Agreement  by failing to properly evaluate the sufficiency of the application fo r the purpose of 
justifying the initiation of the investigation into Program  1.540 China  argues that the application 
included insufficient evidence of the existence and nature of Program  1. In China's view, an objective 
and unbiased investigating authority could not have concluded that there was sufficient basis to 
initiate the investigation, because  
 
533 Australia's second written submission, para s. 374 and 376  (referring to Panel Report, US – Carbon 
Steel (India) (Article  21.5 – India) , para. 7.211 ). 
534 Australia's  first written submission, paras.  640-641; second written submission, paras. 378 -379 
(referring to Investigation 238 final report (Exhibit  CHN-2), p.  207). 
535 China's response to Australia's request for a preliminary ruling, para. 36; response to 
Panel  question  No. 69, paras. 33 -42.  
536 China 's comments on Australia's  responses to Panel question Nos. 37 and 69.  
537 See SCM Agreement , Article  1; Continuation 517 final report (Exhibit CHN -36), p. 77.  
538 China argues that the ADC made a specificity finding in the expiry review, evidenced by the following 
statement by the ADC: "[I]n accordance with sections 269TAAC(4) and (5) and having had regard to 
sections  269TAAC(2) and (3), that Programs 1 , 3, 8, 20, and new Programs 31, 34, 35, 37 are specific ". 
(Continuation  517 final report (Exhibit CHN -36), p. 107  (emphasis added) ). 
539 China never argues that this specificity finding would compel the ADC to find that Program  1 is 
specific in a later segment.  
540 China's first written submission, para. 569; second written submission, para. 367. WT/DS603/R  
 
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  a. the application contain ed insufficient evidence that stainless steel sinks were being 
subsidi zed at the time the application was lodged, given that the statement of findings 
by the Canadian  Border Services Agency  (CBSA)541, a Canadian investigating authority,  
relied on by the applicant relates to a period that was "between 36 and 16 months prior 
to the period of investigation" and "over 30 months" before the initiation of the 
investigation by the ADC542; and 
b. the application neither asserted that Program  1 is specific, nor contain ed evidence upon 
which specificity could  be considered.543 
7.288.   More specifical ly, China argues that the applicant relied on the findings of another 
Member's  investigating authority, i.e. the CBSA, with respect to a similar programme as "relevant 
information" for determining that there are reasonable  grounds to investigate Program  1. However, 
as noted above, China asserts that the CBSA 's statement relates to a period that was between 
36 and 16 months prior to the period of investigation considered by the ADC, and over 30 months 
before the initiation of the investigation.544 China argue s that the ADC did not explain why or how 
such historic information was considered sufficient to justify the initiation of the investigation.545 
China also argues that the ADC merely acknowledged in the "consideration report"546 of the 
investigation that a s ubsidy needed to be specific in order to be countervailable, without actually 
examining specificity.547 China also asserts that t he CBSA 's statement also does not include a finding 
upon which it could be concluded that the similar programme  investigated by the CBSA , i.e. 
"Program  83: Raw Materials Provided by the Government at Less than Fair Market Value" , was 
specific.548 In sum, China submits that an objective and unbiased investigating authority could not 
have concluded that there was sufficient basis to i nitiate the investigation regarding Program  1.549 
7.289.   China rejects Australia's argument that Article  11 does not prevent an investigating authority 
from considering evidence outside the four corners of the application when evaluating whether to 
initiate an investigation based upon an application. China argues that Australia's position is based 
on a misund erstanding of the panel report in China – GOES , is not justified on any interpretation of 
Articles 11.1, 11.2 , and 11.3, and ignores Article  11.6.550 China contends that Article  11.3 requires 
the investigating authority to review the evidence provided in th e application and to decide whether 
that evidence "is sufficient to justify the initiation of an investigation".551 In China's view, while it is 
permissible for an investigating authority to consider information outside the application to assess 
the adequac y and accuracy of the evidence provided in the application, Article  11.3 does not allow 
an investigating authority to seek its own information when an application fails to meet the 
requirements of Article  11.2.552 
7.290.   China further argues that it is unclear fro m the record that the ADC actually had regard to 
any information external to the application when considering whether initiating an investigation into 
Program  1 was justified. China notes that the ADC's consideration report does not reference 
specificity b eyond noting that it is a requirement of establishing that a countervailing subsidy 
exists.553  
7.291.   Australia argues that this claim pertains to an expired measure. Australia notes that , in the 
expiry review, the ADC investigated both new subsidies and previous ly investigated subsidies under 
the same legal authority, i.e. Part XV, Division 6A of the Customs  Act 1901. Australia also contends  
that there is no requirement that the ADC investigate  Program  1 again in a subsequent expiry or 
 
541 CBSA statement of reasons, attached to Inv estigation 238 application  (Exhibit  CHN-60). 
542 China's first written submission, paras. 585 and 589.  
543 China's first written submission, para. 587. 
544 China's first written submission, para. 585. 
545 China's first written submission, para. 586. 
546 Investigatio n 238 consideration report  (Exhibit  CHN-59). This report was published before the 
initiation of the investigation, and the purpose of the report appears to be to consider whether the application 
was sufficient to justify the initiation of the investigation .  
547 China's  first written submission, paras.  581-582. 
548 China's  first written submission, paras.  580 and 587.  
549 China's  first written submission, para. 579. 
550 China's second written submission, para. 386. 
551 China's second written submission, para. 106. 
552 China's second written submission, para. 386. 
553 China's second written submission, paras. 387 to 388.  WT/DS603/R  
 
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  interim review simply due t o the fact that it had been previously investigated in prior segments. 
Australia further stresses that any subsidy, whether previously investigated or not, can be 
investigated in an expiry review whether or not it had been investigated in a previous segmen t, if 
there is evidence that it should be included in the scope of the examination.554 Australia also 
underlines that it is not the case that, absent new evidence regarding Program  1, the ADC would 
investigate it in a subsequent expiry review or interim rev iew, and also that any examination of 
Program  1 would operate as if it were a new subsidy that had never been previously examined.555 
Australia further rejects China 's assertions that the ADC 's investigation of new subsidies in the expiry 
review may be  contrary to WTO law.556 
7.292.   Australia  also argues that in deciding whether to initiate an investigation, an investigating 
authority is not limited to the evidence in the application itself. Australia contends that the ADC also 
relied on its previous investigations into similar subsidy programmes such as aluminium zinc coated 
steel and galvani zed steel, and hot rolled plate steel in which the ADC determined that these 
subsidies (which the ADC considered  to be variations of Program  1) were specific.557 Australia argues 
that the domestic industry did not have access to such information and therefore could not have 
included it in its application.558 Australia further contends that the application itself conta ined 
information on the nature of the subsidy which went to specificity.559 
7.293.   Australia further argues that the absence of explicit references to a specificity determination 
in the consideration report is not in itself inconsistent with Articles  11.2 and 11.3  of the  
SCM Agreement .560 Australia contends that "it is implicit in the Stainless  Steel Sinks  Investigation  
238 Consideration  Report , that the ADC did consider whether there was adequate evidence indicating 
specificity".561 In this regard, Australia points to a statement of the ADC in the consideration report 
that Australia's  domestic legislation  "provides that, in order for a subsidy to be countervailable, it 
must also be specific" .562 Thus, Australia argues that the ADC  acknowledged that specificity must be 
considered.563  
7.294.   China  acknowledges that the question of whether new subsidies can be investigated in an 
expiry review is not a question raised by China 's claim. However, China argues that any such practice 
may be contrary to WTO law. Chi na indicates that the ADC did in fact examine new subsidies in the 
expiry review, and appeared to examine all subsidies (new or old) under the same legal authority. 
China also asserts that nothing about how the ADC examined Program  1 in the expiry review 
indicates that it has somehow been removed from the scope of future countervailing  proceedings.564 
China also argues that any new subsidies would be investigated under the countervailing duty  order 
that only exists  due to the foundational errors committed in  the original investigation.565 China states 
that Division 6A of the Customs Act 1901  simply allows the ADC to investigate subsidies under an 
existing anti-dumping  or countervailing duty  order, and thus it links the investigations of new 
subsidies to the fo undational errors made in the original investigation.566  
 
554 Australia 's responses to Panel question Nos.  71, 73, 103 , and 104.   
555 Australia 's response to Panel que stion No.  104.  
556 Australia 's comments on China 's response to Panel question No. 71. Additional Australia n arguments 
pertaining  to expiry in this context have also been  explained in more  detail  in section 7.2.1.1  above . 
557 Australia's  first written submission, paras.  691-692 (referring to Investigation 198 (hot rolled plate 
steel) final report (Exhibi t CHN-33), p.  10; Investigation 193 (aluminium zinc coated steel) final report 
(Exhibit  AUS-70), p.  48). 
558 Australia 's response to Panel question No.  94.  
559 Australia 's response to Panel question No.  94. 
560 Australia's  first written submission, paras.  695-696 (referring to Panel Report, US – Countervailing  
Measures  (China) , para. 7.25).  
561 Australia's  first written submission, para. 696. 
562 Investigation 238 consideration report  (Exhibit  CHN-59), p.  34. 
563 Australia's  first written submission, para. 696. 
564 China 's response to Panel question No.  71. 
565 China 's response to Panel question No. 103. 
566 China's comments on Australia 's response to Panel question No. 71. China states that the ADC 
investigated the new subsidies in the expiry review under the same legal authority used to investigate 
Program  1 in the original investigation. (China 's response to Panel question No.  71, para. 83). See also 
China's  response to Panel question No.  104, para. 218(a) ( "[i]t would be consistent with Australian 
investigating authority practice for it to do whatever it likes, in terms of examination of subsidies, in a subsidy 
'variable factor ' review ".); and response to Panel question No.  73, para. 96(d) (indicating that the ADC 
 WT/DS603/R  
 
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  7.295.   China further asserts that according to its understanding of the ADC 's practice, the ADC  
could examine Program  1 in a future interim or expiry review, but the ADC would not need to 
examine Program  1 as a new subsidy because the ADC could rely on previous findings vis-à-vis 
Program  1 that it made in previous segments. China also contends that there does not appear to  be 
any evidentiary requirements to be met for the ADC to examine Program  1 in a future review.567 
Moreover, in China 's view, the subsidization provided for under Program  1 is embedded in the 
countervailing duty  order because, in an expiry review, the ADC o nly will continue the order if 
revocation of the order would lead to the continuation or recurrence of "the … subsidization " and 
material injury that the order is intended to prevent. According to China, "the subsidization " includes 
the subsidization by Program  1 found to exist in the original investigation. China also adds that, in 
its view, including new subsidies in an expiry review is likely contrary to Australian law.568 Finally, 
China asserts that the ADC initiation notice in the expiry review indicate s that the ADC would review 
the subsidy programmes  included in the original investigation.569 
7.4.11.2   Expiry  
7.296.   Unlike the majority of China 's claims, this claim is directed solely against the original 
investigation.570 This is so because that is the only segment in which there was a decision by the 
ADC as to whether to initiate an investigation, and the decision to initiate an investigation with 
respect to Program  1 was part of that overall exercise. Thus, it is not pos sible, as a practical matter, 
to examine whether there has been a change of essence as between the initiation decision in the 
original investigation and a similar decision in a later segment. As noted in section  7.2.2 above , 
however, this is not the end to the expiry inquiry. We therefore continue to examine whether the 
ADC's initiation decision with respect to Program  1 in the original investigation has ceased to have 
legal effect, i.e. whether it has expired.  
7.297.   We consider that the legal result of the initiation decision with respect to Program  1 was to 
allow the ADC to examine Program  1 in the original investigation.571 The question of whether the 
initiation decision has ceased to have legal effect, therefore, in our minds, centres on whether 
Australia currently must apply  the original initiation decision for Program  1 to investigate Program  1 
in a post-investigation  segme nt under the countervailing duty  order .572 We consider that the record 
before us indicates that the answer to this question is in the negative. This is so because the record 
supports the conclusion that under Australian law and practice the ADC could invest igate Program  1 
under the countervailing duty  order in a post-investigation segment even in the absence of an 
initiation decision in the original investigation.  
7.298.   We first note that the Panel has asked the parties specific questions regarding  the 
circumstan ces under which the ADC can investigate "new" subsidies  in post -investigation segments 
(i.e. subsidies that had not been investigated in a n original investigation ) and whether such new 
subsidies are treated differently than subsidies that had been investig ated in an original investigation 
(which we will refer to as "original " subsides).573 China  has directed us to nothing in the 
ADC's reports  in any segment or in Australian law that constrains the ability of the ADC to examine 
new subsidies in a post -investigation segment, or that compels new and original  subsidies be treated 
 
investigates not only original subsidies in an expiry review but also "any other subsidies to which it might turn 
its mind in the expiry review "). 
567 China 's response to Panel question No.  104.  
568 China 's comments on Australia 's response to Panel question No.  103. 
569 China 's comments on Australia 's response to Panel question No.  104.  
570 China 's response s to Panel question No s. 37 and 69.  
571 See Investigation 238 consideration report (Exhibit CHN -59), p. 38 ( "[i]n light of the above  
[assessment of Program 1], the Commission considers that there are reasonable grounds to conclude that 
exporters of deep drawn stainless steel sinks may have received benefits under this subsidy and that its 
investigation is warranted. ").  
572 We recal l that we earlier found that we need not consider what group of Chinese exporters might 
have been subject to the stainless steel sinks countervailing duty  order, and whether a change in that 
composition calls into question whether a countervailing duty  order would exist today or not, had the alleged 
inconsistencies with the SCM Agreement  not occurred. These considerations are counterfactual in nature and, 
in our minds, extend beyond the key question of whether Australia currently must apply  the original ini tiation 
decision for Program  1 to investigate Program  1 under the countervailing duty  order.  
573 See e.g. Panel 's question Nos. 71, 103, and 104.  WT/DS603/R  
 
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  in a different manner in post -investigation segments.574 China does , however,  mention the following 
statement in the ADC 's initiation notification for the stainless steel sinks  expiry review:  
My examination of countervailable subsidies will be limited to programs currently 
covered by the countervailing duty notice, however should further evidence of additional 
countervailable subsidy programs be provided I may examine the additional programs 
if to do so will not prevent the timely completion of the inquiry.575 
7.299.   We consider that this statement does not reveal whether new and or iginal subsidies are 
treated differently under Australian law in the context of post-investigation segments .576  
7.300.   The record does contain evidence, however, that the ADC can and does investigate new and 
original subsidies in similar manners in post -investiga tion segments. In a response to a Panel 
question, Australia referred to Australian law Part XV, Division 6A of the Customs Act 1901 , which 
addresses expiry reviews. We agree with Australia that this section of Australia n law appears to draw 
no distinctions  between original and new subsidies.577 We also note that in the three stainless steel 
sinks interim reviews and the expiry review, the ADC requested information on both original and 
new subsidies  and examined exporters ' records with an eye to determining w hether new subsidies 
had been received . We take special note that in one interim review and the expiry review the ADC 
examined new subsidies. In no segment  do we discern any indication that the ADC considered its 
ability to investigate new subsidies was di fferent than how it examined old subsidies as a legal 
matter.578 Thus, we consider that the ADC could assess Program  1 in post -investigation segments 
in essentially the same legal manner whether it was or was not included in the original investigation.  
We also do not consider China's argument that investigating new subsidies in post -investigation 
segments may be contrary to WTO law relevant, as this is not an issue before us in this dispute.   
7.301.   We therefore consider that the record reflects that the ADC does not need to rely on the fact 
that Program  1 was investigated in the original investigation in determining whether or h ow it may 
be examined in the post -investigation segments. This, in our minds, compels the conclusion that the 
original initiation decision with respect to Program 1  is an expired aspect of the order. We therefore 
decline to make findings with respect to th is aspect of the order per ou r reasoning in section  7.6 
below.  
7.5  Railway wheels  
7.302.   In examining China's claims below  with respect to railway wheels, we recall that there has 
only been  one relevant segment that has occurred thus far, i.e. the  original investigation. Thus, no 
expiry issues arise with respect to China's railway wheels claims.  We also note that the numbering 
of China's claims, and the order i n which we address them, has already been described in 
paragraph  7.53 above . 
7.5.1   AD claim 3 under  Article  2.2.1.1  of the Anti-Dumping  Agreement : rejection of 
exporters' costs   
7.303.   The applicable legal framework for this claim has already been set forth in  section  7.3.1.1  
above.  
 
574 China do es argue that the ADC considers information about subsidies from prior segments in making 
findings. This may be correct , but it does not demonstrate a legal compulsion  to treat new and original 
subsidies differently.  
575 Continuation 517 initiation notice (Exhibit AUS -11), p. 5.  
576 We acknowledge that this example may illustrate a more general practice of the ADC, in a given 
segment, to investigate previously investigated subsidies in a somewhat automatic fashion. Even if correct , 
however, this would not, in our minds, cha nge the ultimate conclusion in this section because the ADC would 
still be able to investigate Program 1 in post -investigation segments in the absence of an original initiation 
decision.  
577 Australia 's response to Panel question No. 103.  
578 See Review 352 final report (Exhibit CHN -17), p. 18; Review 459 final report (Exhibit  CHN-22), 
p. 18; Review 461 final report (Exhibit  CHN-51), p. 27; and Continuation 517 final report (Exhibit  CHN-36), 
pp. 79-81 and 83 -84. WT/DS603/R  
 
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  7.5.1.1   Main party arguments  
7.304.   China  argues that  the ADC rejected Masteel's579 costs of production when constructing 
normal values and instead used non -Chinese surrogate costs.  China claims that, in doing so, 
Australia violated Article  2.2.1.1 of the Anti-Dumping  Agreement  because  the ADC failed to calculate 
relevant costs "on the b asis of records kept by the exporter or producer under investigation" within 
the meaning of Article  2.2.1.1. More specifically, China argues that  the ADC either did not determine, 
or wrongly determined, that the records kept by Masteel  did not "reasonably reflect the costs 
associated with the production and sale of the product under consideration " within the meaning of 
Article  2.2.1.1. This is so because, according to China, the ADC instead rejected the Masteel's  costs 
because they "did not reasonably refle ct competitive market costs", within the meaning of applicable 
Australian law.580  
7.305.   Australia  argues that China misunderstands the ADC's  findings and calculations of 
Masteel's  steel billet costs.581 Specifically, Australia argues that "[t]he ADC's  constructed  value 
methodology for Masteel did not rely on the second condition in the first sentence of Article  2.2.1.1, 
as China erroneously assumes. Australia contends that t he ADC relied on the term 'normally,'  as set 
forth in the first sentence of Article  2.2.1.1 , when relying on information other than Masteel's  records 
for the purpose of calculating the cost of production for steel billet" .582 Indeed, Australia asserts that 
the ADC only made  a first condition finding, but no second condition finding, for purposes of 
Article  2.2.1.1.583 According to Australia, the ADC concluded that the relevant circumstances were 
"not normal or ordinary" due to the Chinese Government's  intervention in the underlying steel 
market, which caused significant and systemic imbalances in t hat market.584 Australia argues that 
the word "normally" in the first sentence of Article  2.2.1.1 must be taken into account to give a 
proper interpretation of the provision.585 Australia contends that a proper interpretation of 
Article  2.2.1.1 leads to the conclusion that "irrespective of whether the records are (a)  GAAP 
compliant, and (b)  'reasonably reflect'  costs, an investigating authority may rely on data other than 
the records of the exporter or producer if there are not normal or ordinary circumstance s affecting 
the exporter or producer's  costs" .586 In this regard, Australia argues that the structure of the first 
sentence of Article  2.2.1.1 does not impose an order of analysis as between the two conditions and 
consideration of the word "normally ", and thus the word "normally " affords discretion to depart from 
using exporters ' costs even if the investigating authority does not make fin dings as to one or both 
conditions.587 Australia further asserts that such a sequencing would serve no meaningful 
purpose.588 Australia argues that an investigating authority 's reliance on the word "normally" is not 
unconstrained, and there must be a proper basis for doing so on the record.589 Australia also 
contends that the ADC sought information from Masteel and the Chinese Government  in this context 
but the responses to such requests were incomplete.590 
7.306.   China  responds  that any flexibility afforded by the wo rd "normally " in the first sentence of 
Article  2.2.1.1 would only arise if the ADC made affirmative findings as to the two conditions in that 
sentence, consistent with the panel 's analysis in Australia – Anti-dumping  Measures on Paper .591 
China maintains th at any discretion afforded by the word "normally " to depart from using 
exporters ' records when the two conditions are satisfied must be limited. More specifically, China 
argues that the text and context of the Anti-Dumping  Agreement  indicates that such flexibility would 
arise in the situation where an exporter 's records do not give the investigating authority confidence 
in the accuracy, completeness, faithfulness and reliability of the exporter's cost record.592 China 
 
579 Masteel was the only investigated Chinese exporter in the investigation.  
580 China 's first written submission, section  F.1. 
581 Australia 's first written submission, para. 177. 
582 Australia 's first written submission, para. 178.  
583 Australia 's response s to Panel question No.  61, para. 193, and No.  78, para s. 82-83.  
584 Australia 's first written submission, paras.  179 and 192 -243; second written submission , paras. 143 
and 146.  
585 Australia 's first written submission, paras.  182-191. 
586 Australia 's first written submission, para. 244. 
587 Australia 's second written submission , paras. 150 -158. 
588 Australia 's second written submission , para. 157.  
589 Australia 's second written submission , para. 166.  
590 Australia 's first written submission, paras.  234-243. 
591 China 's second written submission , para s. 199 and 203 -205.  
592 China 's second written submission , para. 239. WT/DS603/R  
 
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  further asserts that the ADC failed to make a finding under the first condition of Article  2.2.1.1 in 
the investigation.593 
7.5.1.2   Evaluation  
7.307.   China claims that the ADC improperly  rejected Masteel's costs of producing steel billet when 
constructing its normal value because the ADC  did so without making a proper  finding under the 
second condition of Article  2.2.1.1.  
7.308.   In the original investigation, the ADC calculated a constructed normal value for Masteel (the 
only investigated  Chinese exporter ).594 In assessing what costs of producti on to use in its 
construction of normal value,  the ADC recalled that , per the relevant underlying statute,  the ADC 
must use the Masteel 's records concerning its costs of production if they are kept in accordance with 
GAAP and reasonably reflect competitive  market costs. The ADC then recalled that the influence of 
the Chinese Government  had, in its view, resulted in distortions in China 's domestic steel  and steel 
input markets.595 The ADC stated that "[i]n these circumstances, the Commission is not required to 
work out an amount for the cost of production using the information set out in Masteel's records ".596 
The ADC then summarily indicated that it had selected a suitable replacement steel billet benchma rk 
cost.597 This analytic progression by the ADC , in our view, establishes that the ADC rejected 
Masteel 's costs  of producing steel billet  because , in its view,  they did not reasonably reflect 
competitive market co sts. In an appendix  to its report , the ADC elaborated on  why it considered that  
Masteel 's costs  of producing steel billet did not reasonably reflect competitive market costs.598 The 
ADC also indicated in this appendix that  "[t]hese circumstances are not normal and ordinary because 
the records of Mas teel reflect the government influence by the GOC which distorts the costs in the 
steel and steel input markets in China ".599 
7.309.   We recall that in section 7.3.1.4  above , addressing a similar claim with respect to the w ind 
towers  proceedings , we considered that when the ADC applies the competitive market costs test, it 
is failing to apply, rather than misapplying,  the second condition in Article  2.2.1.1 of the 
Anti-Dumpin g Agreement.  We see no reason to alter that conclusion here.  We discern no other point 
at which the ADC makes either an affirmative or negative finding under the second condition.  Again, 
the assessment of whether costs "reasonably reflect competitive marke t conditions ", in our opinion, 
is different than whether costs "reasonably reflect the costs associated with the production and sale 
of the product under consideration ". As indicated in the paragraph immediately above, the ADC 
rejected Masteel's relevant c osts based on the former  inquiry , rather than the latter. On this basis, 
we find that, in rejecting Masteel 's costs because they did not reflect competitive market costs,  the 
ADC did not make a finding under the second condition of Article  2.2.1.1. The ADC  therefore could 
not rely on any flexibility provided by the word "normally " in the first sentence of Article  2.2.1.1, 
and thus had no basis upon which to depart from using Masteel 's costs of production reflected in its 
records.  We therefore find that the ADC acted inconsistently with Article 2.2.1.1 of the Anti -Dumping 
Agreement. We also note that we conclude that there was no  first condition finding made in the 
ADC's report in the investigation . Thus, even if there had been an affirmative second  condition  
finding, the ADC would still not have been entitled to depart from using Masteel 's costs.600 
 
593 China 's responses to Panel question Nos.  69 and 80.  
594 Investigation 466 final report (Exhibit  CHN-3), pp.  23-24.  
595 Investigation 466 final report (Exhibit CHN -3), pp. 24 and 80 -95. 
596 Investigation 466 final report (Exhibit CHN -3), p. 24.  
597 Investigation 466 final report (Exhibit CHN -3), pp. 24-25.  
598 Investigation 466 final report ( Exhibit CHN -3), appendix 2. 
599 Investigation 466 final report ( Exhibit CHN -3), p. 80. 
600 We note that Australia argues that the ADC made a first condition finding in the statement of 
essential facts in this investigation, and that this finding was not contested and therefore the finding was clear 
from the course of the investigation. (Australia's responses to Panel question No. 61, para. 193, and No. 78, 
para. 82.) The ADC's report, not the statement of essential facts, in our mind reflects the ADC's findings, 
however, and we discern no f irst condition finding in that report. We  therefore consider that no first condition 
finding was made in the investigation. China also claims violations of Articles  2.1 and 2.2 of the 
Anti-Dumping  Agreement and Article  VI:1 of the GATT 1994 in this context . (China's first written submission, 
section F.1. ) We discern no independent  basis on which to find violations of these provisions. T he Panel 
declines to make findings as to these claims as it would not be helpful in resolving the dispute.  WT/DS603/R  
 
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  7.5.2   AD claim 1 under  Article  2.2 of the Anti-Dumping  Agreement : costs of production in 
the country of origin   
7.310.   The applicable legal framework for this claim has already been set forth in section  7.3.2.1  
above.  
7.5.2.1   Main party arguments  
7.311.   China  recalls that in the railway wheels  investigation the ADC rejected using the 
exporters'  costs of production when determining normal value, and instead used surrogate costs.  
Specifically, China indicates that the ADC replaced Ma steel's steel -billet production costs with a 
Frenc h producer  MG-Valdunes SAS (Valdunes )'s steel-billet purchasing costs.601 China claims that, 
in doing so, Australia violated Article  2.2 of the Anti-Dumping  Agreement because  the ADC used 
costs that were not "the cost of production in t he country of origin" within the meaning of Article  2.2. 
More specifically, China claims that the ADC used the selected surrogate costs because they were 
meant to not represent the costs of production in China, and that the ADC made no material effort 
to adapt such costs so that they could reasonably be considered "the cost of production in [China]". 
China notes that although the ADC made certain adjustments to the surrogate costs in the 
investigation , such adjustments were insufficient to make  the surrogat e costs "costs of production 
in the country of origin". China also asserts that the ADC noted the need for further such 
adjustments, but failed to perform them, citing the lack of information on the record, which, in 
China's view, is an irrelevant legal co nsideration in this context.602 China cites the Appellate  Body 
reports in EU – Biodiesel  (Argentina)  and Ukraine  – Ammonium  Nitrate  in support of its arguments 
in this context.603  
7.312.   Australia  asserts that "China's  claim is limited to challenging the ADC's  approach to 
determining the cost of a single (but important)  input in Masteel's  production process:  steel 
billet" .604 In this context, Australia contends that the ADC recognized that Article  2.2 does not 
preclude the use of out -of-country data, that the circum stances of the investigation meant that it 
was proper for the ADC to resort to out -of-country data, and that the ADC made proper adjustments 
to Valdunes's  data to reflect Masteel's  circumstances in China.605 Australia recalls that the ADC found 
that it could not use Masteel's  recorded costs, and thus turned to other data to determine such costs. 
Australia asserts that the ADC selected the surrogate  costs in this context because 
Valdunes's  purchases were of a particular relevant grade of steel, such data were taken from the 
same relevant period of investigation  and were verified  by the ADC , and because Valdunes's  costs 
did not reflect Chinese market distortions.606 Australia asserts that the ADC adjusted 
Valdune s's SG&A because  Masteel, unlike Valdunes, was a vertically integrated producer  that made 
its own steel billet .607 Australia indicates that the ADC considered, but rejected, the use of alternative 
data sources.608 Australia further argues that the ADC could not further adjust Valdunes's  data to 
ensure that such data represented the cost of production in China because the Chinese Government  
and Masteel failed to provide relevant information to the ADC that could have been used to make 
such adjustments.609 
7.313.   Austr alia also argues that if the Panel were to find a violation of Article  2.2.1.1  under 
AD claim 3 , then it would not be necessary or desirable to also issue findings with respect to this 
claim under Article  2.2. This is not, in Australia 's view, because this claim  is consequential to 
China's  claim under Article  2.2.1.1 . Rather, in Australia 's view, it is because if a violation of 
Article  2.2.1.1 is found, this claim  is premised on a particular outcome of the Article  2.2.1.1 analysis, 
 
601 China's first written  submission, paras.  76-95.  
602 China 's second written submission, paras. 158 -161.  
603 China 's first written submission, paras.  96-119.  
604 Australia 's first written submission, para. 277.  
605 Australia 's first written submission, paras.  278 and 289-292. Specifically, Australia discusses in this 
context the adjustments made to Valdunes 's costs to reflect the fact that Masteel was a vertically integrated 
producer which did not purchase, but made, steel billet. (Australia 's first written submission , paras.  289-290). 
606 Australia 's first written submission, para. 286.  
607 Australia 's second written submission, paras. 19 9-202. Australia notes that the ADC used the costs 
of another steel company, ArcelorMittal, in  making this adjustment, because Masteel p rovided such data for 
this express purpose, ArcelorMittal 's core business was production and sale of steel products, and its relevant 
costs were readily identifiable in its records. (ibid. para. 201).  
608 Australia 's first written submission, paras.  298-311. 
609 Australia 's first written submission, paras.  293-297. WT/DS603/R  
 
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  and if the ADC improperly  rejected exporters ' costs under Article  2.2.1.1, then the Panel 's analysis 
of whether the ADC properly adjusted the costs  to represent the cost of production in China  used 
would be irrelevant  as a practical matter .610 
7.314.   China  responds  that a violation of Article  2.2.1.1 would also result in a violation of Article  2.2, 
but argues that the Panel should still make findings with respect to this Article  2.2 claim even if a 
violation of Article  2.2.1.1 is found. China indicates that such an approach has been followed in other 
disputes .611 China also asserts that the ADC 's adjustment of the surrogate costs for SG&A to which 
Australia refers was incapable of rendering a cost of production in China.612 
7.5.2.2   Evaluation  
7.315.   China claims that the surrogate co sts for steel billet selected by the ADC for purposes of 
constructing Masteel's normal value in the railway wheels investigation did not represent the "cost 
of production in country of origin" within the meaning of Article  2.2 of the Anti-Dumping  Agreement .  
7.316.   In the investigation, and after rejecting Masteel's costs of producing steel billet in 
constructing normal value, t he ADC considered multiple benchmarks to use for Masteel's steel billet 
costs, i.e. private prices, import prices, and external benchmarks .613 The ADC ultimately used the 
steel billet costs of the company Valdunes.  Valdunes  was a French producer and the only other 
verified exporter of railway wheels subject to the investigation.614 The ADC selected Valdunes' s cost 
data because "they are the cost of the particular grade of micro alloyed steel used in the production 
of the good s under consideration " and the ADC had verified the costs  for the same period of 
investigation .615 The ADC thus concluded that "the suitable  [replacement] benchmark is to uplift 
Masteel's  steel billet input costs to reflect the difference between these costs and the costs incurred 
by Valdunes".616  
7.317.   Two adjustments were made to Valdunes's  steel-billet costs. The first was deemed 
appropriate because Valdunes purchased  its steel billet whereas  Masteel made  its own steel billet.617 
The ADC  thus adjusted Valdunes's  SG&A to reflect that  Masteel would not have incurred  certain 
costs as a vertically integrated company in this respect .618 The ADC made the second adjustment to 
address Valdunes's  lack of steel billet purchase cost data for one quarter of the period  of 
investigation  as follows : 
Due to this [lack of data], the Commission a djusted the French billet costs from the 
third quarter o f the investigation period, relative to movements of an East Asia steel 
benchmark, to determine a French billet price in that quarter. The Commission then 
annualised the difference between the French billet costs and the Masteel costs to 
produce billet use d in railway wheels, and uplifted the Masteel billet costs by this 
annualised percentage.619  
7.318.   The ADC discussed, but declined to make, other adjustments  to Valdunes's  costs. Certain 
parties  before the ADC  raised concerns that the steel billet surrogate cost s did not reflect 
 
610 Australia 's response to Panel question No. 12.  
611 China's response to Panel question No. 12.  
612 China 's response to Panel question No. 69, paras. 57-59. 
613 Investigation 466 final report  (Exhibit CHN-3), pp. 100 -102.  
614 Investigation 466 final report  (Exhibit CHN-3), p. 22.  
615 Investigation 466 final report  (Exhibit CHN-3), pp. 101-102. 
616 Investigation 466 final report  (Exhibit  CHN-3), p.  25. See also Ibid. p. 96 (explaining that in the 
statement of essential facts "the Commission calculated the cost of production with reference to the actual 
costs incurred by Masteel in production of steel billet of the particular grades used to produce railway wheels 
and u plifted these costs with reference to the difference between these costs, and the billet purchase price for 
railway wheel grade steel incurred by the French producer examined in this investigation, Valdunes")  
617 Investigation 466 final report  (Exhibit CHN-3), pp.  81, 93-94, and 96.  
618 Investigation 466 final report  (Exhibit CHN-3), pp.  25, 81, and 98 -102. 
619 Investigation 466 final report  (Exhibit CHN-3), p.  96. Interested p arties  also argue d that steel billet 
purchasing costs were irrelevant because Masteel was a vertically integrated producer of steel billet. The AD C 
disagreed, indicating that "[g]iven the GOC 's significant influence on the Chinese steel market and steel input 
markets, the C ommission considers that it is appropriate to uplift Masteel 's costs at the steel billet level. This is 
the most appropriate point to uplift the costs to capture the total impact of the Government influences on the 
cost to produce steel billet in China" . (ibid. pp. 96 -97). The subject of whether the cost of purchasing steel 
billet was relevant at all pertains most directly to China's  AD claim 5.d , discussed further  below.  WT/DS603/R  
 
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  comparative advantages that Masteel enjoyed, such as lower labour costs and the fact that Masteel 
was a "large-scale" producer capable of achieving relatively cheap production of steel billet.620 The 
ADC declined to make additional adjustm ents to Valdunes's  costs, however, because : 
The Commission considers that in order to calculate any comparative advantages or 
disadvantages between Chinese and French billet costs, would  [sic] require the 
Commission to isolate and subtract the effect of the GOC 's significant involvement in 
the Chinese steel market. The Commission considers that it would not be possible to 
isolate and quantify the effect of GOC involvement, with any degree of ac curacy, in the 
relevant markets and to quantify such comparative advantages or disadvantages.621  
Moreover, the ADC indicated that it had not received information from interested parties that would 
have allowed it to make such adjustments.622 
7.319.   We consider tha t the ADC did not reasonably demonstrate that the surrogate costs 
represented  costs of production in China. The  costs were taken from a producer in a different 
country , and the only adjustment made was related to Masteel being  a vertically integrated produ cer 
of steel billet.  There is no explanation in the ADC's findings as to why a French  company's cost of 
purchasing steel billet would meaningfully represent a Chinese company's cost of producing  steel 
billet in China. 623  
7.320.   On this basis, we find that the AD C acted inconsistently with the practice of an unbiased and 
objective investigating authority with respect to Article  2.2 of the Anti-Dumping  Agreement by failin g 
to provide  a reasoned and adequate explanation as to why the uplifted costs, without any 
adjustments to adapt such  uplifted costs to Masteel's circumstances in China (other than SG&A), 
represented a cost of production in China for Masteel.624 
7.5.3   AD c laim 5.d under Artic les 2.2 and 2.2.1.1 of the Anti-Dumping  Agreement:  the 
"manner and circumstances" of rejection of exporters' costs  
7.5.3.1   Main party arguments  
7.321.   China  claims that Australia violated Article s 2.1, 2.2, and 2 .2.1.1 of the 
Anti-Dumping  Agreement  and Article VI:1 of t he GATT 1994  due to  the "manner" and 
"circumstances" in which the ADC rejected certain of Masteel's  costs in the railway wheels  
investigation  when constructing normal value .625 China asserts that its claim addresses "what a 
'cost' is".626 China explains that : 
The investigating authority failed to provide any reasoned and adequate explanation as 
to why prices  paid in the French market for steel billet used in the production of railway 
wheels in France were relevant evidence for calculating the costs of iron ore, coal and 
scrap steel and the processing of those materials into railway wheels in China. China 
 
620 Investigation 466 final report  (Exhibit CHN-3), pp. 97-98 and 100.  
621 Investigation 4 66 final report  (Exhibit CHN-3), p. 98.  See also Ibid. p. 100 (making same  conclusion 
with respect to similar issue).  
622 Investigation 466 final report  (Exhibit CHN-3), p. 98. 
623 We note Australia's argument that " it would be nonsensical  – through the choice of reference data 
under Article  2.2 – to reintroduce the very same distortions that the ADC legitimately excluded under 
Article  2.2.1.1" . (Australia's second written submission , para. 197). We reject this argument because  the ADC 
undertook no meanin gful analysis as to why conditions in France , specifically,  were meaningfully representative 
of costs of production of steel billet in China , whether distorted or undistorted.  It seems to us, rather, that the 
surrogate prices were certain costs for purchas ing steel billet, perhaps free from the alleged Chinese 
distortions, in France.  
624 China also claims violations of Articles  2.1 and 2. 2.1.1 of the Anti-Dumping  Agreement and 
Article  VI:1 of the GATT 1994  in this context. We discern no independent basis on which to find violations of 
these provisions. T he Panel declines to make findings as to these claims as it would not be helpful in resolving 
the dispute.  
625 China's  first written submission, para. 14. China also claims a violation of Article  VI:1 of the 
GATT 1994.  
626 China's  first written submission, para. 308.  WT/DS603/R  
 
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  submits that it is not possible to provide such an explanation within the legal 
requirements of Articles  2.2 and 2.2.1.1.627  
This is so, according to China, because Masteel did not purchase steel billet, and thus using a 
surrogate cost for steel billet in place of Masteel's  raw input costs for the production of steel billet 
cannot be said to have "'a genuine relationship with th e production and sale of the product under 
consideration'".628 China clarifies and stresses "that a cost determination carried out and the ultimate 
calculation of cost mu st be in relation to a cost of a type incurred by the exporter concerned ".629 
7.322.   Australia  responds that "the ADC assessed Masteel's  records and implemented its cost 
adjustment at the steel billet level rather than at the raw material level because an adjustment at 
that level of production was appropriate on the facts of this investigation" .630 Australia emphasi zes 
that, in this context, the ADC took into account information in Masteel's  questionnaire response, that 
the ADC did not have access to verifiable and isolated raw materials costs, and that the ADC adjusted 
the reference data (i.e.  the pu rchase price of steel billet)  to reflect the fact that Masteel was a 
vertically integrated producer.631 Australia also contends that China's  claim lacks a clear legal 
basis.632 Overall, therefore, Australia asserts that this claim , insofar as it relates to t he obligation to 
use costs of production in the country of origin, is subsumed under China's AD claim 1 under  
Article  2.2, and, insofar as it relates to the second condition of Article  2.2.1.1, it lacks a legal basis.633  
7.5.3.2   Evaluation  
7.323.   In this claim, China asks the Panel to find that in the railway wheels  investigation the ADC 
improperly used a cost of purchasing  steel billet as a substitute for the Chinese exporter 's cost of 
producing  steel billet  in constructing normal value . We recall , however, that we have already found 
that Australia violated Articles 2.2.1.1 and 2.2 by improperly rejecting Masteel's  steel-billet 
production costs and then failing to adapt the chosen surrogate costs such that they could be 
considered costs of producti on in China.634 We consider that those conclusions already address the 
key underlying concerns in China's claim here, i.e. that the chosen surrogate costs were an improper 
substitute for Masteel's relevant steel billet costs. Here, China asks us to state th e same conclusion 
in a somewhat different manner. We therefore consider that we need not separately consider this 
claim and decline to make any additional findings with respect to it.  
7.5.4   AD claim 6.a  under Article  2.4 of the Anti-Dumping  Agreement   
7.324.   The appli cable legal framework for this claim has already been set forth in section  7.3.4.1  
above.  
7.5.4.1   Main party arguments  
7.325.   As already explained in examining AD claims 1 and 3 for this proceeding , above, China  
argues that the ADC's  cost substitution methodology to determine constructed normal values 
generated disparities between the norm al value and the export price .635 China argues that such 
disparities represent differences aff ecting price comparability under Article  2.4 of the 
Anti-Dumping  Agreement , because by using costs higher than an exporter's  record costs in 
constructing normal value, the ADC imputed a price -setting variable of which the exporter was not 
 
627 China's  first written submission, para. 313. (emphasis  original)  
628 China's  first written submission, para. 312 (quoting Appellate  Body Report, Ukraine  – Ammonium  
Nitrate , para. 6.24). See also  China's  first written submission, paras.  280-289 and 307 -314. 
629 China 's response to Panel question  No. 15, para. 52. 
630 Australia's  first written submission, para. 253. 
631 Australia's  first written submission, paras.  253 and 260 -272. 
632 Australia's  first writ ten submission, paras.  255-259. This is so because, according to Australia, 
insofar as this claim concerns the use of costs in the country of origin, that claim is already addressed in 
AD claim 1, and insofar as this claim relies on the second condition of  Article  2.2.1.1 (i.e. related to 
AD claim 3), that condition was not the basis for the ADC's  decision to not use the relevant exporters ' costs, 
but, rather, the ADC relied on the term "normally " in Article  2.2.1.1 in this context.  
633 Australia 's response to Panel question  No. 18; second written submission, paras. 204 -214.  
634 See discussions of AD claims 1 and 3 for railway wheels, above . 
635 China's  first written submission, paras.  326 and 336 ; opening statement at the first meeting  of the 
Panel , paras. 89 and 90.  WT/DS603/R  
 
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  cognisant and thu s necessarily did not take into account when making export sales.636 China submits 
that absent any due allowances to account for these disparities637, the comparison between the 
normal value as constructed and the export price in each of the three investigat ions was not a "fair 
comparison" under Article  2.4.638 China, however, asserts that if the Panel were to find violations of 
Article s 2.2, and 2.2.1.1, then there would be no need for the Panel to address this claim. China 
notes that this approach was follow ed by the Appellate Body in EU – Biodiesel (Argentina) .639 
7.326.   Australia  argues that this claim is "entirely, and impermissibly, premised on 
China's  disagreement with Australia's  construction of normal value, and not on any failure to make 
due allowances under Article  2.4".640 Australia argues that there is no textual basis to challenge the 
ADC's  normal value calculation under Article  2.4. Australia thus rejects China's  position that 
Australia's  cost substitution resulted i n a difference as betwe en normal value and export price that 
required an adjustment under Article  2.4. In Australia's  view, Article  2.4 is only concerned with 
making appropriate adjustments that are unrelated to the construction of normal value pursuant to 
Article  2.2, because A rticle 2.4 presupposes that the normal value and export price have already 
been established.641 Australia agrees with China  that the Panel need not proceed to an analysis 
under Article  2.4 if China succeeds on AD claims  under Article s 2.2 and 2.2.1.1.642 
7.5.4.2   Evaluation  
7.327.   We have already set out  our understanding of the relationship between China's claim under 
Article  2.4, and its claims under Articles 2.2 and 2.2.1.1 , in discussing AD claim 6.a in the context  
of the wind towers proceedings , further above . We con tinue to consider that the adjustment s China 
requests pursuant to Article  2.4 would  essentially require the authority to construct normal value 
using  the exporters' costs of production in China . This is the issue addressed in the context of 
China's  claims under Articles 2.2 and 2.2.1.1.  We have  already  found  that the ADC acted 
inconsistently with Articles  2.2 and 2.2.1.1  in resorting to surrogate costs in the railway wheels 
investigation  in examining AD claims 1 and 3 with respect to this proceeding . Accordingly , we 
consider it unnecessary  to examine further whether the ADC also failed to conduct a fair comparison 
under Article  2.4 by failing to make any adjustment s linked to such  use of surrogate costs.   
7.5.5   AD claim 7.b under Article 2.2.2  of the Anti -Dumping Agreement : profits not actually 
realized in the domestic market   
7.328.   The applicable legal framework for this claim has already been set forth in section  7.3.5.1  
above . 
7.5.5.1   Main party arguments  
7.329.   China  recalls that, in the railway wheels  investigation , the ADC found that the only 
investigated Chinese exporter, Masteel, did not sell like products domesticall y. Accordingly, when 
constructing normal values, the ADC could not calculate profit based on actual data pertaining to 
domestic sales of the like product, as envisaged in the chapeau  of Article  2.2.2. China asserts that 
the ADC instead used the method provided for in Article  2.2.2(i) , which refers to the actual amount 
of profit realized on domestic sales for the same general category of products .643 China claims that , 
in doing so,  the ADC acted inconsistently with Article  2.2.2(i):   
a. by including  exported pro ducts in its calculation of the profit rate of the exporter in respect 
of production and sales in the domestic market of the same general category of products 
under Article  2.2.2(i). More specifically, China contends that the profit rate was calculated 
with reference to Masteel's  entire Wheels Division, which made both export and domestic 
 
636 China's  first written submission, paras.  332-333 and 335.  
637 China's  first written submission, paras.  327-331. 
638 China's  first written submission, paras.  15(a), 322, and 327.  
639 China 's second written submission, para. 279. 
640 Australia's  first written submission, paras.  314, 318, and 413. See also ibid. paras.  532-535.  
641 Australia's  first written submission, para. 328; second written submission, paras. 216, 218 , and 221.  
642 Australia's  response of Panel question No. 20, para. 40. 
643 China 's first written submission, paras.  425-426. WT/DS603/R  
 
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  sales.644 The profit was therefore, according to China, not based on "sales in the domestic 
market" as required by Article  2.2.2(i); and  
b. by applying that profit rate to a constructed cost of production using non -Chinese 
surrogate costs , instead of the Chinese expo rter's recorded cost of production in the 
country of origin , the profit was therefore, according to China, not "the actual amounts 
incurred and realized" by the exporter, as required by Article  2.2.2(i).645 
7.330.   China further argues that the ADC knew that the da ta it used included both domestic sales 
and export sales.646 China rejects  Australia's argument that it was not possible for the ADC to 
distinguish and separate export sales from domestic sales.647 In China's view, Australia cannot shift 
the investigating au thority's  obligation to determine profits on the basis of actual data in the 
domestic market to the exporting producers.648 According to China, Masteel  was misled to believe 
that the profit was calculated from the data pertaining to its domestic sales, inst ead of from the data 
pertaining to global sales that included both domestic and export sales.649 
7.331.   Australia  agrees with China that the ADC relied on Article  2.2.2(i)  in making the profit 
determination in this context, and that in doing so the ADC was require d to use actual profit amounts 
realized by Masteel in the Chinese domestic market.650 Australia argues, however, that China failed 
to make a prima  facie case that the sales figures used by the ADC included Masteel's  sales in both 
the domestic and export mar kets.651 Australia acknowledges that the ADC used Masteel's  sales data 
of all railway wheels from Masteel's  "Wheels Division " as its basis , which included both domestic and 
export sales .652 However, Australia contends that the sales data were the best availa ble verified  
information  the ADC could obtain from Masteel on the actual a mounts  it had incurred and reali zed 
from the sale of railway wheels  in the Chinese  domestic  market .653 Australia argues that Masteel  
had suggested that the ADC use this data for this purpose.654 Australia further argues that neither 
Masteel nor the Chinese Government  raised any concerns or objections to the method used by ADC 
to calculate the profits during the investigation.655  
7.332.   In response to China's  argument that the ADC arrived at incorrect amounts for profit by 
applying its calculated profit rate to a constructed cost of production instead of the Chinese 
exporter's recorded cost of production in the country of origin, Australia offer s two arguments. First, 
Australia argues that  China failed to make a prima  facie case of inconsistency because the ADC 
determined amounts for profits using the best available verified information it could obtain from 
Masteel on the actual profits it had re alized from the sale of railway wheels in China's  domestic 
market. Second,  Australia argues that,  given China's  allegation that the ADC improperly applied the 
profit rate to the cost of production is entirely contingent on China's  claim under Article  2.2 (AD 
claim 1), China failed to make a prima facie  case of inconsistency under this claim because it failed 
to make a prima  facie case under Article  2.2.656  
7.5.5.2   Evaluation  
7.333.   We recall that Article  2.2.2(i) allows an investigating authority  to determine the profit on the 
basis of "the actual amounts incurred and realized by the exporter or producer in question in respect 
 
644 Investigation 466 Masteel verification visit report, appendix 3 "Domestic Sales", tab "(b) Profit"  
(Exhibit  CHN-48 (BCI)).  
645 China's  first written submission, paras.  431-432. 
646 China's second written submission, para. 314. 
647 China's second written submission, para. 314. 
648 China's second written submission, para. 316. 
649 China's  second written submission, paras. 315 and 316. 
650 Australia's  first written submission, para. 334. 
651 Australia's  first written submission, paras.  335-336. 
652 Australia's  first written submission, para. 341; second written submission, para. 228. 
653 Australia's  first written submission, paras.  335-336; second w ritten submission, para. 228. In 
response to a question from the Panel, Australia clarified that it "has not suggested that the finding was made 
on basis of facts available in the sense of an Article  6.8 AD determination. The reference to 'best available ' in 
this context merely meant that the ADC used the only verified information that was available ". 
(Australia's  response to Panel question No. 31, para. 91). 
654 Australia's second written submission, para. 228.  
655 Australia's  first written submission, para. 339; second written submission, para. 228; and  response 
to Panel question No. 31, para. 90. 
656 Australia's  first written submission, para. 342. WT/DS603/R  
 
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  of production and sales in the domestic market of the country of origin of the same general category 
of products".  
7.334.   This c laim contains two aspects : first, that the ADC failed to calculate profit on  the basis of  
"sales in the domestic market"  within the meaning of Article 2.2.2(i) ; and second, that the ADC 
calculated Masteel's  profit by applying a profit rate to an uplifted cost of production. We begin with 
the first. In this regard , the parties agree  that: (a) the ADC determined profit on the basis of 
Article  2.2.2(i)657; and (b) the ADC used sales data pertaining to "all railwa y wheels" produced by 
the Wheels Division of Masteel, which included both domestic sales and export sales. Specifically, in 
response to a question posed by the Panel, Australia confirmed that the data it used for the purpose 
of calculating profit included data related to both export sales and domestic sales:  
The cost and sales data relied on was split into 2 categories labelled "Goods Sub Type  A 
… Wheel Under Investigation Scope" and "Goods Sub Type B  … Wheel Not Under 
Investigation Scope".  
Of these catego ries, "Goods Sub Type A  … Wheel Under Investigation Scope" were 
disaggregated by market  but was not usable for the profit calculation since Masteel had 
no sales of the like product in China during the investigation period.  The second 
category, "Goods Sub T ype B … Wheel Not Under Investigation Scope", was not 
disaggregated and included both domestic and export sales . The ADC was not able, on 
the basis of the verified cost data before it, distinguish between export sales and 
domestic sales in this latter cate gory. 658 
7.335.   Accordingly, we find that the ADC did not calculate profit on the basis of the actual amounts 
incurred and realized by Masteel in respect of sales only " in the domestic market of the country of 
origin", as required by Article  2.2.2(i).  
7.336.   Australia raises three principal arguments to justify the ADC's use of data which included 
export sales. First, Australia argues that the data was the best available verified information 
concerning "the actual amounts incurred and realized by the exporter or produce r in question in 
respect of production and sales in the domestic market of the country of origin of the same general 
category of products".  Second, Australia argues that Masteel had proposed that the ADC use the 
data set that contain ed both domestic and ex port sales.659 Third, Australia argues that neither 
Masteel nor the Chinese Government raised any concerns or objections to the method used by ADC 
to calculate the profits during the investigation (which included data pertaining to both domestic and 
export sales). We reject all three  of these arguments , because Article  2.2.2(i) contains no exception 
or qualification from the rule to use actual data which pertains to "sales in the domestic market".660 
Australia 's arguments are premised on  an exception that does not exist.  
7.337.   Accordingly , with respect to the first aspect of China's claim , we conclude that the ADC acted 
inconsistently with Article  2.2.2(i) by failing to calculate profit on the basis of the actual amounts 
incurred and realized b y Masteel in respect of "sales in the domestic market of the country of origin" . 
7.338.   Turning to  the second aspect of China's  claim involving the calculation of amounts of profit 
in the railway wheels  investigation , we note that the ADC applied a profit rate to  a constructed cost 
of production using surrogate costs , rather than using the Chinese exporter's recorded costs of 
production.661 The profit was therefore, according to China, not "the actual amounts incurred and 
 
657 Australia's first written submission, para. 334. See al so Investigation 466 final report  
(Exhibit  CHN-3), p. 25, where the ADC stated that "[a]s Masteel does not sell like goods in China, the 
Commission was unable to calculate profit under subsection 45(2) of the Regulation. The Commission has 
instead calculated an amount for profit under subsection 45(3)(a) of the Regulation by identifying th e actual 
amounts realised by Masteel from the sale of the same general category of goods (other types of railway 
wheels sold by Masteel) on the domestic market in China ". (emphasis added)  
658 Australia's response to Panel question No. 31, para s. 92-93. (emph asis added)  
659 Australia's second written submission, para. 228. 
660 In response to a question from the Panel, Australia clarified that the present case does not concern a 
situation where there was no data concerning "sales in the domestic market" or a lack o f cooperation from the 
exporting producer which justified the use of facts available under Article  6.8 of the Anti-Dumping  Agreement. 
(Australia's response to Panel question No. 31, para. 91). 
661 See also Investigation 466 final report  (Exhibit CHN -3), p. 25. WT/DS603/R  
 
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  realized" by the exporter, as required by A rticle 2.2.2(i).662 We thus recall that  we have found above 
with respect to AD claims 1 and 3  that the ADC acted inconsistently with Article s 2.2.1.1 and 2.2 of 
the Anti-Dumping  Agreement  by improperly rejecting certain of Masteel's costs of production when  
constructing normal value, and replacing them with surrogate costs that did not represent 
Masteel's  cost of production in the country of origin.  Under these circumstances, we discern no way 
in which such amounts could be said to represent the  "actual amou nts incurred and realized" by 
Masteel in the domestic market , as required by Article  2.2.2(i) . Accordingly, with respect to the 
second aspect of China's AD claim 7.b, we find that t he ADC acted inconsistently with Article  2.2.2(i) 
by using non-Chinese surrogate costs of production  in its profit determination in the railway wheels  
investigation .663 
7.5.6   AD claim  8 under  Article  9.3 of the Anti-Dumping  Agreement : collection  of duties  in 
excess  of the margin of dumping  
7.339.   The applicable legal framework for this claim has already been set forth in section  7.2.3  
above.  
7.5.6.1   Main  party  arguments  
7.340.   China  asserts  that Australia has collected anti -dumping duties on the basis of margins of 
dumping that were inflated as a result of the alleged WTO -inconsistencies challenged in China's other 
AD claims. 664 China claims that, as a result, Australia has collected anti-dumping  duties in excess 
of the margins of dumping that would have been "properly established" under Article  2, contrary to 
Article  9.3 of the Anti-Dumping  Agreement  and Article VI:2  of the GATT  1994.665 
7.341.   Australia  argues that China's claim  under Articl e 9.3 is purely consequential , and that it must 
fail given that the ADC's  calculation of relevant dumping margins was consistent with Article  2 of the 
Anti-Dumping  Agreement .666 
7.5.6.2   Evaluation  
7.342.   To the extent that we have found above that the ADC acted inconsistently with the provisions 
of Article  2, we consider that China has established, as a matter of fact,  that the dumping margins 
were improperly  inflated through  the use of "uplifted " surrogate  costs in the  railway wheels 
investigation . In this regard, we note that the ADC stated in the final report  of Investigation 466 
that "[t]he Commission considers that the suitable benchmark is to uplift Masteel's steel billet input 
costs to reflect the difference between these costs and the costs incurred by Valdunes, as adjusted 
for SG&A expenses that Masteel would not have incurred in the production of railway wheels in 
China" and that Masteel's cost of production of steel billet was "typically lower than the Valdunes 
purchase price" .667 We note that Australia does not argue otherwise. Rather, Australia appears  to 
treat the success of China's claim under Article  9.3 as dependent on the other underlying claims 
under the Anti -Dumping Agreement.  In the absence of any rebuttal from Australia, this in our view 
establishes prima facie  that the anti -dumping duties impo sed by the ADC exceeded  the margins of 
dumping  that would have been established had the authorities acted consistently with Article  2. 
 
662 China's  first written submission, paras . 431-432. 
663 China also claims violations of Articles  2.1 and 2. 2 of the Anti-Dumping  Agreement and Article VI:1 
of the GATT 1994  in this context. (See China's  first written submission, section G.6 ). However, China does not 
elaborate on these claims. We discern no independent basis on which to find violations of these provisions. T he 
Panel declines to make findings as to these claims as it would not be helpful in resolving the dispute.   
664 See for example, China's  first written submission, para. 338; opening statement at the first meeting 
of the Panel, para. 111; and response s to Panel question No. 17, para. 62, No. 19, para. 68, No. 23, para . 94, 
and No 110, paras. 240 and 246.  
665 China's  first written submission, paras.  458, 459 -480. See also China's second written submission, 
para. 325. 
666 Australia's  first written submission, paras.  165, 344 -345, and 474 ; second written submission, 
para. 230. 
667 Investigation 466 final report (Exh ibit CHN-3), pp. 25 and 93 (emphasis added); Investigation  466 
Maasteel verification visit report, appendix 2 "CTMS", tab "(a) CTMS"  (Exhibit  CHN-53 (BCI))  and 
Investigation  466 Maasteel verification visit report, appendix 2 "CTMS (Final with uplift)", tab  "(a) CTMS" 
(Exhibit  CHN-54) (showing an increase in "material costs" attributable to adjustments made by the ADC) . WT/DS603/R  
 
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  7.343.   Accordingly, we uphold China's claim that Australia acted inconsistently with Article  9.3 of 
the Anti-Dumping  Agreement  and Article VI:2  of the GATT  1994. 
7.6  Whether to issue findings and recommendations for expired aspects of the 
anti-dumping  and countervailing duty orders   
7.344.   With respect to certain claims above, we have found that challenged aspects of the 
anti-dump ing and countervailing duty  orders are expired. As explained in those sections, we decline 
to make findings or recommendations with respect to the claims that pertain to those aspects. This 
section sets forth our reasoning for so declining.  
7.345.   At the outset,  we agree with China and previous statements by the Appellate Body that we 
have jurisdiction to rule on expired measures.668 We also agree with previous panel and 
Appellate  Body reports indicating that panels have discretion as to whether to issue findings with 
respect to expired measures.669 We note that the relatively recent panel report in Thailand – 
Cigarettes (Philippines) (Article  21.5 – Philippines II ) engaged in a detailed discussion regarding the 
manner in which panels have exercised this discretion.670 We agree with that panel that : 
Panels have attached importance to several different considerations, including most 
notably (1) whether the measure at issue was withdrawn prior to, or only after, the 
establishment of the panel by the DSB; (2) whether the re was a risk of reintroduction 
of the same or materially similar measure; and (3) whether findings on the withdrawn 
measure would have any practical value for implementation in the light of other findings 
on materially similar measures. None of these thre e considerations is decisive in and of 
itself, and they do not necessarily exhaust the circumstances that panels may take into 
account when deciding how to exercise their discretion [.]671  
We also agree with that panel that "[i]n respect of measures withdrawn before panel establishment, 
panel practice appears to heavily lean against making any findings; in respect of measures 
withdrawn after panel establishment, panel practice appears to heavily lean towards panels making 
findings on such measures, bu t not making any recommendation pursuant to Article  19.1 of the 
DSU" .672 
7.346.   China generally asserts that the same arguments which mitigate, in its view, in favour of 
finding that the measures are not expired also mitigate in favour of making findings and 
recom mendations with respect to them even if they are expired.673 We described  such arguments 
extensively in section  7.2.1 above,  and in the sections addr essing expiry of specific aspects. We thus 
will not repeat them here. We are also cognizant that we may consider a range of factors in deciding 
whether to issue findings on expired measures. In our view, we discern no factor or combination of 
factors  that may point in favour of making findings  that outweigh the fact that certain  aspects of the 
anti-dumping and countervailing duty orders expired before panel establishment.  We therefore recall 
that certain aspects of the anti -dumping and countervailing duty orders have  expired by virtue of : 
(a) the ADC's findings in the wind towers and stainless steel sinks expiry reviews, which were 
concluded in  2019 and 2020, respectively ; and/or (b) the administrative review, pursuant to which 
TSP was excluded from the anti -dumping order, concluded in 2020.674 All were concluded before 
 
668 See e.g. China's second written submission, paras. 87-95; Appellate Body Report s, EC – Bananas III 
(Article  21.5 – Ecuador II ) / EC – Bananas III (Article  21.5 – US), para. 270 (explaining that the DSU "nowhere 
provides that the jurisdiction of a panel terminates or is limited by the expiry of the measure at issue").  
669 See e.g. Appellate Body Report, EU – PET (Pakistan),  para. 5.19 (exp laining that "a panel has a 
margin of discretion in the exercise of its inherent adjudicative powers under Article  11 of the DSU", and that 
"[w]ithin this margin of discretion, it is for a panel to decide how it takes into account subsequent modifications 
to, or expiry or repeal of, the measure at issue").  
670 Panel Report, Thailand – Cigarettes (Philippines) (Article  21.5 – Philippines II ), appealed 
9 September  2019, section 7.4.3.1. This panel report was circulated on 12  July 2019, and appealed on 
9 September 2019. It has not yet been adopted by the DSB. We nonetheless find its examination persuasive 
insofar as we cite it , as is the case with other reports cited with approval in this Report .  
671 Panel Report, Thailand – Cigarettes (Philippines) (Articl e 21.5 – Philippines II ), appealed 
9 September  2019, para. 7.468.  
672 Panel Report, Thailand – Cigarettes (Philippines) (Article  21.5 – Philippines II ), appealed 
9 September  2019, para. 7.469. (fns  omitted)  
673 China's second written submission, para.  92.  
674 See section 2 above .  WT/DS603/R  
 
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  Panel establishment in 2022. We consider this factor decisive , and we decline to issue findings or 
recommendations as to the expired aspects of the orders on that basis.675 
8  CONCLUSIONS AND RECOM MENDATIONS  
8.1.  For the reasons set forth in this Report, the Panel concludes as follows:  
a. Wind towers : 
i. with respect to AD claim 3 , in the expiry review, the ADC acted inconsistently 
with Article 2.2.1.1 of the Anti -Dumping Agreement because there was no basis 
for departing  from using TSP's  record costs for steel plate in constructing normal 
value;  
ii. with respect to AD claim 1 , in the expiry review, the ADC acted inconsistently 
with the practice of an unbiased and objective investigating authority with respect 
to Article  2.2 of the Anti -Dumping  Agreement by uplifting  TSP's steel plate costs 
for the purpose of constructing normal value, and then transferring that 
methodology over onto the ADC's calculation of normal values for the 
uncooperative and all other exporters, without a reasoned and adequate 
explanation as to why the uplifted costs, without any adjustments to adapt such 
uplifted costs to TSP's circumstances, represented a cost of production in China 
for TSP;  
iii. it is unnecessary to examine AD claim 5.c  under Articles  2.1, 2.2, 2.2.1.1 of the 
Anti-Dumping Agreement and Article VI:1 of the GATT 1994, because the claim 
is already effect ively addressed under AD claims 1 and 3;  
iv. with respect to AD claim 6.a , having already found violations of Articles 2.2 
and 2.2.1.1,  it is unnecessary to examine whether the ADC failed to conduct a 
fair comparison under Article 2.4 of the Anti -Dumping Agree ment by making 
adjustments to account for the differences generated by the use of surrogate 
costs in constructing normal value;  
v. with respect to AD claim 7.a , China has not demonstrated that the ADC acted 
inconsistently with Article 2.2.2 of the Anti -Dumpin g Agreement because it failed 
to make a prima facie  case that the ADC applied a profit rate to "uplifted" cost 
data in the expiry review;  
vi. with respect to AD claim 7.c , in the expiry review, the ADC acted inconsistently 
with Article 2.2 of the Anti -Dumping Agreement by determining that the domestic 
sales did not permit a proper comparison with export sales on the basis of a 
"relevance" test that has no basis in Article 2.2;  and 
vii. with respect to AD claim 8 , to the extent that the ADC acted inconsistently with 
the provisions of Article 2 of the Anti -Dumping Agreement in the expiry review, 
the ADC also acted inconsistently with Article 9.3 of the Anti -Dumping Agreement 
and Article VI:2 of the GATT 1994.  
b. Stainless steel sinks : 
i. with respect to AD claims 3 and 4 , China has not demonstrated that the ADC 
acted inconsistently with Article 2.2.1.1 of the Anti -Dumping Agreement, and thus 
acted inconsistently with Article 2.2.1 of the Anti -Dumping Agreement, by 
 
675 The situation with respect to the ADC's initiation decision with respect to  Program  1 is somewhat 
unique, since our basis for that finding was that the ADC need not rely on the original initiation decision in 
order to investigate Program  1. See section 7.4.11.2  above . This is not technically due to the ADC's findings in 
the expiry review, per se , but due to a more general legal situation existing under Australian law. Nonetheless, 
we consider that the aspect expired before P anel establishment because that general legal situation existed 
even at the time of the expiry review.  WT/DS603/R  
 
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  rejecting exporters’ record costs for purposes of performing t he 
ordinary -course -of-trade test in the expiry review;  
ii. with respect to AD claims 1 and 2 , in the expiry review, the ADC acted 
inconsistently with the practice of an unbiased and objective investigating 
authority with respect to Article  2.2 of the Anti -Dumping Agreement by failing to 
provide a reasoned and adequate explanation as to why the surrogate costs, with 
only adjustments for delivery and slitting costs, represented a cost of production 
in China. Thus, the ADC also acted inconsistently with Article 2 .2.1 of the 
Anti-Dumping Agreement because it used surrogate costs that were not 
demonstrated to be costs of production in the country of origin in performing the 
ordinary -course -of-trade test;  
iii. with respect to AD claim 6.a , having already found a violation  of Article s 2.2 
and 2.2.1,  it is unnecessary to issue findings on whether the ADC acted 
inconsistently with Article 2.4 the Anti -Dumping Agreement by failing to make 
adjustment to account for the differences generated through the use of surrogate 
costs in applying the ordinary -course -of-trade test. Also, ins ofar as the claim is 
based on the comparison of export price and a normal value that is constructed 
using surrogate costs, we decline to issue findings with respect to this aspect of 
the order because it is expired ; 
iv. with respect to AD claim 6.b.i , China ha s not demonstrated that the ADC acted 
inconsistently with Article 2.4 of the Anti -Dumping Agreement in the expiry 
review in determining that the VAT recoverability difference between domestic 
and export sales affected price comparability between the normal  value and 
export price. However, in the expiry review, the ADC acted inconsistently with 
Article 2.4 of the Anti -Dumping Agreement by applying a percentage to the 
normal value base that was flawed via the use of surrogate costs in applying the 
ordinary -course-of-trade test ; 
v. with respect to AD claim 6.b.ii , in the expiry review, the ADC acted inconsistently 
with the practice of an unbiased and objective investigating authority with respect 
to Article  2.4 of the Anti -Dumping  Agreement by treating accessories  purchased 
by Primy from third -party suppliers differently from accessories produced by 
Primy without an adequate and reasonable explanation. However, China has not 
demonstrated that the ADC acted inconsistently with Article 2.4 of the 
Anti-Dumping Agreeme nt in the expiry review by using an averaging methodology 
in calculating the adjustments to account for differences in accessories for the 
exporting producer Primy;  
vi. with respect to AD claim 6.b.iii , in the expiry review, the ADC acted inconsistently 
with A rticle 2.4 of the Anti -Dumping Agreement by comparing export models to 
export models for purposes of performing a fair comparison as between the 
normal value and export price for Zhuhai Grand;  
vii. with respect to AD claim 7.a , the Panel declines to issue findings with respect to 
China's claim that the ADC acted inconsistently with Article 2.2.2 of the 
Anti-Dumping Agreement by using the cost of production incorporating surrogate 
costs in its determination of profit, because this aspect of the order is expired;  
viii. with respect to AD claim 8 , to the extent that the ADC acted inconsistently with 
the provisions of Article 2 of the Anti -Dumping Agreement in the expiry review, 
the ADC also acted inconsistently with Article 9.3 of the Anti -Dumping Agreement 
and Article VI :2 of the GATT 1994;  
ix. with respect to CVD claims 2 and 3 , the Panel declines to issue findings with 
respect to China's claim that the ADC acted inconsistently with Articles  1.1(b)  and 
14(d)  of the SCM  Agreement by improperly rejecting in -country benchmarks and 
instead using a benchmark that did not relate to the prevailing market conditions WT/DS603/R  
 
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  in the country of provision (i.e.  China) because this aspect of the order challenged 
by China is expired;  
x. with respect to CVD claim 4 , the Panel declines to issue finding s with respect to 
China's claim that the ADC acted inconsistently with Article  2.1(c)  of the 
SCM Agreement by improperly determining that Program 1 was specific because 
this aspect of the order challenged by China is expired;  and 
xi. With respect to CVD claim 5, the Panel declines to issue findings with respect to 
China's claim that the ADC acted inconsistently with Articles  11.1, 11.2, and 11.3 
of the SCM  Agreement by failing to properly evaluate the sufficiency of the 
application for the purpose of justifying  the initiation of the investigation into 
Program 1, because this aspect of the order challenged by China is expired.  
c. Railway wheels : 
i. with respect to AD claim 3 , in the original investigation, the ADC acted 
inconsistently with Article 2.2.1.1 of the Anti -Dumping Agreement because it had 
no basis for departing from using Masteel 's record costs of production when 
constructing normal value ; 
ii. with respect to AD claim 1, in the original investigation, the ADC acted 
inconsistently with the practice of an unbiased and objective investigating 
authority with respect to Article  2.2 of the Anti -Dumping Agreement by failing to 
provide a reasoned and adequate explanation as to why the uplifted costs, 
without any adjustments to adapt such uplifted costs to Masteel's circumstances 
in China (other than SG&A), represented a cost of production in China for Masteel;  
iii. with respect to AD claim 5.d , it is unnecessary to consider this clai m under 
Articles  2.1, 2.2, and 2.2.1.1 of the Anti -Dumping Agreement and Article VI:1 of 
the GATT  1994 because the claim is already effectively addressed under 
AD claims 1 and 3;  
iv. with respect to AD claim 6.a , having  already  found  violations of Articles 2.2 and 
2.2.1.1, it is unnecessary to examine further whether the ADC also failed to 
conduct a fair comparison under Article 2.4 by failing to make any adjustments 
linked to such use of surrogate costs  in constructing normal value ; 
v. with respect to AD claim 7.b , in the original investigation, the ADC acted 
inconsistently with Article 2.2.2(i) of the Anti -Dumping Agreement by failing to 
calculate profit on the basis of the actual amounts incurred and realized by 
Masteel in respect of " sales in the domestic market of the country of origin". The 
ADC also acted inconsistently with Article 2.2.2(i) of the Anti -Dumping Agreement 
by using surrogate costs of production in its profit determination; and 
vi. with respect to AD claim 8 , to the extent that the ADC acted inconsistently with 
the provisions of Article 2 of the Anti -Dumping Agreement in the original 
investigation, the ADC also acted inconsistently with Article 9.3 of the 
Anti-Dumping Agreement and Article VI:2 of the GATT 1994.  
8.2.  Under Articl e 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 facie  to constitute a case of 
nullification or impairment. We conclude that, to the extent that the measures at i ssue are 
inconsistent with the GATT 1994  and Anti -Dumping  Agreement, they have nullified or impaired 
benefits accruing to China under those  agreement s. 
8.3.  Pursuant to Article  19.1 of the DSU, we recommend that Australia bring its measures into 
conformity with  its obligations under the  GATT  1994 and the Anti -Dumping  Agreement.  
__________