WT/DS437/ARB  
 
26 January 2022  
(22-0540) Page: 1/87 
    
 
  
UNITED  STATES  – COUNTERVAILING DUTY MEASURES  
ON CERTAIN PRODUCTS FROM CHINA  
RECOURSE TO ARTICLE 22.6 OF THE DSU BY THE UNITED  STATES  
DECISION BY THE ARBITRATOR  
BCI omitted, as indicated [[***]]  
 
 WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  12 
2   PROCEDURAL MATTERS  ................................ ................................ .............................  14 
2.1   Prior stages of this dispute  ................................ ................................ .................. 14 
2.2   Present arbitration proceedings  ................................ ................................ ........... 14 
2.3   Treatment of BCI  ................................ ................................ ............................... 16 
3   DETERMINATION OF THE LEVEL OF NULLIFICATION AND IMPAIRMENT  ...................  16 
3.1   Scope of the proceedings  ................................ ................................ .................... 17 
3.2   Counterfactual  ................................ ................................ ................................ ...18 
3.3   Methodology  ................................ ................................ ................................ .....23 
3.3.1   Nested approach to elasticities of substitution  ................................ ............ 24 
3.3.2   Net-of-duty adjustment  ................................ ................................ .......... 32 
3.3.3   The effects of dumping on China's market shares  ................................ .......33 
3.3.4   Factors other than trade remedies (Rising Suppliers)  ................................ ..38 
3.4   Data inputs  ................................ ................................ ................................ .......41 
3.4.1   Year-prior................................ ................................ .............................. 41 
3.4.2   Remedy year  ................................ ................................ ......................... 63 
3.4.3   Elasticities  ................................ ................................ ............................. 86 
3.5   Implementation and final N/I calculation  ................................ ............................... 86 
4   CONCLUSION ................................ ................................ ................................ .............  87 
 WT/DS437/ARB  
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 LIST OF ANNEXES  
ANNEX  A 
WORKING PROCEDURES OF THE ARBITRATOR  
Contents  Page  
Annex  A-1 Working Procedures of the Arbitrator  4 
Annex  A-2 Additional Working Procedures of the Arbitrator Concerning Business 
Confidential Information  9 
Annex A -3 Additional Working Procedures of the Arbitrator Concerning Meetings with 
Remote Participation  10 
ANNEX B  
ARGUMENTS OF THE PARTIES  
Contents  Page  
Annex  B-1 Executive summary of the arguments of the United States  13 
Annex  B-2 Executive summary of the arguments of China  21 
ANNEX C  
DATA INPUTS AND CALCULATIONS OF THE ARBITRATOR  
Contents  Page 
Annex  C-1 Data inputs for US market values in the years -prior 32 
Annex C-2 Data inputs for elasticities  34 
Annex C-3 Data inputs for the WTO -inconsistent and the WTO -consistent CVD rates  36 
Annex C -4 Data inputs for US market values in 2017  40 
Annex C -5 Primary NAICS  codes for Pressure Pipe, Kitchen Shelving, Seamless Pipe, and 
Print Graphics  43 
Annex C -6 Scaling index for domestic varieties of  Pressure Pipe, Kitchen Shelving, 
Seamless Pipe, and Print Graphics  49 
Annex C -7 Scope adjustments for  selected varieties of  Kitchen Shelving and Print 
Graphics  51 
Annex C -8 Remedy year figures for selected varieties of Pressure Pipe, Kitchen Shelving, 
Seamless Pipe, and Print Graphics  54 
Annex C -9 GAMS code  of the two -step Armington model  57 
Annex C -10 Data inputs used to implement the Armington model under the two steps  61 
Annex C -11 Results of implementing the  first step of the two -step A rmington model  63 
  WT/DS437/ARB  
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 CASES CITED IN THIS DECISION  
Short Title  Full Case Title and Citation  
Brazil – Aircraft 
(Article  22.6 – Brazil)  Decision by the Arbitrator, Brazil – Export Financing Programme for Aircraft – 
Recourse to Arbitration by Brazil under Article 22.6 of the DSU and Article 
4.11 of the SCM Agreement , WT/DS46/ARB , 28 August  2000, DSR 2002:I, p. 
19 
Canada – Aircraft Credits 
and Guarantees 
(Article  22.6 – Canada ) Decision by the Arbitrator, Canada – Export Credits and Loan Guarantees for 
Regional Aircraft – Recourse to Arbitration by Canada under Article 22.6 of the 
DSU and Article 4.11 of the SCM Agreement , WT/DS222/ARB , 
17 February  2003, DSR 2003:III, p. 1187  
EC – Bananas III (Ecu ador) 
(Article 22.6 – EC) Decision by the Arbitrator, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the 
European Communities under Article 22.6 of the DSU , WT/DS27/ARB/ECU , 
24 March  2000, DSR 2000:V, p. 2237  
EC – Bananas III (US) 
(Article 22.6 – EC) Decision by the Arbitrator, European Communities – Regime for the 
Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the 
European Communities under Article 22.6 of the DSU , WT/DS27/ARB , 
9 April 1999, DSR 1999:II, p. 725  
EC – Hormones  Appellate Body Report, European  Communities – Measures Concerning Meat 
and Meat Products (Hormones) , WT/DS26/AB/R , WT/DS48/AB/R , adopted 
13 February  1998, DSR 1998:I, p.  135 
EC – Hormones (Canada) 
(Article  22.6 – EC) Decision by the Arbitrator, European  Communities – Measures Concerning 
Meat and Meat Products (Hormones), Original Complaint by Canada – 
Recourse to Arbitration by the European  Communities under Article 22.6 of 
the DSU , WT/DS48/ARB , 12 July 1999, DSR 1999:III, p.  1135 
EC – Hormones (US) 
(Article 22.6 – EC) Decision b y the Arbitrator, European  Communities – Measures Concerning 
Meat and Meat Products (Hormones), Original Complaint by the United  States 
– Recourse to Arbitration by the European  Communities under Article 22.6 of 
the DSU , WT/DS26/ARB , 12 July 1999, DSR 1999:III, p.  1105 
EC and certain member 
States – Large Civil Aircraft 
(Article  21.5 – US) Panel Report, European  Communities and Certain Member States – Measures 
Affecting Trade in Large Civil Aircraft  – Recourse to Article 21.5 of the DSU by 
the United  States , WT/DS316/RW  and Add.1, adopted 28  May 2018, as 
modified by Appellate Body Report WT/DS316/AB/RW, DSR 2018:VI, p.  2519 
EC and certain member 
States – Large Civil Aircraft 
(Article 22.6 – EU) Decision by the Arbitrator, European  Communities and Certain Member States 
– Measures Affecting Trade in Large Civil Aircraft  – Recourse to  Article 22.6 of 
the DSU by the European  Union , WT/DS316/ARB  and Add.1 , 2 October  2019, 
DSR 2019:XII, p. 6477  
Japan – DRAMs (Korea)  Appellate Body Report, Japan – Countervailing Duties on Dynamic Random 
Access Memories from Korea , WT/DS336/AB/R  and Corr.1, adopted 
17 December  2007, DSR 2007:VII, p.  2703 
Russia – Pigs (EU)  Panel Report, Russian Federation – Measures on the Importation of Live Pigs, 
Pork and Other Pig Products from the European  Union , WT/DS475/R  and Add.1, 
adopted 21  March  2017, as modified by Appellate Body  Report 
WT/DS475/AB/R, DSR 2017:II, p.  361 
US – 1916 Act (EC) 
(Article  22.6 – US) Decision by the Arbitrator, United  States – Anti-Dumping Act of 1916, Original 
Complaint by the European Communities – Recourse to Arbitration by the United 
States under Art icle 22.6 of the DSU , WT/DS136/ARB , 24 February  2004, DSR 
2004:IX, p.  4269 
US – Anti-Dumping 
Methodologies (China) 
(Article 22.6 – US) Decision by the Arbitrator, United  States – Certain Methodologies and Their 
Application to Anti -Dumping Proceedings Involving China – Recourse  to Article 
22.6 of the DSU  by the United  States , WT/DS471/ARB  and Add.1, 
1 November  2019, DSR 2019: XII, p. 6775  
US – Carbon Steel (India)  Appellate Body Report, United  States – Countervailing Measures on Certain Hot -
Rolled Carbon Steel Flat Products from India , WT/DS436/AB/R , adopted 
19 December  2014, DSR 2014:V, p.  1727 
US – Continued Suspension  Appellate Body Report, United  States – Continued Suspension of Obligations in 
the EC – Hormones Dispute , WT/DS320/AB/R , adopted 14  Novem ber 2008, 
DSR 2008:X, p.  3507 
US – COOL 
(Article  22.6 – US) Decisions by the Arbitrator, United  States – Certain Country of Origin Labelling 
(COOL) Requirements – Recourse to Article 22.6 of the DSU by the 
United  States , WT/DS384/ARB  and Add.1 / WT/DS386/ARB  and Add.1, 
circulated to WTO Members 7  December  2015, DSR 2015:XI, p.  5877 
US – Countervailing 
Measures (China)  
(Article  21.3(c))  Award of the Arbitrator, United  States – Countervailing Duty Measures on 
Certain Products from China – Arbitration under Article 21.3(c) of the DSU , 
WT/DS437/16 , 9 October  2015, DSR 2015:XI, p.  5775 
US – Countervailing 
Measures (China)  Appellate Body Report, United  States – Countervailing Duty Measures on 
Certain Products from C hina, WT/DS437/AB/R , adopted 16  January  2015, DSR 
2015:I, p.  7 WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 Short Title  Full Case Title and Citation  
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 
US – Countervailing 
Measures (China) 
(Article  21.5 – China)  Appellate Body Report, United  States – Countervailing Duty Measures on 
Certain Products from China – Recourse to Article 21.5 of the DSU by China,  
WT/DS437/AB/RW  and Add.1, adopted 15  August  2019, DSR 2019:IX, p. 4737  
US – Countervailing 
Measures (China) 
(Article  21.5 – China)  Panel Report, United  States – Countervailing Duty Measures on Certain Products 
from China – Recourse to Article 21.5 of the DSU by China,  WT/DS437/RW  and 
Add.1, adopted 15  August  2019, as upheld by Appellate Body Report 
WT/DS4 37/AB/R W, DSR 2019:IX, p. 4931  
US – FSC 
(Article  22.6 – US) Decision by the Arbitrator, United  States – Tax Treatment for "Foreign Sales 
Corporations" – Recourse to Arbitration by the United States under Article 22.6 
of the DSU and Article 4.11 of the SCM Agreement , WT/DS108/ARB , 
30 August  2002, DSR 2002:VI, p.  2517 
US – Gambling 
(Article  22.6 – US) Decision by the Arbitrator, United  States – Measures Affecting th e Cross -Border 
Supply of Gambling and Betting Services – Recourse to Arbitration by the 
United  States under Article 22.6 of the DSU , WT/DS285/ARB , 
21 December  2007, DSR 2007:X, p.  4163 
US – Large Civil Aircraft 
(2nd complaint) 
(Article  22.6 – US) Decision by the Arbitrator, United  States – Measures Affecting Trade in Large 
Civil Aircraft (Second Complaint) – Recourse to Article 22.6 of the DSU by the 
United  States , WT/DS353/ARB  and Add.1, 13  October  2020 
US – Offset Act (Byrd 
Amendment) ( India) 
(Article  22.6 – US Decision by the Arbitrator, United  States – Continued Dumping and Subsidy 
Offset Act of 2000, Original Complaint by India – Recourse to Arbitration by the 
United  States under Article 22.6 of the DSU , WT/DS217/ARB/IND , 
31 August  2004, DSR 2004:X, p.  4691 
US – Section 110(5) 
Copyright Act (Article 25 ) Award of the Arbitrator, United  States – Section 110(5) of the US Copyright Act 
– Recourse to Arbitration under Article 25 of the DSU , WT/DS160/ARB25/1 , 
9 November  2001, DSR 2001:II, p.  667 
US – Tuna II (Mexico) 
(Article 22.6 – US) Decision by the Arbitrator, United  States – Measures Concerning the 
Importation, Marketing and Sale of Tuna and Tuna Products – Recourse to 
Article 22.6 of the DSU by the United  States , WT/DS381/ARB , 25 April 2017, 
DSR 2017:VIII, p.  4129 
US – Upland Cotton  Appellate Body Report, United  States – Subsidies on Upland Cotton , 
WT/DS267/AB/R , adopted 21  March  2005, DSR 2005:I, p.  3 
US – Upland Cotton 
(Article  22.6 – US I) Decision by the Arbitrator, United  States – Subsidies on Upland Cotton – 
Recourse to Arbitration by the United  States under Article 22.6 of the DSU and 
Article 4.11 of the SCM Agreement , WT/DS267/ARB/1 , 31 August  2009, DSR 
2009:IX, p.  3871 
US – Washing Machines 
(Article 22.6 – US) Decision by the Arbitra tor, United  States – Anti-Dumping and Countervailing 
Measures on Large Residential Washers from Korea – Recourse to Article 22.6 
of the DSU by the United  States , WT/DS464/ARB  and Add.1, 8  February  2019, 
DSR 2019:XII, p. 6299  
US – Wool S hirts and 
Blouses  Appellate Body Report, United  States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R , adopted 23  May 1997, 
and Corr.1, DSR 1997:I, p.  323 
 
 WT/DS437/ARB  
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 EXHIBITS REFERRED TO IN THIS DECISION  
 Exhibit  Title 
Exhibit  CHN-4 USITC Final Determination (March 2009), Publication No. 4064  
Exhibit CHN -5 USITC  Final Determination (November 2016), Publication No. 4644 (related case involving 
same product)  
Exhibit CHN -8 Notice of Amended Final Affirmative Countervailing Duty Determination and  
Notice of Countervailing Duty Order, 74 Federal Register 4136 (23 Janu ary 2009)  
Exhibit CHN -11 USITC Final Determination (January 2009), Publication No. 4055  
Exhibit CHN -19 USITC Final Determination (August 2009), Publication No. 4098  
Exhibit CHN -23 USITC Final Determination (January 2010), Publication No. 4124  
Exhibit C HN-24 USITC Final Determination (September 2014), Publication No. 4489; related case 
involving same product  
Exhibit CHN -28 USITC Final Determination (June 2010), Publication No. 4162  
Exhibit CHN -32 USITC  Final Determination (November 2010), Publication No. 4190  
Exhibit CHN -36 USITC Final Determination (May 2011), Publication No. 4229  
Exhibit CHN -37 USITC Review (March 2017), Publication No. 4677  
Exhibit CHN -41 USITC Final Determination (June 2012), Pub lication No. 4328  
Exhibit CHN -43 Final Affirmative Countervailing Duty Determination, Final Affirmative Critical 
Circumstances Determination, 77 Federal Register 63788 (17 October 2012)  
Exhibit CHN -45 USITC Final Determination (November 2012), Publicatio n No. 4360  
Exhibit CHN -46 USITC Review (March 2019), Publication No. 4874  
Exhibit CHN -50 USITC Final Determination (November 2010), Publication No. 4192  
Exhibit CHN -51 USITC  Review (December 2016), Publication No. 4656  
Exhibit CHN -53 List of Data Used (All Public Data)  
Exhibit CHN -55 Trima (Norris Cylinder) 2012 10K Report  
Exhibit CHN -56 Trima (Norris Cylinder) 2018 10K Report  
Exhibit CHN -60 Erika Bethmann, David Coffin, Samantha Schreiber, and Heather Wickramarachi, "A Non -
Technical Guide to the PE Modeling Portal," U.S. International Trade Commission Working 
Paper 2019 –11–B, November 2019  
Exhibit CHN -63 Robert C. Feenstra, Philip Luck, Maurice Obstfeld, and Katheryn N. Russ, "In Search of 
the Armington Elasticity," The Review of Economics and Statistics, 2018 100:1, 135 -150 
Exhibit CHN -73 USITC Review (October 2017), Publication No. 4738  
Exhibit CHN -74 USITC Dataweb  Import and Export Statistics  
Exhibit CHN -94 Explanation for Calculation of U.S. Domestic Industry Shipments – Steel 
Cylinders  
Exhibit CHN -96 Proper Interpretation of Feenstra, et al.  
Results  
Exhibit CHN -99 Preliminary Determination Summary Chart  
Exhib it CHN -100 Revised WTO -Consistent CVD Rate  
Summary Chart  
Exhibit CHN -103 Produce r Price Index Data  
Exhibit CHN -104 Producer Price Index Data – Case Specific Adjustment  
Exhibit CHN -105 USITC  Third Review (October 2017), Publication No. 4731  
Exhibit CHN -106 Quantification of Differences between the Preliminary and Final Determinations for 
Pressure Pipe , Line Pipe , OCTG , Wire Strand , Aluminum Extrusions , and Steel Cylinders  
Exhibit CHN-112 
(BCI)  U.S. Solar Market Insight 2017 Year in Review [[BCI]]  
Exhibit CHN -113 Prusa, T.J., and T. Besedes, "The Hazardous Effects of Antidumping."  Economic Inquiry, 
Vol. 55, No. 1, January 2017, 9 30  
Exhibit CHN -114 Staiger, R.W., and F.A.Wolak. "M easuring Industry Specific Protection: Antidumping in 
the United States."  Brookings Papers on Economic Activity: Microeconomics, 1994, 1994, 
51-118 
Exhibit CHN -120 Revised Data Sources (Year -Prior, Remedy Year, and Elasticities)  
Exhibit CHN -123 USITC Dataweb Import Data for Solar Panels  
Exhibit USA -1 Implementation of Determinations Pursuant to Section 129 of the Uruguay Round 
Agreements Act, 81 Fed. Reg. 37180 (June 9, 2016)  
Exhibit USA -9 Final Results of Sunset Review and Revocation of Counte rvailing Duty Order: Tow Behind 
Lawn Groomers and Parts and Thereof From the People's Republic of China , 79 Fed. Reg. 
56769 (September 23, 2014)  
Exhibit USA -16 U.S. International Trade Commission, Certain Seamless Carbon and Alloy Steel Standard, 
Line, an d Pressure Pipe from China: Investigation Nos. 701 -TA-469 and 731 -TA-1168 
(Review) , USITC Publication 4595 (February 2016)  
Exhibit USA -19 International Energy Agency, Photovoltaic Power Systems Programme, National Survey 
Report of Photovoltaic Application s in United States of America 2017, 2018, p. 23 
(table  18), available at https://iea -pvps.org/wp -
content/uploads/2020/01/Natio nal_Survey_Report_of_PV_Power_Applications_in_USA_ -
_2017.pdf  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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  Exhibit  Title 
Exhibit USA -20 U.S. Department of Energy, Energy Information Administration, 2017 Annual Solar 
Photovoltaic Module Shipments Report  (August 2018), p. 2 (table 2), available at 
https://www.eia.gov/renewable/annual/solar_photo/archive/2017/pdf/pv_full.pdf  
Exhibit USA -21 U.S. International Trade Commission, Certain Crystalline Silicon Photovoltaic Products 
from China and Taiwan , Investigation Nos. 701 -TA-511 and 731 -TA-1246-1247 (Final), 
USITC Publication 4519 (February 2015)  
Exhibit USA -22 U.S. International Trade Commis sion, Crystalline Silicon Photovoltaic Cells (Whether or 
not Partially or Fully Assembled into Other Products) , Investigation No. TA -201-75, 
Volume 1: Determination and Views of Commissioners, USITC Publication 4739 
(November 2017)  
Exhibit USA -25 U.S. Int ernational Trade Commission, Prestressed Concrete Steel Wire Strand from China : 
Investigation Nos. 701 -TA-464 and 731 -TA-1160 (Review), USITC Publication 4569 
(September 2015)  
Exhibit USA -30 U.S. International Trade Commission, U.S.-Mexico -Canada Trade Ag reement: Likely 
Impact on the U.S. Economy and on Specific Industry Sectors , USITC Publication 4889 
(April 2019)  
Exhibit USA -33 Technical Note on Nested Demand (Rule of Two)  
Exhibit USA -44 
(BCI)  Year-Prior US Shipments and Imports Data  
Exhibit USA -46 Elasticities  
Exhibit USA -47 
(BCI)  Data Inputs for DS471 Two -Step Armington Approach Without US Adjustments  
Exhibit USA -50 
(BCI)  AD Duty Rates and CVD Rates Used In Step 1 of the Two -Step Armington Approach  
Exhibit USA -51 
(BCI)  AD Duty Rates and CVD Rates Used In Step 2 of the Two -Step Armington Approach  
Exhibit USA -58 
(BCI)  Year-Prior Import Data for Four Products, Based on DS471 Exhibit USA -94 
Exhibit USA -59 U.S. Imports from China and RoW, Based on DS471 Exhibit USA -57 
Exhibit USA -60 U.S. Shipments for Six Products, Based on DS471 Exhibit USA -58 
Exhibit USA -61 U.S. Shipment Estimates for the Three Additional Products  
Exhibit USA -62 
(BCI)  2017 U.S. Imports from China for Four Products based on DS471 Exhibit USA -21 
Exhibit USA -63 
(BCI)  US Response to the Arbitrator's Question 62 in DS471  
Exhibit USA -64 
(BCI)  2017 U.S. Imports From China As Reported By Customs, By Specified Product, and Entry 
Rate 
Exhibit USA -65 U.S. Imports for Consumption Using HTSUS Categories fo r the Three Additional Products  
Exhibit USA -66 
(BCI)  U.S. Imports from China from Customs for the Three Additional Products  
Exhibit USA -67 U.S. Imports for Consumption Using HTSUS Categories for Seamless Pipe, Print Graphics, 
and Pressure Pipe for Specif ied Years  
Exhibit USA -74 
(BCI)  Company -Specific Antidumping Duty Rates, Based on DS471 Exhibit USA -92  
Exhibit USA -77 Antidumping Duty Rates for the Three Additional Products  
Exhibit USA -79 
(BCI)  Stata Code Inputs for U.S. Two -Step Armington Model (Excel)  
Exhibit USA -81 Stata Code Inputs for U.S. Two -Step Armington Model (Excel)  
Exhibit USA -82 Stata Code for Two -Step Armington Model with Both US Adjustments (CVD+AD and 
Supply Shock)  
Exhibit USA -83 Stata Code for Two -Step Armington Model with Supply Shock Adjustment Only  
Exhibit USA -85 World Steel Association, Steel Statistical Yearbook 2017 , Table 19: Production of Wire 
Rod, available at : https://www.worldsteel.org/steel -by-topic/statistics/steel -statistical -
yearbook.html  
Exhibit USA -101 Revised Estimates of the Level of Nullification or Impairment  
Exhibit USA -102 
(BCI)  U.S. Apparent Consumption Graphs Incorporating the GDP Deflator Approach  
Exhibit USA -105 Revised Stata Codes  
Exhibit USA -107 Comparison of Provisional and Final CVD Rates  
Exhibit USA -116 
(BCI)  Affidavit of Norris Cylinder  
Exhibit USA -136 
(BCI)  Preston Pipe & Tube Report: API Line Pipe Market Analysis  
Exhibit USA -138 Updated U.S. Proposed WTO -Inconsistent CVD Rates: Correction to Exhibit USA -100 
Exhibit USA -139 Revised Estimates of the Level of Nullification or Impairment: Revision of Exhibit USA -
101 
Exhibit USA -148 U.S. International Trade Commission, Oil Country Tubular Goods from India, Korea, 
Turkey, Ukraine, and Vietnam : Investigation Nos. 701 -TA-499-500 and 731 -TA-1215-
1216, 1221 -1223 (Review), USITC Publication 5090 (July 2020)  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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  Exhibit  Title 
Exhibit USA -149 
(BCI)  Aluminum A ssociation, Excerpt of "U.S. and Canadian Producer Shipments of Aluminum 
Extruded Products " Dataset  
Exhibit USA -154 Elasticities: Revised Version of Exhibit USA -46 
Exhibit USA -155 
(BCI)  Year-Prior U.S. Domestic Shipments and Imports Data  
Exhibit USA -156 
(BCI)  2017 U.S. Domestic Shipments and Imports Data  
Exhibit USA -157 
(BCI)  CVD Rates and AD Rates Used in the U.S. Model  
Exhibit  USA-160 U.S. Estimates of the Level of Nullification or Impairment  
 
  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 OTHER INFORMATION REFERRED TO IN THIS DECISION  
Title 
Decreux , Y. and H. Valin (2007), MIRAGE, Updated Version of the Model for Trade Policy Analysis with a 
Focus on Agriculture and Dynamics, CEPII Working Paper 2007 -15, October 2007, CEPII  
Justin R. Pierce and Peter K. Schott, "A Concordance Between Ten -Digit U.S.  Harmonized System Codes 
and SIC/NAICS Product Classes and Industries" (2012), Journal of Economic and Social Measurement , 
37(1-2):61 -96 
United States Census Bureau, Annual Survey of Manufactures 201 0, available at : 
https://www.census.gov/data/tables/time -series/econ/asm/2008 -2011-asm.html  (accessed 1 October 
2021) (Table  "2010  Value of Product Shipments" ) 
United States Census Bureau, Annual Survey of Manufactures 201 5, available at : 
https://www.census.gov/data/tables/time -series/econ/asm/2013 -2016-asm.html  (accessed 1 October 
2021) (Table  "2015  Value of Product S hipments" ) 
United States Census Bureau, Annual Survey of Manufactures 201 6, available at : 
https://www.census.gov/data/tables/time -series/econ/asm/2013 -2016-asm.html  (accessed 1 October 
2021) (Table  "2016  Value of Product Shipments" ) 
United States Census Bureau, Economic Census  2017, available at : 
https://www.census.g ov/data/tables/2017/econ/economic -census/naics -sector -31-33.html  (acces sed 1 
October 2021) (Table "EC1700BASIC")  
United States International Trade Commission, USITC Dataweb, available at : https://dataweb.usitc.gov/  
(accessed 1  October 2021)  
  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 ABBREVIATIONS USED IN THIS DECISION  
Abbreviation  Description  
BCI business confidential information  
CGE computable general equilibrium  
CVD countervailing duty  
CSPV crystalline silicon photovoltaic  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
GATT 1994  General Agreement on Tariffs and Trade 1994  
GDP gross domestic product  
HTS Harmonized Tariff Schedule  
HTSUS  Harmonized Tariff Schedule of the United States  
NAICS  North American Industry Classification System  
N/I nullification or impairment  
OCTG  oil country tubular goods  
PE partial equilibrium  
PPI producer price index  
PV photovoltaic  
RoW rest of the world  
RPT reasonable period of time  
SCM Agreement  Agreement on Subsidies and Countervailing Measures  
USBEA  United States Bureau of Economic Analysis  
USCBP  United States Customs and Border Protection  
USDOC  United States Department of Commerce  
USITC  United States International Trade Commission  
WTO World Trade Organization  
 WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 LIST OF TABLES IN THIS DECISION  
Table 
No. Title Page 
No. 
1 CVD rates in force at the expiry of the RPT for Line Pipe, OCTG, and Seamless Pipe  19 
2 Revised Section 129 CVD rates for Line Pipe, OCTG, and Seamless Pipe  19 
3 Dates of determination of the CVD and AD orders  37 
4 Years-prior advanced by the parties for each of the ten products at issue  42 
5 The preliminary and final CVD determinations for the six products concerned by the parties' 
disagreement  43 
6 Years -prior relied upon by the Arbitrator  49 
7 Year-prior (2007) market sales for Pressure Pipe  51 
8 Year-prior (2007) market sales for Line Pipe 52 
9 Year-prior (2008) market sales for Kitchen Shelving  55 
10 Year-prior (2008) market sales for OCTG  56 
11 Year-prior (2008) market sales for Wire Strand  57 
12 Year-prior (2009) market sales for Seamless Pipe  57 
13 Year-prior (2009) market sales for Print Graphics  58 
14 Year-prior (2009) market sales for Aluminum Extrusions  58 
15 Year-prior (2010) market sales for Steel Cylinders  60 
16 Year-prior (2011) market sales for Solar Panels  63 
17 Remedy -year market sales for Pressure Pipe  71 
18 Remedy -year market sales for Line Pipe  72 
19 Remedy -year market sales for Kitchen Shelving  74 
20 Remedy -year market sales for OCTG  76 
21 Remedy -year market sales for Wire Strand  78 
22 Remedy -year market sales for Seamless Pipe  80 
23 Remedy -year market sales for Print Graphics  82 
24 Remedy -year market sales for Aluminum Extrusions  84 
25 Remedy -year market sales for Steel Cylinders  85 
26 Remedy -year market sales for Solar Panels  86 
27 Estimated level of nullification and impairment  87 
 
  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 12 - 
 
 1  INTRODUCTION  
1.1.  The present arbitration proceedings arise in a dispute initiated by China against the 
United  States . The challenged measures of the United  States  relate to the imposition of 
countervailing duties on a range of Chinese products, and the investigations leading to the imposition 
of such duties . These measures were found to be WTO -inconsistent in the original and compliance 
proceedings1, following which China ha s requested the DSB authori zation to suspend concessions at 
an annual amount of USD 2.4 billion.2 The United  States  has objected to this request3, leading to 
the present arbitration proceedings.4 
1.2.  Our task in this arbitration  is to establish whether the level of suspension of concessions that 
China requests authorization for is equivalent to the level of nullification or impairment  (N/I).5 In its 
methodology paper, China has reduced the amount of concessions that it seeks to suspend to 
USD 1.02 billion .6 During the proceedings, China has further reduced this amount to 
USD 788.75  million  as a result of adjustments to its approach, in  part due to agreements with certain 
arguments by the United  States .7 According to its latest calculations, the United  States  considers 
that the proper level of N/I – and hence, the suspension of concessions that China could be 
authori zed to impose – should be no more than USD 106 million annually .8 
1.3.  In light of the parties ' arguments and evidence in these proceedings, we have determined that 
the appropriate level of N/I is USD 645.121 million  per annum . We have calculated this figure 
based on the parties' agreement to use a two -step Armington model  similar to that applied i n the 
arbitration decisions in US – Washing Machines (Article 22.6 – US) and US – Anti-Dumping 
Methodologies (China) (Article  22.6 – US). We have also taken into account the  parties' agreement 
on a "net -of-duties" approach whereby duty payments  are excluded from the final calculation  of N/I . 
Further, we  have decided to exclude  Lawn Groomers from these proceedings in light of the parties' 
agreement that the relevant countervailing duty ( CVD) measures had been withdrawn before the 
end of the reason able period of time (RPT) and are thus out of scope.  
1.4.  In calculating the above figure, we did not accept certain methodological suggestions proposed 
by the parties, which they describe as "adjustments" to the two -step Armington model  applied in US 
– Washing  Machines (Article 22.6 – US) and US – Anti-Dumping Methodologies (China) (Article  22.6 
– US). We have declined the United  States ' suggestion to take into account the anti-dumping duties  
imposed on the ten products at issue largely contemporaneously to the  CVDs in question. It is not 
evident how any impact of those anti -dumping duties would translate into what both parties agree 
should be the focus of this arbitration: the impact of the CVDs at issue on China's market shares. 
We have also rejected the Unite d States ' suggestion to take into account the alleged impact of 
certain private investments and government measures in third countries other than China , the 
so-called "Rising Suppliers ", for lack of direct evidence for such impact and absent sufficient 
explanation of its exogeneity to the CVDs at issue.   
1.5.  China proposed that we apply a "nested approach"  to elasticities of substitution  under which 
micro -elasticities (i.e. elasticities of substitution among different import varieti es), would be l arger 
than macro -elasticities (i.e. elasticities of substitution between domestic and imported varieties). 
 
1 Panel Reports, US – Countervailing Measures (China) , section 8; US – Countervailing Measures (China) 
(Article 21.5 – China) , section 8; Appellate Body Reports, US – Countervailing Measures (China) , section 5; 
US – Countervailing Measures (China) (Article 21.5 – China) , section 6; DSB, Minutes of the meetings held on 
16 January 2015, WT/DSB/M/355, section 1 (with regard to the original proceedings), and 15 August 2019, 
WT/DSB/M/433, section 9 (with regard to the compliance proceedings).  
2 WT/DS437/30.  
3 WT/DS437/31.  
4 WT/DS437/32.  
5 Under Article 22.4 of the DSU, "the level of the suspension of concessions or other obligations 
authorized by the DSB shall be equivalent to the level of the nullification or impairment." Accordingly, as a 
recent arbitrator emphasised, "Article 22.7 of the DSU defines the mandate for an arbitrator acting exclusively 
under Article 22.6; that is, the ar bitrator 'shall determine whether the level of suspension is equivalent to the 
level of nullification or impairment'." Decision by the Arbitrator, US – Large Civil Aircraft (2nd complaint) 
(Article  22.6 – US), para. 3.3.  
6 China's methodology paper, para. 106. 
7 China's  comments on the United  States ' response to Arbitrator question No. 98, para.  57, and 
No. 100, para. 58.  
8 United  States ' closing statement  at the meeting of the Arbitrator , para. 27; response to Arbitrator 
question No. 114, para.  157; and Exhibit USA-160. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 13 - 
 
 As regards the specific ratio under such a nested approach, China suggested a "Rule of Two ", 
whereby micro -elasticities would be the double of macro -elasticities. Conversely, the United  States  
suggested a "Rule of One", with equal micro - and macro -elasticities. We conclude that the 
United  States  has not demonstrated this alternative "non-nested approach" . That said, the 
United  States  has successfully called into question applyin g a nested approach with China's proposed 
Rule of Two. We have therefore rejected China's proposed Rule of Two. Our calculations are based 
on a nested approach, with the ratio between micro - and macro -elasticities at the square r oot of two  
(i.e. approximately 1.41) , as the most reasonable figure in light of the parties' limited evidence.  
1.6.  As regards the counterfactual compliance sce nario, we have relied on the final CVD rates 
determined by the United  States  Department of Commerce ( USDOC ) in the relevant Section 129 
proceedings  as a starting point for the calculation of the duties that would have been 
WTO-consistent , as suggested by the United  States . Although these rates took effect a few weeks 
after the end  of the RPT, their calculation has been multilaterally determined to be WTO -inconsistent 
in the compliance stage of the present dispute, and China's request for suspension of concessions is 
based on the WTO -inconsistency of these determinations. In  the int erest of prompt dispute 
settlement, we  have decided to rely on these rates instead of those in force at the end of the RPT 
as suggested by China.  
1.7.  The parties agreed that the remedy year  is 2017, and our calculation is based on this calendar 
year. As  for th e calendar year prior  to the imposition of the WTO -inconsistent CVDs at issue 
(year-prior), the  parties agreed on the year-prior for four products and disagreed with regard to six 
products. Again, where the parties agreed, we followed them. For the six pro ducts where the parties 
disagreed, we decided to accept the earlier year s-prior suggested by China. We agree with China 
about the importance of relying on data uncontaminated by the preliminary CVDs imposed in the 
subsequent calendar years alternatively advanced by the United  States . 
1.8.  While the parties agreed on the key elastici ty figures9, they disagreed on numerous other data 
points  necessary for our calculation. These disagreements concern the market shares of the 
US domestic  variety  and the varieties imported from China and the rest of the world (RoW) for each 
product at iss ue in the year -prior, as well as the total market size for each product in the remedy 
year. We have addressed these disagreements based on what we considered to be the most solid 
evidence, the most reasonable calculation methodology and the best available data – developing our 
own calculations where necessary.   
1.9.  The rest of this Decision elaborates on the above points in the following structure:  
 The next, second section addresses procedural matters. It summarises the original and 
compliance proceedings in th is dispute, and the key steps and procedural aspects of this 
arbitration, including the treatment of business confidential information (BCI).  
 The subsequent , third section deals with the main issue before us: the determination of 
the level of N/I. It first  addresses the scope of these proceedings, followed by the 
counterfactual  compliance scenario . It then turns to the various methodological and data 
issues raised by the parties or necessary for making our calculation. Once these issues are 
settled, the thi rd section concludes by implementing the outcome of the earlier 
methodological and data analys es to calculate the level of N/I. 
 A final, Conclusion section ends the Decision.10 
 
9 This is without prejudice to their disagreement on the nested approach to the elasticities of 
substitution  (see section 3.3.1 below ). 
10 The Addendum to this Decision, WT/DS437/ARB/Add.1, contains all working procedures of the 
Arbitrator in Annex A, the executive summaries of the parties in Annex B, and the data inputs and calculations 
of the Arbitrator in Annex C.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 14 - 
 
 2  PROCEDURAL MATTERS  
2.1  Prior stages of this dispute  
2.1.  This dispute commenced on 25 May 2012, upon the filing of China's original request for 
consultations with the United  States .11 On 20  August 2012, China requested the establishment of a 
panel.12 The panel and the Appellate  Body in the original proceedings f ound that the United  States  
acted inconsistently with certain provisions of the SCM  Agreement.13 The DSB adopted the 
Appellate  Body report and the panel report, as modified by the Appellate  Body report, on 16 January 
2015.14 
2.2.  On 9 October 2015, an arbitrato r under Article  21.3(c) of the DSU determined that the RPT for 
the United  States  to implement the DSB recommendations and rulings would expire on 
1 April 2016.15 
2.3.  The compliance proceedings16 started with China's request, on 13  May 201 6, for consultations 
with the United  States  with respect to the alleged failure of the United  States  to implement the 
recommendations and rulings of the DSB in this dispute.17 On 8 July 2016, China requested the 
establishment of a compliance panel.18 As upheld by the Appellate Body19, the compliance panel 
concluded, in relevant part, that the United  States  acted inconsistently with: i) Articles 1.1(b) and 
14(d) of the SCM Agreement in the Pressure Pipe, Line Pipe, OCTG, and Solar Panels Section 129 
proceedings; and ii) Article 2 .1(c) of the SCM Agreement in the Section 129 proceedings with respect 
to all ten products at issue.20 The DSB adopted the Appellate  Body report and the panel report  in 
the compliance proceedings , as upheld  by the Appellate  Body report, on 15 August 2019 .21 
2.2  Present a rbitration proceedings  
2.4.  On 17 October 2019 , China requested authorization from the DSB to suspend concessions or 
other obligations at an annual amount of USD 2.4 billion , with respect to goods und er the agreements 
described in Article 22.3(g)(i) of the DSU .22 
2.5.  On 25 October 2019 , the United  States  objected to China's proposed level of suspension . At the 
DSB meeting of 28 October 2019, t he DSB took note  that the matter raised by China had been  
referr ed to arbitration pursuant to  Article 22.6 of the DSU.23 The Arbitrator was constituted on 
15 November 201924 as follows:  
 
11 China's consultation r equest in the original proceedings was made pursuant to Article 4 of the DSU, 
Article XXIII:1 of the GATT 1994 , and Article 30 of the SCM Agreement  (WT/DS437/1 ). 
12 China's panel request in the original proceedings was made pursuant to Articles 4 and 6 of t he DSU, 
Article XXIII:2 of the GATT 1994 , and Article 30 of the SCM Agreement (WT/DS437/2).  
13 The Panel and Appellate Body in the original proceedings found that the United  States  had acted 
inconsistently with Articles 1.1(a)(1), 1.1(b), 11.3, and  14(d) of  the SCM Agreement (see Appellate Body 
Report, US – Countervailing Measures (China) (Article 21.5 – China) , para. 1.3). 
14 DSB, Minutes of the meeting held on 16 January 2015, WT/DSB/M/355.  
15 Award of the Arbitrator, US – Countervailing Measures (China)  (Article 21.3(c)) , WT/DS437/16.  
16 On 15 April 2016, the parties informed the DSB of their Agreed Procedures under Articles 21 and 22 
of the DSU and Article 7 of the SCM Agreement (WT/DS437/19).  
17 China's consultation request in the compliance proce edings was made  pursuant to Articles 4 and 21.5 
of the DSU, Article XXII of the GATT 1994, Article 30 of the SCM Agreement, and paragraph 1 of the 
Sequencing Agreement (WT/DS437/20).  
18 China's panel request in the compliance proceedings was made pursuant t o Articles 6 and 21.5 of the 
DSU, Article XXIII of the GATT 1994, and Article 30 of the SCM Agreement  (WT/DS437/ 21). 
19 See Appellate Body Report, US – Countervailing Measures (China) (Article 21.5 – China) , section  6. 
20 For a complete list of findings in the compliance proceedings, see Appellate Body Report, 
US – Countervailing Measures (China) (Article 21.5 – China) , section 6.  
21 DSB, Minutes of the meeting held on 15 August 2019, WT/DSB/M/433.  
22 Recourse to Article 22. 2 of the DSU by  China, WT/DS437/30.  
23 DSB, Minutes of the meeting held on 28 October 2019, WT/DSB/M/436.  
24 Recourse to Article 22.6 of the DSU by the United States, WT/DS437/32.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 15 - 
 
 Chairperson:  Mr Hugo Perezcano  
Members:   Mr Luis Catibayan  
Mr Thinus Jacobsz  
    
 
2.6.  An organizational meeting was held on 17 December 2019 to discuss procedural aspects of the 
arbitration proceeding. After consulting with the parties, the Arbitrator adopted its 
Working  Procedures on  8 January 2020 . At the joint request of  the parties, on 8 January 2020 the 
Arbitrator also adopted dedicated BCI Procedures, as elaborated in section 2.3 below.25 Also on 
8 January 2020, the Arbitrator adopted its timetable, which it amended on 27  October 2020 in light 
of developments regarding the  meeting of the Arbitrator with the parties.  
2.7.  In accordance with the timetable and Working Procedures adopted by the Arbitrator , China  
submitted a communication explaining its methodology for calculating the proposed level of  
suspension on 14 January 2020.  The United  States  filed its written submission on 18 February 2020 . 
China filed its written submission on 24 March 2020 . The Arbitrator sent questions to the parties  for 
written responses on 23 April 2020 , to which the parties  responded on 7 May 2020 . The Arbitrator 
sent additional questions to the parties for written responses on 22 July 2020 , to which the parties 
responded  on 21 August 2020 . 
2.8.  On 17 April 2020, the Arbitrator sent a communication to the parties, explaining that, given 
the COVID -19-related r estrictions on worldwide travel , it seemed unlikely that it would be possible 
to meet physically with the Arbitrator in Geneva at the time originally scheduled in the timetable , 
i.e. 26 -27 May 2020 . In response, China requested the Arbitrator to issue addi tional written 
questions to the parties rather than reschedule the meeting .26 In turn, the U nited States was of the 
opinion that a real -time exchange of views would be necessary in order to resolve this dispute , and 
proposed to reschedule  the meeting for a later date and to further consult  should conditions not 
permit the meeting to be held at the reschedule d date.27 According to the United  States , an in-person 
meeting would be necessary to provide both parties an adequate opportunity to explain their 
positions and respond in real time to each other's arguments and the Arbitrator's questions .28 
2.9.  Having conside red these comments, on 28 April 2020, the Arbitrator announced to the parties 
that the meeting would not take place on the originally scheduled date, and that it would monitor 
the situation and revert to the parties at the end of May/beginning of June 2020  to explore the best 
possible way forward.29 On 5 June30 and 2 July 202031, the Arbitrator sent two communications to 
the parties indicating that, in light of  limited progress in easing restrictions on worldwide travel, it 
would continue to monitor the sit uation and, su bject to sufficient further progress, would revert to 
the parties for their additional comments on the way forward.  
2.10.   On 5 October 2020, the Arbitrator contacted the parties for their views on the idea of holding 
a hybrid virtual/in -person meet ing.32 In response, China agreed with the arrangement proposed by 
the Arbitrator.33 The United  States  reiterated its objection to holding the substantive meeting via 
videoconference and requested the Arbitrator to postpone it until an in -person meeting in Geneva 
would be possible. At the same time, the United  States  requested that, if the Arbitrator decided to 
hold a virtual session with the parties, it should hold time -limited virtual sessions, provide any 
questions to the parties in advance, and refrain f rom asking additional questions during the 
session.34 
2.11.   Having considered these comments, on 20 October 2020, the Arbitrator announced to the 
parties that it would hold a hybrid virtual/in -person meeting with the parties on 12, 16, and 
 
25 Additional Working Procedures of the Arbitrator Concerning Business Confidential Information 
(BCI Procedures ). 
26 See China's communications (20 and 22 April 2020).  
27 See United  States ' communications (20 and 22 April 2020).  
28 See United  States ' communications (20 and 22 April 2020).  
29 Arbitrator communication to the parties (28 April 2020).  
30 Arbitrator communication to the  parties ( 5 June 2020 ). 
31 Arbitrator  communication to the parties ( 2 July 2020 ). 
32 Arbitrator  communication to the parties ( 5 October 2020 ). 
33 See China's communicat ion (9 October 2020).  
34 See United  States' communication (9 October 2020).  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 16 - 
 
 18 November 2020 and, after having consulted the parties, it adopted Additional Working Procedures 
Concerning Meetings with Remote Participation.35 The Arbitrator indicated that the meeting sessions 
would be limited in time to the periods when both parties as well as all three arbitrators  were 
available across their different time zones during the day. The Arbitrator added that it would send 
advance questions to the parties before the meeting, while reserving the possibility of asking for 
clarifications from the parties during the Q&A sess ion. 
2.12.   Following individual and collective test sessions with the parties, t he Arbitrator held a hybrid 
virtual/in -person meeting with the parties on 12, 16, and 18 November 2020 . On 20 November 
2020, the Arbitrator sent additional questions to the p arties  for written responses. The parties 
responded to these questions on 11 December 2020  and provided comments on each other's 
responses on 8 January 2021 . 
2.13.   The Arbitrator submitted its Decision for translation on 29 November 2021,  and notified the 
parties of thi s transmission. After reviewing with the parties that the Decision did not include any 
BCI, the Arbitrator circulated its Decision to WTO Members on 26 January 2022 . 
2.3  Treatment  of BCI  
2.14.   At the organizational meeting held on 17 December 2019 , both parties proposed that the 
Arbitrator adopt Additional Working Procedures of the Arbitrator Concerning Business Confidential 
Information (BCI Procedures) submitted in the course of the proceedings, based on the language 
used in the working procedures on BCI in US – Anti-Dumping Methodologies ( China ) 
(Article  22.6 – US). As indicated, the Arbitrator adopted the proposed BCI Procedures  on 
8 January  2020 accordingly .36 
2.15.   On 5 January 2021, the United  States  informed the Arbitrator that it had discovered 
inadvertent omissions of double brackets for BCI in the United  States ' responses to the questions 
from the Arbitrator, submitted on 11 December 2020. The United  States  provided the Arbitrator with 
a revised v ersion of the United  States ' responses and requested that the original version submitted 
on 11  December 2020 be replaced with this revised version. China had no objections to this request. 
On 12 January 2021, the Arbitrator agreed to grant the leave to cor rect omissions requested by the 
United  States , pursuant to paragraph 22 of its Working Procedures, confirming that the original 
version of the responses submitted by the United  States  on 11 December 2020 would be considered 
as replaced with the revised ver sion submitted on 5 January 2021.  
2.16.    In accordance with paragraph 8 of the BCI Procedures, on 29 November 2021  the Arbitrator 
issued to the parties a version of its Decision for BCI review . On 7 December 2021, the parties 
indicated that they had no comments in the context of the BCI review of the Decision .37 In 
accordance  with the aforementioned paragraph of the BCI Procedures,  the text of our Decision 
circulated to Members is identical to the text of the confidential version issued to the parties, with 
the exception of passages that disclose BCI , which have been  replaced by "[[ ***]]". 
3  DETERMINATION OF THE LEVEL OF NULLIFICATION AND IMPAIRMENT  
3.1.  Despite their disagreement on the level of N/I, t he parties agree that the purpose of these 
Article  22.6 arbitration p roceedings is  to determine whether the level of suspension of concessions 
or other obligations ( level of suspension) proposed by China is equivalent to the level of nullification 
or impairment ( level of N/I) of the benefit s that China could have expected a s a result of the 
United  States ' compliance with the DSB's recommendations and rulings by the end of the  RPT.38 
3.2.  We note that in Article  22.6 arbitration proceeding s, the "overall burden " of proving that the 
requirements of the DSU have not been met rests in general on the party challenging the proposed 
 
35 Arbitrator communication to the parties (20 October 2020); Annex A -3 of the Addendum to this 
Decision, WT/DS437/ARB/Add.1.  
36 See Annex A -2 of the Addendum to this Decision, WT/DS4 37/ARB/Add.1.  
37 In accordance with paragraph  8 of the BCI Procedures (Annex A -2 of the Addendum to this Decision, 
WT/DS437/ARB/Add.1).  
38 China's methodology paper, paras. 14 and 17; United  States' written submission, paras.  19, 22 -24, 
and 34 -36. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 17 - 
 
 level of suspension.39 In other words, it  is for the United  States  in this dispute to prove that China's 
proposed level of suspension of c oncessions  is not "equivalent" to the level of nulli fication and 
impairment within the meaning of Article  22.4 of the DSU.  
3.3.  Despite these rules on the general allocation of the burden of proof in Article 22.6 arbitrations, 
the duty rests on both parties to produce evidence and to collaborate in presenting evidence to the 
Arbitrator .40 In particular, "it  is for each party to bring forward the elements to sustain the factual 
assertions it makes"41, insofar as "[i]t is for the party alleging the fact to prove i ts existence".42 
3.4.  We also note that, i n the event we conclude that China's propos ed level of suspension of 
concessions or other obligations  is not WTO -consistent , we can not end our examination the way 
panels do.  Instead, we would be called upon to go further , and, in pursuit of the basic DSU objectives 
of prompt and positive settlement of disputes, we would need to estimate the level of suspension 
we consider to be equivalent to the impairment suffered.43 
3.1  Scope of the proceedings  
3.5.  In its methodology pap er, China indicated that the present proceedings cover a total of eleven 
CVD investigations, in particular the Section 129 proceedings relating to (i)  Pressure  Pipe; 
(ii) Line Pipe; (iii) Lawn Groomers; (iv) Kitchen Shelving;  (v) OCTG;  (vi) Wire Strand;  
(vii) Seamless  Pipe; (viii) Print Graphics;  (ix) Aluminum Extrusions;  (x) Steel Cylinders; and  
(xi) Solar Panels .44 
3.6.  In its written submission, t he United  States  agree d to the relevance of only ten of the se eleven 
CVD investigations . The United  States  request ed the exclusion  of Lawn Groomers, claiming that the 
relevant CVD order was revoked prior to the expiration of the RPT . According to the United  States , 
the Arbitrator should  not conduct a  counterfactual analysis for Lawn Groomers because  the level of 
N/I attributable to the maintenance of the CVD measure on Lawn Groomers beyond the expiration 
of the RPT is zero.45 
3.7.  In its written submission, China did not contest the United  States ' assertion and evidence that 
the CVD order concerning Lawn Groomers was withdrawn more than a year before the end of the 
 
39 See Decisions by the Arbitrator s, EC – Hormones (Canada) (Article  22.6 – EC), para s. 9-11; 
EC – Hormones (US) (Article  22.6 – EC), paras. 9 -11; US – Washing Machines (Article  22.6 – US), para. 1.14 , 
US – Large Civil Aircraft (2nd complaint) (Article 22.6 – US), para . 4.3;  US – Anti-Dumping Methodologies 
(China) (Article  22.6 – US), para. 1.11 ; US – 1916 Act (EC) (Article  22.6 – US), paras.  3.2-3.3; US – Gambling 
(Article  22.6 – US), paras.  2.22-2.23; and US – COOL (Article  22.6 – US), para.  4.7. 
40 See Decision s by the Arbitrator s, EC – Bananas III (Ecuador) (Article 22.6 – EC), para. 38; 
EC – Bananas III (US) (Article 22.6 – EC), para. 4.2; EC – Hormones (Canada) (Article 22.6 – EC), para. 11; 
EC – Hormones (US) (Article 22.6 – EC), para. 11; US – FSC (Article  22.6 – US), para. 2.11; US – Offset Act 
(Byrd Amendment) (India) (Article  22.6 – US), paras. 2.26 -2.27; Brazil – Aircraft (Article  22.6 – Brazil) , 
paras. 2.8-2.9; and US – Large Civil Aircraft (2nd complaint) (Article 22.6 – US), para . 4.4. 
41 Decision by the Arbitrator, US – Gambling (Article  22.6 – US), para.  2.24. See also D ecision s by the 
Arbitrator s, EC – Hormones (Canada) (Article  22.6 – EC), para. 11; EC – Hormones (US) (Article  22.6 – EC), 
paras. 9 -11; US – Washing Machines (Article  22.6 – US), para. 1.14 ; Brazil – Aircraft (Article  22.6 – Brazil) , 
para. 2.9 ; US – FSC (Article  22.6 – US), para. 2.11; and US – Offset Act (Byrd Amendment) (India) 
(Article  22.6 – US), paras. 2.26 -2.27. 
42 Decisions by the Arbitra tors, EC – Hormones (Canada) (Article  22.6 – EC), para. 10; EC – Hormones 
(US) (Article  22.6 – EC), para. 10. See also Decision by the Arbitrator, US – Gambling ( Article 22.6 – US), 
para. 2.24. 
43 See Decisions by the Arbitrators, EC – Hormones (Canada) (Article  22.6 – EC), para. 12; EC – 
Hormones (US) (Article  22.6 – EC), para. 12. 
44 China's methodology paper, paras. 2 and 11. According to China, "[t]he products at issue in the 
11 CVD investigatio ns are circular welded austenitic stainless pressure pipe ('Pressure Pipe'), circular welded 
carbon quality steel line pipe ('Line Pipe'), tow behind lawn groomers ('Lawn Groomers'), kitchen appliance 
shelving and racks ('Kitchen Shelving'), oil country tu bular goods ('OCTG'), prestressed concrete steel wire 
strand ('Wire  Strand'), seamless carbon and alloy steel standard, line, and pressure pipe ('Seamless Pipe'), 
coated paper suitable for high -quality print graphics using sheet -fed presses ('Print Graphic s'), aluminum 
extrusions, high pressure steel cylinders ('Steel Cylinders'), and crystalline silicon photovoltaic cells 
('Solar  Panels')." China's methodology paper , fn 3 to para. 2. See also ibid., para.  11 (referring to 
Panel  Report, US – Countervailing Measures (China) (Article  21.5 – China) , section 3.1) . 
45 United  States' written submission , para. 6. See also ibid., paras. 9, 32, and 54; and Exhibit USA -9. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 18 - 
 
 RPT. Ultimately, China also excluded the CVD order concerning Lawn Groomers from its calculation 
of the level of N/I.46 
3.8.  As mentioned, the RPT in this dispute expired on 1 April 2016.47 According  to the information 
provided by the United  States , uncontested by China, the USDOC revoked the relevant CVD order 
for Lawn Groomers on 23  September 2014, effective 3 August  2014.48 In light of this and the parties' 
agreement, we have decided to exclude the CVD order concerning Lawn  Groomers from the scope 
of our analysis. We shall address only the ten remaining CVD investigations and products for 
calculating the level of N/I  in the present proceedings, namely: (i) Pressure Pipe;  (ii) Line Pipe;  
(iii) Kitchen Shelving;  (iv) OCTG;  (v) Wire Strand;  (vi) Seamless  Pipe; (vii) Print Graphics;  
(viii) Aluminum Extrusions;  (ix) Steel Cylinders; and  (x) Solar Panels.49 
3.2  Counterfactual  
3.9.  The parti es agree that , in order to determine level of N/I , the Arbitrator should assess a 
"counterfactual" scenario, i.e. a "hypothetical scenario that describes what would have happened in 
terms of trade flows had the responding party implemented the DSB recommen dations and rulings"50 
by the end of the RPT, and "compare [] [this counterfactual] with the actual situation, as of the end 
of the RPT – where the Member has yet to come into compliance – in order to quantify the trade 
effect caused by that Member's failure to comply" .51 As the RPT expired on 1 April 2016, the  parties 
agree that the baseline year or reference period for a counterfactual analysis should be the 2017 
calendar year.52 
3.10.   In light of the relevant DSB recommendations and rulings in th e Article  21.5 compliance 
proceedings53, the parties are also in agreement that, had the United  States  brought its measures 
into conformity with its obligations under Articles 2.1(c) and 14(d) of the SCM  Agreement , it would 
not have identified a countervai lable subsidy with respect to the alleged provision of inputs for less 
than adequate remuneration, and any countervailing duties (CVDs) applied to the products at issue 
would be calculated so as to exclude the portion of the total CVD margin attributed to the alleged 
input subsidy programmes.54 
3.11.   Thus, the parties agree that the appropriate counterfactual analysis would entail modifying 
the relevant CVD rates by deducting the portion attributable to the alleged input subsidy programs.55 
However, the parties d isagree on the original WTO -inconsistent CVD rates to be used when making 
this calculation for some of the products for which the revised rates entered into force after the 
expiry of the RPT.56 Although the parties' principled disagreement in this context concerns five of 
 
46 China's written submission , para. 25.  
47 See China's methodology paper, paras. 14, 17, and fn 15 to para. 17; United  States' written 
submission, para. 12.  
48 Exhibit USA -9. 
49 This list follows the order submitted by China in its N/I estimates , which in turn corresponds to the 
numerical order of the docket numbers assigned by USITC to the CVD investigations at issue. This Decision 
follows the same order in addressing the measures and products at issue.  
50 China's methodology paper, para.  15 (and the arbitration decisions referenced in fn 17 thereto); 
United  States' written submission, paras.  27-28 (and the arbitration decisions referenced in fns 21 -22 thereto).  
51 China's methodology paper, para.  15 (quoting Decision by the Arbitrator, US – Washing Machines  
(Article  22.6 – US), para. 3.7). See also United  States' written submission, paras.  27-28. 
52 China's methodology paper, para.  4; United  States' written submission, para.  28 and fn 23 thereto.  
53 WT/DSB/M/433, para. 9.33.  
54 China's methodology paper, paras.  20-21. See also ibid., paras.  18-19; United  States' written 
submission, para.  29; and China 's written submission, para.  9. 
55 China's methodology paper, paras. 16, 20 and 21; United  States' written submission, para. 29.  
56 As regards the calculation of the counterfactual WTO -consistent CVD rates, the parties had 
disagreements at an earlier stage o f these proceedings but these were ultimately resolved. First, regarding the 
inputs for the LTAR subsidy rate to be deducted from the WTO -inconsistent CVD rates, the United  States  
claimed that China had incorrectly identified the portion of the CVD rate at tributable to the input subsidy 
programs for four of the measures (Line Pipe, Wire Strand, Seamless Pipe , and Steel Cylinders). China 
accepted the rates proposed by the United  States  for Line Pipe and Steel Cylinders in its written submission. In 
response to questions from the Arbitrator, the United  States  concurred with China with respect to Seamless 
Pipe, and China accepted the United  States ' proposal regarding Wire Strand. ( United  States ' written 
submission, paras.  30 and 41 -45; China's written submissio n, para. 24; United  States ' response to Arbitrator 
question  No. 27, para. 143; and China's response to Arbitrator question  No. 96, para. 56.) Second, the 
United  States  claimed that China's calculations failed to apply the methods that the USD OC used to derive the 
 WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 the products at issue, its impact in terms of actual differences in the CVD rates only extends to 
three: Line Pipe, OCTG , and Seamless Pipe.57 
3.12.   In its calculation, China uses the following CVD rates that were in force at the expiry of the 
RPT on 1  April 2016 :58 
Table 1: CVD rates in force at the expiry of the RPT  for Line Pipe, OCTG, and 
Seamless  Pipe59 
PRODUCT  RESPONDENTS IN THE RELEVANT  
CVD INVESTIGATIONS  CVD RATES60 
Line Pipe  Huludao Seven Star Group, Huludao  Steel Pipe Industrial Co. Ltd., and 
Huludao Bohai Oil Pipe Industrial Co. Ltd.  33.43  
All Others  36.74  
OCTG  Tianjin Pipe (TPCO)  10.49  
All Others  13.41  
Seamless Pipe  Hengyang Steel, Hengyang Valin Steel, Hengyang Valin MPM, Xigang 
Seamless Steel (Hengyang)  56.67  
Tianjin Pipe (TPCO)  13.66  
All Others  35.17  
 
3.13.   The United  States , by contrast, relies on the final revised CVD rates that were determined by 
the USDOC in the Section 129 proceedings followed to implement the recommendations and rulings 
of the DSB in the original proceedings of this dispute (the Section 129 proceedings) .61 According to 
the United  States , this would be consistent with the fact that the Section 129 CVD rates were the 
compliance measures reviewed in the Article 21.5 proceedings in this dispute.62 The revised 
Section  129 rates for the products and respondents in question are:  
Table 2:  Revised Section 129 CVD rates  for Line Pipe, OCTG, and Seamless Pipe  
PRODUCT  RESPONDENTS IN THE RELEVANT CVD INVESTIGATIONS  CVD 
RATES63 
Line Pipe  Huludao Seven Star Group, Huludao Steel Pipe Industrial Co. Ltd., and 
Huludao Bohai Oil Pipe Industrial Co. Ltd.  32.65  
All Others  36.35  
OCTG  Tianjin Pipe (TPCO)  7.71 
All Others  12.26  
Seamless 
Pipe Hengyang Steel, Hengyang Valin Steel, Hengyang Valin MPM, Xigang 
Seamless Steel (Hengyang)  49.56  
Tianjin Pipe (TPCO)  8.24 
All Others  28.90  
 
3.14.   China asserts that, according to the decision by the arbitrator in US – Tuna II (Mexico) 
(Article  22.6 – US), compliance measures implemented after the expiry of the RPT should not form 
 
"All Others" rates. China considered that the changes made by the United  States  were consistent with the 
parties' shared position and reflected these changes i n its own estimates. ( United  States ' written submission, 
paras. 31 and 46 -53; United  States ' response to Arbitrator question  No. 68, paras. 92 -95, and No. 69, 
paras.  96-105; and China's response to Arbitrator question  No. 29, paras. 74 -77, and No. 97, para . 57).  
57 Revised rates were also published for Pressure Pipe and Solar Panels, but they were identical to the 
prior ones. China does not take issue with using the rates from the Section 129 determinations for the 
remaining five products (i.e. Kitchen Shelv ing, Wire Strand, Print  Graphics, Aluminum Extrusions, and 
Steel Cylinders). (China's written submission, para. 17).  
58 China's written submission, para. 14.  
59 This table and table 2 below only show the respondents for which the CVD rates changed after the  
expiry of the RPT.  
60 Exhibit CHN -100. 
61 United  States' written submission , para.  38. 
62 United  States' response to Arbitrator question No. 20, paras. 123 and 127; opening statement  at the 
meeting of the Arbitrator, para. 8.  
63 Exhibit USA -138. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 part of a counterfactual analysis under Article  22.6 of the DSU.64 China points out that the arbitrator 
in that dispute considered the pertinent  version of the  measure to be the one in existence at the 
time of expiry of the RPT, noting that such version "may or may not be the most recent version of 
the relevant measure".65 By contrast, t he United  States  points out  that there have been Article 22.6 
arbitrations that relied on compliance measures adopted after the expiry of the RPT to quantify the 
level of N/I. The United  States  advances as examples the arbitrator decisions in US – FSC 
(Article  22.6 – US) and US – COOL (Article  22.6 – US).66 
3.15.   Despite the above state ment in US – Tuna II (Mexico) (Article  22.6 – US) referenced by China, 
the two other arbitration decisions cited by the United  States  suggest to us that, as a matter of fact, 
previous Article 22.6 arbitrators have not followed a uniform approach to this is sue. There have been 
prior Article 22.6 arbitrations, including those mentioned by the United  States , in which compliance 
measures adopted after the expiry of the RPT have been considered for the determination of a 
counterfactual in an N/I assessment.67 We are therefore of the view that the determination of the 
relevant measure for an N/I assessment must be resolved on a case -by-case basis, depending on 
the facts and circumstances of the specific dispute.  Indeed, as a prior Article 22.6 arbitrator held, 
even if previous arbitrators had established one single level of nullification or impairment at the level 
that existed at the end of the RPT, "we do not read anything in Article 22 of the DSU that would 
preclude us from following a different path if the circu mstances of this case clearly required it".68 
3.16.   The specific factual circumstances of the dispute before us are as follows. Although the USDOC  
informed the interested parties of the initiation of the Section 129 proceedings regarding all products 
at issue on 27 April 2015 (i.e. before the expiry of the RPT on 1 April 2016), it published its final 
CVD determinations for this specific group of pro ducts on 9 June 2016, stating that they would 
become effective retroactively as of 26 May 201669, that is almost two months after the expiration 
of the RPT on 1 April 2016.70 As China explains, in the  course of the  compliance proceedings it 
challenged cert ain determinations made by the United  States  in the context of these Section 129 
proceedings.71 As a consequence, the Section  129 Proceedings were one of the measures reviewed 
and ultimately found to be WTO -inconsistent in those compliance proceedings.72 The relevant panel 
and Appellate Body findings in this regard were multilaterally endorsed when the DSB adopted the 
compliance reports in August  2019. Finally, in the context of this arbitration proceeding, the 
 
64 China's wr itten submission, para. 13 (referring to Decision by the Arbitrator, US – Tuna II (Mexico) 
(Article 22.6 – US), paras 3.19 -3.21 and 3.25); comments on the United Sates' response to Arbitrator question 
No. 113, para. 99 (referring to Decision by the Arbitra tor, US – Tuna II (Mexico) ( Article  22.6 – US), 
para. 3.24) . 
65 Decision by the Arbitrator, US – Tuna II (Mexico) (Article  22.6 – US), para.  3.24. 
66 United  States' response to Arbitrator question No. 20, paras. 124 -125 (referring to Decisions by the 
Arbitra tors, US – FSC (Article  22.6 – US), para. 2.12; US – COOL (Article  22.6 – US), fn 5 to para. 1.3 and 
fn 59 to para. 3.2).  
67 In fact, the same Article 22.6 arbitrator in US – Tuna II (Mexico) (Article 22.6 – US) analysed other 
prior arbitration decisions wh en discussing the issue, namely EC – Bananas III , US – Upland Cotton , and 
Brazil  – Aircraft . (Decision by the Arbitrator, US – Tuna II (Mexico) (Article  22.6 – US), para.  3.28-3.47).  
68 "Most previous arbitrators have established one single level of nullification or impairment at the level 
that existed at the end of the reasonable period of time granted to the responding party to bring its legislation 
into conformity. We do not disagree that this approach is, in the large majority of cases, the most appropriate. 
However, we do not read anything in Article 22 of the DSU that would preclude us from following a different 
path if the circumstances of this case clearly required it." (Decision by the Arbitrator, US – Offset Act 
(Byrd  Amendment) (India) (Article  22.6 – US), para.  4.21). (fn omitted)  
69 Exhibit USA -1. 
70 We note in this regard that the United  States initiated the Section 129 Proceedings before the RPT 
was determined by an arbitratio n carried under Article 21.3 (c) of the DSU. The relevant Award of that 
arbitrator was circulated on 9 October 2015, when Section 129 Proceedings were already on their way. 
(Award  of the Arbitrator, US – Countervailing Measures (China)  (Article 21.3(c)) ). 
71 China's methodology paper, para. 11.  
72 The Panel Report refers to them as the "preliminary and final determinations made by the 
United  States Department of Commerce (USDOC) under Section 129 of the Uruguay Round Agreements Act 
(Section  129) to comply wit h recommendations and rulings of the DSB made in the original proceeding in 
US – Countervailing Measures (China) ". (Panel Report, US – Countervailing Measures (China) (Article  21.5 – 
China) , para. 2.1). WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 Section  129 Proceedings are the measures regar ding which China seeks to obtain authorization to 
suspend concessions or other obligations.73 
3.17.   The parties agree that the revised CVD rates suggested by the United  States  correspond to 
the final determinations under the Section 129 proceedings, and that the  revised rates for this subset 
of products became  effective after the expiry of the RPT. We also note that the United  States  does 
not claim that it has brought its measure s into conformity with the recommendations and rulings of 
the DSB within the RPT. The re are no disagreements between the parties on these aspects of the 
dispute.  
3.18.   As argued by China, the existence of an RPT is crucial in the assessment under Article  22.7. 
According to DSU Article  22.1, the suspension of concessions or other obligations is a vailable in the 
event that the recommendations and rulings are not implemented within the RPT. That said, as the 
United  States  argues, Article  22 directs an arbitrator to base its decision on the "recommendations 
and rulings" of the DSB to bring a WTO -inconsistent measure into conformity.74 Further, under 
Article  22.4, "the level of the suspension of concessions or other obligations authorized by the DSB 
shall be equivalent to the level of the nullification or impairment [caused by the measures]". As a 
prior Article 22.6 arbitrator noted, "it would be the WTO -inconsistency of [th e measure  at issue ] that 
would be the root cause of any nullification or impairment suffered by [the complainant]".75 Thus, 
in order to be able to determine the level of N/I, it is e ssential to identify the measures causing such 
N/I. Whether the Section 129 CVD rates were implemented before or after the expiration of the RPT, 
does not immediately determin e the relevant measure, or version of the measure, for our 
counterfactual analysi s.76 
3.19.   Turning to the arbitration decisions referenced by the parties, we note that one of the 
considerations for the choice of the arbitrator in US – Tuna II (Mexico) (Article  22.6 – US) to rely on 
an earlier pre -RPT measure was that this had been  the subject of adverse DSB recommendations 
and rulings. In the words of that arbitrator, the alternative post -RPT measure proposed by the 
respondent was "not yet subject to any panel or Appellate Body findings, and so it is not a measure 
that has been found t o be WTO inconsistent".77 The arbitrator added that, although the respondent 
had made changes to the earlier measure, the adverse DSB recommendations and rulings remained 
in effect "until such time as there are new, overriding panel and/or Appellate Body f indings that have 
been adopted by the DSB or a mutually agreed solution has been notified to the DSB".78 We therefore 
consider that, while the arbitrator in US – Tuna II (Mexico) (Article  22.6 – US) opted for a pre -RPT 
measure , this was based at least in p art on a consideration of multilateral review. We find this 
particularly noteworthy as the measures at issue in the present arbitration (i.e.  the Section 129 
Proceedings) have been multilaterally reviewed and found to be WTO -inconsistent in Article 21.5 
compliance proceedings.  
3.20.   The relevance of multilateral review as a reason for reviewing post -RPT measures  in the 
present proceedings  is supported by the two arbitration decisions referenced by the United  States . 
The arbitrator in US – FSC (Article  22.6 – US) noted that "it was [the measure that had come into 
existence after the expiration of the RPT ] which was reviewed by the Compliance Panel and, on 
appeal, by the Appellate Body, under Article 21.5 of the DSU."79 In US – COOL (Article  22.6 – US), 
the arbitrat or calculated the level of N/I caused by the original and amended measures, which had 
 
73 See China's methodology paper, paras. 2, 3, 11 , and 12. See also Recourse to Article 22.2 of the DSU 
by China, WT/DS437/30, p. 2. We also note China's argument that: "[i]n this dispute, the measures found to 
be inconsistent with the SCM Agreement are the U .S. compliance measures pertaining to the ten cases  at 
issue. This is clear from the findings of the compliance panel and the Appellate Body. The DSB's 
recommendations in relation to these findings are similarly clear: the United  States  must bring its measures 
into conformity with the relevant provisions of the SCM Agreement." (China's written submission, para. 31).  
74 United  States ' written submission , paras. 34 and 35.  
75 Decision by the Arbitrator, EC – Bananas III (US) (Article 22.6 – EC), para. 4.8. We also agree with 
the reasoning of such arbitrator regarding the timing of proceedings.  (See ibid., fn 11 to para. 4.11). 
76 United  States' response to Arbitrator question No. 113, para. 154.  
77 Decision by the Arbitrator, US – Tuna II (Mexi co) (Article  22.6 – US), para.  3.25. 
78 Decision by the Arbitrator, US – Tuna II (Mexico) (Article  22.6 – US), para.  3.35. 
79 Decision by the Arbitrator, US – FSC (Article  22.6 – US), para. 2.12.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 been reviewed at the original and compliance stages, although the amended measure came into 
force one day after the expiry of the RPT.80 
3.21.   China claims that in US – FSC (Ar ticle 22.6 – US) the parties had agreed on the compliance 
measure adopted after the expiry of the RPT being the relevant measure for evaluating the 
suspension of concessions, whereas no such agreement has been reached by China and the 
United  States  in this  proceeding.81 Regarding US – COOL (Article  22.6 – US), China notes that in its 
statement to the DSB, the United  States  explicitly stated that it "had come into compliance within 
the ten -month reasonable period of time set by a WTO arbitrator, which had expired the previous 
day".82 We do not consider that such circumstances alter the fact that, as the United  States  explain s, 
measures adopted after the expiry of the RPT were indeed used for assessing the level of N/I in 
those Article 22.6 arbitration proceedings, and that in both cases the relevant measures under 
discussion had been subject to multilateral review through com pliance proceedings.83 
3.22.   Our mandate as an Arbitrator, consistent with the obligation established in Article 22.4, is 
specifically set out in Article 22.7 of the DS U: "The arbitrator… shall determine whether the level of 
such suspension is equivalent to the level of nullification or impairment ". 
3.23.   We recall that the Appellate Body has described suspension of concessions or other obligations 
as the last resort in the chain of events of a multi -stage process that constitutes a WTO dispute:  
[T]he suspension of con cession is the last resort available to a Member who has 
successfully challenged the consistency with the covered agreements of another 
Member's measure. The DSB's authorization to suspend concessions is necessarily 
preceded by a multi -stage dispute settle ment process. This process may encompass: 
(i) consultations, (ii) panel proceedings, (iii) appellate review, (iv) the adoption of the 
panel and Appellate Body reports, (v) an arbitration to determine the reasonable period 
of time for implementation, (vi) c ompliance panel proceedings, (vii) compliance 
appellate review, and (viii) an arbitration to determine the level of suspension of 
concessions. The authorization to suspend concessions is thus granted following a long 
process of multilateral dispute settlem ent in which relevant adjudicative bodies, as well 
as the DSB, render multilateral decisions at key stages of the process.84 
3.24.   As already noted, in this case the Section 129 Proceedings have been multilaterally reviewed 
under Article 21.5 and the compliance reports adopted by the DSB. In this connection , we further 
note that China's request for the suspension of concessions is based on the findings of 
WTO-inconsistency in such compliance reports.85 
3.25.   Accordingly, in the circumstances of the present proceedings,  we shall rely on the final CVD 
rates determined by the USDOC in the Section  129 Proceedings for the counterfactual and the 
calculation of the WTO -consistent CVD rates in this dispute. Consequently, the initial 
 
80 Decisions by the Arbitrator, US – COOL (Article  22.6 – US), fn 59 to para. 3.2.  "The 'amended COOL 
measure' comprised the original COOL measure as amended by the [compliance measure enacted after the 
expiry of RPT]."  (Ibid., fn 6 to para 1.4).  
81 China's comments on the United  States' response t o Arbitrator question No. 113, para. 103 (referring 
to Decision by the Arbitrator, US – FSC (Article  22.6 – US)). 
82 China's comments on the United  States' response to Arbitrator question No. 113, para. 101 (quoting 
DSB, Minutes of the meeting held on 31 Ju ly 2013, WT/DSB/M/332, Item 11). (emphasis omitted)  
83 In a comparable manner, the Article 22.6 arbitrator in US – Upland Cotton  considered the lack of a 
multilateral determination of inconsistency as "an important aspect of the legal situation before us, which we 
must take into account in these proceedings". (Decision by the Arbitrator, US – Upland Cotton (Article 22.6 – 
US I), para 3.42 ). 
84 Appellate Body Report, US – Continued Suspension , para. 317. As a recent Article 22.6 arbitrator 
explained, the authorization to maintain a suspension "would only lapse following confirmation, through WTO 
dispute settlement proceedings or a mut ually agreed solution, of the responding party's substantive 
compliance" . The same  Article 22.6 arbitrator has emphasised the importance of formal multilateral 
confirmation, explaining that the justification for maintaining a suspension should be found in the formal 
multilateral compliance status of the responding party (Decision by the Arbitrator, EC and certain member 
States – Large Civil Aircraft (Article 22.6 – EU), para 6.51 , referring to Appellate Body Report, US – Continued 
Suspension , section IV.E ). 
85 See China's methodology paper, paras. 10 -21. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 WTO-inconsistent CVD rates to be used in the implementation of the two -step Armington model  will 
be the ones suggested by the United  States .86 
3.3  Methodology  
3.26.   To estimate the impact of the WTO -inconsistent CVD orders on China's 2017 exports of 
subject products to the United  States , the parties agree that the Arbitrator should apply a two -step 
Armington elasticities model similar to the methodology that was used in US – Washing  Machines 
(Article 22.6 – US) and US – Anti-Dumping Methodologies (China) (Article  22.6 – US).87 
3.27.   As the parties explain, the Armington elasticities model needs to be applied twice, once with 
WTO-inconsistent CVDs and once more with WTO -consistent CVDs, to compute, with regar d to each 
CVD order at issue, the value of sales of imports from China in the US market for the 2017 remedy 
year. The  former figure then needs to be subtracted from the latter for each CVD order, and, finally, 
the differences obtained for each CVD order ne ed to be added up in order to calculate the overall 
level of N/I.88 This was also the overall approach applied in the two above -mentioned Article  22.6 
arbitrations.89 
3.28.   Although the parties agree in general on the use of a two -step Armington model  to estimate 
the level of N/I,90 the parties propose the following "advancements" in China's words91, or 
"adjustments" as described by the United  States92, to the methodology, mo st of which are in turn 
challenged by the other party:93 
 China's proposed nested approach to elasticities of substitution, including the application 
of the Rule of Two;  
 China's proposed net -of-duty adjustment to exclude duty payments from the estimated 
remedy-year sales of imports from China obtained with the Armington model using both 
WTO-inconsistent and WTO -consistent CVD rates , and hence ultimately from the N/I 
calculation;  
 the United  States ' suggestion to account for the effect of both subsidies and du mping  on 
China 's market shares  in the United States ; and  
 the United  States ' suggestion to account  for factors other than trade remedy measures  
that influenced the evolution of the market in the period between the imposition of such 
measures and the base ye ar of the analysis (2017) (Rising Suppliers).  
 
86 See Annex  C-3 for the WTO -inconsistent Section 129 rates relied upon by the Arbitrator and t he 
resulting WTO -consistent CVD rates for each of the ten products at issue.  
87 China's methodology paper, para.  4; United  States' written submission, para.  3. 
88 China's methodology paper, paras. 4 -7 and 28 -33; United  States' written submission, paras. 2 -3. 
89 Decisions by the Arbitrators, US – Washing Machines (Article  22.6 – US), paras. 3.118 -3.121 ; 
US – Anti-Dumping Methodologies (China) (Article  22.6 – US), para s. 7.43-7.46. 
90 Under the two -step Armington model, the level of N/I is calculated by first estimating the value of 
imports from China in the US market with WTO -inconsistent CVDs for the 2017 reme dy year . This is done by 
applying the Armington elasticities model to the US market as it had existed prior to the imposition of the 
WTO-inconsistent CVDs in order to simulate, for each CVD order, the impact of imposing the WTO -inconsistent 
CVDs on the sal es, and hence the market shares, of three varieties: imports from China, imports from the rest 
of the world, and shipments of US domestic producers. The simulated market  shares are then multiplied by the 
value of total 2017 sales in the US market to obtain  an estimated 2017 Chinese import value for the 
WTO-inconsistent scenario. This procedure is repeated using WTO -consistent CVDs so that estimated 2017 
Chinese import values are obtained under both scenarios  for each CVD order. The differences between the t wo 
scenarios are then aggregated to obtain the level of N/I (see China's methodology paper, paras. 4 -7, 28-33, 
and 44 -72; United  States' written submission, paras.  27-28). 
91 China's methodology paper, paras. 8 -9. 
92 United  States' written submission, para.  7. 
93 United  States' written submission, para.  4; China's written submission, paras. 3 -5. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 3.3.1   Nested approach to elasticities of substitution  
3.29.   China suggests that the Arbitrator should apply a "nested approach"94 to the demand structure 
of the two -step Armington model . This approach is based on the assum ption that the elasticity of 
substitution between imports from different sources, i.e. subject and non -subject imports or 
"micro -elasticity", would be different from the elasticity of substitution between imports and 
US domestic goods, the "macro -elasticity". Relying on economic literature and empirical evidence in 
the form of an econometric study and descriptive statistics, China advances that the micro -elasticity 
is twice the corresponding macro -elasticity  for all products at issue (Rule  of Two).95 
3.30.   The United  States  in principle does not oppose a nested approach being considered where 
trade diversion is expected. However, the United  States  notes that, for the products at issue, no 
trade diversion is to be expected.96 The United  States  considers th at a constant elasticity of 
substitution assumption (or  Rule of One) between different imports and between imported and 
domestic goods would be more appropriate. The United  States  submits that a literature standard 
and empirical evidence support its positi on in this regard.97 
3.31.   The United  States  adds that it is China that needs to provide evidence that the micro - and 
macro -elasticities of substitution differ for the products at issue in these proceedings and that the 
Rule of Two  is a reasonable assumption abo ut their relative magnitudes.98 According to the 
United  States , China has not presented any persuasive evidence in support of its position.99 
3.32.   We note that China's proposal contains two linked but distinct issues. First, whether it is 
reasonable to set micro -elasticit ies for the products at issue that differs from their macro -elasticities 
(i.e. a nested approach) and, second, whether it is reasonable to assume that this difference can be 
approximated by a factor of two (i.e. the Rule of Two). Before asse ssing these issues, we  address 
first the systemic arguments made by the parties on the burden of proof in the context of China's 
proposal for a nested approach.  
3.33.   China claims that, due to the allocation of the initial burden of proof in an Article 22.6 
arbitration, if the parties' arguments in favour or against the Rule of Two  are of equal merit, 
the Arbitrator needs to apply the Rule of Two .100 The United  States  argues that China conflates the 
burden of proof with each party's responsibility to present evide nce and support their arguments.101 
3.34.   As regards the burden of proof, we recall that in an Article  22.6 arbitration proceeding it is 
the party challenging the proposed level of suspension that bears the general burden of proving that 
the requirements of the D SU have not been met.102 In other words, as a matter of principle, it is for 
the original respondent, the United  States  in this dispute, to prove that China's proposed level of 
suspension of concessions is not "equivalent" to the level of N/I within the mea ning of Article  22.4 
of the DSU.103 In the context of the nested approach, this would mean that the United  States  would 
 
94 China's methodology paper, paras. 8, 27, 82, and 107; China's response to Arbitrator question No. 1, 
para. 1. The technical implementation of such nested approach is  outlined in paragraphs 51 -56 of China's 
methodology paper.  
95 China's methodology paper, para. 83.  
96 United  States' response to Arbitrator question No. 1, para. 4.  
97 United  States' written submission, paras. 88, 108 and 110. See also United  States' response to 
Arbitrator question No. 101, para. 100.  
98 United  States' written submission, para. 111.  
99 United  States' written submission, para. 108.  
100 China's opening statem ent at the meeting of the Arbitrator, para. 16.  
101 United  States' response to Arbitrator question No. 100, paras. 85 -89. 
102 See Decisions by the Arbitrators, US – Anti-Dumping Methodologies (China) (Article  22.6 – US), 
para. 1.11; US – Washing Machines (Arti cle 22.6 – US), para. 1.14 ; US – 1916 Act (EC) (Article  22.6 – US), 
paras.  3.2-3.3; US – Gambling (Article  22.6 – US), paras.  2.22-2.23 (quoting Decision by the Arbitrator, 
EC – Hormones (Canada) (Article  22.6 – EC), para. 9) ; US – FSC (Article 22.6 – US), para. 2.10; US – COOL 
(Article  22.6 – US), para.  4.7 (quoting Decision by the Arbitrator, EC – Hormones (Canada) (Article  22.6 – EC), 
para. 9) ; EC and certain member States – Large Civil Aircraft (Article 22.6 – EU), para. 4.2; US – Large Civil 
Aircraft (2nd complaint) (Article 22.6 – US), para.  4.3; EC – Hormones (Canada) (Article  22.6 – EC), para. 9; 
and EC – Hormones (US) (Article  22.6 – EC), para. 9. See also Appellate Body Reports, US – Wool Shirts and 
Blouses,  p. 14; EC – Hormones , para.  104; US – Upland Cotton , para. 644; and US – Carbon Steel (India) , 
para. 4.505; and Panel Report, Russia – Pigs (EU) , para. 7.589.  
103 See Decisions by the Arbitrators, EC – Hormones (Canada) (Article 22.6 – EC), para. 9; 
EC – Hormones (US) (Article 22.6 – EC), para. 9. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 need to put forward sufficient arguments and evidence to disprove the methodology proposed by 
China.  
3.35.   The United  States  argues that it has  succeeded in making a prima facie  case that China's 
request for suspension of concessions is not equivalent to the level of N/I due to the fact that China 
revised the level of suspension initially requested  to the DSB  to a lower amount in its methodology 
paper .104 We understand that we are not being asked to assess the appropriateness of such a 
reduction at that stage of the proceedings.  
3.36.   We note that there have been other Article 22.6 arbitration proceedings in which th e original 
complainant has reduced the level of suspension initially requested to the DSB once it presented its 
methodology paper.105 For instance, in the recent US – Large Civil Aircraft (2nd complaint) 
(Article  22.6 – US) arbitration, the original complai nant, the European Union, initially requested 
authorization from the DSB to take countermeasures totalling USD 12 billion annually106, but later 
calculated a level of suspension of USD 10.02 billion in its methodology paper.107 Despite this 
downward change i n the original complainant's request, the arbitrator confirmed the 
long-established allocation of the burden of proof among the parties as follows:  
"For present purposes, it is sufficient to state that we regard the United  States , as the 
party challenging the proposed level of countermeasures, to bear the overall burden of 
demonstrating that the [original complainant's] methodology results in 
countermeasures that are not "commensurate" with the degree and nature of the 
adverse effects determined to exist. T o discharge that burden, it is not sufficient for the 
United  States  merely to propose an alternative methodology that it asserts is more 
appropriate. Rather, the United  States  must engage with the methodology used by the 
[original complainant], in the sens e that the United  States  must demonstrate why that 
methodology would result in countermeasures that are not "commensurate" within the 
meaning of Article 7.10 of the SCM Agreement."108 
3.37.   We agree with this approach. Thus, evoking the mere fact that the origina l complainant has 
revised its originally requested level of N/I downwards does not amount to making a prima facie  
case or shift the burden of proof to the original complainant. In our view, once the original 
complainant has presented a downward revised sus pension request in its methodology paper, that 
is the request on which the arbitration proceedings will be based109, and the long -established 
allocation of the parties' burden of proof applies with respect to that reduced amount. Similarly to 
the arbitrator  in US – Large Civil Aircraft (2nd complaint) (Article  22.6 – US), we still regard the 
United  States , as the party challenging China's proposed level of suspension , to bear the initial 
burden of demonstrating that such reduced level of suspension requested by China is not equivalent 
to the level of N/I in this dispute.  
3.38.   That said, the rules on the allocation of the burden of proof in Article  22.6 arbitration 
proceedin gs do not relieve the parties from their general duty to provide evidence to an arbitrator.110 
In the words of previous Article 22.6 arbitrators, "[a]n issue to be distinguished from the question 
of who bears the burden of proof is that of the duty that res ts on both parties to produce evidence 
 
104 United  States' response to Arbitrator question No. 100, para. 91. See also United  States' closing 
statement  at the meeting of the Arbitrator, para. 3; response to Arbitrator question No. 98, paras. 79 -83, and 
No. 100, paras. 85 -89. 
105 See e. g. Decision by the Arbitrator, US – Large Civil Aircraft (2nd complaint)  (Article  22.6 – US), fn 44 
to para. 1.29 (referring to ibid., para. 6.6 and fns 123 and 597) and fn 123 to para. 6.6.  
106 Decision by the Arbitrator, US – Large Civil Aircraft (2nd complaint)  (Article  22.6 – US), para. 1.19  
(referring to Recourse to Article 22.2 of the DSU, and Articles 4.10 and 7.9 of the SCM Agreement by the 
European Union, WT/DS353/17) . 
107 Decision by the Arbitrator, US – Large Civil Airc raft (2nd complaint)  (Article  22.6 – US), para. 1. 29. 
108 Decision by the Arbitrator, US – Large Civil Aircraft (2nd complaint)  (Article  22.6 – US), para. 4.3. 
(fns omitted)  
109 We consider this situation to be different from an increase of the requested level of N/I in the original 
complainant's methodology paper from the originally requested level of suspension addressed to the DSB . 
See e.g. Decision by Arbitrator, EC – Bananas III (Ecuador) (Article 22.6 – EC), paras. 22-24.  
110 Decision by the Arbitrator, US – Gambling (Article 22.6 – US), para.  2.24. See also  Decision s by the 
Arbitrator s, EC – Hormones (Canada) (Article  22.6 – EC), para. 11; EC – Hormones (US) (Article  22.6 – EC), 
para. 11.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 and to collaborate in presenting evidence to the [a]rbitrators"111, and "it  is for each party to bring 
forward the elements to sustain the factual assertions it makes".112 Thus, we agree with the 
United  States  that each  party has "a duty to collaborate in the establishment of the facts".113 
3.39.   Accordingly, while the United  States  is required to submit evidence showing that China's 
proposal is not equivalent  to the level of N/I , China  is also required to come forward with evi dence 
explaining how it arrived at its proposal.114 In this sense, the  duty rests on both parties to produce 
evidence and to collaborate in presenting evidence to the Arbitrator115, regardless  of which party 
bears the overall burden of proof.116 As the Appell ate Body has held, "precisely how much and 
precisely what kind of evidence will be required to establish … a presumption [that what is claimed 
is true] will necessarily vary from measure to measure, provision to provision, and case to case."117 
3.40.   In light of the above, we shall examine the totality of the evidence submitted by the parties 
in the context of China's proposal for a nested approach and specifically for a Rule of Two . We recall 
in this regard that "[i]n determining the level of nullific ation or impairment …, we need to rely, as 
much as possible, on credible, factual, and verifiable information."118 We shall analyse the arguments 
and evidence advanced by the parties in four parts: (i) the United States International Trade 
Commission (US ITC) report containing a survey on the characteristics of the products at issue; 
(ii) the existence of an  alleged literature standard; (iii)  hypothesis tests and point estimates 
contained in a recent econometric study; and (iv)  descriptive evidence stemming f rom observed 
trade patterns after the measure was put in place. As regards China's claim about the parties' 
arguments and evidence being of equal merit or in equipoise, we will address the relevant arguments 
if, after having engaged with the parties' subst antive arguments and evidence, we consider that 
indeed we are in this specific scenario.  
 
111 Decision by the Arbitrator, Brazil – Aircraft (Article  22.6 – Brazil) , para. 2.9. See also Decisions by 
the Arbitrators, EC – Hormones (Canada) (Article  22.6 – EC), para.  10; EC – Hormones (US) 
(Article  22.6 – EC), para. 10; US – Gambling (Article 22.6 – US), para.  2.24; and US – Washing Machines 
(Article  22.6 – US), para. 1.14  (quoting Decision by the Arbitrator, US – Gambling ( Article 22.6 – US), 
para. 2.24).  
112 Decision by the Arbitrator, US – Gambling (Article  22.6 – US), para.  2.24 (referring to Decisions by 
the Arbitrators, EC – Hormones (Canada) (Article  22.6 – EC), para. 11; EC – Hormones (US) (Article  22.6 – EC), 
para. 11). See also Decision by the Arbitrator, US – Large Civil Aircraft (2nd complaint) (Article 22.6 – US), 
para. 4.4.  
113 United  States' response to Arbitrator question No. 100, para. 89 (quoting Decision by the Arbitrator, 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US), para. 1.11 ). See also Decisions by the 
Arbitrators, US – Gambling ( Article 22.6 – US), para. 2.24, US – Washing Machines (Article  22.6 – US), 
para. 1.14 (quoting Decision by the Arbitrator, US – Gambling ( Article 22.6 – US), para.  2.24) ; EC – Hormones 
(Canada) (Article  22.6 – EC), para. 11; and EC – Hormones (US) (Article  22.6 – EC), para. 11. 
114 Decisions by the Arbitrators, EC – Hormones (Canada) (Article 22.6 – EC), para. 11; EC – Hormones 
(US) (Article 22.6 – EC), para. 11. See also Decision s by the Arbitrator s, Brazil – Aircraft (Article  22.6 – Brazil) , 
para. 2.8; EC – Bananas III (Ecuador) (Article 22.6 – EC), para. 38; and US – Large Civil Aircraft 
(2nd complaint) (Article 22.6 – US), para . 4.4.  
115 Decision by the Arbitrator, Brazil – Aircraft (Article  22.6 – Brazil) , para. 2.9. See also Decision s by 
the Arbitrator s, US – FSC (Article  22.6 – US), para. 2.11; US – Offset Act (Byrd Amendment) (India) 
(Article  22.6 – US), para. 2.26  (quoting Decision by the Arbitrator, EC – Hormones (Canada) (Article 22.6 – 
EC), para. 11) and para. 2.27 (refe rring to Decisions by the Arbitrators, Brazil – Aircraft (Article  22.6 – Brazil) , 
paras. 2.9 -2-11; and Canada – Aircraft Credits and Guarantees (Article 22.6 – Canada) , para. 3.76) . 
116 "An issue to be distinguished from the question of who bears  the burden of proof is that of the 
duty that rests on both parties to produce evidence and to collaborate in presenting evidence to 
the Arbitrators. This is why, even though [the original respondent] bears the original burden of 
proof, we expected [the original compl ainant] to come forward with evidence explaining why its 
proposal constitutes appropriate countermeasures and we requested it to submit a 'methodology 
paper' describing how it arrived at the level of countermeasures it proposes. "  
(Decision by the Arbitrator, Brazil – Aircraft (Article 22.6 – Brazil) , para. 2.9 . See also Decision s by the 
Arbitrator s, EC – Bananas III (US) (Article 22.6 – EC), para.  4.2; US – Large Civil Aircraft (2nd complaint) 
(Article 22.6 – US), para . 4.4). 
117 Appellate Body Report, US – Wool Shirts and Blouses , p. 14.  
118 Decision by the Arbitrator, US – 1916 Act (EC) (Article 22.6 – US), para. 5.54 . See also Decisions of 
the Arbitrators, US – Washing Machines (Article 22.6 – US), para. 1.16 (referring to ibid., para . 5.54); 
US – Large Civil Aircraft (2nd complaint) (Article 22.6 – US), para. 3.6  (quoting Decision by the Arbitrator, 
EC and certain member States – Large Civil Aircraft (Article 22.6 – EU), para. 6.173 (in turn quoting Decision 
by the Arbitrator, US – Tuna II (Mexico) (Article 22.6 – US), para. 5.16 (fns omitted) (in turn quoting Decisions 
by the Arbitrator, US – COOL (Article 22.6 – US), para. 4.5; US – Gambling (Article 22.6 – US), para. 3.3; and 
US – 1916 Act (EC) (Article 22.6 – US), para. 5.54))).  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 3.3.1.1   USITC survey evidence and elasticity estimates  
3.41.   The United  States  considers that the Arbitrator has compelling evidence before it supporting 
identical micro - and macro -elasticities for each of the specific products at issue. The United  States  
notes that, in the current proceedings, both parties have relied on USITC reports for elasticities of 
substitution, which are developed within the framework of a non -nested, constan t elasticity of 
substitution model and, hence, support the Rule of One.119 The United  States  also argues that the 
USITC  investigations pertinent to this dispute found through business surveys that, for all products 
at issue with the exception of Wire Strand, "domestic, Chinese, and non -subject imported varieties 
are similarly comparable in terms of intrinsic characteristic s, quality, and terms of sale".120 The 
United  States  adds that most of the products at issue are standardized materials produced to 
common specifications such that they are fully interchangeable across all sources.121 
3.42.   China argues that it is not evident from  USITC reports whether USITC has evaluated the 
Rule of Two  for use within its product analysis, and the United  States  has not indicated where such 
an evaluation could be found.122 China further refers to the evidence on interchangeability as 
insufficient be cause the questionnaire is not informative regarding how buyers react to price 
changes.123 
3.43.   We note that, despite the United  States ' claim that the USITC reports use the Rule of One, 
i.e. a non -nested approach, the USITC reports in question do not seem to sp ecify whether their 
estimates rely on a nested or a non -nested approach. Accordingly, we disagree with the 
United  States ' claim that China's reliance on the USITC estimates for macro -elasticities implies 
adopting the Rule of One.  
3.44.   Regarding interchangeabili ty and comparability, we note that while it appears reasonable that 
these factors contribute to determining elasticities, there is nothing on the record suggesting that 
these would be the only factors. These factors might imply that the ratio of micro - to macro -elasticity 
is indeed lower for the products at issue than for less comparable products . However,  we fail to see 
this as clear evidence that the ratio should be one as suggested by the United  States . 
3.3.1.2   Standard approach in the economic modelling literat ure 
3.45.   According to China, using the Rule of Two  would be in accordance with an established standard 
for economic analysis of international trade. China argues that the Rule of Two  has been widely 
applied in the context of modelling the effect of counterfactu al policy changes, including by the 
USITC, the WTO Secretariat, and the Global Trade Analysis Project (a network of researchers and 
policy -makers that provides a standard model and data for modelling global trade flows ).124 China 
submits that this standard in the literature is based on a series of papers finding micro -elasticities 
to be larger than macro -elasticities. In comparison, according to China, the United  States ' 
assumption of a constant elasticity between all suppliers is an outlier in the economic literature.125 
3.46.   The United  States  argues that although the Rule of Two  has been used in certain trade policy 
modelling literature, the fact that a rule of thumb may be widely used is no substitute for evidentiary 
support , and considers that the studies cited  by China in support of the Rule of Two  suffer from 
biased estimation techniques.126 The United  States  notes that, contrary to China's assertion, 
although the USITC employed the Rule of Two  in multisector computable general equilibrium (CGE) 
modelling, the lack of empirical support led the USITC to abandon the Rule of Two  in its recent CGE 
analysis of the impact of the US -Mexico -Canada Agreement.127 The United  States  further argues that 
 
119 The United  States notes that, as examples of both parties' reliance on USITC reports, the parties 
have set the macro -elasticity equal to the elasticity of substitution reported in USITC repo rts, and have used 
the supply and demand elasticity estimates reported in USITC reports (United  States' response to Arbitrator 
question No. 1, para. 2).  
120 United  States' response to Arbitrator question No. 1, para. 3.  
121 United  States' response to Arbitrato r question No. 1, para. 4.  
122 China's written submission, para. 60.  
123 China's opening statement at the meeting of the Arbitrator, para. 13.  
124 China's methodology paper, paras. 8 and 83 -86. See also China's written submission, para. 54.  
125 China's methodology  paper, paras. 8 and 87 -89 (referring to Exhibits CHN -63, 69, and 70); 
written  submission, para. 3; and response to Arbitrator question No. 1, para. 5.  
126 United  States' response to Arbitrator question No. 1, para. 20; Exhibit USA -33. 
127 United  States' writt en submission, para. 109 (referring to Exhibits USA -30 and USA -33). WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 CGE assumptions are not necessarily applicable to the type of product -by-product, partial equilibrium 
(PE) modelling required in these proceedings.128 The United  States  adds that the increased 
discarding of the Rule of Two , even in multisector CGE modelling, c onfirms that this rule is not an 
appropriate simplifying assumption for a single -product PE model. Regarding PE modelling, the 
United  States  argues that the Rule of One is standard practice and has been used in previous 
arbitrations, including in DS471.129 
3.47.   We consider that the degree to which a standard in the economic literature may serve as 
guidance in a specific arbitration proceeding would depend not only on its alleged wide use but also 
on the evidence it is based on and its applicability to the specifi c situation at issue.  
3.48.   We agree with the United  States  that the use of the Rule of Two  in CGE modelling appears to 
be based on a limited set of older studies that do not provide conclusive evidence that 
micro -elasticities are consistently twice as large as macro -elasticities. At  most, these studies could 
be taken to support the conclusion that micro -elasticities tend to be larger than macro -elasticities. 
In any event, a standard applied in CGE modelling might not necessarily be informative for a PE 
model as used in the form of the Armington model  in this arbitration. CGE models analyse more 
aggregated sectors rather than individual products, which might have an impact on the degree of 
substitutability.  
3.49.   While the United  States  points out that the USITC has dis carded the Rule of Two , the 
United  States  has not substantiated its claim that the Rule of One is standard in the PE  modelling 
literature, nor has the United  States  submitted any evidence which such a standard may be based 
on. The United  States  references a USITC working paper, which provides a technical description of 
the Rule of One and claims that "the standard trade policy model is the constant elasticity of 
substitution (CES)  tariff model"130, without however substantiating the reasons for using such Ru le. 
Further, while the USITC working paper describes the use of the Rule of One, it also contains 
declarations acknowledging the nested approach and the Rule of Two .131 In any case, we do not 
consider that a single study could establish the existence of a w idely applied literature standard.  
3.50.   In light of the above, we consider that the parties' arguments regarding literature standards 
do not provide conclusive support for either a nested approach (with any ratio, including the 
Rule of Two) or a non-nested approach for the purposes of this arbitration.  
3.3.1.3   Econometric evidence  
3.51.   China claims that the Rule of Two  is additionally supported by econometric evidence reported 
in a recent study ( Feenstra et al.132). At the outset, the United  States  claims that none of the 
products at issue in these proceedings were in the sample used in the study and hence the results 
cannot be generalized.133 However, China notes that Feenstra et al.  does estimate a micro -elasticity 
for OCTG and that the broad categories covered by the study include "Metal Products " which includes 
products at issue in this dispute.134 We consider that while the direct product overlap between 
Feenstra et al.  and the products at issue is limit ed to OCTG, the presence of the product categories  
 
128 United  States' written submission, para. 4.  
129 United  States' written submission, para. 110.  
130 Exhibit CHN -60, p. 2. See also United  States' response to Arbitrator question No. 70, fn 7 t o para. 6; 
No. 100, fn 94 to para. 98; and No. 101, fn 96 to para. 100.  
131 For instance, the paper acknowledges that "modellers commonly nest all imported varieties in an 
industry and keep the domestic variety outside the nest", that "many modellers use the rule -of-two", and that 
"for many products, there is greater substitutability between imported varieties than there is between domestic 
and imported varieties".  (Exhibit CHN -60, pp. 2, 8, and 16).  
132 Robert C. Feenstra, Philip Luck, Maurice  Obstfeld, and Katheryn N. Russ, "In Search of the Armington 
Elasticity," The Review of Economics and Statistics , 2018 100:1, 135 -150 (Exhibit CHN -63) (Feenstra et al. ). 
133 United  States' response to Arbitrator question No. 1, paras. 17 -18. 
134 China's respon se to Arbitrator question No. 70, paras. 2 and 4.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 "Primary Metals " and "Metal Products "135 in the study confers relevance to Feenstra et al. given that 
seven out of the ten products at issue fall under these categories.136 
3.52.   China relies on essentially two se ts of the study's results concerning hypothesis tests and 
point estimates. Regarding hypothesis tests, China argues firstly that, for 34.7% of the cases , 
Feenstra et al. is able to reject in a statistically significant way the hypothesis that the 
micro -elasticity is less than or equal to the macro -elasticity . China adds that the failure to reject the 
hypothesis for the other two thirds of the products in no way indicates that the Rule of One is a 
superior choice.137 Secondly, China states that, when testing the hypothesis of the Rule of Two , the 
study is only able to reject the Rule of Two  for between 10% and 20% of the cases. According to 
China, Feenstra et al. suggests that, at a minimum, the micro -elasticity  should be above the 
macro -elasticity  and the vas t majority of contemporary trade policy modellers fail to find anything 
in the study that dissuades them from adopting the Rule of Two .138 
3.53.   The United  States  responds that the fact that Feenstra et al. finds estimated macro -elasticities 
that are statisticall y and significantly lower than estimated micro -elasticities for only "between 
one-quarter and one -third of the [sample] goods" supports its own position.139 The United  States  
suggests that China misinterprets the evidence that the micro -elasticity  may be la rger than the 
macro -elasticity  as definitive evidence that for all products the micro -elasticity  is exactly two times 
larger than the corresponding macro -elasticity .140 The United  States  adds that Feenstra  et al. does 
not provide information on the power of the statistical tests applied. The United  States  refers to 
Bayes' Theorem141, according to which the power of a statistical estimator must be known if one 
wishes to determine the probability that a null h ypothesis (in this case, the Rule of Two) is true when 
the statistical test fails to reject this null hypothesis.142 
3.54.   Regarding point estimates, China notes firstly that Feenstra  et al. obtains higher point 
estimates for elasticities among imports in 74.5% o f the cases analysed. If the elasticities were to 
be the same, China contends, one would see higher point estimates in only 50% of the cases , and 
the probability of finding higher point estimates in 74.5% of cases would essentially be zero in the 
scenario argued by the United  States .143 China adds that in the product category most comparable 
to the products at issue (Metal Products), all goods sampled by Feenstra et al. have higher 
micro - than macro -elasticity  point estimates. China also notes that for the o ne product which is 
subject to both Feenstra et al. and this dispute, OCTG, the estimated micro -elasticity  is between two 
and 3.5 times higher than the macro -elasticity  estimated by USITC.144 
 
135 These two product categories appear to be based on the North American Industry Classification 
System (NAICS) and are defined by the NAICS manual as a "subsector [that] smelt[s] and/or refine[s] ferrous 
and nonferrous metals from ore, pig or scrap, using electrometallurgical and other process metallurgical 
techniques" (Primary Metals) and as a "subsector [that] transform[s] metal into intermediate or end products, 
other than machinery, computers and electro nics, and metal furniture, or treat[s] metals and metal formed 
products fabricated elsewhere" (Metal Products). Executive Office of The President - Office of Management and 
Budget, North American Industry Classification System, 2017. See  
https://www.census .gov/naics/reference_files_tools/2017_NAICS_Manual.pdf . 
136 The exceptions being Kitchen Shelving, Print Graphics, and Solar Panels.  
137 China's written submission, para. 57.  
138 China's written submission, para. 59.  
139 United  States' written submission, para. 10 8. 
140 The United  States explains that the Feenstra et al.  paper conducts two statistical tests for a set of 
products that are not randomly selected and are not representative of the products at issue in these 
proceedings, and links China's assumptions to each test. According to the United  States, the first test is for the 
null hypothesis that the micro -elasticity is less than or equal to the macro -elasticity versus the alternative 
hypothesis that the micro -elasticity is greater than the macro -elasticity (in which the authors reject the null 
hypothesis for two -thirds to three -quarters of the sample products, and do not reject the null hypothesis, but 
cannot conclude the alternative hypothesis is valid, for the remaining products), and the second test is for the 
null hypothesis that the Rule of Two is valid (in whic h the authors find statistical evidence to reject the null 
hypothesis in one -tenth to one -fifth of the products in the sample). (United  States' response to Arbitrator 
question No. 1, paras. 9 -10). 
141 Bayes' Theorem provides the probability of a null hypothe sis given the outcome of a statistical test. 
(United  States' response to Arbitrator question No. 1, fn 34 to para. 12).  
142 United  States' response to Arbitrator question No. 1, para. 12. The United  States also contests an 
example submitted by China in Exhib it CHN -96, claiming that China relies on incorrect data from Feenstra et 
al. (Ibid., paras. 14 -16; Exhibits CHN -96; and USA -102 (BCI))  
143 China's written submission, para. 56. 
144 China's response to Arbitrator question No. 70, paras. 1-6. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 3.55.   The United  States  contests China's interpretation of the point es timates of Feenstra et al. for 
extrapolating beyond what is supported by the data presented in that paper in light of the large 
standard errors surrounding them.145 
3.56.   We note the seemingly contradictory hypothesis tests in which Feenstra et al. first fails to  
reject the Rule of Two  for up to 90% of the products studied but also reports that the micro -elasticity  
is statistically significantly larger than the macro -elasticity  for only about one third of the products 
reviewed. This may be explained by relatively imprecise estimates potentially caused by the small 
number of observations in the study. In light of this, we fail to see these hypothesis tests as 
conclusive evidence for either a nested or a non -nested approach.  
3.57.   Concerning point estimates, we agree with China that Feenstra et al. reporting estimated 
micro -elasticities that are larger than estimated macro -elasticites for 74.5% of the products studied 
supports the use of a nested approach. Even if the point estimates are not precisely estimated and 
the United States  is correct in arguing that China's calculations extrapolate beyond what the study's 
data supports, they appear to be the best available econometric evidence on the record for the 
relative size of micro - and macro -elasticities.  
3.58.   That said, we do no t concur with China that Feenstra et al. provides clear evidence in favour 
of implementing the nested approach using the Rule of Two  in these arbitration proceedings. 
The estimated micro -elasticities in Feenstra et al. are not consistently twice as large a s the estimated 
macro -elasticities. Therefore, we take the econometric evidence as supportive of a nested approach 
but not of the implementation using the Rule of Two . 
3.3.1.4   Descriptive statistics  
3.59.   China argues that product -specific descriptive evidence complemen ts the econometric 
evidence. China claims that the United  States ' suggestion to adjust the Armington model  to reflect 
the increased market share of countries  that are Rising Suppliers146, in fact, lends support to the 
Rule of Two . China argues that, at its core, the United  States  seems to be showing that non -Chinese 
import suppliers gained larger market share than expected after the imposition of the duties.147 For 
China, this pattern of third -country responses can be explained by the fact that micro -elasticities 
are greater than macro -elasticities.148 China argues that, at least regarding  cases where  the 
United  States  feels such an adjustment should be made to the Armington m odel, the United  States  
has provided direct e vidence that the import -import response is larger than the import -domestic 
response.149 To support its argument, China presents a table showing that, for each of the products 
at issue, the drop in China's shares in the US market from the year -prior to the r emedy year (17.77% 
on average) is smaller than the drop in China's share of US imports in the same period (39.86% on 
average). According to China, this is evidence that the CVDs imposed on Chinese products result in 
trade diversion to non -subject imports a t a rate higher than the diversion to US domestic products.150 
3.60.   The United  States  criticizes China for mischaracterizing the United  States ' argument about 
Rising Suppliers. The United  States  acknowledges that its proposed "supply shock" adjustment 
implies th at imports from certain third countries have gained market share at the expense of 
products of the US domestic, Chinese, and other RoW varieties, and that a nested approach 
generates such a market response.151 However, the United  States  argues that the adju stments 
proposed by China and the United  States  are based on different underlying assumptions, which have 
substantial implications for estimating the level of N/I. According to the United  States , China's 
application of the Rule of Two  implies that imports from China are twice as substitutable for imports 
from non -subject countries than they are for the domestic variety.152 On the contrary, the 
United  States  argues that the underlying assumption of its proposed supply -shock adjustment is 
that producers in cer tain third countries have increased their ability to supply during the period 
 
145 United  States' re sponse to Arbitrator question No. 1, para. 19.  
146 See section 3.3.4 below.  
147 China's written submission, para. 53. 
148 China's response to Arbitrator question No. 1, para. 2. 
149 China's written submission, para. 61. See also China's  response to Arbitrator ques tion No. 1, para. 2.  
150 China's response to Arbitrator question No. 1, paras. 3 and 4.  
151 United  States' response to Arbitrator question No. 1, para. 6.  
152 United  States' response to Arbitrator question No. 1, para. 7. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 31 - 
 
 between the imposition of the CVDs and the expiration of the RPT, independently of any duties on 
Chinese import s.153 
3.61.   We agree with China that the trade pattern observed after the imposition of the CVDs in which 
third country suppliers gained a larger market share relative to domestic suppliers could be 
consistent with a nested approach. The  United  States  argues that such a trade pattern is also 
consistent with its proposed adjustment related to Rising Suppliers. However, as analysed later154, 
we do not consider that the United  States  has substantiated this adjustment. We also note that the 
intensity of the  observed trade diversion towards other importers varies significantly by product 
rather than being consistently around twice as large as the trade diversion towards domestic 
varieties. Our conclusion  is, thus, that this descriptive evidence can be support ive of a nested 
approach with micro -elasticities larger than macro -elasticities but it does not support China's 
implementation of that approach with the Rule of Two . 
3.3.1.5   Conclusion  
3.62.   As mentioned155, China's proposed adjustment raises two issues: (i)  whether to a pply a 
nested approach; and, if so, (ii) whether to use the Rule of Two  for the specific ratio between 
macro - and micro -elasticities for all of the products at issue. In light of the aforementioned 
considerations, and having reviewed the totality of the ar guments and evidence put forward by the 
parties, we have arrived at the following conclusions.  
3.63.   As regards the nested approach, we consider that the United  States  has failed to prove that 
micro -and macro -elasticities are equal for the products at issue (Rul e of One). Logically, therefore, 
the United  States  has not proven that China's suggestion for using a nested approach per se  is 
inadequate. Indeed, we consider that the evidence provided by China has successfully demonstrated 
the appropriateness of the nes ted approach.  
3.64.   As regards the specific ratio for such a nested approach, although the United  States  has not 
made a prima facie  case in favour of its alternative proposal of a Rule of One, we consider that it 
has called into question the Rule of Two  advanced  by China, and that the evidence submitted by 
China is not sufficient to justify the Rule of Two . We recall in this regard that, despite the allocation 
of the general burden of proof, "it  is for each party to bring forward the elements to sustain the 
factual assertions it makes".156 While the United  States  "is required to submit evidence showing that 
[China's] proposal is not equivalent" within the meaning of Article 22.4 of the DSU, China is also 
"required to come forward with evidence explaining how it arr ived at its proposal and showing why 
its proposal is equivalent to the trade impairment it has suffered".157 
3.65.   We recall China's argument  that, if the parties' arguments are "of equal merit such that the 
evidence was in  'equipoise'"158, its position should nec essarily prevail. This concept was explained 
by a previous arbitrator as follows:  
Following well -established WTO jurisprudence, … it is for the [original respondent] 
to submit arguments and evidence sufficient to establish a prima facie  case or 
presumption that the level of suspension proposed by the [original complainant] is not 
equivalent to the level of nullification and impairment … . Once the [original respondent] 
has done so, however, it is for the [original complainant] to submit arguments and 
evidence sufficient to rebut that presumption. Should all arguments and evidence 
 
153 United  States ' response to Arbitrator question No. 1, para. 8.  
154 See section 3.3.4 below.  
155 See paragraph 3.32 above.  
156 Decision  by the Arbitrator, US – Gambling (Article  22.6 – US), para.  2.24 (referring to Decisions by 
the Arbitrators, EC – Hormones (Canada) (Article  22.6 – EC), para. 11; EC – Hormones (US) (Article  22.6 – EC), 
para. 11). 
157 Decisions by the Arbitrators, EC – Hormones (Canada) (Article 22.6 – EC), para. 11; EC – Hormones 
(US) (Article 22.6 – EC), para. 11. (emphasis omitted) See also Decision s by the Arbitrator s, Brazil – Aircraft 
(Article  22.6 – Brazil) , para.  2.8; EC – Bananas III (Ecuador) (Article 22.6 – EC), para. 38; and US – Large 
Civil Aircraft (2nd complaint) (Article 22.6 – US), para . 4.4.  
158 China's opening statement at the meeting of the Arbitrator, para. 16. (emphasis omitted)  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 remain in equipoise, the [original respondent] , as the party bearing the original burden 
of proof, would lose.159 
3.66.   We do not consider that the parties' evidence and arguments are "of equal merit" or 
"in equipoise"  in this context . While the United  States  has failed to disprove the nested approach 
per se, its claim against a nested approach with the s pecific ratio of two has been successful. It has 
thus established "a prima facie  case or a presumption" that China's suggestion for a Rule of Two  
would result in a level of suspension not equivalent to the level of N/I. As noted, while showing that 
macro -elasticities are higher than micro -elasticities, China's evidence is insufficient to justify the 
Rule of Two , and hence China has not rebutted the presumption established by the United  States . 
3.67.   In short, the parties' arguments and evidence do not mutually un dermine each other's 
positions. Rather, they provide sufficient basis for accepting a nested approach, but not with a ratio 
of two as suggested by China.  
3.68.   Given its limitations, however, the evidence before us is insufficient for determining a specific 
figure for a nested approach in the range argued by the parties, i.e. between 1 and 2. Nonetheless, 
in light of our mandate as an Article  22.6 arbitrator, we cannot end our analysis here. We are called 
upon to go further and estimate the level of suspension we  consider to be equivalent to the level of 
N/I suffered by China. As noted by a previous arbitrator:  
There is  … a difference between our task here and the task given to a panel. In the 
event we decide that the [original complainant's] proposal is not WTO c onsistent  
(i.e. the suggested amount is too high ), we should not end our examination the way 
panels do, namely by requesting the DSB to recommend that the measure be brought 
into conformity with WTO obligations. … [W] e would be called upon to go further. I n 
pursuit of the basic DSU objectives of prompt and positive settlement of disputes, we 
would have to estimate the level of suspension we consider to be equivalent to the 
impairment suffered. This is the essential task and responsibility conferred on the 
arbitrators in order to settle the dispute.160 
3.69.   As the parties' evidence points to an overall ratio of micro - to macro -elasticities of above one, 
but not necessarily as high as two, we need to choose an appropriate ratio between these values. 
Given our task and the limitations of the evidence before us, we felt compelled to review other 
available approaches in the economic  literature beyond those put forward by the parties, and note 
that another major CGE model, Mirage, by the Centre d'Etudes Prospectives et d'Informations161, 
uses the square root of two, or approximately 1.4 1.162 As this ratio is in line with our reading of the 
parties' evidence that the overall ratio of micro - to macro -elasticities for the products at issue would 
be above one but below two, we adopt this number and implement the nested approach accordingly, 
using  a ratio of  the square root of two  (i.e. approximately 1.41) . 
3.3.2   Net-of-duty adjustment  
3.70.   As explained163, once both steps of the two -step Armington m odel have been completed, a 
subtraction needs to be performed. For each CVD order at issue, the figure for the e stimated 
remedy -year sales of imports from China obtained under step 1 of the Armington model with 
WTO-inconsistent CVD rates needs to be subtracted from the figure for the estimated counterfactual 
remedy -year sales of imports from China obtained under ste p 2. 
 
159 Decision s by the Arbitrator s, EC – Hormones (Canada) (Article 22.6 – EC), para. 9 ; EC – Hormones 
(US) (Article 22.6 – EC), para. 9. (emphasis omitted) See also Decision by the Arbitrator, Brazil – Aircraft 
(Article 22.6 – Brazil) , para.  2.8. 
160 Decision s by the Arbitrator s, EC – Hormones (Canada) (Article 22.6 – EC), para. 12; EC – Hormones 
(US) (Article 22.6 – EC), para. 12. (emphasis omitted; fns omitted)  
161 The Mirage consortium tasked with maintaining the model consists of the European Commission, the 
International Food Policy Research Institute (IFPRI), the Institut National de la Recherche Agronomique , the 
Internationa l Trade Centre, Trinity College, the United Nations Economic Commission for Africa, Università del 
Molise, and the World Trade Organization. See http://www.mirage -model.eu/miragewiki/index.php?title=  
MIRAGE_Consortium . 
162 See Decreux, Y. and H. Valin (2007), MIRAGE, Updated Version of the Model for Trade Policy Analysis 
with a Focus on Agriculture and Dynamics, CEPII Working Paper no. 2007 -15, October  2007, CEPII.  
163 See para. 3.27 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 33 - 
 
 3.71.   China's proposed net -of-duty adjustment would entail excluding duty payments from both 
sides of this subtraction, and hence ultimately from the N/I calculation.164 In essence, China argues 
that the export values used for the N/I calculation should not include any duty revenue being 
collected as such duties do not accrue to Chinese exporters.165 
3.72.   Initially, the United  States  disagreed with this adjustment suggested by China, arguing that 
it is a "baseless" departure from the arbitrator's approach in US – Anti-Dumping Methodologies 
(China) (Article  22.6 – US), which would "distort the results of the estimation of the level of [N/I]".166 
However, in response to a question from the Arbitrator, the United  States  ultimately describes 
China's suggested adjustment for a net -of-duty calculation as "reasonable … from the perspective 
of trade opportunities for China", and agrees to revise its own computer code to incorporate China's 
net-of-duty adjustment.167 
3.73.    In light of the parties' agreement, we shall apply China's net -of-duty adjustment when 
calculating the level of N/I for the purpose of these proceedings. In doing so, we need not address 
the approach of prior Article  22.6 arbitrations .168 
3.3.3   The effects of dum ping on China's market shares  
3.74.   According to the United  States , China's market share in the year prior to the imposition of the 
CVDs was distorted by dumping practices.169 As a consequence, the first methodological adjustment 
proposed by the United  States  to the two -step Armington m odel would be to take into account the 
effect of such dumping on China's market shares by simulating the effect of the AD duties adopted 
by the United  States  in response, in step one of the two -step Armington model .170 In practice, t he 
United  States  suggests applying a duty rate on imports from China that is equal to the 
WTO-inconsistent CVD rate plus an AD duty rate in step one of the two -step Armington model, 
before moving in step two to a rate equal to the WTO -consistent CVD rate p lus the same unchanged 
AD duty rate, rather than simply modelling the effect of a move from a WTO -inconsistent to a 
WTO-consistent CVD rate.  
3.75.   The United  States  argues that this adjustment would ensure that the level of N/I is calculated 
using a model that m ore accurately represents the US market at the expiration of the RPT, based 
on a counterfactual that better captures the changes in duty rates applied to imports from China in 
that period.171 If dumping is not accounted for, explains the United  States , the model would generate 
2017 counterfactual market shares that would overstate China's underlying competitiveness and 
inflate the level of N/I.172 According to the United  States , not including other factors in the model 
 
164 China's methodolo gy paper, paras. 9 an d 76-77. 
165 China's methodology paper, paras. 7 and 33.  
166 United  States' written submission, para. 106.  
167 United  States' response to Arbitrator question No. 9, para. 74. See also Exhibits USA -101; USA -105; 
and USA -139. 
168 The two prior arbitrations relying o n the two -step Armington model applied different approaches to 
calculate the level of N/I. A net -of-duty calculation was used in US – Washing Machines (Article  22.6 – US), 
whereas the arbitrator in US – Anti-Dumping Methodologies (China) (Article  22.6 – US) applied a gross -of-duty 
calculation (see Decisions by the Arbitrators, US – Washing Machines (Article 22.6 – US), para. 5.3; 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US), section 7.2). China argues that the arbitrator in 
US – Washing Machi nes (Article 22.6 – US) was right to apply the net -of-duty adjustment, and that the 
computer code used by the arbitrator in US – Anti-Dumping Methodologies (China) (Article  22.6 – US) 
contained a "critical programming error" by not excluding the relevant d uties (see China's response to 
Arbitrator  question No. 9, para. 16, referring to China's written submission, paras. 65 -75; China's methodology 
paper, paras. 73 -81). 
169 United  States' written submission, paras. 7 and 72.  
170 United  States' written submission, paras. 7 and 72. The United  States includes up to three distinct 
Chinese varieties in its proposed implementation of the two -step Armington model, which depend on the 
product at issue and the different AD duties applied to Chinese imports (see Exhibits USA -81 and USA -82). 
According to China, the approach of adopting three distinct Chinese varieties reflects the model used in 
US – Anti-Dumping Methodologies (China) (Article  22.6 – US) that was formulated to accommodate the AD 
duties at issue in that dispute, which differed depending on the classification of the Chinese firms. In the 
present proceedings, China argues, the CVD duties apply consistently across all the firms, and the paral lel AD 
duties cannot be properly incorporated into the model because the added complexity of three distinct varieties 
is unnecessary (China's response to Arbitrator question No. 3, para. 11).  
171 United  States' response to Arbitrator question No. 3, paras. 2 5 and 26.  
172 United  States' written submission, paras.  7, 68, 72, 123, and 136; opening statement at the meeting 
of the Arbitrator, para.  23. See also Exhibits USA -74 (BCI) and USA -77. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 34 - 
 
 that could affect China's 2017 market sh are would implicitly assume that such factors did not affect 
the United  States ' market.173 The United  States  claims that if the AD duties are not explicitly included 
in step one, the Armington model would be essentially asking how the market would be differ ent if 
CVD rates were WTO -consistent at the expiration of the RPT and if AD duties had never been 
imposed.174 
3.76.   The United  States  argues that imports from China in 2017 were affected by both CVD and AD 
duties, imposed at or around the same time for each of th e ten products at issue.175 
The United  States  explains that its rationale for this proposed adjustment extends to any changes 
that occurred between the imposition of the CVD measure and the remedy year, as long as the 
change had an impact on market shares o ver the relevant time period, and there is evidence 
supporting that relationship.176 According to the United  States , if, hypothetically, the AD measures 
had been applied several years prior to the imposition of the CVD measures, it would not be 
appropriate to incorporate them into step one of the two -step Armington model .177 In such a case, 
explains the United  States , the AD measures would already be reflected in China's year -prior market 
share, and, accordingly, the impact of these measures on China's relative competitiveness would 
already be represented in the 2017 counterfactual market shares.178 In contrast, the United  States  
argues , AD measures imposed in the same year as the CVD measures or any year between that 
year and 2017 should be incorporated into the model to generate an adequate representation of the 
counterfactual 2017 market.179 
3.77.   China contests the validity of this proposed adjustment and requests the Arbitrator to reject 
it. According to China, this proposal is an attempt to undermine the integrity of the two -step 
Armington model  by reverting it, in practice, to a one -step approach.180 China claims that this 
adjustment would artificially reduce China's market share in step two of the methodology, ignoring 
year-prior market shares and understating the level of N/I181 as a result of attributing the effect of 
the CVD duties to the AD duties.182 The purpose of the two -step Armington  model, argues China, is 
to identify the N/I caused by the measures that are the subject of the N/I inquiry, which means 
taking those measures and only those measures into account in the model.183 China notes that this 
methodology was developed specifically  to address the problem of the depressing effect of the 
United  States ' WTO -inconsistent duties over time.184 China is of the view that the timing or duration 
of the AD duties is irrelevant. According to China, whether AD duties were imposed in the year -prior, 
the remedy year, or the period in between, the effect of the WTO -inconsistent CVD duties would be 
distorted if an adjustment for the AD duties were to be included in the model.185 
3.78.   In response, the United  States  challenges the idea that the two -step Armin gton model could 
isolate the effect of a particular policy, such as CVDs, by excluding all other relevant policies, such 
as AD duties. If that were true, argues the United  States , the level of N/I estimates obtained in a 
model that simulates changes in bot h CVD and AD duties together should be equal to the sum of 
 
173 United  States' closing statement  at the meeting of the Arbitrator, par a. 10.  
174 United  States' opening statement at the meeting of the Arbitrator, paras. 13 and 21. 
(emphasis  original)  
175 United  States' response to Arbitrator question No. 2, para. 22.  
176 United  States' closing statement at the meeting of the Arbitrator, para. 1 0; response to Arbitrator 
question No. 102, para. 106.  
177 United  States' written submission, paras. 68 and 72; response to Arbitrator question No. 72, 
para. 14. 
178 United  States' response to Arbitrator question No. 72, para. 16.  
179 United  States' response to Arbitrator question No. 72, para. 17.  
180 China's written submission, paras. 3, 4, 29, 34, 36, and 38; response to Arbitrator question No. 2, 
para. 9, and No. 30, para. 3; closing statement at the meeting of the Arbitrator, para. 9.  
181 China's response to Arb itrator question No. 30, para. 3; opening statement at the meeting of the 
Arbitrator,  para. 17.  
182 To illustrate this point, China suggests imagining a case where the United  States has imposed both 
AD duties at a rate of 100% and WTO -inconsistent CVD duties  at a rate of 50% on a particular product. 
Supposing that both duties are market preclusive, China argues, if an arbitrator were to incorporate the AD 
duties into an N/I assessment of the CVD duties, the resulting N/I would be zero, because the parallel AD  
duties would be market -preclusive on their own (China's opening statement at the meeting of the Arbitrator, 
paras. 20 and 26 -27). 
183 China's response to Arbitrator question No. 104, para. 72.  
184 China's closing statement at the meeting of the Arbitrator, pa ra. 9.  
185 China's response to Arbitrator question No. 72, para. 16.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 35 - 
 
 the level of N/I estimates obtained in models that simulate changes in each policy individually.186 
However, the United  States  points out, the sum of the N/I estimates from individually modifying 
CVD and AD duties for every single product exceeds the estimate obtained in a model that simulates 
concurrent changes in both CVD and AD duties.187 
3.79.   China considers that the United  States  is mistaken in this hypothetical calculation. According 
to China, if the  sum of the AD and CVD N/I calculated separately equals the level of N/I when the 
effects of the two duties are modelled together, it "would show that the full measure of [N/I] was 
not being captured by the model but rather that some portion was being misa ttributed to the parallel 
AD duties".188 China argues that trade distortions have an inherently non -linear impact on the value 
of trade. On account of this non -linearity, modelling the effect of a market -preclusive AD duty before 
modelling the effect of a W TO-inconsistent CVD duty would lead to a finding of zero N/I resulting 
from the latter duty. According to China, the United  States  fails to take into account the non -linear 
effects of duties (or other measures) that affect trade. Ignoring the non -linear na ture of the 
interaction between trade distortions, in China's view, would be incorrect from an economics 
perspective.189 
3.80.   China further contends that there is no principled basis for this adjustment.190 According to 
China, incorporating the AD duties, as sugg ested by the United  States , would open a "Pandora's Box 
of complications" and encourage the United  States  to seek endless "adjustments" for measures that 
happen to overlap temporally with the measures subject of the N/I inquiry in order to collapse the 
two-step Armington model  into a one -step approach.191 China extends this point to future 
arbitrations, arguing that adopting this adjustment "would open the door to a 'tit -for-tat' series of 
proposed adjustments by complainants and respondents that would so co mplicate the application of 
the two -step model as to render impossible the Arbitrator's task of accurately determining the level 
of nullification and impairment".192 In China's view, there would essentially be no limit to the number 
and types of "adjustment s" that could be made to the original complainant's market shares in order 
to reduce those shares to the respondent's desired levels.193 China considers that the evidentiary 
standard relied upon by the United  States  imposes no meaningful restraint on the types of non -tariff 
actions that could be incorporated into the model because it effectively reserves unlimited discretion 
to the United  States  to adjust market shares as it sees fit.194 
3.81.   China adds that, if the United  States  was permitted to "adjust" market shares downward due 
to factors that allegedly inflated China's market share in the year -prior ( and, thus, reducing the level 
of N/I), Ch ina would need to be permitted to "adjust" its market share upward in the remedy year 
to account for factors that would have increased its market share in that year, thus also increasing 
the level of N/I.195 China claims that it has not done so because it u nderstands that this would fatally 
compromise the integrity of the two -step Armington m odel.196 Asked for measures that could overlap 
temporally with the CVDs at issue, China indicates that it "is not aware of any trade remedy 
measures that applied to the p roducts at issue in [the year prior to the imposition of the CVD 
measures]".197 
3.82.   The United  States  notes that China has not brought forward evidence and arguments for any 
other factors that may have increased China's relative competitiveness between the year -prior and 
2017.198 The United  States  claims that it considered those factors itself but did not find evidence 
 
186 United  States' response to Arbitrator question No. 4, para. 39. See also ibid., para. 40, and Table  5. 
187 United  States' response to Arbitrator question No. 4, para. 39. See also ibid., para. 40, and Table  5. 
188 China's opening statement at the meeting of t he Arbitrator, para. 28. (emphasis original)  
189 China's response to Arbitrator question No. 104, para. 64.  
190 China's response to Arbitrator question No. 72, para. 20.  
191 China's written submission, para. 36; response to Arbitrator question No. 30, para. 2, and No. 105, 
para. 74. 
192 China's opening statement at the meeting of the Arbitrator, para. 5. See also China's closing 
statement at the meeting of the Arbitrator, para. 8.  
193 China's written submission, para. 29.  
194 China's comments on the United  States' resp onse to Arbitrator question No. 71, para. 7.  
195 China's response to Arbitrator question No. 105, para. 74.  
196 China's comments on the United  States' response to Arbitrator question No. 102, para. 67.  
197 China's response to Arbitrator question No. 2, para. 8.  
198 United  States' comments on China's response to Arbitrator question No. 105, para 44.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 36 - 
 
 demonstrating that any other contemporaneous duties or any non -tariff actions in the United  States  
meaningfully affected China's relative competit iveness.199 
3.83.   China also argues that this proposed adjustment is based on a misunderstanding of the 
purpose of Article 22.6 of the DSU.200 According to China, Article 22.6 of the DSU  is concerned with 
"the measure found to be inconsistent with a covered agreement". China notes the United  States ' 
acknowledgement that "Article  22.2 of the DSU, which is explicitly referenced in the first sentence 
of Article 22.6, limits the role of an ar bitrator to assessing the effects of the WTO -inconsistent U.S. 
CVD measures in accordance with the DSB's recommendations."201 In China's view, accepting the 
United  States ' proposed adjustment would threaten the viability of the Article 22.6 proceeding as a 
mechanism for inducing compliance with the recommendations and rulings of the DSB.202 In addition, 
China argues that incorporating the parallel AD duties would require the Arbitrator to evaluate the 
trade effects and the WTO -consistency or inconsistency of measures that were not subject to the 
recommendations and rulings of the DSB in this dispute, noting that seven of the ten products at 
issue underlying these proceedings were also at issue in US – Anti-Dumping Methodologies (China) 
(Article 22.6 – US) and involved the USDOC's application of WTO -inconsistent anti -dumping 
methodologies.203 Thus, China argues, incorporating the WTO -inconsistent AD duties analysed in 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US) would imply rewarding the 
United  States it for its WTO -inconsistent actions.204 China argues that even if the AD duties were not 
WTO-inconsistent, it would be incorrect to incorporate them into the model.205 Trade actions other 
than those at issue, according to China, should not be considered,  regardless of their 
contemporaneity or WTO -consistency or inconsistency.206 
3.84.   The United  States  challenges China's view that including the AD duties in the Armington model 
requires the Arbitrator to assess their WTO -consistency or inconsistency, as they are incorporated 
into the model only to correctly represent the actual extent of duties on imports from China in the 
relevant period.207 In other words, the United  States  argues that, whether WTO -consistent or 
WTO-inconsistent, the AD duties did exist, and they  can and should be taken into account in the 
analysis.208 
3.85.   China notes that parallel duties were present in US – Washing Machines (Article 22.6 – US) 
and US – Anti-Dumping Methodologies (China) (Article 22.6 – US), but those arbitrators computed 
the level of  N/I by isolating the impact of the specific measures that were at issue. According to 
China, a major reason for the implementation of the two -step Armington model  in those arbitrations 
was to separately identify and evaluate the effect of the specific measures under scrutiny.209 The 
United  States  explains, however, that none of the parties in those proceedings had proposed a 
two-step Armington model  to begin with, a nd thus no party proposed any adjustments to control for 
other relevant factors in a two -step Armington model .210 
3.86.   We note that there seems to be no doubt that the AD duties were made effective either 
contemporaneously or with a very limited delay relative t o the introduction or amendment of the 
final CVDs at issue. China does not dispute the existence of these parallel duties or their timing. 
According to the evidence provided by the parties, the relevant dates of imposition of the CVDs and 
the AD duties wer e the following:  
 
199 United  States' response to Arbitrator question No. 71, para. 13; comments on China's response to 
Arbitrator question No. 105, para 46.  
200 China's response to Arbitrator  question No. 104, para. 63. 
201 China's written submission, para. 30 (quoting United  States' written submission, para. 35) 
(original  emphasis by the United States omitted).  
202 China's response to Arbitrator question No. 72, para. 20.  
203 China's written submission, paras. 28 and 31.  
204 China's written submission, para. 33.  
205 China's response to Arbitrator question No. 30, paras. 1 and 4.  
206 China's opening statement at the meeting of the Arbitrator, paras. 18 -19. 
207 United  States' response to Arbitrator question No. 4, para. 38, and No. 103, para. 120.  
208 United  States' response to Arbitrator question No. 4, para. 39. See also ibid., para. 40, and Table  5. 
209 China's written submission , paras.  4 and 37 (referring to Decisions by the Arbitrators, 
US – Washing  Machines (Article 22.6 – US), paras. 3.120 and 3.121; US – Anti-Dumping Methodologies 
(China) (Article  22.6 – US), paras. 7.1 -7.6). 
210 Unites States' comments on China's response to Arbitrator question No. 72, para. 22.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 37 - 
 
 Table 3 : Dates  of determination of the CVD and AD orders  
Product  Final CVD determination date  
(amendment date)211 AD order  
effective date212 
Pressure Pipe  28 Jan 2009  17 Mar 2009  
Line Pipe  24 Nov 2008  
(23 Jan 2009)  13 May 2009  
Kitchen Shelving  27 Jul 2009  14 Sep 2009  
OCTG  7 Dec 2009  
(20 Jan 2010)  21 May 2010  
Wire Strand  21 May 2010  
(7 Jul 2010)  29 Jun 2010  
Seamless Pipe  21 Sep 2010  
(10 Nov 2010)  10 Nov 2010  
Print Graphics  27 Sep 2010  
(17 Nov 2010)  17 Nov 2010  
Aluminum Extrusions  4 Apr 2011  26 May 2011  
Steel Cylinders  7 May 2012  21 Jun 2012  
Solar Panels  17 Oct 2012  07 Dec 2012  
 
3.87.   However, the fact that these AD duties existed in parallel with the CVDs does not in itself 
justify their incorporation. As  explained213, it is for the original respondent  in these proceedings , the 
United  States , to prove that China's proposed level of suspension of concessions is not "equivalent" 
to the level of N/I within the meaning of Article 22.4 of the DS U. To discharge that burden, as prior 
arbitrators have noted, merely putting forward a different methodology is not sufficient in the 
absence of a demonstration that China's methodology is incorrect. Accordingly, the fact that the 
United  States  has success fully demonstrated the existence of these AD duties, which is uncontested 
by China, does not discharge the United  States ' burden of proof. As a previous arbitrator held:  
It may be possible to present an alternative methodology as a way of engaging with, 
and contributing to disproving, a proposed methodology. However, merely putting 
forward … a different methodology as 'appropriate' or as one that 'more accurately 
estimates ' the level of nullification or impairment is not sufficient. In the absence of a 
demonstration that the proposing party's methodology is incorrect, the mere submission 
of an alternative methodology would not meet the objecting party's burden of proof. 
This is because the alternative methodology does not, in itself, assist the Arbitrator in 
determining whether the result from the first methodology is (or is not) equivalent to 
the level of nullification or impairment. In such a situation, it would follow fro m the rules 
on burden of proof that the objecting party has not proved that the act at issue is 
WTO-inconsistent .214 
3.88.   It is a priori compelling that a duty increase, such as the imposition of the AD duties advanced 
by the United  States  in the context of this  proposed adjustment, would have an impact on Chinese 
imports and their share in the US market. At the same time, as the United  States  explains, past 
arbitrators have consistently held that "[ t]he mandate of the arbitrators is to determine whether the 
level of suspension of concessions or other obligations sought by the complaining party is equivalent 
to the level of nullification or impairment sustained by the complaining party as a result of the failure 
of the responding party to bring its WTO -inconsisten t measures into compliance ."215 In the words of 
 
211 Exhibit CHN -99. 
212 United  States' response to Arbitrator question No. 2, paras. 23 and Table 2 thereto, and 24 and 
Table 3 thereto.  
213 See para.  3.2 above.  
214 Decisions by the Arbitrator, US – COOL  (Article 22.6 – US), para. 4.12. (emphasis added; 
fns omitted) See also Decision by the Arbitrator, US – Large Civil Aircraft (2nd complaint) (Article 22.6 – US), 
para. 4.3.  
215 United  States' written submission para. 36 (quoting Decision by the Arbitrator, US – 1916 Act (EC) 
(Article 22.6 – US), para. 4.5). (emphasis added)  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 38 - 
 
 the United  States , "Article 22.2 of the DSU, which is explicitly referenced in the first sentence of 
Article 22.6, limits the role of an arbitrator to assessing the effects of the WTO -inconsistent U .S. 
CVD mea sures in accordance with the DSB's recommendations ."216 
3.89.   In our view, a s we need to focus on the N/I resulting from the CVDs at issue, the United  States  
needs to show more than the mere existence of the AD duties or that these may have an impact on 
Chinese i mports. The United  States  must demonstrate whether and, if so, in what manner or degree 
any trade impact of these AD duties would alter the level of N/I resulting from the CVDs. Indeed, 
the parties advance different propositions regarding how such measures  may interact with each 
other for calculating the level of N/I.  
3.90.   The United  States  implements its proposed adjustment based on the assumption that CVDs 
and AD duties are one and the same measure and can be merged into a single duty rate. 
The United  States  calculates the level of N/I by using rates beyond the WTO -consistent 
and -inconsistent CVD rates, by adding the same unchanged AD duty rates to both sides of the 
subtraction.217 China  contests the assumptions underlying this calculation method, arguing that the 
implementation applied by the United  States  may lead to an overlapping effect of CVDs and 
AD duties and ignore the possibility of a non -linear response to these two types of separately 
imposed duties, which risks distorting the impact of the CVDs at is sue on the level of N/I.218 
3.91.   To sustain its proposed adjustment, the United  States  merely provides hypothetical N/I 
calculations that illustrate that the level of N/I would be different when calculations are performed 
for each type of duty in isolation or wh en both types of duties are included in a single N/I 
calculation.219 However, we note that the result of the calibration of an economic model is a mere 
quantification of the underlying economic theory and assumptions chosen. The calibration serves to 
implem ent such theory and assumptions but does not amount to justifying these.  
3.92.   By submitting only such modelling outcomes, without any further evidence, the United  States  
does not substantiate its assumption, and fails to explain whether and, if so, in what mann er or 
degree any trade impact of these AD duties would alter the level of N/I resulting from the CVDs at 
issue. Accordingly, the United  States  has not demonstrated that China's estimated level of N/I is 
inconsistent with Article 22.4 of the DSU, and we sha ll not adopt this methodological adjustment 
proposed by the United  States . 
3.93.   We are reaching this conclusion exclusively on the basis of the above evidentiary grounds and 
based on the evidence before us in these proceedings. We  need not and hence do not make any 
principled statement as to the appropriateness of an Article  22.6 arbi tration taking into account trade 
measures, such as AD duties, different from those at issue in a specific dispute. We  also do not 
address whether, as a matter of principle, it may or may not be appropriate to consider, in the 
specific context of applying the two -step Armington model , measures other than those at issue in a 
specific dispute, and whether the relative timing of such other measures or their alleged 
WTO-consistency or inconsistency should be of any relevance in that regard.  
3.3.4   Factors other than t rade remedies (Rising Suppliers)  
3.94.   The second adjustment to the two -step Armington model  requested by the United  States  
consists of accounting for factors other than trade remedy measures. According to the United  States , 
these other factors entail that new m arket participants and increased capacity of other third 
countries have influenced the evolution of the market between the imposition of the CVD measures 
and the remedy year (2017). The new market participants and third countries whose market shares 
 
216 United  States' written submission, para. 35. (emphasis added) See also China's written submission, 
para. 30 (referring to the United  States' written submission, para. 35).  
217 United  States' written submission, paras. 95, 98, 99, and 102; response to Arbitr ator question No. 4, 
paras. 31 -40; comments on China's response to Arbitrator question No. 104, paras. 16 and 19 -22; and 
Exhibits USA -50 (BCI), USA -51 (BCI), and USA -157 (BCI).  
218 China's response to Arbitrator question No. 104, paras. 63-73; comments on th e United  States' 
response to Arbitrator question No. 71, paras. 5 -9. 
219 United  States' response to Arbitrator question No. 4, paras. 39 -40, and Table 5.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 39 - 
 
 have a llegedly grown disproportionately fast as a result of "industry  investments" or certain 
"government policies"220 are referred to by the United  States  as Rising  Suppliers.  
3.95.   The United  States  suggests implementing the Rising Supplier s adjustment by imposing a 
negative duty rate on imports from the affected countries. The United  States  would follow this 
approach since the structure of the Armington model  does not allow for modelling industry 
investments or government policies explicitly. The size of the negative  duty under this adjustment 
would be intended to generate a market share for the Rising Suppliers as it was observed in 2017.221 
As a result, the adjustment would yield a larger market share for these Rising  Suppliers and a smaller 
market share for all othe r suppliers, crucially China.  
3.96.   The United  States  requests these supply -shock adjustments with respect to five products.222 
For the remaining products at issue, the United  States  explains that it has either not found sufficient 
documentation of investments or  policy changes to identify a set of Rising  Suppliers, or it has not 
been able to separate data on the relevant  imports from the RoW aggregate.223 
3.97.   According to the United  States , this adjustment to the two -step Armington model  would be 
necessary to capture China's true relative competitiveness in the 2017 remedy year.224 Without this 
adjustment , argues the United  States , the two -step Armington model  as implemented by China and 
applied in US – Anti-Dumping Methodologies (China) ( Article  22.6 – US) would implicitly assume 
that the CVDs imposed on imports from China were the only factor contributing to the changes in 
China's market share between the year -prior and 2017.225 According to the United  States , the simple 
fact that action w as taken against countervailable subsidies may have spurred changes in China and 
elsewhere that altered the relative competitiveness of different import varieties. This could have 
contributed to the decline in Chinese imports beyond what is attributable to  the price difference 
resulting from the CVDs at issue.226 
3.98.   China agrees that import varieties' market share in the remedy  year is the outcome of a 
myriad of factors227, but rejects the United  States ' proposed adjustment. China  considers this to be 
an arbitrary attempt by the United  States  to revert to a one -step Armington model  with the sole 
intention of reducing China's remedy -year benchmark market share.228 China argues that the 
two-step Armington model  was precisely designed to address the issue of the distortion of trade 
levels in the remedy year .229 In China's view, adjusting for other factors would open a "pandora's 
box" and encourage original respondents to seek endless "adjustments" to reduce the or iginal 
complainant's market share, and thus the level of N/I,  and ultimately collapse the two -step approach 
into a one -step approach.230 China adds that no supporting evidence has been provided for the 
United  States ' assertions. China also notes that, crucially, no evidence is given that the fast growth 
in the market share of non -Chinese import varieties was not a result of the trade -diverting effect of 
the WTO -inconsistent CVDs  imposed on China.231 According to China, the implication that there were 
 
220 United  States' written submission, paras. 73 and 76. For example, according to the United  States, 
investments by producers in Korea, Malaysia, the Netherlands, Thailand, and Viet Nam dramatically increased 
their overall competitiveness in the solar panels market between 2012 and 2016. (United  States' written 
submission, para. 77 and fn 68 thereto).  
221 Exhib its USA -82; USA -83. 
222 The United  States originally presented the adjustment for three products only (OCTG, 
Aluminum  Extrusions, and Solar Panels), but it extended it to two additional products (Pressure Pipe and 
Line Pipe) in response to a question from th e Arbitrator. (United  States' written submission, paras. 77, 83 -85, 
and 138; United  States' response to Arbitrator question No. 5, paras. 47 -53). 
223 The United  States provides explanations regarding Kitchen Shelving, Wire Strand, Seamless Pipe, 
and Print  Graphics. (United  States' response to Arbitrator question No. 5, paras. 54 -58). 
224 United  States' written submission, paras. 7, 69, 117, and 123.  
225 United  States' written submission, para. 73; United  States' response to Arbitrator question No. 5, 
para. 43.  
226 United  States' written submission, para. 74.  
227 China's comments on the United  States' response to Arbitrator question No. 103, para. 72.  
228 China's written submission, paras. 3, 34, 40, 43, 62, 79, and 88.  
229 China's written submission, paras. 5 and 35; open ing statement at the meeting of the Arbitrator, 
para. 35.  
230 China's written submission, paras. 29 and 36; opening statement at the meeting of the Arbitrator, 
para. 34.  
231 China's  written submission, para. 47.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 40 - 
 
 no inves tments or relevant government policies in any countries other than those referenced as 
Rising Suppliers would confirm that this approach is completely arbitrary.232 
3.99.   We note that, in introducing its evidence, the United  States  explains that it is not possibl e to 
directly observe supply shocks for every product for which the relative competitiveness of third 
country suppliers has evolved between the imposition of the relevant CVDs and the remedy year. 
In other words, the United  States  does not submit direct ev idence of the alleged industry 
investments or government policies that would form the basis of its Rising Supplier s adjustment. 
Rather, the United  States  indicates that, "as the best alternative", it has relied on two types of 
evidence: USITC investigation s and trade data trends.233 
3.100.   As the first type of evidence, the United  States  refers to USITC reports issued in the context 
of different CVD, AD, and safeguards investigations on the relevant products.234 Depending on the 
product at issue, the United  States  argues, inter alia , that these USITC reports detail "investments 
in manufacturing capacity"235 or show an emerging industry in which "the United  States  is a growing 
market for its exports"236, or that the  duties imposed due to such investigations imply that the 
imports from those third countries were subsidized or sold at less than fair value in the US market.237 
3.101.   We would need more than the descriptive passages from these USITC reports to assess if 
the indu stry investments or government policies claimed by the United  States  in the context of 
Rising  Suppliers have actually taken place. Without further and direct evidence for these 
developments in third countries, the information provided in these USITC report s leads to mere 
assertions. What is more, some of the phenomena referenced in these USITC reports are distinct 
from the investments and policies claimed by the United  States  in the context of Rising  Suppliers. 
For instance, the United  States  being a growin g market for exports  from a certain third country does 
not in itself prove the existence of industry investments or government policies, let alone what such 
investments and policies would specifically entail. Also, t he CVDs and AD duties referenced by the 
United  States  may be expected to have negatively affected the competitiveness of Rising  Suppliers. 
Indeed, for one product, the United  States  indicates that it has found evidence of the deterioration 
of the relative competitiveness of certain third countri es due to the imposition of trade remedies 
against their imports.238 
3.102.   As the second type of evidence, the United  States  refers to the expansion of the market 
share of Rising  Suppliers vis-à-vis other third countries, including China. As mentioned, without 
further evidence, these changes in market share do not demonstrate the industry investments and 
government policies claimed by the United  States . Absent specific evidence to the contrary, it could 
be equally plausible to expect that it is precisely because of the effects of the measures at issue on 
China's market share in the United States  that other Members would step in to supply the US market.  
3.103.   In addition to the lack of direct evidence, the United States ' proposed adjustment suffers 
from another shortcoming insofar as it relies on the assumption that the Rising  Suppliers 
phenomenon is completely exogenous to, or independent from, the measures at issue. The 
United  States  acknowledges that this adjustment should be applied when "certain third countries 
have become more competitive in the U .S. market due to reasons that are independent from the 
CVD measures at issue".239 However, as China remarks, i t is not clear from the evidence on the 
record tha t the increase of the capacities of Rising  Suppliers is actually independent from the 
existence of the WTO -inconsistent CVDs . Some of the USITC reports referenced by the 
United  States , in fact, even indicate that imports from other countries substantially increased their 
presence in the US market "after the imposition of the antidumping and countervailing duty orders 
 
232 China's written submission, paras. 49 and 51.  
233 United  States' opening statement at the meeting of the Arbitrator, para. 27.  
234 United  States' response to Arbitrator question No. 5, paras. 49 -53, and No. 6, paras. 59 -63. 
235 United  States' response to Arbitrator question No. 6, para. 62.  
236 United  States'  response to Arbitrator question No. 6, para. 63.  
237 United  States' response to Arbitrator question No. 5, paras. 49 -58, and No. 6, paras. 60 -61. 
238 As a consequence, the United  States implements a supply shock adjustment to that specific market 
to reduce th e shares of those third countries whose relative competitiveness has deteriorated (United  States' 
response to Arbitrator question No. 5, paras. 41 -58; comments on China's response to Arbitrator question 
No. 105, para.  46). 
239 United  States' closing statemen t at the meeting of the Arbitrator, para. 14.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 41 - 
 
 on imports from China".240 In other words, t he United  States  has not demonstrated that the rise of 
these alleged Rising  Suppliers is not a natural consequence of the introduction of the CVDs at issue.  
3.104.   Accordingly, we shall not adopt the Rising  Suppliers methodological adjustment proposed by 
the United  States . We ar e taking this decision purely on the basis of the above evidentiary issues. 
As already indicated in the context of the United  States ' first proposed adjustment241, we therefore 
make no principled statement as regards the appropriateness or not of taking int o account factors 
different from the measures at issue, such as Rising  Suppliers, in the context of a two -step 
Armington model . 
3.4  Data inputs  
3.105.   In terms of data inputs, the two -step Armington model  necessitates utilizing data on the 
market share of the three  product varieties242 for the year  prior to the imposition of the CVDs at 
issue, as well as overall  market size data for the remedy year for each of the ten products at issue.243 
In addition, the Armington m odel also requires data on total supply elasticities,  demand elasticities, 
and elasticities of substitution for each of the ten products.  
3.106.   The following sections address these data issues, based on what we considered to be the 
most solid evidence244, the most reasonable calculation methodology245, and the best available 
data246, developing our own calculations where necessary.  
3.4.1   Year-prior  
3.107.   Regarding the year -prior, the parties disagree on specific year -prior data points, and for six 
products they advance different calendar years as the year-prior.  
 
240 USITC Publication 4739 (regarding Solar Panels)  (Exhibit USA -22), p . 40. See also ibid., 
pp. 10 and 93. 
241 See section 3.3.3 above.  
242 In light of our rejection of the United  States' proposed adjustment to take into account the effects of 
dumping, we  base our calculations on the following three product varieties suggested by China: 
(i) US domestic production; (ii)  Chinese imports; and (i ii) imports from the rest of the world.  
243 We note that f or the purposes of this Decision and the implementation of the two -step Armington 
model , the relevant market values have been rounded to USD 1,000.  
244 See e.g. Award of the Arbitrator, US – Section 110(5) Copyright Act (Article 25) , para. 4.28: "in the 
absence of figures grounded on facts, [Article 22.6] Arbitrators tried to use estimates which … seemed 
reasonable on the basis of the information availab le." See also ibid., para. 1.18; Decision by the Arbitrator, 
EC and certain member States – Large Civil Aircraft (Article 22.6 – EU), para.  6.175 and fn 307 thereto  
(referring to Award of the Arbitrator, US – Section 110(5) Copyright Act (Article 25) , para . 4.28 ; Decisions by 
the Arbitrator, US – COOL  (Article 22.6 – US), para. 5.101 . 
245 See e.g. Decision by the Arbitrator, US – Washing Machines (Article 22.6 – US), para. 1.16 (referring 
to Decision by the Arbitrator, US – 1916 Act (EC) (Article  22.6 – US), para. 5.54): "[i] n determining the level 
of nullification or impairment, previous arbitrators developed their own appropriate methodologies, based 
either on elements of methodologies proposed by the parties, or on an altogether different approach.  Any 
determination of nullification or impairment, because it is based on assumptions, is necessarily a 'reasoned 
estimate' relying on 'credible, factual, and verifiable information'."  (fns omitted)  
246 See e.g. Decision by the Arbitrator, EC and certain member States – Large Civil Aircraft (Article 22.6 
– EU), para. 6.175: " we must seek to ensure that not just our methodological approach, but also our concrete 
quantitative estimation, is supported, wher ever possible, by credible and verifiable information. To that end, 
we have undertaken all reasonably feasible efforts to request additional information from the parties to 
complete the record. Where we nevertheless ultimately did not have access to certai n desired information 
(e.g. because it is not readily available), we drew appropriate inferences from the best available information on 
the record, provided that the best information that we had was itself credible and verifiable" . (fn omitted)  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 42 - 
 
 3.4.1.1   Determination of the year -prior  
3.108.   According to the United  States , China identified incorrect calendar years for the year prior 
to the imposition of six247 CVD measures.248 The United  States  claims that it has followed the same 
approach that was use d in US – Anti-Dumping Methodologies (China) (Article  22.6 – US): it has 
identified the year -prior based on the timing of the final  CVD determination for each product.  The 
United  States  argues that this is  the correct year -prior to use for the adjusted two -step Armington 
model.249 
3.109.   China counters that it has adopted a consistent approach to defining the year -prior. 
China  claims that  the relevant year -prior for the purposes of determining  the level of N/I in this 
dispute is the calendar year prior to the year in which the WTO -inconsistent duties  were imposed, 
and the WTO -inconsistent duties were imposed as of the effective date of the preliminary  
determination in each case.250 
3.110.   The parties thus agree on the year -prior for four products and disagree for the remain ing six 
products. The year s-prior advanced by the parties are: 
Table 4: Year s-prior  advanced by the parties for each of the ten products at issue  
Products  Years -prior advanced by the parties  
China251 United  States252 
Pressure Pipe  2007 2008 
Line Pipe  2007 2008 
Kitchen Shelving  2008 
OCTG  2008 2009 
Wire Strand  2008 2009 
Seamless Pipe  2009 
Print Graphics  2009 
Aluminum Extrusions  2009 2010 
Steel Cylinders  2010 2011 
Solar Panels  2011 
 
3.111.   In our calculations,  we rely on the parties' agreed year -prior for : 
a. Kitchen  Shelving (2008) ; 
b. Seamless  Pipe (2009) ; 
c. Print Graphics (2009) ; and 
d. Solar Panels (2011) .  
3.112.   The six remaining products affected by the parties' disagreement are : 
a. Pressure Pipe ; 
 
247 The original United  States ' objection concerning the correct year -prior relates to three products: 
Pressure Pipe, Line Pipe, and OCTG (see United  States' written submission,  para. 125 ). In engaging with this 
objection in its written submission, China extends it to an additional three products : Wire Strand ; 
Aluminum  Extrusions ; and Steel Cylinders . (China's written submission , para. 22 ). This extension increases  the 
scope of the parties' disagreement in this context to a total of six products : Pressure Pipe ; Line Pip e; OCTG ; 
Wire Strand ; Aluminum Extrusions ; and Steel Cylinders.  
248 United  States ' written submission, paras.  5 and 8.  
249 United  States ' written submission, para.  125. 
250 China's written submission, para. 76.  
251 See Exhibit CHN -120. 
252 See Exhibit USA -155 (BCI) . WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 43 - 
 
 b. Line Pipe ; 
c. OCTG ; 
d. Wire Strand ; 
e. Aluminum Extrusions ; and  
f. Steel Cylinders.  
3.113.   For each of these products, China suggests the calendar year preceding the United  States ' 
suggested year -prior. China contends that the years -prior suggested by the United  States  involve 
preliminary C VDs which affected China's market share, thus distorting the calculation of the level of 
N/I. 
3.114.   According to China253, the preliminary and final CVD determinations for the six products 
concerned by the parties' disagreement were introduced (and, where applica ble, amended) on the 
following dates:  
Table 5: The preliminary  and final CVD determinations  for the six products concerned by 
the parties' disagreement  
Products  Preliminary CVD determination date  
(and date of amendment,  
where applicable)  Final CVD determin ation date  
(and date of amendment, where 
applicable)  
Pressure Pipe  10 July 2008  
(amended on 7 August 2008)  28 January 2009  
Line Pipe  9 September 2008  24 November 2008  
(amended on 23 January 2009)  
OCTG  15 September 2009  7 December 2009  
(amended on 20 January 2010)  
Wire Strand  2 November 2009  21 May 2010  
(amended on 7 July 2010)  
Aluminum 
Extrusions  7 September 2010  4 April 2011  
Steel 
Cylinders  18 October 2011  7 May 2012  
 
3.115.   The United  States  contest s neither  the accuracy of these dates  nor the fact that preliminary 
duties were in place during the year -prior it advances for each of these six products254, although the 
United  States  adds that no provisional CVD s were collected for several months between the 
expiration of the provisional CVD  measures and the publication of the final determinations.255 
3.116.   Importantly, while the parties agree that the preliminary determinations were not at issue 
at the original or compliance stages of this dispute,  they explicitly concur that this is not 
determinative for identifying the correct year -prior.256 Accordingly, we do not address th is issue. We 
 
253 See Exhibit CHN -99. 
254 See China's response to Arbitrator question  No. 13, para. 49. See also Exhibit CHN -99 and China's 
response to Arbitrator question  No. 107, para. 84.  
255 See United  States ' opening statement  at the meeting of the Arbitrator , para. 29.  See also 
United  States ' closing statement  at the meeting of the Arbitrator , para. 17.  
256 China recognizes that the preliminary determinations in these particular investigations were not at 
issue in earlier stages of this dispute with respect to China's cla ims concerning alleged inputs for LTAR 
subsidies. However, China argues  that this does not mean that the year -prior may be one that include s the 
preliminary duties imposed pursuant to those determinations , noting  that the preliminary duties in each of 
these cases were imposed as part of the same investigation that resulted in the imposition of the final duties . 
China also argues that both sets of duties suffer from the same legal flaws that the DSB identified with respect 
to the final determinations, i.e. the USDOC's findings with respect to the alleged "inputs for LTAR" subsidies . 
(See China's response to Arbitrator question  No. 33, para . 9). The United  States  concurs that the preliminary 
determinations for the six products were not "at issue" in earlier st ages of this dispute. (United  States ' 
response to Arbitrator question  No. 33, para.  10). Although in its original panel request China identified "the 
preliminary and final countervailing duty measures identified in Appendix 1 [to such request ]" as the "spe cific 
measures at issue"  (Request for the Establishment of a Panel by China, WT/DS437/2) , the United  States  
 WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 44 - 
 
 focus rather on the relationship of these preliminary CVD determinations to  the final CVD 
determinations, and the characteristics and impact of the preliminary CVD determinations , as well 
as the two economic papers submitted by China . 
3.4.1.1.1   Relationship of the preliminary and final CVD determinations  
3.117.   As China points out, the preliminary CVDs in each of the  six cases in question were imposed 
as part of the same investigation that resulted in the imposition of final CVDs.257 The United  States  
does not contest this. In the parties' description of the differences between the preliminary and final 
CVDs, the ir figures for the relevant CVD rates quantitively correspond and show that, with the 
exception of one supplier258, preliminary CVDs ranging from 6.18 to 137.65 % were imposed on each 
of the six products at issue. Further, the differences between the corresp onding preliminary and final 
CVD rates varied between +236.50 and -130.28 % per product and respondent.259 
3.118.   In introducing key aspects of its CVD regime , the United  States  argues that China fails to 
take into account that provisional measures are, as the  term indicates, preliminary and temporary. 
Provisional CVD measures expire after 120 days, and exposure to duty liability is not confirmed until 
a final CVD determination  takes place  and a duty order is imposed . Even then, under the 
US retrospective system of CVD duty assessment, final duty liability is typically not known until  a 
later date , when the USDOC determines final CVD duty margins in an administrative review.260 
3.119.   China acknowledges  that, under the United  States ' CVD regime, preli minary duties are 
provisional in nature and the final duty rate is not confirmed until a final CVD determination is 
reached. China further acknowledges  that, under the United  States ' "retrospective" system, actual 
duty liability is not finally determined i n most cases until the completion of an administrative review. 
China considers that the United  States  appears to misunderstand China's position with respect to 
the imposition of preliminary CVD duties on the products. China's point is that regardless of wh en 
the actual duty liability is finally determined, distortive effects occur as soon as preliminary duties 
are imposed.261 
3.120.   In light of these aspects of the United  States ' CVD regime, which the parties agree upon, we 
consider that preliminary and final CVDs are closely linked by virtue of the design of the US CVD 
regime , despite the sometimes considerable rate differences between the two , as mentioned earlier.  
3.4.1.1.2   Characteristics and impact of the preliminary CVD determinations  
3.121.   As a further aspect of its CVD regi me, the United  States  indicates that, while the 
United  States  Customs and Border Protection ( USCBP ) suspends liquidation and starts collecting 
cash deposits from the date of the imposition of provisional CVD measures as a result of an 
affirmative prelimina ry CVD determination, these cash deposits are provisional and potentially 
refundable.262 In response, China indicates that, in practice, preliminary duties are rarely if ever 
refunded to Chinese exporters. China contends that any refunding of preliminary CV Ds is irrelevant; 
 
considers that the reference to preliminary determinations amongst all of the other decisions and documents 
appears to have been an effort by China to be comprehensive in its identification of any and all documents of 
potential relevance to its "as applie d" claims. The United  States  points out that throughout the original dispute, 
the provisional CVD rates determined in the preliminary determinations and the timing of those determinations 
were never raised as an issue. Rather, references were made to the p reliminary determinations to the extent 
that they, when read together with the final determinations, explained decisions that  the USDOC made in 
connection with the  imposition of the CVD measures (United  States' response to Arbitrator question No. 33, 
para. 12 (referring to United States' written submission, para. 37)) . Accordingly, the United  States  claims , the 
preliminary determinations have no relevance for determining the correct year -prior, and the dates of those 
preliminary determinations are not deter minative of the correct year -prior in this proceeding (United  States ' 
response to Arbitrator question  No. 33, para. 13 ). 
257 China's response to Arbitrator question  No. 33, para. 9.  
258 See Exhibit USA -107. 
259 China's response to Arbitrator question  No. 33, par a. 8 (referring to Exhibit CHN -106); United  States ' 
response to Arbitrator question  No. 33, para. 9 (referring to Exhibit USA -107). 
260 United  States ' response to Arbitrator question  No. 14, fn 110 to para. 93. See also United  States ' 
response to Arbitrator question  No. 32, para. 4.  
261 China's response to Arbitrator question  No. 31, para. 5.  
262 United  States ' response to Arbitrator question  No. 32, para. 3. See also ibid., para. 4 ; United  States ' 
opening statement  at the meeting of the Arbitrator , para. 29.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 45 - 
 
 rather, what is relevant is whether the preliminary duties distort trade.263 China adds that it does 
not dispute that months or sometimes years later, some amount of the deposits collected may be 
refunded following the final determinations  of the USDOC and  the USITC when final liability is 
calculated. However, according to China, this possibility does not nullify the distortive effects that 
occur as a result of the preliminary liability imposed on importers.  Furthermore, China maintains 
that in many cases there are no entries to liquidate at any duty rate because the preliminary duty 
rate is so high that it effectively blocks all imports of subject product.264 
3.122.   The United  States  emphasi zes that for all of the products in question, no provisional CVDs 
were collected for several months between the expiration of the provisional CVD period and the 
publication of the final CVD determination.265 According to the United  States , China has not explained 
how, or why, any changes in trade flows du ring such gap periods should be attributed to CVD duties 
when there were no CVD duties in place.266 China responds that it is irrelevant that the 
WTO-inconsistent preliminary CVD duties were not in place for the entirety of the United  States ' 
proposed year -prior or that preliminary CVD duties are potentially refundable. According to China, 
the United  States ' argument does not address, let alone refute, China's position that it is the 
imposition of the WTO -inconsistent preliminary CVD duties that distorts tra de flows .267 
3.123.   We agree with China that, as a matter of principle, it is indeed the possibility of the 
preliminary CVDs having an impact on trade that is relevant for determining an appropriate 
year-prior for each product at issue . We also consider that the p rovisional nature of such preliminary 
duties, including their possible subsequent refunding or their non -collection for a considerably later 
period , is immaterial in terms of the immediate trade impact that such preliminary duties may have 
on affected expo rters.  Also, according to the evidence before us268, the gap periods raised by the 
United  States  never amounted to more than a few months and, thus never left a whole calendar 
year completely free of preliminary CVD duties.  
3.124.   As regards the more immediate imp act of preliminary CVDs, we note China's example 
concerning OCTG . According to China, the preliminary CVDs were imposed on OCTG on 
15 September 2009.  Using the harmonized tariff schedule ( HTS) codes listed for the case along with 
the public USITC DataWeb trade data, in 2009 the average monthly customs value of US imports 
from China prior to the imposition of the preliminary CVD duties was USD 132 million. By contrast, 
the average monthly US imp orts from China in 2009 following  the imposition of the preliminary CVD 
duties was just USD 157,590, a  drop of over 99%. According to China, these figures clearly show 
that the trade -depressing effects of the WTO -inconsistent CVD duties were already affect ing China's 
exports to the US market in 2009.269 We note that, according to the information provided by the 
United  States270, preliminary duties on OCTG were imposed on 15 September 2009 and were 
collected until 14 January 2010, and the final determination w as effective on 21 May 2010. As the 
OCTG example shows, the four -month gap period between January and May 2010 advanced by the 
United  States  does not alter the immediate effect the preliminary duties may have had as of their 
imposition in September 2009.  
3.125.   The United  States  does not contest the factual aspects of China's OCTG  example , and indeed 
it recognizes that the existence of a temporary preliminary CVD measure could have some impact 
on trade, including on China's market share.271 However, the United  States  contends, preliminary 
CVDs have a variable trade impact depending on the circumstances, and even if such  an impact 
were to be negative, it should not be indiscriminately attributed to preliminary CVDs.272 According 
to the United  States , China  unjustifiably assumes that the 99%  drop in OCTG imports from China in 
2009 was due to the imposition of the preliminary CVD duties, but China does not provide any 
 
263 China's opening statement  at the meeting of the Arbitrator , para. 45.  
264 China's response to Arbitrator question  No. 31, para. 6.  
265 United  States ' opening statement  at the meeting of the Arbitrator , para. 29. See also United  States ' 
closing statement  at the meeting of the Arbitrator , para. 17.  
266 See United  States ' response to Arbitrator question  No. 109, para. 139.  
267 China's response to Arbitrator question  No. 107, para. 78. See also China's comment s on the 
United  States ' response to Arbitrat or question  No. 109, para. 83.  
268 United  States ' response to Arbitrator question  No. 2, para. 23.  
269 China's written submission, para. 20. See also China's opening statement  at the meeting of the 
Arbitrator , para. 46.   
270 United  States' response to Arbitrator question No. 2, para. 23, and Table 2.  
271 United  States' response to Arbitrator question No. 109, para. 138.  
272 United  States ' response to Arbitrator question  No. 109, para. 138.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
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 evidence that the preliminary CVD duties are the cause for this decline . For instance, according to 
the United  States , China neglects that 2009 was at the height of the great recession, or that there 
may have been industry events or other factors that contributed to the decline in demand.273 
According to United  States , the mere  fact that certain imports from China significantly declined 
around the same time as the imposition of the preliminary duties does not prove that any Chinese 
exporters actually exited the US market due to the preliminary duties.274 The United  States  contend s 
that China has not provided any evidence for the exit of Chinese exporters as a result of the 
preliminary CVDs .275 
3.126.   In response, China submits that the United  States ' argument that a 99% drop in OCTG 
imports from China was not entirely due to the impositio n of the preliminary duties is hardly evidence 
that the preliminary duties had no effect on imports of OCTG from China.  China notes that, according 
to the USITC, the size of the total US market for OCTG (i.e. domestic shipments plus imports from 
all source s) fell by 46.8% between 2008 and 2009. In China's words, t hat imports from China fell 
by 99% during this period " cannot simply be attributed to the Great Recession ".276 
3.127.   China adds that,  contrary  to the United  States ' claims , it has demonstrated that import s 
dropped significantly following the imposition of the preliminary duties. China reiterates that, in the 
case of OCTG , for example, the average monthly US imports from China in 2009 following the 
imposition of the preliminary CVD duties dropped by over 99 %. According to China, it is reasonable 
to infer from this steep decline that at least some exporters exited the market entirely following the 
imposition of the preliminary duties277 as such a dramatic reduction in trade necessarily indicates 
that some (or more likely, most) suppliers from China ceased supplying the US market.278 
3.128.   We find China's OCTG example compelling as an illustration of the immediate negative trade 
impact of preliminary CVDs. We agree with China that it is unrealistic to assume that a 99% decrease 
in OCTG imports from China immediately following the introduction of preliminary CVDs would be 
unrelated to the preliminary duties imposed in 2009. Unlike China, however, we do not se e this 
steep decline as direct and conclusive proof of Chine se firms' exit from the US OCTG market because 
of the preliminary CVDs. We agree with the United  States  that China's OCTG example could mean 
that each exporting firm reduced the level of its expor ts, or a subset of exporting firms left the 
market, or a mix of both. However, regardless of the specific form in which the negative trade impact 
of the preliminary CVDs could manifest, the risk of such impact seems sufficiently serious to warrant 
excludin g any calendar year when preliminary duties were in place from being defined as the 
year-prior.  
3.4.1.1.3   Economic papers submitted by China  
3.129.   China also submits two economic papers279, which, it claims, show that the rate of 
preliminary CVDs is proportional to the exi t of exporters and that such impact of preliminary CVDs 
is higher than final CVDs.280 The first paper  concludes that:  
"[A]n affirmative preliminary LTFV [less than fair value] finding places the importer at 
considerable risk for future duty payments on any imports purchased after that date. 
Again, this situation suggests that an affirmative preliminary LTFV finding, coupled with 
an expectation that the final determination will also be affirmative, would lead to a sharp 
drop in the rate of imports and to a ri se in prices, with these effects lasting for the 
remainder of the investigation."281 
3.130.   The second economic  paper submitted by China finds that " the most significant effects occur 
early in the investigation ", that the "investigation effects are larger than tho se when the final AD 
 
273 United  States ' closing statement  at the meeting of the Arbitrator , para. 18.  
274 United  States ' closing statement  at the meeting of the Arbitrator , para. 19. See also United  States ' 
response to Arbitrator question  No. 108, para. 135.  
275 United  States ' response to Arbitrator question  No. 108, para s. 136 -137. 
276 China's response to Arbitrator question  No. 107, paras. 79 -80. 
277 China's opening statement  at the meeting of the Arbitrator , para. 46.  
278 China's comment s on the United  States' response to Arbitrator question No. 108, para. 82.  
279 China's opening statement  at the meeting of the Arbitrator , para. 47 (refer ring to  Exhibits CHN -113 
and CHN -114).  
280 China's response to Arbitrator question No. 107, paras. 81 -83. 
281 Exhibit  CHN-114; China's response to Arbitrator question No. 107, para.  81. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 47 - 
 
 duty is levied, implying that by the time the final duty is levied most of the effect  on the extensive 
margin has already happened", and that "[e]xporters often cease serving the market during  the 
investigation."282 
3.131.   The United  States  responds that these two economic papers submitted by China do not 
discuss the impact of preliminary CVD measures on the products at issue in this proceeding, and 
thus do not provide any evidence that Chinese exporters have actually exited the  market in response 
to the relevant preliminary CVD measures.  Rather, the United  States  argues, one economic paper  
(Exhibit CHN -113) covers anti -dumping cases from 2006 or earlier, whereas the other 
(Exhibit  CHN-114) covers anti -dumping cases from 1980 to 1985 – both time -periods during which 
none of the CVD measures at issue in this proceeding were yet in place.283 According to the 
United  States , both papers simply find that exports to the United  States  from subject countries 
declined following the impositi on of certain AD duties, which could mean that each exporting firm 
reduced the level of its exports, or a subset of exporting firms left the market, or a mix of both. The 
United  States  adds that neither paper makes use of firm -level data, which would be re quired to 
determine whether exporting firms exited from the market. Thus, according to the United  States , 
neither paper submitted by China is directly relevant to the question of whether exporters exit the 
market because of the imposition of preliminary du ties.284 
3.132.   China responds that the findings of the two economic papers are highly relevant to this 
proceeding. Both papers specifically document trade effects caused by preliminary duties on imports 
from subject suppliers, and therefore provide crucial academ ic support for the general proposition 
that preliminary duties have large and immediate effects on trade.285 China adds that, even if these 
papers do not specifically address CVDs, they provide proof that it is generally understood by 
economic experts that the trade effects of preliminary duties are large.286 According to China, 
Exhibit  CHN-114 documents that the preliminary duty has the same type of negative effect on trade 
as basic trade theory predicts and, importantly, documents that the impact of the dut y is felt 
immediately. China considers Exhibit CHN -113 equally relevant, as it examines how subject suppliers 
often cease supplying the market once the preliminary duties have been imposed and finds that the 
likelihood that subject suppliers will stop sell ing to the United  States  is higher in the period 
immediately following the imposition of the preliminary duties than in the period after the imposition 
of the final duties.287 
3.133.   We agree with the United  States  that the two economic papers submitted by China do not 
directly relate to CVDs, but we disagree on the se papers not being "directly relevant to the question 
of whether exporters exit the market because of the imposition of preliminary duties ".288 Insofar as 
both CVDs and AD duties entail an additional tariff on relevant import s, we see a high degree of 
similarity in the practical operation and impact of CVDs and AD duties. Accordingly, we do read the 
two econo mic papers submitted as evidence by China lending support to its argument that 
preliminary CVDs have an immediate  negative impact on relevant imports. These papers also 
underscore the intuitively compelling general point that a tariff increase, for instance in the form of 
preliminary CVDs, has a  corresponding negative  impact on relevant i mports , irrespective of the 
products at issue .289 
 
282 Exhibit CHN -113; China's response to Arbitrator question No. 107, para.  82. 
283 United  States' response to Arbitrator question No. 108, para. 133. See also United  States' comments 
on Chin a's response to Arbitrator question No. 107, paras. 50 -53. 
284 United  States' response to Arbitrator question No. 108, para. 134. See also United  States' comments 
on China's response to Arbitrator question No. 107, paras. 50 -53. 
285 China's comments on the Uni ted States' response to Arbitrator question No. 108, para. 80.  
286 China's comments on the United  States' response to Arbitrator question No. 108, para. 81.  
287 China's comments on the United  States' response to Arbitrator question No. 108, para. 82.  
288 United  States ' response to Arbitrator question  No. 10 8, para. 13 4. 
289 We note  in this regard the explanation by the United  States  of the contrary trade impact of a 
reduction in CVDs. The United  States  indicates that a "[d]uty reduction acts like a price cut", and that its 
"effects amount to an overall increase in U .S. demand for [imports] from China."  (United  States ' written 
submission, para. 58 ). WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 48 - 
 
 3.4.1.1.4   Conclusion  
3.134.   We agree with the parties that it is important to choose the "correct" year -prior in the interest 
of a correct calculation of the level of N/I.290 We also agree with China that the year -prior must be 
an objective  benchmark, otherwise the entire analysis of the level of N/I would  be compromised.291 
3.135.   We agree with China that, in order to accurately estimate the level of N/I, the effects of the 
WTO-inconsistent duties in the reference year must be compar ed to a year in which trade flows were 
not distorted by those duties, and that using a year -prior when the preliminary duties were in place 
could prevent us from satisfying that basic requirement.292 As China notes, what is relevant is 
whether the prelimina ry duties distort trade.293 We therefore also agree with China that using the 
calendar years suggested by the United  States  would risk including periods in which the duties, even 
if in a preliminary form, have affected China's share in the US market . We not e that the United  States  
has not specified any advantages, from the perspective of our mandate, of running such a risk.  
3.136.   In light of the parties' arguments and evidence, we conclude  that the United  States  has not 
demonstrated that the year -prior used by China for each product at issue would distort  the 
calculation of the level of suspension so that it would not be equivalent to the level of N/I.294 On the 
contrary, the collective body of evidence adduced by China suggests to us that preliminary CVD 
duties would have a significant negative impact on Chinese trade flows.  
3.137.   Basing our choice of the year -prior on the calendar year preceding the imposition of the 
preliminary CVDs would therefore secure a correct calculation, rather than , as the United  States  
suggests, distort the purpose of this arbitration.295 Accordingly, we select the year -prior suggested 
by China for each of the six products in question.  
3.138.   In doing so, we consider it immaterial and unnecessary to explore whether our app roach 
reflects a deviation , as the United  States  suggests, from US – Washing Machines (Article  22.6 – US) 
and US – Anti-Dumping Methodologies (China) (Article  22.6 – US).296 Neither  of these two previous 
arbitratio n proceedings  that relied on the two -step A rmington m odel had to choose between 
preliminary and final CVD determinations to establish the correct year -prior, and in fact both used 
the two -step Armington model  to avoid a distorted calculation of the level of N/I.297 In the 
circumstances of the present case and for the reasons elaborated upon earlier, we consider that 
choosing the calendar years preceding the preliminary CVDs is the appropriate approach to avoid 
any such distortion with regard to the six products for which the parties disagree on the year -prior.  
 
290 See, e.g. China 's response to Arbitrator question No.  107, paras. 83 -84; United  States' opening 
statement  at the meeting of the Arbitrator , para.  30. 
291 China's opening statement  at the meeting of the Arbitrator,  para. 45.  
292 China's response to Arbitrator question No.  31, para. 6. See also China's comments on  the 
United  States' response to Arbitrator question No.  108, para. 80.  
293 China's opening statement  at the meeting of the Arbitrator , para. 45.  
294 As explained, the party challenging the proposed level of suspension in an Article 22.6 arbitration 
proceeding bears the general burden of proving that the requirements of the DSU have not been met. In the 
context of determining the year -prior, the United  States  has the original burden of proving that China's 
proposal of a year -prior for the products at issue would  result in the level of suspension not being equivalent to 
the level of N/I in the sense of Article 22.4 of the DSU.  (See para. 3.2 above).  
295 United  States' response to Arbitrator question No.  14, fn 110 to para. 93.  
296 United  States' response to Arbitrator  question No. 108, para. 137 ; and No. 109, para. 140; 
comments on China's response to Arbitrator question No. 107, para. 54 ; written submission, paras. 124 -125; 
response to Arbitrator question No. 14, fn 110 to para. 93; opening statement  at the meeting of the Arbitrator , 
para. 29; and closing statement  at the meeting of the Arbitrator , paras. 16 and 20 . 
297 China rightly points out in this regard that "[a]s the arbitrators in DS464 and DS471 acknowledged, 
in order to accurately estimate N/I, it is necessary to adopt a methodology that isolates the specific policy at 
issue and excludes the distorting effects of the WTO -inconsistent duties over time. For this reason, the 
arbitrators adopted the two -step approach to the Armington model." (China's writt en submission, para.  19. 
(fns omitted) See also Decision s by the Arbitrator s, US – Washing Machines (Article 22.6 – US), 
paras. 3.115-3.118; US – Anti-Dumping Methodologies (China) (Article  22.6 – US), paras. 6.63 -6.67).  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 49 - 
 
 3.139.   Taking into account the parties' agreement for the other four products, we adopt the 
following year s-prior for the ten products at issue in these proceedings:  
Table 6: Years -prior relied upon by the Arbitrator  
Products  Years -prior relied upon by the Arbitrator  
Pressure Pipe  2007 
Line Pipe  2007 
Kitchen Shelving  2008 
OCTG  2008 
Wire Strand  2008 
Seamless Pipe  2009 
Print Graphics  2009 
Aluminum Extrusions  2009 
Steel Cylinders  2010 
Solar Panels  2011 
 
3.4.1.2   Year-prior market shares per product  
3.140.   In addition to disagreeing on the correct year -prior for six of the ten products at issue298, 
the parties also disagree on the year-prior market data to be used for the three different sales 
varieties (US  domestic variet y, imports from China,  and imports from the RoW) for these ten 
products .299 In particular, China relies on i nformation of the three varieties obtained from USITC 
reports for eight of the products at issue (Pressure Pipe, Line Pipe, OCTG, Wire  Strand, Seamless 
Pipe, Print  Graphics, Aluminum Extrusions , and Solar Panels).300 For the remaining  two product s301, 
China estimates domestic sales by using methodologies tailored to each product and obtains import 
data from USITC Data Web.302 The United  State s, in turn,  relies on sales information of the three 
varieties obtained from USITC reports for four  of the products at issue (Wire  Strand, Seamless Pipe, 
Print Graphics, and Aluminum Extrusions) . For the remaining  product s, the United  States  relies on 
dome stic sales from USITC reports (with the exception of Kitchen Shelving and Steel Cylinders), and 
sources import varieties data from the US Census Bureau  and USCBP.303 
3.141.   The year -prior data issues relate to data sources  (for Pressure Pipe, Line Pipe, OCTG, 
Aluminum Extrusions, and Steel Cylinders), calculation methodologies (for Kitchen Shelving and 
Steel Cylinders),  and product scope  (for Kitchen Shelving, Pressure Pipe, Print Graphics, and Solar 
Panels) . To the extent necessary in light of our earlier determin ation of the year -prior304, we address 
these data issues with regard to each of the ten product s and for each of the three sales varieties . 
 
298 As mentioned, the parties disagree on the year -prior to be used for six of the products 
(i.e. Pressure  Pipe, Line Pipe, OCTG, Wire Strand, Aluminum Extrusions , and Steel Cylinders) . We addressed 
the parties' disagreement in section 3.4.1.1 above.  
299 See Exhibits CHN -120 and USA -155 (BCI).  
300 China's methodology paper, para. 92 and fn 67 thereto.  
301 According to China, some of the necessary market information for Kitchen Shelving and 
Steel Cylinders was not provided in the relevant final USITC reports . (China's methodology paper, para. 93). 
302 China explains that it was able to use the H TS10 tariff codes listed in the relevant USITC reports 
(Exhibits CHN -19 and CHN -41) to download the value of trade for Chinese exports and exports from the RoW, 
using USITC DataWeb as source of the H TS10 import data. (C hina's methodology paper, para.  94 and fn 68 
thereto).  
303 The United  States  explains  that it generally relies on the same shipment data used by the 
US – Anti-Dumping Methodologies (China) (Article  22.6 – US) arbitrator for the seven products (namely 
Line Pipe, OCTG, Seamless Pipe, Print Graphics, Aluminum Extrusions, Steel Cylinders, and Solar Panels ) that 
were at issue in that arbitration. For the other three products  (namely Pressure Pipe, Kitchen  Shelving, and 
Wire St rand), the United  States  claims to follow estimation methods similar to those applied by that arbitrator.  
(United  States ' written submission, paras. 124 -127 ( referring to Exhibit  USA-44 (BCI)); opening statement at 
the meeting of the Arbitrator, paras.  32-34; response to Arbitrator question No. 110, para. 141;  and 
comment s on China's response to Arbitrator question No. 73, para. 23).  
304 See section 3.4.1.1 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 50 - 
 
 3.4.1.2.1   Pressure  Pipe  
3.142.   As noted, the parties disagree on the year -prior for Pressure Pipe. In addition, they also 
disagree on the data source for the two import varieties. As a consequence, they present different 
values for the sales data to be used for the three  varieties. Chin a presents sales data based on 
USITC Publication 4064, Table IV -4305, for all three varieties. The  United  States  relies on the same 
table in the same USITC report for sales of the US domestic variety, while it sources data for the 
two import varieties from the US Census Bureau.306 
3.143.   Regarding sales of the US domestic variety , while both parties rely on the same USITC 
report (Exhibit  CHN-4, Table IV -4), their figures differ slightly because they correspond to different 
calendar years  as the year -prior. Since thi s USITC report shows  only the first three quarters of each 
year (January to September), both parties annualize this data.307 
3.144.   Absent direct data for the full calendar year, we consider the annualization of the available 
quarterly data to be reasonable.308 Since we have determined 2007 to be the year -prior for 
Pressure  Pipe309, we rely on the annuali zed figures for domestic sales provided by China for that 
calendar year based on the data contained  in USITC Publication 40 64.310 
3.145.   As regards the two import varieties , the parties' figures differ because they concern 
different calendar years as the year -prior and they  rely also on different data sources . China submits 
data for the full calendar year 2007 from Table IV -4 of the above -mentioned USITC report311, 
whereas the United  States  relies on HTS aggregates312 from the US Census Bureau.313 
3.146.   The United  States  claims  that for the products  that were not at issue in US – Anti-Dumping 
Methodologies (China) (Article 22.6 – US), like Pressure Pipe, it has derived import data using a 
methodology that is consistent with the methodology used by that arbitrator.314 The United  States  
explains that it relies on import data from the US Census Bureau  in what it considers the proper 
year-prior (2008) because full calendar year import data is not available in the aforementioned 
USITC report for 2008.315 
3.147.   As the parties do not critici ze the alternative  import data source s relied upon by the other 
party316 and USITC Publication 4064  contains import sales data for 2007, whic h we have determined 
 
305 See Exhibit CHN -4. 
306 See Exhibit USA -65. 
307 See United  States ' response to Arbitrator question  No. 1 3, para. 88 . 
308 We note that a similar approach was followed by the arbitrator in US – Anti-Dumping Methodologies 
(China) (Article 22.6 – US): "[f]or [certain anti -dumping orders], the USITC investigation reports do not 
provide data for the fu ll calendar year but only for the first six or nine months of the year. In such cases, we 
annualize the relevant data to estimate the annual value of US shipments by dividing the data by the 
corresponding number of months and multiplying the result by 12 ( i.e. the number of months in a year)." 
(Decision by the Arbitrator, US – Anti-Dumping Methodologies (China) (Article 22.6 – US), fn 272 to 
para. 7.16).  
309 See section 3.4.1.1 above.  
310 Exhibit CHN -4. 
311 Exhibit CHN -4. 
312 The United  States uses the following HT S10 codes: 7306405005, 7306405040, 7306405062, 
7306405064 , and 7306405085 . 
313 United  States ' response to Arbitrator question No. 1 3, para. 88.  
314 United  States ' response to Arbitrator question No. 1 3, para. 88.  
315 Exhibit USA -65; United  States ' response to Arbitrator question  No. 1 3, para. 88 . 
316 We note that there may be a potential difference in the scope of the products covered by the parties' 
import data. The USITC report relied upon by China states that the data in Table IV -4 are based on "U.S. 
imports fro m official statistics as adjusted to include  WSS pressure pipe imported under HTS basket categories 
and to exclude  pressure pipe greater than 14 inches and imports of non -subject mechanical tubing from 
Canada ." (Exhibit CHN -4, p. IV-6 (emphasis original)).  Conversely, the United  States  uses five H TS10-level 
categories, which may not have been adjusted in the same way as indicated in the USITC report referred to 
above.  The United  States acknowledges that it is not able to determine exactly how certain import values were 
adjusted and explains that, as a result, the import values it provides are "exact aggregates of the HTSUS data 
reported by the U.S. Census without any a djustments". (United  States'  response to Arbitrator question  No. 46, 
para. 52).  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 51 - 
 
 to be the year -prior for Pressure Pipe317, we consider it reasonable to rely on the import data 
extracted by China from that report.  
3.148.   Therefore, for the three sales varieties of Pressure Pipe, we shall rely on the following 
year-prior fi gures derived from USITC Publication 4064318: 
Table 7: Year-prior (2007) market sales for Pressure Pipe  
Varieties  Total sales  
US domestic variety  USD 201,460,000  
Imports from China  USD 154,833,000  
Imports from the rest of the world  USD 158,535,000  
 
3.4.1.2.2   Line Pipe  
3.149.   As noted, the parties disagree on the year -prior for Line Pipe. In addition, they also disagree 
on the data source for the imports. As a consequence, they present different values for the sales 
data to be used for the three sales varieties  of this product . China presents sales data based on 
USITC Publication 4055 for all three varieties.319 The United  States  relies on the same USITC report 
for sales of the US domestic variety, while it sources data for the two import varieties from 
US Customs320 and the US Census Bureau.321 
3.150.   Regarding sales of the US domestic variety , while both parties  rely on the same USITC 
Publication 4055 ( Exhibit CHN -11, Table IV -12), their figures differ because they correspond to 
different calendar years  as the year-prior. In addition, China uses data available for the full calendar 
year of 2007, while the United  States  annuali zes data from the first three quarters of 2008 
(January  to September)  as data only for those first nine months of 2008 is available in Tab le IV-12 
of the USITC report .322 Since we have determined 2007 to be the year -prior for Line Pipe323, we rely 
on the figures for domestic sales provided by China for that year and contained in USITC Publication 
4055.324 
3.151.   As regards the two import varieties , the parties' figures  differ because they concern 
different calendar years as the year -prior and  they rely also on different data sources . China submits 
data for the full calendar year 2007 from Table IV -12 from the above -mentioned USITC report325, 
whereas the  United  States  relies o n company -specific USCBP data for imports from Chin a326, and 
HTS aggregates from the US Census Bureau for imports from the rest of the world327. The parties 
disagree on the appropriateness of relying on USCBP data.328 
 
317 See section 3.4.1.1 above.  
318 Exhibit CHN -4. 
319 Exhibit CHN -11, Table IV -12. 
320 Exhibit USA -58 (BCI).  
321 Exhibit USA -59. 
322 As mentioned in section 3.4.1.2.1 above, regarding Pres sure Pipe , absent direct data for the full 
calendar year, we consider annuali zation of the available quarters data to be reasonable.  
323 See section 3.4.1.1 above.  
324 Exhibit CHN -11. 
325 Exhibit CHN -11. 
326 Exhibit USA -58 (BCI). T he United  States  indicates that it uses the USCBP data for imports from China 
because full calendar year data is not available for 2008 in the USITC report used by China (Exhibit  CHN-11). 
According to the United  States , for the products for which the arbitrator in US – Anti-Dumping Methodologies 
(China) (Article  22.6 – US) relied on BCI data from the USCBP for year -prior imports from China  (i.e. Line Pipe, 
OCTG, Steel Cylinders, and Solar Panels) , it has used the same USCBP data, based on the reference HTSUS 
codes from the relevant investigation product scope . (United  States' opening statement at the meeting of the 
Arbitrator, para.  34). 
327 Exhibit USA -59. 
328 See section 3.4.2.1.2 on the use of USCB P data for remedy year estimates. Further, and specific to 
the year -prior, China argues that  the best that the USCBP can do  to estimate the value of subject imports from 
China  is use the Harmonized Tariff Schedule ("HTS") codes from the CVD order and attem pt to guess the 
 WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 52 - 
 
 3.152.   As the United  States  does not critici ze the alternative import data source s relied upon by 
China,  and USITC Publication 4055 contains import sales data for 2007 (which we have determi ned 
to be the year -prior for Line Pipe329), we consider it reasonable to rely on the import data extracted 
by China from that report.  
3.153.   Therefore, as regards the three sales varieties of Line Pipe, we shall rely on the following 
year-prior figures derived fro m USITC Publication 4055:  
Table 8: Year -prior (2007) market sales for Line Pipe  
Varieties  Total sales  
US domestic variety  USD 757,701,000  
Imports from China  USD 153,881,000  
Imports from the rest of the world  USD 315,411,000  
 
3.4.1.2.3   Kitchen Shelving  
3.154.   In the case of Kitchen Shelving , the parties agree that the correct year -prior is 2008 but 
they disagree on the data sources and estimation methodologies. The parties also raise issues of 
product scope for all three product varieties. As data from the USIT C reports corresponding to the 
relevant CVD order is not available, both parties attempt to estimate sales of all three varieties 
based on various data sources and assumptions.330 
3.155.   Regarding sales of the US domestic variety , China presents  data based on US C ensus 
shipment estimates for the primary 6 -digit North American Industry Classification System ( NAICS ) 
code applying to kitchen appliances.331 China acknowledges that this estimate covers a broader 
range of products than the relevant CVD order, which is lim ited to Kitchen Shelving.332 Therefore, 
China  adjusts the  NAICS -level estimate using  a factor derived from  more granular import  data. 
Assuming  that the share of Kitchen Shelving in domestic  shipments of kitchen appliances equals the 
share of Kitchen Shelvin g in imports of the same NAICS categories , China calculates the share of 
imports under the HTS10 codes that it assigns to Kitchen Shelving in total imports under all H TS10 
codes associated with the relevant NAICS codes for kitchen appliances . Arguing that there appears 
to be no single H TS10 category exactly corresponding to Kitchen Shelving, China applies  the ratio 
of (approximated) subject imports measured at the HTS10 level333 to imports of all HTS10 codes 
associated with all the relevant NAICS codes.334 
3.156.   The United  States ' estimation method  for the US domestic  variety335 first takes the total 
value ("U.S. product shipment values") of all kitchen appliances sold in the United  States  obtained 
at the NAICS level336 from industry reports, producer price  indexes, and a USITC report.337 As this 
figure also includes imports, the United  States  then reduces it by the total value of imports. Finally, 
the United  States  scales the resulting figure by a factor obtained from the aforementioned USITC 
 
amount of subject merchandise based on the amount of exporter sales of HTS code merchandise using a series 
of ad hoc adjustments.  China argues that the USCBP records subject imports only by following the imposition 
of the relevant measure, which implies that "USCBP data will only have a partial tally of the full year of 
imports". China adds that even if USCBP obtained import data prior to the imposition of the relevant CVD 
order, since no merchandise was "subject merchandise" during that per iod, USCBP could not have 
differentiated between what would have later been considered as subject and non -subject merchandise under a 
given HTS code. (China's response to Arbitrator question No. 13, paras.  47-58). 
329 See section 3.4.1.1 above.  
330 See Exhibit s CHN-53 and USA -61, respectively . 
331 NAICS code 335221  (Household Cooking Appliance Manufacturing) . See also Exhibit CHN -53. 
332 China's methodology paper, para. 95.  
333 China approximates subject imports as imports under the H TS10 codes associated with the pr imary 
NAICS code 335221 obtained from USITC DataWeb . However, some of the relevant HTS codes include 
Kitchen  Shelving only as a portion, whereas other HTS10 codes may refer to specific subcategories of 
Kitchen  Shelving.  
334 See Exhibit CHN -53 and data in Exh ibits CHN -74 and CHN -76. 
335 Exhibit USA -61. 
336 NAICS codes 3352211, 3352213, and 335222.  
337 USITC Publication 4098 (Exhibit CHN -19). WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 53 - 
 
 report represen ting the cost share of Kitchen Shelving within the relevant NAICS categories338, based 
on the consideration that the latter cover more than the subject products.  
3.157.   Each party challenges the approach advanced by the other party. The United  States  claims 
that t he underlying HTS codes used by China include more than just subject products.339 China 
argues that the estimates of the United  States  are based on unverified assumptions that are 
impossible to evaluate.340 
3.158.   As both estimation methodologies rely on the import  figures submitted, we turn to the import 
varieties before addressing the data on US domestic sales.  
3.159.   As regards the two import varieties , China uses eight HTS10 tariff codes based on USITC 
Publication 4098341 to download relevant 2008 import data from USITC  DataWeb (Exhibit CHN -74) 
for both import varieties .342 The United  States  estimates the 2008 imports from China by scaling the 
2010 imports of  only two HTS10 categories of "oven racks " (as these two statistical numbers were 
not in effect or available prior to 2009 )343 with the change in market trends of imports from other 
related products ( described by the United  States  as "basket categories " since they cover a number 
of products not covered by the relevant order344), and multiplying this by two in order to also account 
for refrigerator shelving that is covered by the six remaining basket HTS categories used by China.345 
As regards RoW imports, t he United  States  estimate s that these imports account for  5% of total US 
shipments , arguing that imports from China make up the large majority of US shipments .346 
3.160.   Again, e ach party calls into question the approach  advanced by the other party. The 
United  States  claims that China use s import values based on Harmonized Tariff Schedule of the 
United  States  (HTSUS ) categories that the USITC has reported to be "basket categories" containing 
a number of products outside of the scope of the relevant CVD measure.347 To illustrate this, the 
United  States  lists products covered by the HTS co des used by China that , according to the 
United  States , would not fit the description of subject merchandise.348 The United  States  considers 
only two of the HTS codes used by China to be appropriate.349 
3.161.   In turn, China claims that the United  States ' approach is based on a series of  arbitrary 
assumption s.350 In particular, as regards Chinese imports, China argues  that the United  States  does 
 
338 1.8% for household refrigerators and home freezers and 2.75% for oven ranges. ( USITC Publication 
4098 (Exhibit  CHN-19)). 
339 United  States' response to Arbitrator question No. 37, para. 27. 
340 China's response to Arbitrator question No. 37, para. 23. 
341 Exhib it CHN -19. 
342 China lists the  eight H TS10-level codes in Exhibit CHN -53, p. 10, fn I, and in its data extract 
Exhibit  CHN-74 (the HTS10 codes are: 7321.90.5000, 7321.90.6040, 7321.90.6060, 7321.90.6090, 
8418.99.8050, 8418.99.8060, 8516.90.8010 , and 8516.90. 8050). USITC Publication 4098 (Exhibit CHN -19) 
mention s four HTS subheadings which contain these codes (7321.90.50, 7321.90.60, 8418.99.80, and 
8516.90.80) and the following HTS10-level codes (six of which were used by China): 7321.90.5000, 
7321.90.6090, 8 418.99.8050, 8418.99.8060, and 8516.90.8000 (where 8516.90.8000 is split into 
8516.90.8010 and 8516.90.8050 , effective 1 July 2009 ). 
343 The United  States  uses just two HTS10-level codes: 7321.90.6040 ("Shelving and racks for cooking 
ovens, of iron or steel ") and 8516.90.8010 ("Shelving and racks for electric cooking stoves, range and ovens of 
subheading 8516.60.40") and refers to trade under these two statistical reporting numbers as "oven racks" for 
simplicity . As the United  States  recogni zes, import data for these two codes is not available for 2008 because 
they were not in effect prior to 2009.  (Exhibit USA -61; United  States' response to Arbitrator question No. 11, 
para. 82).  
344 Exhibit USA -61. 
345 The United  States assume s that "oven racks " constitute  around 50 % of all Kitchen Shelving imports 
from China, with the remaining 50% reported under the other "basket " categories, e.g. refrigeration shelving.  
(Exhibit USA -61). 
346 According to the United  States, China was the largest source of imports of oven ra cks from 
2008-2010, with Mexico and Taiwan making up the large majority of the rest of imports under the 
corresponding statistical reporting numbers. The United  States explains that, with imports from China making 
up the large majority of U.S. total shipme nts, analysts approximate the rest of total shipments at 5% of U.S. 
total shipments (s ee Exhibit USA -61). 
347 Unites States' written submission, para. 127; opening statement at the meeting of the Arbitrator, 
para. 33.  
348 United  States ' response to Arbitrator question  No. 11 , para. 84.  
349 United  States ' response to Arbitrator question  No. 11 , paras. 81 -85. 
350 China's response to Arbitrator question No. 11, para. 26. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 54 - 
 
 not have data for the two HTS10 codes it suggests using for 2008, as the United  States  uses 2010 
data under these two codes and then scales this down by 20% based on the overall trend in imports 
from 2008 to 2009 of the aggregate data (i.e. including also non -subject products) . China also 
argues that the United  States  assumes  no change in imports from 2009 to 2010  China adds that it 
is entirely arbitrary to assume that imports of oven racks account for 50% of total Kitchen Shelving 
imports in the absence of supportive data.  As for RoW imports, China argues that the United  States ' 
approach is  questionable because it merely assumes, without adequate explanation, that imports 
from the rest of the world represent 5% of total imports.  According to China, these assumptions are 
not economically justified.351 
3.162.   China has made a "compromise proposal"352, later in the proceedings and in light of alleged 
inadequacies of the United  States ' HTS system -based identification of subject imports, to use the 
mid-point between its own and the United  States ' estimate for both import varieties.353 China has 
also suggest ed that this mid -point should be based on a corrected US estimate whereby the value 
of the two HTS codes relied upon by the United  States  should be multiplied by four rather than two 
to obtain the final value of US imports . China argues that such an adjustment is sensible as there 
are eight relevant HTS codes , which is four times the number of the two HTS codes that the 
United  States  has taken into consideration.354 China  adds that if this mid-point suggestion is not 
accepte d, its proposal is to use the import estimates it has originally put forward.355 
3.163.   The United  States  disagrees with the above compromise proposal from China concerning 
mid-points, arguing that it is not based on data or evidence. The United  States  adds that i ts estimate 
needs no correction. According to the United  States , China's proposed mid-point approach would 
incorrectly assume that approximately 60% of imports  from China under the reference HTSUS codes 
consist of subject products.356 The United  States  considers the proposal unreasonable also because 
it would be based on an unsupported premise that each of the HTSUS codes would represent an 
equal value of imports, and because only the two HTSUS codes covering oven racks would be specific 
to Kitchen Shelving products, while the other six HTSUS codes would broadly include non -subject 
products.357 
3.164.   In China's view, both parties  have offered alternative approaches to derive the figures 
needed, produc ing different estimates for imports.358 China highlights that the United States  has not 
"demonstrated" what imports account for, noting that assumptions and estimations have been 
necessary.359 Thus, China argues that its mid-point proposal is a compromise proposal intended to 
address this specific circumstance, which "ackn owledges that the two sides have intractable 
differences".360 
3.165.   We note that the parties agree that no data is available that corresponds to the scope of 
Kitchen Shelving as set out in the relevant CVD order. Hence, both parties' estimates for import 
varietie s are necessarily based on assumptions and simplifications. That said, we agree with several 
of the criticisms that each party has raised concerning the other party's estimate. As argued by the 
United  States , China's estimate based on eight HTSUS codes does appear to be overinclusive since 
six of these HTSUS codes apply to kitchen appliances more broadly rather than to Kitchen Shelving 
specifically. However, China appears to be correct in arguing that many of the Unites States' 
assumptions are arbitrary , and several of these assumptions could lead to an underinclusive 
estimate. For example, the United  States  merely asserts that imports under two HTSUS codes 
account for exactly 50% of all Kitchen Shelving imports. The United  States  also does not explain 
how t he analysts it cites reached the 5% figure for imports from the RoW that it claims to use. 
Further, while asserting to use this 5% of total shipments figure, we note that the United  States ' 
 
351 China's response to Arbitrator question  No. 11 , paras. 23 -39. 
352 China's comments on the United  States' response to Arbitrator question No. 76, para. 21.  
353 China's response to Arbitrator question No. 35, paras. 20 and 21 . 
354 China's response to Arbitrator question No. 12, para. 43, and No. 35, paras. 20 and 21 . 
355 China's  comments on the United  States' response to Arbitrator question No. 76, para. 21.  
356 United  States' response to Arbitrator question No. 76, paras. 23 -24. 
357 United  States' response to Arbitrator question No. 76, para. 30.  
358 China's comments on the United  States' response to Arbitrator question No. 76, para. 17.  
359 China's comments on the United  States' response to Arbitrator question No. 76, para. 19 (quoting 
United States' response to Arbitrator question No. 76, para. 23).  
360 China's comments on the United  States' response to Arbitrator question No. 76, para. 21.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 55 - 
 
 actual RoW imports estimate of USD 5 million accounts for only 3.9% of its estimated total 
shipments.361 
3.166.   Therefore, an estimate for the two import varieties in between the two parties' estimates 
may lead to a better approximation. China's proposal of a mid-point estimate appears in this context 
reasonable as it acknowl edges the large uncertainty surrounding both parties' figures. We note the 
United  States ' concern that such a mid-point estimate could lead to a share of Kitchen Shelving in 
total kitchen appliance imports that differs substantially from the cost share est imates it has 
provided. However, it is unclear to what extent the United  States ' cost share estimates, which are 
based on total production, are directly applicable to the two import varieties. We therefore adopt 
the mid -point estimates proposed by China  for the two import varieties. We calculate this mid -point 
without first correcting for the United  States ' estimate as proposed by China. We agree with the 
United  States  that such a correction presumes that each of the HTSUS codes would represent an 
equal val ue of imports, and China has not supported this presumption with evidence.  
3.167.   In light of this conclusion for the import varieties, we reject the United  States ' estimate for 
the domestic variety, which is quantitatively comparable to the one provided by China , since it is a 
function of the United  States ' import variety estimates. In contrast, in the absence of more precise 
data, we consider that China's estimate is the best available estimate for the domestic variety as it 
attempts to correct for the overinclu sion caused by relying on aggregate NAICS codes. Hence, we 
adopt China's estimate for the domestic variety.  
3.168.   As a result, as regards the three sales varieties of Kitchen Shelving, we shall rely on the 
following year -prior figures:  
Table 9: Year -prior (20 08) market sales for Kitchen Shelving  
Varieties  Total sales  
US domestic variety  USD 84,256,000  
Imports from China  USD 150,477,000  
Imports from the rest of the world  USD 276,171,000  
 
3.4.1.2.4   OCTG  
3.169.   As noted, the parties disagree on the year -prior for OCTG. In addition, they also disagree on 
the data source for the imports. As a consequence, they present different values for the sales data 
to be used for the three varieties. China presents  sales data based on USITC Publication 4124 for all 
three varieties  of OCTG .362 The United  States  relies on the same USITC report for sales of the 
US domestic variety, while it sources data for the two import varieties from US  Customs363 and the 
US Census Bureau.364 
3.170.   Regarding sales of the US domestic variety , while both parties rely on the same USITC 
Publication 4124 (Exhibit CHN -23, Table IV -6), their figures differ because they correspond to 
different calendar years  as the year -prior. In addition, China uses data available for the full calendar 
year 200 8, while the United  States  annuali zes data from the first three quarters of 2009 (January  to 
September) as data is available  only for those first  nine months of 200 9 in Table IV -6 of the USITC 
 
361 We note that the United  States' estimate roughly corresponds to 5% of shipments of the domestic 
variety. However, the United  States explanation that "[w]ith imports from China making up the large maj ority 
of U.S. total shipments, analysts approximate the rest of total shipments at 5 percent of U.S. total shipments" 
suggests to us that the analysts referred to by the United  States consider shipments of all three varieties since 
imports from China appea r to be included in the definition of "U.S. total shipments" (Exhibit USA -61, p. 6).  
362 Exhibit CHN -23, Table IV -6 
363 Exhibit USA -58 (BCI).  
364 Exhibit USA -59. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 56 - 
 
 report .365 Since we have determined 2008 to be the year -prior for OCTG366, we rely on the figures 
for domestic sales provided by China for that year and contained in USITC Publication 4124.367 
3.171.   As regards the two import varieties , the parties' figures differ because  they concern 
different calendar years as the year -prior and  rely on different data sources . China submits data for 
the full calendar year 2008 from Table IV -6 of the above -mentioned U SITC report368, whereas the 
United  States  relies o n company -specific USCBP data for imports from China369, and HTS  aggregates 
from the US Census Bureau for imports from the RoW370. As mentioned, the parties disagree on the 
appropriateness of relying on USCBP data.371 
3.172.   As the United  States  does not criticize the alternative import data sources relied upon by 
China and USITC Publication  4124 contains import sales data for 2008 (which we have determined 
to be the year -prior for OCTG372), we consider it reasonable to  rely on the import data extracted by 
China from that report.  
3.173.   Therefore, for the three sales varieties of OCTG, we shall rely on the following year -prior 
figures derived from in USITC Publication 4124373: 
Table 10: Year-prior (2008) market sales for OCTG  
Varieties  Total sales  
US domestic variety  USD 6,184,818,000  
Imports from China  USD 2,805,206,000  
Imports from the rest of the world  USD 2,572,888,000  
 
3.4.1.2.5   Wire Strand  
3.174.   As noted, the parties disagree on the year -prior for Wire Strand. As a consequence, they 
present different values for the sales data to be used for the three varieties.  Both parties, however, 
obtain their figures for all three varieties  from the same Table IV-6 of USITC  Publication  4162.374 
3.175.   As we have determined  2008 to be the year -prior for Wire Strand375 and USITC Publication 
4162 contains domestic sales and imports data for 2008, we consider it reasonable to rely on the 
data extracted by China from that re port. 
3.176.   Therefore, as regards the three  sales varieties of Wire Strand, we shall rely on the following 
year-prior figu res derived from USITC Publication 4162376: 
 
365 As mentioned in section 3.4.1.2.1 above  regarding Pressure Pipe , absent direct data for the full 
calendar year, we consider annuali zation of the available quarters data to be reasonable.  
366 See section 3.4.1.1 above.  
367 Exhibit CHN -23. 
368 Exhibit CHN -23. 
369 Exhibit USA -58 (BCI). See fn 326 to para. 3.151 above.  
370 Exhibit USA -59. 
371 See fn 328 to para. 3.151  above.  In addition, as regards specifically OCTG, China also argues that 
the exporter -specific USCBP data used by the United  States  for OCTG is problematic because the United  States  
proposes measuring imports by customs value ; however,  in that case, the USITC decided that imports should 
be measured by the landed duty value paid.  (China's response to Arbitrator question No. 73, para. 22).  
372 See section 3.4.1.1 above.  
373 Exhibit CHN -23. 
374 Exhibit CHN -28, Table IV -6. 
375 See section 3.4.1.1 above.  
376 Exhibit CHN -28, Table IV -6. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 57 - 
 
 Table 11: Year -prior (2008) market sales for Wire Strand  
Varieties  Total sales  
US domestic variety  USD 333,721,000  
Imports from China  USD 194,276,000  
Imports from the rest of the world  USD 21,771,000  
 
3.4.1.2.6   Seamless Pipe  
3.177.   In the case of Seamless Pipe, the parties agree that the correct year -prior is 2009, and they 
submit identical sales data for each of the three  varieties in that year.377 In light of the parties' 
agreement, we shall rely on the following year -prior figures  for the three sales varieties of 
Seamless  Pipe: 
Table 12: Year -prior (2009) market sales for Seamless Pipe  
Varieties  Total sales  
US domestic variety  USD 199,357,000  
Imports from China  USD 135,240,000  
Imports from the rest of the world  USD 348,609,000  
 
3.4.1.2.7   Print Graphics  
3.178.   In the case of Print Graphics, the parties agree that the correct year -prior is 2009, and they 
also agree378 that the relevant data source for sales data of all three varieties should be  
USITC  Publication 4192, dated November 2010.379 
3.179.   Regarding sales of the US domestic variety , while both parties  rely on the same USITC 
report (Exhibit  CHN-50), their figures differ because they use different tables contained therein.  
China uses the figures contained in Table IV -6 of the report, which correspond to "Certain coated 
paper (All U.S. integrated producers)", whereas the United  States  relies on the figures co ntained in 
Table IV -4 which correspond to "Certain coated paper other than coated packaging paperboard".380 
3.180.   The United  States  claims that it reported the same data that was used by the arbitrator in 
US – Anti-Dumping Methodologies (China) (Article  22.6 – US), which does not include coated 
packaging paperboard  and that, instead,  China appears to use a different definition of subject 
merchandise.381 China has agreed to exclude coated packaging paperboard from the scope of 
Print Graphics in the course of these p roceedings, and suggests relying on the domestic variety 
figures for the year -prior that are contained in the table used by the United  States .382 We note, 
 
377 We note that the parties obtain the corresponding sales data from different sources. While China 
presents sales data based on Table C -4 in USITC Publication 4190, dated November  2010 (Exhibit CHN -32), 
the United  States  presents sales dat a obtained from US – Anti-Dumping Methodologies (China) 
(Article  22.6 – US) (Exhibit USA -155) (BCI), which is based on USITC Publication 4595, dated February 2016  
(Exhibit  USA-16). The United States notes that its data source is a more recent USITC report,  while China's 
data source is an earlier USITC report, but highlights that the relevant data in those reports are the same. 
(United  States' response to Arbitrator question No. 10, para. 75). Considering that both parties present the 
same sales figures, we do not consider it necessary to explore their differences concerning the se data sources.  
378 Exhibits CHN -120 and USA -155 (BCI).  
379 Exhibit CHN -50. 
380 Exhibit CHN -50, Tables IV -4 and IV -6. 
381 United  States' written submission, para. 126, and fn 103 thereto. The United  States speculates that 
"[i]t is possible that the arbitrator in DS471 decided to exclude coated packaging paperboard from the relevant 
data based on  the USDOC 's determination to exclude from the product scope coated packaging paperboard 
products with a  thickness of 310 cm or more and a density of less than 0.70 g/cm3". (United  States ' response 
to Arbitrator question  No. 1 0, para. 76).  
382 China's response to Arbitrator question No.  38, paras. 25 and 26; and No.  77, para. 36.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 58 - 
 
 however, that even though China confirmed that the se figures should be used , it still relie s on the 
initially submitted figures with year -prior market data  in its calculations .383 
3.181.   Despite China's use of its original year -prior US domestic sales figures in its last relevant 
exhibit, we consider it reasonable, in light of the parties' agreement on the scope o f the CVD order  
excluding coated packaging paperboard, to rely on the US domestic sales figure provided by the 
United  States  and contained in Table IV -4 of Exhibit CHN -50. 
3.182.   As regards the two import varieties , the parties submit identical  figures based on the same 
USITC report.  
3.183.   Therefore, for the three sales varieties of Print Graphics, we shall rely on the following 
year-prior figures derived from USITC Publication 4192:  
Table 13: Year-prior (2009) market sales for Print Graphics  
Varietie s  Total sales  
US domestic variety  USD 1,023,688,000  
Imports from China  USD 297,527,000  
Imports from the rest of the world  USD 420,989,000  
 
3.4.1.2.8   Aluminum Extrusions  
3.184.   As noted, the parties disagree on the year -prior for Aluminum Extrusions. As a consequence, 
they present different values for the sales data to be used for the three varieties.  China presents 
sales data based on USITC Publication 4229  for all three varieti es384, while the United  States  
presents sales data obtained from the more recent USITC Publication 4677 .385 We note that for each 
of the two alternative calendar years advanced by the parties, both USITC Publication s 4229 and 
4677 contain the same figures for all three varieties.  
3.185.   As we have determined 2009 to be the year-prior for Aluminum Extrusions386, and sin ce the 
parties' data sources contain the same figures for that calendar year for all three sales varieties of 
Aluminum Extrusions, we shall rely on the following year -prior figures provided by China and derived 
from both U SITC reports:387 
Table 14: Year-prior (2009) market sales for Aluminum Extrusions  
Varieties  Total sales  
US domestic variety  USD 2,888,945,000  
Imports from China  USD 547,968,000  
Imports from the rest of the world  USD 359,382,000  
 
3.4.1.2.9   Steel Cylinders  
3.186.   As noted, the parties disagree on the year -prior for Steel Cylinders. In addition, they also 
disagree on the data sources and calculation methodologies to be used. As a consequence, they 
present different values for the sales data to be used for the three varieties. China presents sales 
data based on reports from a specific supplier (i.e. the TriMas  Corporation) for domestic sales388 and 
 
383 Exhibit CHN -120. 
384 Exhibit CHN -36, Table IV -2. 
385 Exhibit CHN -37, Table C -1. 
386 See section 3.4.1.1 above.  
387 Considering that both USITC reports present the same sales figures for year 2009, we do not 
consider it necessary to explore the parties' differences concerning the se data sources.  
388 Exhibit CHN -55. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 59 - 
 
 USITC DataWeb  for the two import varieties.389 The United  States  also relies on information from 
that supplier for sales of the US domestic variety, while it sources data for the two import varieties 
from US  Customs390 and the US Census Bureau.391 
3.187.   Regarding sales of the US domestic variety , China obtains  sales data from the 2012 SEC 
Annual Report (Form  10-K) of the TriMas  Corporation.392 According to China, Norris Cylinder , a 
sub-unit in the Engineered Components Division of the TriMas Corporation , is the only company 
producing high pressure steel cylinders in the United  States .393 China  estimates US  domestic 
shipments by attempting to extract the domestic sales of Norris Cylinder  from the sales of TriMas 
Corporation's  Engineered Components Division  reported in the 2012 SEC Annual Report .394 
According to China, the engineered componen ts division consisted of producers of: (i) specialty 
engines and engine replacement parts for use in oil and natural gas production and other industrial 
and commercial markets; and (ii) steel cylinders produced by Norris Cylinder.395 Since the 10K form 
does not separate revenue due to domestic shipments from export sales nor across the different 
lines of TriMas Corporation's  Engineered Components Division, China assumes that, first, 50% of 
the reported 2010 revenue of TriMas Corporation's Engineered Components Division  stems from 
Norris Cylinder , and, second, that two thirds of reported revenue comes from domestic sales.396 
3.188.   The United  States  initially  propose d a similar methodology to that of China397, albeit for a 
different year -prior, and based on the assumption that Norris  Cylinder's entire estimated revenue 
for 2011 stemmed from US domestic sales.398 In response to a follow -up question by the Arbitrator, 
the United  States  submitted a letter containing the exact value of domestic sales figur es of steel 
cylinders by Norris Cylinder for the 2010 and 2011 calendar years  (i.e. for both alternative 
years -prior).399 According to the United  States , relying on these direct figures would obviate the 
need to make any assumptions concerning the value of Norris Cylinder's domestic sales.400 
3.189.   The domestic sales data from Norris Cylinder provided by the United  States  seems to us to 
be the best available data on the record, since it contains an exact figure, without requiring 
assumptions or estimation methodolo gies, and has been issued directly by Norris Cylinder. 
Accordingly, we consider it reasonable to rely on this data for domestic sales but using the figure 
relating to calendar year 2010, which we have determined to be the year -prior for Steel Cylinders.401 
3.190.   As regards the two import varieties , the parties' figures differ because they concern 
different calendar years as the year -prior and  also rely on different data sources . China submits data 
for the full calendar year 2010 from the USITC online DataWeb syste m402, whereas the United  States  
relies o n company -specific USCBP data for imports from China403, and HTS  aggregates from the 
 
389 Exhibit CHN -120. 
390 Exhibit USA -58 (BCI).  
391 Exhibit USA -59. 
392 China's methodology paper, para. 95; written submission, para. 23. See also Exhibit CHN -55. 
393 China's methodology paper, para. 95; Exhibit CHN -94. 
394 Exhibit CHN -94; Exhibit CHN -55.  
395 Exhibit CHN -94. 
396 Exhibit CHN -94. 
397 Exhibit USA -60. 
398 United  States' response to Arbitrator question  No. 1 4, paras. 93 -96. 
399 Exhibit USA -116 (BCI); United  States ' response to Arbitrator question  No. 48, para. 56 . 
400 United  States ' response to Arbitrator question  No. 48, para. 56 . 
401 See section 3.4.1.1 above.  
402 China indicates that it uses the primary HTS10 tariff code HTS 7311.00.0030 in USITC Publication 
4328 to download import data from USITC DataWeb  for both import varieties . This USITC publication notes, 
however, that "[s]ubject  merchandise may also be imported under HTSUS statistical reporting numbers 
7311.00.0060 or 7311.00.0090" (Exhibit CHN -41). In response to a follow -up question by the Arbitrator, China 
confirms, and the United  States  agrees , that HTS 7311.00.0030 is the appropriate and sole HTS code to be 
used in this context and that the other HTS codes are only secondary ones. (China's methodology paper, 
para. 94; China's response to Arbitrator question  No. 49, para. 44; United  States ' response to Arbitrator 
question  No. 49, paras. 57 -58; and Exhibits CHN -41 and CHN -74). 
403 Exhibit USA -58 (BCI). See fn 326 to para. 3.151 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 60 - 
 
 US Census Bureau for imports from the RoW.404 As mentioned, the parties disagree on the 
appropriateness of relying on USCBP data.405 
3.191.   As we have determined 2010 to be the year -prior for Steel Cylinders406 and since the data 
sources provided  by the United  States  do not contain import data for that year, we consider it  
reasonable to rely then on the import data provided by China for 2010.  
3.192.   Therefore, with regard to the three sales varieties  of Steel Cylinders, we shall rely on the 
following year -prior figures:  
Table 15: Year -prior (2010) market sales for Steel Cylinders  
Varieties  Total sales  
US domestic variety  [[***]] 
Imports from China  USD 23,009,0 00 
Imports from the rest of the world  USD 2,821,0 00 
 
3.4.1.2.10   Solar Panels  
3.193.   In the case of Solar Panels, the parties  agree that the correct year -prior is 2011. However, 
they disagree on the data sources, and they also raise issues of product scope. As a consequence, 
the parties present different values for the sales data for the three product varieties. China submits 
sales data based on USITC Publication 4360 (Table IV -4) for all three varieties.407 The United  States  
submits sales data used in US – Anti-Dumping Methodologies (China) (Article  22.6 – US)408, and, as 
a consequence, indirectly relies on a USITC report for sale s of the US domestic variety, and on 
US Customs and US Census Bureau for imports.  
3.194.   Regarding sales of the US domestic variety , both parties rely, directly or indirectly, on 
different USITC reports.409 As mentioned, China relies on USITC Publication 4360 , dated November 
2012410, whereas the United  States  relies on USITC Publication 4519, dated February 2015.411 
According to the United  States , the figures in these USITC reports differ because more data bec ame 
available between 2012 and 2015.412 
3.195.   Each party challenges the approach advanced by the other party. In general, China considers 
it inappropriate to rely in the present proceedings  on the sales data previously used in 
 
404 Exhibit USA -59. While the exact HTSUS codes used are not mentioned in the source used by the 
United  States , in response to a question from the Arbitrator, the United  States  explains that it uses the same 
HTS10 code as China . (United  States ' response to Arbitrator question  No. 1 4). 
405 See fn 328 to para. 3.151 above.  
406 See section 3.4.1.1 above.  
407 Exhibit CHN -45. 
408 Exhibit USA -44 (BCI).  
409 The United  States originally argued that its figure for US domestic shipments came from the same 
USITC report that China had submitted ( USITC Publication 4360), referenced by the arbitrator in 
US – Anti-Dumping Methodologies (China ) (Article  22.6 – US). However, the United  States recognized that the 
arbitrator in those proceedings was not able to confirm this number. During the course of the proceedings, the 
United  States explains that the report containing its figures is the more r ecent USITC Publication 4519 
(United  States ' response to Arbitrator question  No. 42, para. 38. See also Exhibit CHN -45).  
410 Exhibit CHN -45. 
411 Exhibit USA -21. 
412 United  States ' response to Arbitrator question  No. 42, para. 38.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 61 - 
 
 US – Anti-Dumping Methodologies (Chi na) (Article  22.6 – US) for several reasons413, especially 
because, according to China, there is publicly available data that would be more appropriate for 
"evaluating the specific violations at issue in this dispute".414 The United  States  claims that China' s 
data excludes photovoltaic (PV) cells, which was included in the scope of the relevant CVD measure 
as indicated in the CVD order in the Federal Register .415 Specifically, for US domestic shipments, the 
United  States  notes that China's figure includes only  PV modules, while the United  States  presumes 
that the figure it cites is larger because the arbitrator in US – Anti-Dumping Methodologies (China) 
(Article  22.6 – US) had most likely estimated the value of US domestic shipments of PV cells and 
derived its own estimate  for domestic shipments of cells and modules .416 
3.196.   Later in the proceedings, the United  States  notes that it does not disagree with China's 
approach of using data for modules alone (without separately accounting for shipments of cells) as 
a proxy for the size of the US domestic Solar Panel market .417 Similarly, China agrees that the values 
are similar in both USITC reports and states that it does not oppose the use of the more recent 
USITC  report as the basis for domestic sales in the year -prior.418 Therefore, considering China's 
position, we adopt the figure for the US domestic variety proposed by the United  States  based on 
USITC Publication 4519.419 
3.197.   As regards the two import varieties , the parties'  figures differ because they rely on 
different data sources. China submits data for the full calendar year 2007 from Table IV -4 of USITC 
Publication 4360  for both import varieties.420 The United  States  relies on company -specific USCBP 
data for impor ts from China421, and on HTS  aggregates from the US Census Bureau for imports from 
the RoW.422 As mentioned, the parties disagree on the appropriateness of relying on USCBP data 
with regard to both import varieties.423 
3.198.   Regarding imports from China , China believes that public data on PV modules alone are 
an accurate proxy for the overall Solar Panel market as imports of solar cells from China were small 
during both the year -prior and the remedy year.424 The United  States  notes that the USCBP data it 
submits covers imports of both PV cells and modules .425 The United  States  adds that t he USCBP data 
 
413 First, in China's view, arbitrators in Article 22.6 proceedings should rely on public, verifiable data 
whenever possible. Second, China considers that the claim that the public data reported in the USITC reports 
contains non -subject imports is difficult t o reconcile with the USITC's described efforts to report apparent 
domestic consumption as precisely as possible for the product subject to the investigation. Third, China argues 
that since none of the parties in US – Anti-Dumping Methodologies (China) (Art icle 22.6 – US) argued for the 
use of the two -step Armington model to calculate the level of N/I, the appropriateness of some of the key data 
required for the two -step Armington model was not fully explored in those proceedings. Fourth, China claims 
that t he violation at the core of US – Anti-Dumping Methodologies (China) (Article  22.6 – US) required 
additional, nuanced, firm -specific data, which is not needed to compute the level of N/I in this dispute. Finally, 
China notes that the data in US – Anti-Dumpi ng Methodologies (China) (Article  22.6 – US) contains information 
on additional varieties for China which is unnecessary for this proceeding and serves only to complicate the 
analysis  (China's response to Arbitrator question  No. 1 0, paras. 17 -21). 
414 China' s response to Arbitrator question  No. 1 0, para. 21.  
415 Exhibit CHN -43. 
416 United  States ' response to Arbitrator question  No. 1 0, paras. 75 -80. 
417 The United  States explains that most domestically produced cells are internally used in the 
production of modules  by a same firm and, as consequence, separately estimating US domestic shipments of 
cells and those of modules would result in double -counting. (United  States ' response to Arbitrator question  
No. 42, para. 39).  
418 China's response to Arbitrator question No.  74, para. 25.  
419 Exhibit USA -21. 
420 Exhibit CHN -45. 
421 Exhibit USA -58 (BCI). See fn 326 to para. 3.151 above . According to the United  States, th e 
arbitrator in US – Anti-Dumping Methodologies (China) (Article  22.6 – US) did not use USITC imports data for 
Solar Panels' year -prior data, "so the United  States likewise did not use USITC data". (United  States' closing 
statement at the meeting of the Arbitrator, para. 25).  
422 Exhibit USA -59. 
423 See fn 328 to para. 3.151 . 
424 China's response to Arbitrator question No. 41, para. 31. 
425 United  States ' response to Arbitrator question  No. 1 0, paras. 77 and 78. However, 
Exhibit  USA-58 (BCI)  mentions only "CS PV cells". In response to a follow -up question by the Arbitrator, the 
United States clarified that the label "CSPV cells" was intended to be a shortened version of "CSPV Cells and 
Modules" (United  States ' response to Arbitrator question  No. 43, para. 41 (referring to Exhibits USA -58 (BCI) 
and USA -59)). WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 62 - 
 
 used by the US – Anti-Dumping Methodologies (China) (Article  22.6 – US) arbitrator has appropriate 
scope and temporal coverage to be applicable in the present proceedings concerning CVD orders.426 
3.199.   China disagrees with the United  States  that t he USCBP data  has appropriate scope. China 
claims that, by referring to the title of t he HTS codes underlying the United  States ' USCBP data, the 
United  States  has included a large number of out -of-scope products in its submission, specifically 
generators and lead acid batteries.427 China adds that  the United  States ' USCBP data may 
undercount  year-prior imports from China because USCBP begins to request information from 
exporters of subject merchandise once a preliminary duty is imposed, which calls into question the 
suitability of relying on USCBP data for the year -prior sales figures of the Chinese import variety .428 
According to China, the preliminary determination date for a CVD order on Solar Panels was 
26 March  2012. It is therefore not evident to China  how USCBP may have recorded company -specific 
importation of subject merchandise already in the year -prior (2011) .429 China adds that even if 
USCBP were able to access pre -CVD import records of subject firms ex post , it may fail to include in 
its set of sub ject firms Chinese firms that had exported in the past but stop ped exporting once the 
CVD order was put in place . China argues that this would result in an  undercount  of imports from 
China.430 
3.200.   According to the United  States , this concern by China is based on "a misunderstanding about 
the nature of the year -prior USCBP data" because USCBP data are not based on subject merchandise 
under specific CVD orders, but are based instead on the reference HTS codes that are used by USCBP 
to identify shipments that may be subject to relevant duties.431 Accordingly, the United  States  
considers that the USCBP data it submits covers the entirety of Chinese imports under the relevant 
HTS codes for the year -prior.  
3.201.   As regards sales of imports from the  rest of the world , China source s its figure  from the 
above -mentioned USITC report432 and covers only PV modules , whereas the sales figure submitted 
by the United  States  is based on data from the US Census Bureau .433 
3.202.   The United  States  argues that the differe nce between the USITC -reported data advanced by 
China and the HTSUS -based data used by the United  States  appears to be due to a difference in 
product coverage.434 According to the United  States , the USITC -reported data is "compiled from data 
submitted in re sponse to [USITC] questionnaires" and only includes imports of modules among 
subject Solar Panels products. In addition, the United  States  explains that the HTSUS -based USCBP 
and US Census figures submitted by the United  States  aggregate values of all impo rts under the 
reference HTSUS codes and include imports of both cells and modules, as well as any other products 
that fall under the reference HTSUS codes.435 China argues that the USITC data it submits for 
year-prior RoW imports purges these products as we ll as out -of-scope thin film solar panels.436 China 
reiterates that the HTSUS codes used by the United  States  include substantial amounts of 
out-of-scope products.437 
 
426 United  States ' response t o Arbitrator question  No. 44, para. 42.  
427 China 's response to Arbitrator question  No. 75, paras. 26 -35. 
428 China's response to Arbitrator question  No. 1 3, paras. 45 -58. 
429 See Exhibit CHN -99. 
430 China's response to Arbitrator question  No. 1 3. 
431 United  States ' response to Arbitrator question  No. 32, para. 6.  
432 Exhibit CHN -45. 
433 Exhibit USA -59. 
434 United  States' response to Arbitrator question No. 75, paras. 20 and 21.  
435 United  States' response to Arbitrator question No. 75, paras. 20 and 21 and fns 13, 14, and 15 
thereto (quoting Exhibit CHN -45 and referring to the United States' response to Arbitrator question Nos. 10 
and 59).  
436 China's comments on the United  States' re sponse to Arbitrator question No. 75, para. 13.  
437 China explains that three of the HTS codes listed in the Solar Panels CVD order cover out -of-scope 
merchandise: 8501610000 (AC generators (alternators) of an output not exceeding 75 kva); 8501318000 
(DC generators, not exceeding 750 w); and 85072080 (Lead -acid storage batteries other than of a kind used 
for starting piston engines or as the primary source of power for electric vehicles). China claims to have 
confirmed, using data reported by USITC DataWeb, t hat the United  States used the HTS codes for generators 
and lead -acid batteries in its submitted import data. China also claims that, in addition to excluding 
out-of-scope generators and batteries, the USITC data submitted by China is preferable to the U.S . Census and 
USCBP data because it excludes out -of-scope thin -film products under HTS code 8541406020. 
(China's  response to Arbitrator question No. 75, paras. 26 -35. See  also Exhibits CHN -45 and CHN -123).  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 63 - 
 
 3.203.   We consider that the import estimates of both parties have shortcomings. We acknowledge 
China's concern that the United  States ' estimate appears to be overinclusive due to the presence of 
out-of-scope generators and lead acid batteries. We also agree with the United  States ' criticism that 
the import of solar cells, not captured by China's estima te, should be accounted for given the scope 
of the relevant CVD order. Accordingly, we cannot rely on either party's import estimates.  
3.204.   We note that the USITC report advanced by China  includes a table that reports the value of 
imports for both solar modules  and solar cells (Table IV -2). This table is based on landed duty -paid 
rather than apparent consumption, which is the basis of Table IV -4 relied upon by China. These 
tables appear to differ due to technical adjustments made by USITC; however, these adjustm ents 
are small in value when based on a comparison of import values of modules only.438 In order to 
account also for solar cells, we consider it reasonable to rely on Table IV -2 of USITC Publication 4360 
to obtain an estimate for both import varieties, even  if this table reports landed duty -paid and not 
apparent consumption as the tables predominantly used by the parties.  
3.205.   Therefore, with regard to the three sales varieties  of Solar Panels, we shall rely on the 
following year -prior figures:  
Table 16: Year-prior (2011) market  sales for Solar Panels  
Varieties  Total sales  
US domestic variety  USD 804,853,000  
Imports from China  USD 1,905,220,000  
Imports from the rest of the world  USD 824,588,000  
 
3.4.2   Remedy year  
3.206.   As noted439, the parties agree that, since the RPT expired on 1 April 2016, the baseline year 
or reference period for a counterfactual analysis should be the 2017 calendar year .440 The parties 
disagree on the data points to be used for each of the ten products.  
3.207.   Unlike  the sales data necessary for the year -prior, only an estimate of the total market size 
is needed  for the remedy year , rather than estimates for each of the three varieties (US domestic 
sales, imports from China, and RoW imports). China, in fact, submits o nly an aggregate remedy -year 
sales estimate for four of the products at issue (Line Pipe, Kitchen Shelving, Wire Strand, and 
Seamless Pipe)441, whereas for the remaining six products ( Pressure Pipe, OCTG, Print Graphics , 
Aluminum Extrusions , Steel Cylinders , and Solar Panels) , China submits data for each of the three 
varieties. The  United  States  contests the remedy -year sales estimates of China for all ten products, 
and proposes alternative estimates based on estimates for each of the three varieties of  all ten 
products.442 
3.208.   The parties' disagreements  concern several issues, including estimation methodologies, data 
sources, and product scope. Several of these disagreements relate to more than one product. 
Accordingly, before addressing each product individually , we examine these general, cross -cutting 
disagreements and issues.  
3.4.2.1   General d isagreements  affecting remedy -year market size  
3.209.   The parties rely on USITC reports pertaining to the products and years at issue for total 
market size and variety estimates when such reports are available. However, unlike for the 
year-prior, USITC reports with the appropriate product scope covering the remedy year are available 
 
438 Table IV -4 reports USD 1,729 million of solar mod ule imports from China, Table IV -2 reports 
USD 1,799  million (Exhibit CHN -45). 
439 See para. 3.9 above.  
440 China's methodology paper, para. 66; United  States' written submission, para.  28 (referring to 
China's methodology paper, para. 4).  
441 Exhibit CHN -120. 
442 Exhibit USA -156 (BCI).  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 64 - 
 
 only for two products (OCTG and Solar Panels)443 and even in these two cases they only apply to a 
subset of varieties. As a result, for remedy -year market size estimates, the parties rely on other 
sources or extrapolate data from USITC reports of earlier years.  
3.210.   Each party criticizes the adjustments chosen by the other party. In particular, the 
United  States  questions China's use of a gross domestic product ( GDP) deflator to extrapolate data, 
whereas China criticizes the United  States ' reliance on confidential USCBP data to obtain estimates 
for imports from China.  We address these two disagreements in turn.  
3.4.2.1.1   Remedy  year data estimates  obtained using a GDP deflator  
3.211.   As China explains , for five products444 it use s information  from either a USITC sunset review 
or a USITC report from a nother investigation involving the same product scope  for estimating the 
sales of the three varieties and calculating total market size.  However, as the reports  on three of 
those five products ( Pressure Pipe, Print  Graphics , and Aluminum Extrusions ) were published prior 
to 2017, China  scales data from the latest year with reported market data available to 2017 values 
using a GDP deflator.445 For a sixth product,  Steel Cylinders, China u ses data on import supply from 
a USITC sunset review and adjusts it by a GDP deflator  for the import varieties , and uses domestic 
data that is available directly for 2017 from the sole US producer for the domestic sales  variety .446 
For the other four products ( Line Pipe, Kitchen Shelving, Wire Strand , and Seamless  Pipe), no 
subsequent USITC reports dated after the relevant year -prior a re available or the information therein 
is redacted, so China estimate s the 2017 market size by scaling the size of the whole market in the 
relevant year -prior for each product using a GDP deflator  without differentiating by variety .447 In 
other words, China adjusts USITC data from years preceding the remedy year using a GDP deflator, 
whether for all or only some varieties, for all products except OCTG and Solar Panels.  
3.212.   The United  States  argues  that China's GDP deflator approach is unsou nd and overstate s the 
level of N/I.448 According to the  United  States , China's GDP deflator approach is not a valid method 
for estimating market size in the remedy year since applying a GDP deflator to data from previous 
years merely show s the market size o f the original data year in terms of 2017 dollars, rather than 
the actual market size in 2017 . The United  States  claims that , in effect, China is assuming constant 
consumption between the original data year and 2017.449 
3.213.   The United  States  adds that, w hile th e underlying USITC data are likely to be accurate for 
the original data year, there is no evidence that putting the US market size for that original data 
year in terms of 2017 dollars, by applying a GDP deflator, would accurately reflect the size of the 
US market in 2017.450 According to the United  States , as a measurement of inflation , the GDP 
deflator can be used on a given year 's value to calculate what that value would be in terms of another 
year's dollars ; however, a GDP deflator is not an appropriate p roxy for projecting the future demand 
or consumption, or measuring the past demand or consumption, for a product.451 
3.214.   The United  States  notes that, unlike the estimates generated by China' s GDP deflator , the 
actual U S market size , as reported in USITC reports, has varied, sometimes dramatically, 
year-to-year.452 According to the United  States , there is no relationship between the actual 2017 
market size  and the projected 2017 value based on applying the GDP deflator to the value from the 
latest  year for which USITC data is available .453 In particular, the United  States  argues that if a 
remedy year happened to be determined as  2009 or any other year that t he economy was in 
recession, the GDP deflator would fail to reflect the actual decline and instead would show growth in 
consumption. The United  States  maintains that, "[b]ecause  a GDP deflator is not able to accurately 
estimate consumption for every year, it simply is not an appropriate tool for estimating consumption 
 
443 Exhibits CHN-46 and USA -148. 
444 Pressure Pipe, OCTG, Print  Graphics, Aluminum Extrusions , and Solar Panels . 
445 China's methodology paper, para. 99; Exhibit CHN -120. 
446 China's methodology paper, para. 100; Exhibit CHN -120. 
447 China's methodology paper, para.  101. 
448 United  States' written submission, paras. 148 -150. 
449 United  States' response to question No. 23, para. 132.  
450 United  States' response to question No. 23, para . 133.  
451 United  States' response to question No. 23, para. 133.  
452 United  States' response to question No. 23, para. 134, including Figures 3 -5 (referring to 
Exhibit  USA-102 (BCI)).  
453 United  States' response to question No. 23, Figures 3 -5. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 65 - 
 
 for any given year ".454 The United  States  adds that  it is also inappropriate to assume that the year 
China chose as an original data year is the best proxy for the remedy year in terms of appar ent 
consumption.455 
3.215.   The United  States  claims that  China seems to calculate the market size  for 2017 by not 
taking into account specific factors related to the products when estimating US domestic shipments, 
by not providing the relevant customs information on the actual product, and by not taking into 
account US imports from the RoW.456 The United  States  claims that, in contrast,  the value s of the 
US market for each product that the United  States  uses for its ana lysis is based on actual shipment 
data for the relevant product, which is significantly more accurate than China's estimate based on a 
GDP deflator.457 
3.216.   From the outset, China  recognizes that in US – Anti-Dumping Methodologies (China) 
(Article  22.6 – US), the arbitrator  expressed a preference for directly measuring the size of the 
market in the remedy year. China argues that this preference is precisely why it gathered information 
from later USITC reports when such reports were available. However, China argue s, the USITC has 
not provided any non -redacted information for Kitchen Shelving, Line Pipe, Seamless Pipe , or 
Wire Strand, and hence adjusting market size by the inflation rate (as proxied by the GDP deflator) 
is a reasonable approach.458 
3.217.   China rejects the alternative  estimates  advanced  by the United  States .459 China reiterates 
that it applied the same approach in all cases for measuring the total US market size in the remedy 
year.460 In particular, China recalls, in five cases461 it has used USITC reports that  are more recent 
than the year -prior to produce its remedy -year estimates , and notes that in each  of these  cases the 
GDP deflator  adjustment was minor – no more than a 6% adjustment for inflation. Thus, China 
argues, unless the United  States  is proposing t hat the USITC reports China relies upon are 
inaccurate, there can be little debate over China's estimate of the remedy -year market size. As 
regards a sixth product, Steel Cylinders, China claims that it has used an up -to-date Form -10K 
report from the only US domestic producer along with remedy -year HTS trade data to compute the 
overall remedy -year market size .462 In the remaining  four cases ( Line Pipe, Kitchen Shelving, 
Seaml ess Pipe , and Wire  Strand), China claims that there were no more recent  USITC reports 
covering the subject product, and  argues that  "[c]onsistent with the principles of consistency and 
transparency, … adjusting the year -prior market size to estimate the re medy -year market size is 
perfectly reasonable ".463 
3.218.   China adds that the United  States  proposes using a mix of confidential data and ad hoc 
adjustments to publicly available data.464 China criticizes the United  States ' use of confidential 
USCBP data for import s from China arguing that it cannot confirm its accuracy.465 Regarding imports 
from the RoW, China rejects the ad hoc , ex post  adjustments to the public HTSUS trade data that 
the United  States  proposes with respect to Seamless Pipe.466 Regarding domestic production, China 
claims that the approach  of the United  States  is problematic because it discards verified USITC data 
in favour of a series of arbitrary assumptions, and, thus, there is no reas on to presume that such an 
approach would lead to a more accurate estimate of the domestic industry's size. On the contrary, 
according to China, its reliance on the GDP deflator is based on verified data and assumes that 
domestic production is stable in re al value terms and grows with inflation.467 
3.219.   Further, China argues, if one considers Pressure Pipe, Seamless Pipe , and  Print Graphics,  
in each of these cases, the United  States  downsizes the value of imports in the remedy year from 
 
454 United  States'  response to question No. 23, para. 135. (emphasis original)  
455 United  States' response to question No. 23, para. 135.  
456 United  States' written submission, para.  148. 
457 United  States' written submission, para.  8. 
458 China's methodology paper, para.  102. 
459 China's written submission, paras.  78-85. 
460 China's written submission, para. 80.  
461 Pressure Pipe, OCTG, Print  Graphics, Aluminum Extrusions , and Solar Panels . 
462 China's written submission, para. 80.  
463 China's written submission, para.  81. 
464 China's written submission, paras.  82-84. 
465 China's  response to Arbitrator question  No. 24, para. 61.  
466 China's  response to Arbitrator question  No. 24, para. 62.  
467 China's res ponse to Arbitrator question No. 24, para. 63. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 66 - 
 
 other import supply source s using an ad hoc scaling metric based on adjustments from the original 
investigation ( which is eight or more years -prior). China finds the United  States ' position untenable. 
China argues  that, while  the United  States  opposes China's GDP deflator -based approach which  
occasionally us es information from original investigation USITC reports  (if later reports are 
unavailable) , the United  States  relies on  those same reports when it proposes ad hoc  adjustments 
to lower the market size in the remedy year.468 
3.220.   For Ch ina, adjusting the best verifiable, publicly available data to get an estimate for the 
remedy year would be a relatively easy task in this dispute , because  for six of the cases, the 
timeframe requiring inflation adjustment is short, making  it unlikely that different price indices will 
imply large differences in the adjustment.469 China concludes by stating that the United  States ' 
position that the GDP deflator approach cannot measure market  changes is inaccurate. According to 
China, the fact  that it used US market size information from USITC reports from 2015 or 2016, for 
example, to estimate the size of the US  market in 2017, is hardly unreasonable. The relevant 
question, China claims, is whether another price deflator would be more appropri ate than the GDP 
deflator.470 According to China, the United  States  presents no evidence that any other deflator is 
superior to what China has proposed, and in most cases, the GDP deflator's impact on the estimate 
of the US market size is quite modest.471 
3.221.   In principle, we do not consider it a priori unreasonable to rely on data from years that are 
close to the remedy year adjusted  by an appropriate index that captures changes in market size if 
reliable sales data from the remedy year is unavailable. However, such an approach does not appear 
warranted when reliable data for the actual remedy year is available.  
3.222.   In addition, assuming that data less recent than the remedy year is reliable as a point of 
departure for estimating remedy -year sales, we do not consider  a GDP deflator to be an appropriate 
index for adjusting such data in the context of this dispute. According to the United States Bureau 
of Economic Analysis ( USBEA), the source of China's data,472 the GDP deflator " measures changes 
in the prices of goods and services produced in the United  States ".473 The USBEA adds that the GDP 
deflator is "a  measure of inflation ".474 Hence, as argued by the United  States , using a GDP deflator 
would imply assuming constant consumption  levels over time with only prices changing. We agree 
with the United  States  that such an assumption is unreasonable given that the United  States  has 
provided several examples in which consumption has varied significantly over time.475 
3.223.   We also note that the  arbitrator in US – Anti-Dumping Methodologies (China) (Article  22.6 
– US) rejected China's suggested inflation -based adjustment of data from earlier calendar years in 
order to calculate remedy -year sales as "not reasonable or objective":  
China's suggestion to use inflation -adjusted values from the year prior to the imposition 
of the anti -dumping orders, rather than 2017 values, is not reasonable or objective. We 
 
468 China's written submission, para.  83. 
469 China's response to Arbitrator question No. 26, para. 72. According to China, only for four cases 
(Line Pipe, Kitchen Shelving, Wire Strand, and Seamless Pipe) the timeframe requiring inflation adjustment 
would be long, since for the other products China either provided data for 2015 (i.e. Pressure Pipe, 
Print Graphics, and Aluminum Extrusions), or for 2013 (i.e. OCTG), or no adjustment is needed (i.e. for 
Steel Cylinders and Solar Panels). ( China's  response to Arbitrator question  No. 26, para. 73).  
470 In a response to a question from the Arbitrator asking for other publicly available deflators, China 
presented an alternative to its GDP deflator in the form of a produc t-specific Producer Price Index ("PPI"). 
According to China, the overall impact of using product -specific PPI data rather than the GDP deflator is 
modest. However, while the PPI varies slightly from case to case and from the GDP deflator, it is not obvious  
for China that the PPI is a preferred metric to adjust the public data to evaluate the market size in 2017 since 
the PPI focuses on the very broad output of US producers including not only the goods and services purchased 
by producers as inputs in their o wn operations or as investment, but also goods and services bought by 
consumers from retail sellers and directly from the producer. China argues that, in contrast, the GDP deflator, 
as a measure of inflation, is a better representation of the real changes in market s size for the products at 
issue (China's  response to Arbitrator question  No. 26, paras. 70 -71; Exhibits CHN -103 and CHN -104). 
471 China's written submission, para.  85. 
472 See Exhibit CHN -53. We note that China indicates Federal Reserve Economic Data  as source, which 
identifies as original source the USBEA (see https://fred.stlouisfed.org/series/GDPDEF , last accessed 
1 October  2021).  
473 https://www.bea.gov/data/prices -inflation/gdp -price-deflator , accessed  on 5 October, 2021.  
474 https://www.bea.gov/data/prices -inflation/gdp -price-deflator , access ed on 5 October, 2021.  
475 See para. 3.214  above . WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 67 - 
 
 recall that our mandate is to determine the level of nullification or impairment caused 
by the United  States ' failure to implement the DSB recommendations and rulings by  the 
expiry of the reasonable period of time. We also recall that the parties agreed to use 
calendar year 2017 as the reference period. Thus, we consider it appropriate to use the 
actual 2017 values of the US market, including the actual 2017 value of US s hipments, 
when applying the Armington model to simulate the impact of reducing the 
WTO-inconsistent anti -dumping duties from the actual 2017 duty rates to the 
counterfactual duty rates. If we were to use the values of the US market in the year 
prior to the  imposition of the anti -dumping orders, inflation -adjusted or not, we would 
be simulating the impact of reducing the WTO -inconsistent anti -dumping duties at a 
point in time where these duties had not yet been imposed. In our view, this would not 
be in acco rdance with our mandate.476 
3.224.   China argues that by using the latest USITC reports available or other transparent market 
information, it has addressed this criticism by the arbitrator in US – Anti-Dumping Methodologies 
(China) (Article 22.6 – US).477 We disagre e. If reliable data from the actual remedy year is available, 
using data from earlier USITC reports  does not address the criticism since it would still be simulating 
the impact of reducing the WTO -inconsistent CVDs before the end of the RPT, which would no t 
correspond to the parties' agreed view as to our mandate.  
3.225.   We note China's argument that, by relying  on the year-prior data  of certain CVDs  to make 
adjustments to remedy -year data that admittedly  does not have the appropriate product scope, the 
United  States essentially mirrors China's approach and, therefore, acts inconsistently  with its own 
criticism of China's GDP deflator -based methodology . However, we consider it more reasonable to 
assum e that certain consumption ratios remain constant over time than the assumption that  total 
consumption remains constant over time. For example, the United  States  scales  for Pressure Pipe 
2017 RoW imports from basket HTSUS codes using the share of subject product in these HTSUS 
codes obtained with information from the or iginal USITC reports.478 This assumes that the ratio of 
subject product in the more aggregated HTSUS codes has remained constant. Adjusting actual 2017 
import data with such a ratio still ensures that the resulting estimate is based on data from the 
remedy year. In contrast, assuming constant consumption over time leads to an estimate that is 
based on year -prior data.  
3.226.   We also note that for three products (Pressure Pipe, Kitchen Shelving, and 
Aluminum  Extrusions), there is no remedy -year data on the record fo r domestic shipments since 
both parties rely on data from prior years. In such a case, a scaling exercise might be reasonable, 
but we consider that an appropriate index for this exercise should optimally consider changes in both 
quantities and prices, and not just in one of them as is the case for the GDP deflator. Such indices 
are publicly available in the form of growth rates for national or industrial output.  
3.227.   In light of the above, we reject China's remedy -year estimates for all products that are 
obtaine d using a GDP deflator for the purposes of these proceedings. We shall proceed to reviewing 
the data provided for each of the three varieties of each product at issue, and, subject to such data 
being reasonable, we will use it in order  to determine the tot al remedy -year market size  for each 
product as detailed in our product -by-product analysis in section 3.4.2.2 . 
3.4.2.1.2   Use of USCBP data for imports from China as submitted by the United  States  
3.228.   The United  States  relies on data obtained from USCBP to submit remedy -year data from 
2017 for the Chinese import variety  of all ten products. The United  States  repeatedly argues that 
this data was used by the arbitrator in US – Anti-Dumping Methodologies (China) (Article 2 2.6 – US) 
and should therefore be considered appropriate also for our proceedings.479 
3.229.   China argues that relying on such USCBP data is inappropriate. According to China, we 
should rely in the first instance on verified data reported by the USITC even if it r elates to years 
earlier than the remedy year, and only turn to other publicly available data where the relevant USITC 
 
476 Decision by the Arbitrator, US – Anti-Dumping Methodologies (China) (Article 22.6 – US), para. 7.18 . 
(fn omitted)  
477 China's methodology paper, para. 102.  
478 United  States' written submission, paras. 144 -147. 
479 See e.g. United  States' response to Arbitrator question No. 15, paras. 97-107, and No. 80, para. 35.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 68 - 
 
 data is not publicly available. China considers that the fact that the arbitrator in US – Anti-Dumping 
Methodologies (China) (Article 22.6  – US) relied on exporter -specific USCBP data does not support 
the use of such data in the present arbitration because the WTO violations at issue in that dispute 
related to an exporter -specific duty adjustment. According to China, the WTO violation at iss ue in 
these proceedings does not vary depending on the exporter and, thus, the only reason to use the 
exporter -specific USCBP data submitted by the United  States  would be if the United  States  could 
demonstrate that the USCBP data is somehow superior to the  data obtained from USITC reports or 
HTSUS  import data submitted by China.480 
3.230.   China adds that USCBP  data is confidential and could only be relied upon if the United  States  
submitted additional data reporting imports by exporter to allow both China and the A rbitrator  to 
verify its accuracy.481 China argues that a llowing one party to assert the value of imports  subject to 
the CVD orders  without enabling  the other party to verify th ese value s would "call the legitimacy of 
the N/I calculation into question ".482 
3.231.   In addition, as regards specifically Line Pipe and OCTG, China claims that the United  States ' 
data relies upon customs value, even though USITC deemed landed duty value paid the correct 
metric to measure imports, which is higher in value. Chin a also claims that for Line Pipe and Solar 
Panels , some imports that enter under the HTS codes listed in the relevant CVD orders are 
non-subject products. According to China, the USITC data it submitted excludes any out -of-scope 
product included in the USC BP data submitted by the United  States .483 
3.232.   The United  States  responds that China has not supported its argument that relying on USCBP 
data is inappropriate. The United  States  suggests that China can verify USCBP data by comparing it 
with export data compile d by the General Administration of Customs China and argues that the 
United  States  relies on non -public data only where adequate public data is not available. In 
particular, the United  States  argues that , for the remedy -year, USCBP data is the most accurat e 
data source for the products at issue . According to the United States, this is because the USCBP 
collects data using the description of the product as defined in the relevant CVD order , through its 
Automated Commercial Environment  system .484 
3.233.   Given that ou r mandate points us to the remedy year , we consider that using actual data 
from the remedy year is preferable to using data from previous years that are adjusted by inflation 
or growth rates. Hence, insofar  as there are no USITC reports covering 2017, we a gree with the 
United  States  that USCBP data directly for 2017 appear to be the most accurate remedy -year 
Chinese import data on the record. The fact that USCBP data is not public does not a priori  disqualify 
such data. As a matter of fact, prior arbitrator s have relied on non -public data to establish the level 
of N/I.485 Also, we agree with the United  States  that, apart from pointing out the non -public nature 
of USCBP data, China has not indicated why such data should generally be unreliable.486 
3.234.   Accordingly, when no superior data is availabl e for a certain product at issue, we shall rely 
on USCBP data for imports from China in the remedy year  provided by the United States . 
3.4.2.2   Remedy -year market size  per product  
3.235.   As mentioned, the parties  disagree on remedy -year market size  estimates for all ten 
products. As noted, the parties' disagreements concern several aspects including estimation 
methodologies, data sources and product scope. W e address the se data issues put forward by the 
parties with regard to e ach of the ten product s at issue , including as regards the three sales varieties . 
 
480 China's response to Arbitrator question No. 44, para. 35, and No. 73, para. 23; comments on the 
United States' response to Arbitrator question No. 110, paras. 84 -85; and opening statement at the meeting of 
the Arbitrator, para. 55. 
481 China's response to Arbitrator question No. 12, para. 42; No. 24, para. 61; and No. 2 5, para. 67.  
482 China's response to A rbitrator question No. 12, para. 42.  
483 China's response to Arbitrator question No. 73, para. 22; opening statement at the meeting of the 
Arbitrator, para. 56.  
484 United  States ' response to Arbitrator question  No. 1 5, paras. 97 -107 and No. 82, para. 41 . 
485 See, e.g. Decision by the Arbitrator, US – Anti-Dumping Methodologies (China) (Article 22.6 – US). 
486 We note that China states in the context of, for instance, Kitchen Shelving , that "the United  States  
does have confidential USCBP data that could be helpful for assessing trade in the remedy year, but it has not 
made that data available to China" (China's response to Arbitrator question No. 25, para. 67) . WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 69 - 
 
 3.4.2.2.1   Pressure Pipe  
3.236.   China obtains estimates for the three varieties  by applying a GDP deflator to 2015 data from 
USITC Publication 4644.487 The United  States  presents data for the domestic variety based on the 
same USITC report but,  for imports from China and from the RoW, the United  States  relies on USCBP 
and HTSUS -based US Census data respectively.488 The HTSUS -based US Census data for  imports 
from the RoW includes, according to th e United  States , out -of-scope product. Therefore, the 
United  States  scales this data using the average ratio over the years 2007 -2009 of USITC Publication 
4064 data489 with the appropriate  scope to the HTSUS data with a larger scope.490 
3.237.   Regarding sales of the US domestic variety , both parties use USITC Publication 4644 as a 
data source, but they disagree on which year's data within that report to use as a starting point for 
calculating remedy -year sales and they use different indices to scale data in order to reach an 
estimate for 2017. While China uses data for the full year of 2015, the United  States  annualizes data 
from the first quarter (January -March) of 2016 and scales it by the year -on-year growth rate of sales 
in this specific variety from t he first quarter of 2015 to the first quarter of 2016 .491 
3.238.   We note that according to USITC Publication 4644 actual annual sales in 2015 were 10% 
smaller than annualized first quarter sales of that year.492 Further, we consider that relying on the 
first quarte r of 2016 as opposed to the full year of 2015 involves a relatively small difference in 
terms of how recent the underlying data is. Hence, we consider it appropriate to rely on data for the 
full year of 2015, as suggested by China, and not on annualized fi rst quarter data for 2016, as 
suggested by the United  States . 
3.239.   Regarding the scaling of the data to the remedy year, the parties use different indices. China 
uses the GDP deflator, whereas the United  States  scales by an index based on market -size changes 
from the first quarter  of 2015 to  the first quarter of  2016. As indicated, we disagree with China's 
suggested GDP deflator.493 Among other reasons, we consider this index inappropriate for the 
current proceedings as it does not account for changes in consumpt ion levels in the remedy year or 
previous years. In this context, we note that the index used by the United  States  also ignores 
possible changes in consumption levels between 2016 and 2017, the remedy year, and assumes 
that growth simply continues in a lin ear fashion. Further, the index proposed by the United  States  
is based on a comparison of a single quarter only and, therefore, might not be representative of the 
full annual development. As a result, we consider that neither China's nor the United  States ' 
proposed indices are appropriate.  
3.240.   We recall that to obtain  year-prior domestic shipment data in the context of a different 
product, Kitchen Shelving, China and the United  States  appear to rely on the US Census' Annual 
Survey of Manufactures494, which repor ts annual shipment data at the 6 -digit NAICS industry 
level.495 As noted regarding year -prior data for Kitchen Shelving496, we consider this survey as a 
reliable data source. Hence, we consider that growth rates obtained on the basis of this survey for 
the primary 6 -digit NAICS codes associated with the products at issue in the context of Pressure  Pipe 
can serve as a more reliable approximation for market -size changes at the more disaggregated 
product level than the indices advanced by the parties. In particu lar, we consider that 6 -digit-level, 
or industry -level, growth rates for the relevant years may better capture product -level growth rates 
in the relevant period than the national price changes advanced by China in the form of a GDP 
 
487 Exhibits CHN -5 and CHN -120. GDP deflator  data i s reported in Exhibit CHN -53. 
488 Exhibits CHN -5; USA -65; USA -66 (BCI); and USA -156 (BCI).  
489 Exhibit CHN -4. 
490 United States' written submission paras. 144 -146 and Table 11.  
491 Exhibit USA -61. 
492 Exhibit CHN -5, Table IV -3. The annualized value is USD 94,912,000 for 2015 while the actual value 
is USD 85,540,000.  
493 See section 3.4.2.1.1 above.  
494 See Exhibits CHN -53 and USA -61. 
495 In years where a full economic census is conducted (every five years in cluding the remedy year), 
these figures are reported in the Economic Census instead of the Annual Survey of Manufactures.  
496 See section 3.4.1.2.3 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 70 - 
 
 deflator or the past pro duct-level growth rates relied upon by the United  States .497 Therefore, to 
obtain the value of domestic sales of Pressure Pipe for the remedy year, we will calculate a scaling 
index based on this data and apply it to 2015 sales data for the full year from U SITC Publication 
4644.498 
3.241.   As regards the two import varieties , China obtains estimates by applying a GDP deflator 
to 2015 data from a USITC Publication 4644, resulting  in an estimate of zero for Chinese 
remedy -year imports. In turn, the United  States  relies on remedy -year data from  the USCBP for 
Chinese imports and on remedy -year HTSUS -based US Census data for RoW imports, which the 
United  States  scales to correct for any out-of-scope product s. 
3.242.   As explained499, we disagree  with China's suggested GDP deflator. As regards the data 
submitted by the United  States  for imports from China , China challenges the United  States ' 
estimates due to reliance on USCBP data, which we have addressed earlier.500 Considering that the 
United  States ' data is based on information from the actual remedy year, and no other data from 
that year is available, we consider the estimate for Chinese imports provided by the United  States  
superior to China's 2015 data scaled by a GDP deflator and to  be the best available data on the 
record, and we will rely upon this data.  
3.243.   For imports from the RoW, China criticizes the United  States ' correction for out -of-scope 
products to its HTSUS -based estimate. As mentioned, the United  States  implements this correction 
by scaling the data using the average ratio over the years 2007 -2009 of USITC report data with the 
appropriate product scope to the HTSUS data with a larger scope . China argues tha t using an ad hoc  
scaling metric based on adjustments from the original investigation  is inconsistent with the 
United  States ' criticism of China's use of market -size estimates based on data from the original 
investigation combined with a GDP deflator. China adds that the adjustment only serves to diminish 
the size of the market in the remedy year.501 
3.244.   We note that China acknowledges502 that the USITC report it relies upon indicates that the 
HTSUS codes pertaining to Pressure Pipe include out -of-scope products.503 Hence, we consider it 
reasonable to adjust for such scope issues. As explained, we consider such a scope adjustment to 
be more reasonable than assuming constant consumption over time as implied by China's GDP 
 
497 We note that the annual growth rate from 2015 to 2016 based on 6 -digit NAICS industry statistics 
matches the United  States' estimated growth rate obtained from comparing the first quarters of 2015 and 2016 
at the more disaggregated product -level as reported in USITC Publication 4644 quite closely. Industry -level 
shipments shrank by 9.9% while the United  States' first quarter comparison suggests a decline of 11.3% at the 
product -level. We also note that the industry -level growth rate from 2014 to 2015 (19.4%) was similar to the 
product -level growth reported by USITC (26.4%). According to industry statistics , the market recovered in 
2017 partly with a growth rate of 15.1% (or 3.7% compared to 2015). This is in stark contrast to the 
United  States' assumption, which is not substantiated by concurrent data, that the market continued to shrink 
by 11.3%. See US Ce nsus' Annual Survey of Manufactures 2015 and 2016 and Economic Census of 2017 data 
for NAICS code 331110 available at: https://www.census.gov/data/tables/time -series /econ/asm/2013 -2016-
asm.html  (accessed 1 October 2021) (Tables "2015 Value of Product Shipments" and "2016 Value of Product 
Shipments")  and https://www.census.gov/data/tables/2017/econ/economic -census/naics -sector -31-33.html  
(accessed 1 October 2021) (Table "EC1700BASIC").  
498 To obtain shipment estimates at the 6 -digit NAICS -level for the industry associated with 
Pressure  Pipe, we follow China' s methodology (see Exhibit CHN -53) used for determining year -prior market 
values of Kitchen Shelving. In other words, we use the NAICS -HTS concordance by Pierce and Schott (2012) to 
match the HTS codes listed in USITC Publication 4644 to a 6 -digit NAICS co de (331110 – "Iron and steel mills 
and ferroalloy manufacturing ") (Justin R. Pierce and Peter K. Schott,  "A Concordance Between Ten -Digit U.S. 
Harmonized System Codes and SIC/NAICS Product Classes and Industries"  (2012) , Journal of Economic and 
Social Meas urement , 37(1-2):61 -96). We then obtain shipments data for this NAICS code from the Annual 
Survey of Manufactures and the Economic Census and deduct exports obtained from USITC's Dataweb. 
See Annex C -5 for the identification of the primary NAICS  code, Anne x C-6 for the calculation of the scaling 
index, and Annex C -8 for the calculation of the resulting remedy year figure . We note that these steps were not 
criticised by the United  States in the context of year -prior data of Kitchen Shelving. In fact, the United  States 
also relies on primary NAICS codes for that product.  
499 See section 3.4.2.1.1 above.  
500 See section 3.4.2.1.2  above.  
501 China's written submission, paras. 82 and 83.  
502 China's response to Arbitrator question No. 46, para. 37. 
503 See USITC Publication 4064, p. IV -6 (Exhibit CHN -4). WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 71 - 
 
 deflator -based estimate. 504 As a result, we adopt the United  States ' estimates for imports from the 
RoW.  
3.245.   Therefore, with regard to  Pressure Pipe, we shall rely on the following variety -specific figures  
for the purposes of calculating the total remedy -year market size : 
Table 17: Remedy -year market sales  for Pressure Pipe  
Varieties  Total sales  
US domestic variety  USD 8 9,091,000 
Imports from China  [[***]] 
Imports from the rest of the world  USD 156,207,000  
TOTAL MARKET SIZE  [[***]] 
 
3.4.2.2.2   Line Pipe  
3.246.   In the case of Line Pipe, China does not report sales data by variety but calculates an 
estimate for the total market size in the remedy year (2017) obtained by applying a GDP deflator to 
its estimated total sales  data for the year -prior (2007).505 The United  States  calculates its 
remedy -year total US market -size figure as the sum of sales estimates and data for the three 
varieties .506 The United  States ' estimate for sales of the US domestic variety  in 2017 is based on 
industry data from Preston Pipe  and Tube, a private data and consulting company.507 For imports 
from China and from the RoW, the United  States  relies on USCBP and HTSUS -based US Census data 
respectively.508 
3.247.   As explained509, we do not consider the use of a GDP deflator, as suggested by Chin a, to be 
a reliable approach for calculating remedy -year sales. Hence, we review the remedy -year data for 
all three varieties provided by the United  States , as well as China's arguments against relying on 
such data, before calculating the total value of re medy -year sales.  
3.248.   Regarding sales of the US domestic variety , the United  States ' data includes price and 
quantity information at a disaggregated level , used to obtain an estimate which  the United States  
argues is in line with the scope of the CVD order. In particular, the United  States  multiplies the 
average US price for welded pipe of 16 inches or less in diameter by the 2017 production quantity 
of that pipe type and size. It obtains the production quantity by multiplying the share of line pipe 
that is 16 inches or less  in diameter in total line pipe shipments with the total amount of welded 
pipes shipped domestically. China criticizes the United  States ' estimate as being based on arbitrary 
assumptions, as well as unverifiable data sources and calculations .510 China adds that, while 
Preston  Pipe and Tube is a well -known source for pipe data , its data does not match the product 
scope under the relevant CVD order. In particular, China claims that the product scope is limited to  
pipes not greater than 14 inches i n outside diamete r, whereas the Preston Pipe and Tube  data reports 
data only for pipes up to 16 inches in diameter. China concludes that the United  States ' estimate 
includes out -of-scope products.511 
3.249.   The United  States  responds that China appears to have erroneously cited the product scope 
of Pressure Pipe, which is limited  to pipes not greater than 14 inches in diameter. The United  States  
argues that, in contrast, the product scope of Line Pipe, the product at issue in  this context, includes 
pipes up to 16 inches in diameter.512 
 
504 See para. 3.225 above.  
505 Exhibit CHN -120. See also Exhibit CHN -53 for reported GDP deflator  data. 
506 Exhibit USA -156 (BCI).  
507 Exhibits USA -60 and USA -136 (BCI).  
508 Exhibits USA -59 and USA -64 (BCI).  
509 See section 3.4.2.1.1 above.  
510 China's response to Arbitrator question No. 24, para. 63 and Table 5 . 
511 China's response to Arbitrator questio n No. 83, paras. 47 -49. 
512 United  States' comments on China's response to Arbitrator question No. 83, para. 32.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 72 - 
 
 3.250.   We note that, as argued by the United  States , the product scope of the relevant order, as 
defined in the relevant  notice of CVD order issued by the Department of Commerce, is "circular 
welded car bon quality steel pipe of a kind used for oil and gas pipelines (welded line pipe), not more 
than 406.4 mm (16 inches) in outside diameter, regardless of wall thickness, length, surface finish, 
end finish or stenciling".513 
3.251.   In light of the clarification reg arding product scope and while we agree with China that the 
United  States ' estimate is based on a set of assumptions, we still consider that the estimate is 
preferable to China's estimate which assumes constant consumption levels over a 10 -year period. 
The United  States ' estimate is based on actual 2017 data and each of its assumptions appear to be 
reasonable. In particular, we consider that assuming that the share of line pipe that is 16 inches or 
less in diameter is the same in total line pipe sales and w elded line pipe sales not unreasonable in 
the absence of welded line pipe sales data. We also consider that applying the average price across 
different welded line pipes 16 inches or less in diameter to this sales estimate is reasonable in the 
absence of m ore disaggregated sales data that would allow for a better matching between 
disaggregated price and line pipe types.  
3.252.   As regards the two import varieties , the parties' disagreements with respect to the 
United  States ' estimates for imports from China revolve  around the use of USCBP data. As  explained, 
if no superior data is available, we consider  the use of USCBP data for the remedy year to be 
reasonable.514 As regards imports from the RoW, China does not challenge the scope of the 
HTSUS -data based estimate of  the United  States . In light of this and since it is the only data for 
Line Pipe imports from the RoW on the record for the remedy year, we adopt the estimate based on 
HTSUS data provided by the United  States . As we have rejected China's GDP deflator appro ach, we 
adopt the United  States ' estimates for the two import varieties.515 
3.253.   Therefore, with regard to  Line Pipe, we shall rely on the following variety -specific figures  for 
the purposes of calculating the total remedy -year market size : 
Table 18: Remedy -year marke t sales for Line Pipe  
Varieties  Total sales  
US domestic variety  USD 542,483,000  
Imports from China  [[***]] 
Imports from the rest of the world  USD 605,500,000  
TOTAL MARKET SIZE  [[***]] 
 
3.4.2.2.3   Kitchen Shelving  
3.254.   In the case of Kitchen Shelving, China  estimates the remedy  year (2017) total sales in the 
US market by applying a GDP deflator to its estimated total sales  for the year-prior agreed by the 
parties (2008).516 The United  States  calculates the remedy year total market size figure as the sum 
of its sales estimates for the three varieties . The United  States ' estimate for sales of the US domestic 
variety in 2017 is calculated using the same methodology the United  States  employs to e stimate the 
year-prior equivalent, namely as a certain percentage of NAICS -level total remedy -year sales of 
kitchen appliances in the United  States  informed by Kitchen Shelving cost share estimates less 
imports. The United  States ' estimate for Kitchen Shel ving imports from China are based on USCBP 
data for 2017. Its estimates for imports from the RoW are calculated by deducting the above imports 
from China from estimated total imports obtained using the United  States ' methodology for 
 
513 Exhibit CHN -8. 
514 See section 3.4.2.1.2 above.  
515 We note that in its later submissions (Exhibits USA -79 (BCI) and USA -156 (BCI)), the United  States' 
figure for imports from the RoW differs by USD 100,000 from the figure contained in Exhibit USA -59, which the 
United  States refers to as the source of Exhi bit USA -156 (BCI). Exhibits USA -79 (BCI) and USA -156 (BCI) 
indicate a value of USD 605,600,000, whereas Exhibit USA -59 indicates USD 606,500,000. Given that the 
United  States argues that Exhibit USA -59 is the source of its data, we rely on the figure conta ined therein, 
i.e. USD 606,500,000.  
516 Exhibit CHN -120. See also Exhibit CHN -53 for reported GDP deflator  data. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 73 - 
 
 estimating the year -prior imports from China. The United  States  uses two HTSUS codes to calculate 
imports of oven -related kitchen shelving from the US Census and multiplies this number by two to 
account for all other types of kitchen shelving.517 
3.255.   As explained, we do not consider the use of a GDP deflator, as suggested by China, to be a 
reliable approach for calculating remedy -year sales.518 Hence, we review the remedy -year data for 
all three varieties provided by the United  States  as well as China's arguments against relying on 
such data, before calculating the total value of remedy -year sales.  
3.256.   For sales of the US domestic variety , the United  States  criticizes the assumptions 
underlying the use of a GDP deflator519. China criticizes the United  States ' estimation methodology 
as based on ad hoc , unverified, and unattributed statements . China adds that the cost share 
estimates upon which the United  States ' methodology rests are ranges rather than specific figures 
implying that the United  States ' estimate, which uses the mid-point of the range, could be 
substantially misestimating the true value.520 
3.257.   As noted, we do not consider that applying a GDP deflator to market size estimates of 
previous years, especially if the period at issue covers  nine years, is reasonable.521 We further agree 
with China that the United  States ' estimate is based on a series of  unfounded assumptions, in 
particular insofar as it rests on its import estimates as indicated below. We therefore reject both 
parties' estimates for the remedy -year sales of the domestic variety of Kitchen Shelving.  
3.258.   To assess whether reasonable alternativ e estimates  for the US domestic variety are 
available, we turn to the parties' year -prior estimates because both parties emphasize the 
importance of using consistent product definitions across the year-prior and  the remedy year.522 We 
recall that we have re lied on China's methodology for estimating year -prior sales of the domestic 
variety, which rests on adjusting NAICS -level sales estimates downwards to correct for out -of-scope 
products, as reasonable. Therefore, we apply this methodology to remedy -year dat a to obtain an 
estimate of remedy -year sales of the domestic variety that is consistent with the definition used in 
the year -prior.523 
3.259.   For import varieties  data, we note that as regards imports from China,  the parties' 
disagreements revolve around the use o f USCBP data, which we have addressed earlier.524 
Accordingly, since no data superior  to USCBP data is available, we adopt the United  States ' estimate 
of imports from China based on direct USCBP data for 2017.  
3.260.   As regards imports from the RoW, in the absence  of direct remedy -year data, the 
United  States  employs the same methodology  to imports from the RoW in the remedy year  as in the 
case of the year -prior sales of the domestic variety of Kitchen Shelving. As in the case of the 
 
517 Exhibits USA -61; USA -66 (BCI); and USA -156 (BCI).  
518 See section 3.4.2.1.1 above.  
519 See section 3.4.2.1.1 above.  
520 China's response to Arbitrato r question No. 11, para. 25, and No. 25, para. 66.  
521 See section 3.4.2.1.1 above.  
522 China's response to Arbitrator question No. 40, para. 29; United  States ' response to Arbitrator  
question No. 40, para. 35. 
523 The methodology is explained in detail by China  in Exhibit CHN -53. Following this methodology, we 
obtain NAICS 6 -digit level domestic shipments using the primary NAICS code, 335221 ( Household cooking 
appliance manufacturing ), pertaining to Kitchen Shelving from the Economic Census 2017 (available at: 
https://www.census.gov/data/tables/2017/econ/economic -census/naics -sector -31-33.html  (accessed 
1 October 2021) (Table "EC1700BASIC") ) and correct it by exports obtained from USITC Dataweb. As no data 
is reported for the relevant code in 2017, we use 2016 data from the Annual Survey of Manufactures 2016 
(available at: https://www.census.gov/data/tables/time -series/econ/asm/2013 -2016-asm.html  (accessed 
1 October 2021) (Table "2016 Value of Product Shipments") ) and scale it using the growth rate of the more 
aggregated 5 -digit industry 33522 for which  data is available. To correct for out -of-scope products within the 
NAICS 6 -digit industry, we apply to this figure an import -data-based estimate. We calculate aggregate imports 
for all HTSUS codes associated with the NAICS industry and calculate the share  of imports pertaining to HTSUS 
codes referenced in the CVD order in this aggregate import figure. See  Annex C -5 for the identification of the 
primary NAICS  code, Annex C -6 for the calculation of the scaling index, Annex C -7 for the scope adjustment, 
and A nnex C -8 for the calculation of the resulting remedy year figure . See als o fn 498 to para. 3.240 above.  
524 See section 3.4.2.1.2 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 74 - 
 
 year-prior, China argues that the United  States ' approach is based on a series of  arbitrary 
assumption s.525 
3.261.   As discussed in the context of the year -prior, we agree with China that the United  States ' 
figure rests on arbitrary assumptions regarding the share of subject imports in HTSUS cat egories 
under which Kitchen Shelving is classifiable , which could lead to an underinclusive estimate .526 
Therefore,  to maintain a certain correlation between  the scope of the year -prior and the remedy -year 
estimates, we turn to our year -prior estimate for imports from the RoW.527 This estimate is based 
on the mid -point between the figure s of China and the United  States . This mid-point estimate implies 
that a certain share of all imports that entered the United  States  under the eight HTSUS codes 
referenced in the CVD order is subject product. We consider that applying this share of subject 
product to the total remedy -year imports from the RoW under the eight HTS US codes gives us an 
estimate that is consist ent with our approach in the year -prior. Accordingly, we adopt this approach.  
3.262.   As a result, with regard to  Kitchen Shelving, we shall rely on the following variety -specific 
figures for the purpo ses of calculating the total remedy -year market size : 
Table 19: Remedy -year market sales for Kitchen Shelving  
Varieties  Total sales  
US domestic variety  USD 278,363,000 
Imports from China  [[***]] 
Imports from the rest of the world  USD 412,630,000  
TOTAL MARKET SIZE  [[***]] 
 
3.4.2.2.4   OCTG  
3.263.   China relies on a 2020 USITC report on OCTG that covers the remedy year for sales of all 
the three varieties.528 However, for the import varieties, China submits only a combined estimate , 
since the USITC report in question does not list imports from China s eparately.529 The United  States , 
in turn, relies on the same 2020 USITC Report as the data source for its domestic variety estimate , 
but uses USCBP data for imports from China and HTSUS -based data from US Census for imports 
from the RoW.530 
3.264.   Regarding sales of the US domestic variety , the parties rely on the same 2020 USITC 
report ( USITC Publication 5090) but their figures differ because they rely on different tables within 
that report . While China relies on Tables I -11/III-11 stating apparent consumption531, the 
United  States  relies on Table III -8 stating US shipments . The United  States  explains that the 
quantities reported in both tables are the same and that the small difference in values  arises because 
Table I -11 includes the value of toll processing on domestic OCTG, while Table III -8 does not.  The 
United  States  adds that this technical adjustment by the USITC serves to reduce any potential 
reclassification or double -counting of imports for purposes of calculating the value of US apparent 
consumption .532 China argues that the values from Table III -11 are used by the USITC when 
computing market shares in Table III -14 and claims that the data used by the USITC for calculating 
market shares p rovide s the correct basis for year -prior data  and should also be used here.533 
3.265.   As regards the relevant table to be used for determining domestic sales data, we note that 
both parties consistently rely on apparent consumption tables.534 While the United  State s explains 
 
525 China's response to Arbitrator question No. 25, para. 68.  
526 See section 3.4.1.2.3 above.  
527 See section 3.4.1.2.3 above.  
528 USITC Publication 5090 (Exhibit USA -148).  
529 Exhibit CHN -120. See also Exhibit CHN -53 for reported GDP deflator  data. 
530 Exhibits USA -59; USA -64 (BCI); and USA -156 (BCI).  
531 Table III -11 reproduces the relevant values indicated in Table I -11. 
532 United  States' response to Arbitrator question No. 85, para. 48.  
533 China's comments on the United  States' responses to Arbitrator question Nos. 85 and 86, 
paras.  33-37. 
534 See also para. 3.204 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 75 - 
 
 where the difference between the two tables in USITC Publication 5090 stems from, it does not 
indicate why it deviates from this approach in this context. In the absence of such a justification, we 
consider it more reasonable to use the figures from Table I -11/III -11, as suggested by China.  
3.266.   China proposes to adjust the value in Table III -11 to include shipments related to the 
incremental value from heat -treating imports as this information is redacted in the report but listed 
as part of the domes tic shipments. China adds that these shipments create value to the domestic 
industry and are therefore regarded as domestic sales. China notes that an earlier USITC report on 
OCTG from 2014535 provides sufficient information for such an adjustment in the fo rm of unit values 
for unfinished and finished OCTG in the years 2011 to 2013. Based on this information, China 
calculates that the incremental value from heat -treating , imported , unfinished OCTG range d during 
that period from 30.5% to 38.3%  and argues that  this suggests that the confidential treatment of 
the value of heat -treating imports "could be quite large" .536 The United  States  argues that USITC  
includes the incremental value from heat treatment of imported OCTG by domestic producers to 
reduce any potential reclassification or double -counting of imports for purposes of calculating the 
value of apparent consumption  by the United  States . According to the United  States , it has selected 
the value reported in Table III -8, which does not incorporate this technical adjustment, because that 
value represents unadjusted data that is not linked to the calculation of apparent consumption.537 
3.267.   As regards the need to adjust for the incremental value from heat -treating imported OCTG, 
we note that in USITC Publication 4124, which relates to the underlying CVD investigation on Chinese 
imports and serves as the parties' data source in the year -prior,  there is no indication that the value 
from heat -treating imported unfinished OCTG would be excluded from the scope of the 
investigation.538 In addition, subsequent investigations explicitly include such heat -treated imported 
unfinished OCTG within their scope. In particular, USITC Publication 5090, which is relied upon by 
the parties as the remedy -year data source, defines the incremental value from heat -treating 
imported OCTG as part of domestic shipments539, and states that : 
the Commission rejected a respo ndent argument that the Commission should find a 
separate like product for U.S. heat treated semi -finished OCTG or "green tubes ". 
The Commission found that there was not a clear dividing line between green tubes and 
finished OCTG.540 
3.268.   We also note that China 's reference to unit value data highlights that adjusting for such 
OCTG is not negligible and that an exclusion from the market size estimate could lead to an 
underestimated level of N/I.  
3.269.   Therefore, we adjust the figure based on Table I -11/III -11 in USITC Publication 5090 to 
include the incremental value  of heat -treating imported unfinished OCTG as suggested by China.541 
3.270.   As regards the two import varieties , China only submits a figure for RoW imports, which 
is identical to the total imports amount determined  by USITC in USITC Publication 5090. Since USITC 
Publication 5090 does not list imports from China separately, China submits that Chinese imports 
 
535 USITC Publication 4489 (Exhibit CHN -24). 
536 China's com ments on the United  States' response to Arbitrator question No. 86, para. 37.  
537 United  States' response to Arbitrator question No. 85, para. 48.  
538 USITC Report 4124 (Exhibit CHN -23). 
539 USITC Publication 5090 , Table I -11/III -11. 
540 Exhibit USA -148, p.  7. 
541 We perform such adjust ment by relying on Table I -2 in USITC publication 5090 (Exhibit USA -148). 
The table states the market share of U.S. producers' U.S. shipments of fully domestic value (57.8%) and the 
market share of shipments related to the incrementa l value of heat -treating imports (2.6%) in total apparent 
consumption in 2013. The ratio of these two numbers, 4.5%, is the value of the shipments related to the 
incremental value of heat -treating imports relative to the value of fully domestic shipments. Considering that 
this information is the best available data on the record, we apply it to the value of fully domestic shipments in 
2017 in table I -11 (USD 3,108,763,000) to obtain an estimate of the incremental value of heat -treating 
imports in the remedy  year. This estimate can be added to the figure for fully domestic shipments in table I -11 
such that the estimate for OCTG sales of the domestic variety that we rely on reflects the incremental value of 
heat-treating imports. In particular, we perform the following calculation: 3,108,763,000 + 
3,108,763,000*(2.6/57.8) = 3,248,604,000.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 76 - 
 
 amount to zero. We consider China's estimate for the total value of imports based on USITC 
Publication 5090, w ithout differentiating between Chinese and RoW imports542, to be reasonable . 
3.271.   While in principle we do not consider it inappropriate to rely on the United  States ' import 
data sources (USCBP and US Census), we are not of the view that the United  States  has sh own that 
they are more reliable , especially as China has submitted direct USITC import data for the remedy 
year. In fact, the United  States  acknowledges that the difference between the parties' RoW  import 
figures is small and appears to arise only from the way the imports  are assessed with USITC 
reporting figures on a landed, duty -paid value basis  and US Census reporting figures on a customs 
value  basis. The United  States  adds that it relies on US C ensus data because the arbitrator in 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US) used it, noting that the arbitrator did 
not have access to the USITC report used by China since it had only been published in 2020.543 We 
consider, though, that  this argument does not raise relevant doubts about China's figure in this 
context.  
3.272.   Therefore, with regard to  OCTG, we shall rely on the following domestic and import figures 
for the purposes of calculating the total remedy -year market size : 
Table 20: Reme dy-year market sales for OCTG  
Varieties  Total sales  
US domestic variety  USD 3,248,604,000  
Imports from China and the RoW  USD 3,107,415,000  
TOTAL MARKET SIZE  USD 6,356,019,000  
 
3.4.2.2.5   Wire Strand  
3.273.   In the case of Wire Strand, China does not report sales data by variety but instead calculates 
a total sales estimate for remedy year (2017) in the US  market by applying a GDP deflator to its 
estimated total sales  data for the year-prior advanced by China and accepted by us (2008).544 In 
turn, t he United  States  calculates its remedy -year total US market -size figure as the sum of sales 
estimates for the three varieties . The United  States  obtains its estimate for sales of the US domestic 
variety  in 2017  using several steps and several data sources as outlined in the next paragraph.545 
The United  States ' estimates for imports from China are  based on USCBP data for 2017  and imports 
from the RoW  are based on HTSUS  data from the US Censu s.546 
3.274.   As explained, we do not consider the use of a GDP deflator, as suggested by China, to be a 
reliable approach for calculating remedy -year sales.547 Hence, we review the remedy -year data for 
all three varieties provided by the United States , as well as China's arguments against relying on 
such data, before calculating the total value of remedy -year sales.  
3.275.   As regards the domestic variety , the United  States  estimates the sales of the domestic 
variety using data for wire rod, an input into wire strand production, from the World Steel 
Association.548 In particular, the United  States  uses data from USITC Publication 4569  on wire strand 
production  to calculate the 2007 -2009 ratio of US wire strand production to US wire rod production , 
and infers the quantity of wire strand sales by applying this ratio to 2017 US wire rod production .549 
The United  States  then multiplies this estimated wire strand quantity by wire strand unit values for 
2017. These unit values are obtained by s caling unit values data  for 2009  from the aforementioned 
 
542 As explained before, only the total market size on the remedy year matters for the purposes of 
implementing the second step of the two -step Armington m odel. Therefore, consi dering that neither party has 
raised scope issues as to the HTS US codes relied upon by USITC for the total imports figure in the relevant 
USITC report, we consider it to be sufficient to assess only the total value of OCTG imports in the remedy year 
withou t differentiating between imports from China and imports from the RoW.  
543 United  States' response to Arbitrator question No. 84, paras. 45 and 46.  
544 Exhibit CHN -120. See also Exhibit CHN -53 for reported GDP deflator  data. 
545 Exhibits USA -61 and USA -156 (BCI) .  
546 Exhibits USA -65; USA -66 (BCI); and USA -156 (BCI).  
547 See section 3.4.2.1.1 above.  
548 See Exhibits USA -85, Table 9; USA -86, Table 9.  
549 See Exhibits USA -25 and USA -61. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 77 - 
 
 USITC  Publication  4569 and by  using the trend in the unit price of imported wire strand varieties 
taken from USITC DataWeb.550 
3.276.   According to China, t he United  States  performs a n assumption -intensive calculation that 
essentially mirrors  China's approach  by using an industry trend to scale domestic production 
reported by the USITC for the period prior to the WTO -inconsistent duty being imposed.  China adds 
that its  approach is super ior as it maintains the real value of domestic shipments  in a more 
straightforward manner .551 While noting that the World Steel Association is a well -known industry 
group, China argues that it reports only wire rod production data, hence the United  States  relies on 
assumptions that are unlikely to hold. China argues that an increase in demand for domestic wire 
strand triggered by the CVD orders at issue might lead to a different wire rod to wire strand 
production ratio given that wire rod is used for many ot her outputs. China considers that using unit 
values of imports as proxy for domestic prices ignores that the CVD order at issue distorts import 
and domestic prices in opposite directions. China adds that both parties' figures require an 
assumption about th e change in wire strand prices between the year -prior and 2017 but, whereas 
its own assumption could be unaffected by the CVD duties, the United  States ' estimate is downward 
biased as a result of the duties.552 
3.277.   We consider that China's concerns regarding th e United  States ' estimate appear valid. 
Nonetheless, despite its shortcomings, we consider that the United  States ' estimate is the best 
estimate on the record since it is the only estimate informed by actual 2017 data. While China 
explains how the CVD orde r might lead to certain inaccuracies when inferring 2017 wire strand sales 
from 2017 wire rod production quantities, it does not address our concern that China's GDP 
deflator -based estimate might miss any changes in consumption quantities that might occur between 
2008 and 2017.553 Further, we disagree with China's claim that the United  States ' methodology 
effectively mirrors China's methodology simply because the United  States  also relies on a price 
trend.554 The fact that the resulting figures of both partie s are similar does not automatically support 
that standpoint, and it does not imply that China's approach of ignoring possible changes in 
consumption levels is reasonable. Therefore, we rely on the United  States ' estimate for sales of the 
domestic variety.  
3.278.   For import varieties  data, we note that as regards imports from China, the parties' 
disagreements revolve around the use of USCBP data, which we addressed earlier.555 Since we find 
that no data superior to USCBP data is available  on the record, we consider  the use of USCBP data 
for the remedy year to be reasonable. Accordingly, as we have rejected China's GDP deflator 
approach, we adopt the estimate of imports from China based on USCBP data provided by the 
United  States . 
3.279.   As regards imports from the RoW, China does not challenge the scope of the HTSUS -data 
based estimate of the United  States . In light of this and since it is the only data for wire strand 
imports from the RoW on the record for the remedy year, we adopt the estimate based on HTSUS 
data pro vided by the United  States . 
3.280.   Therefore, with regard to  Wire Strand, we shall rely on the following variety -specific figures  
for the purposes of calculating the total remedy -year mark et size : 
 
550 See Exhibit USA -61. 
551 China's response to Arbitrator question No. 24, para. 63, Table 5.  
552 China's response to Arbitrator question No. 58, paras. 56 -59. 
553 See section 3.4.2.1.1 above.  
554 China's response to Arbitrator question No. 24, para. 63, Table 5.  
555 See section 3.4.2.1.2 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 78 - 
 
 Table 21: Remedy -year market sales  for Wire Strand  
Varieties  Total sales  
US domestic variety  USD 201,603,000  
Imports from China  [[***]] 
Imports from the rest of the world  USD 91,619,000  
TOTAL MARKET SIZE  [[***]] 
 
3.4.2.2.6   Seamless Pipe  
3.281.   In the case of Seamless Pipe, China does not report sales data by variety but calculates a 
total sales estimate  for the remedy  year (2017) in the US  market by applying a GDP deflator to its 
estimated total sales  for the year -prior agreed by the parties (2009) .556 The United  States  calculates 
its remedy -year total market size figure as the sum of sales estimates for the three varieties. For 
the US domestic variety, the United  States  estimates sales in 2017 by annualizing sales in the first 
quarter (January -March) of 2017 obtained from USITC Pub lication 4731 .557 The United  States ' 
estimates of imports from China are based on USCBP data for 2017, whereas imports from the RoW 
are estimated by using HTSUS data from the US Census Bureau, which, according to the 
United  States , has a larger scope than t he actual subject product.558 As in the case of 
Pressure  Pipe559, the United  States  adjusts the scope by multiplying the average ratio of USITC 
report data over the years 2007 to 2009 with the appropriate scope to the aforementioned HTSUS 
data with a larger scope.560 
3.282.   As explained561, we do not consider the use of a GDP deflator, as suggested by China, to be 
a reliable approach for calculating remedy -year sales. Hence, we review the remedy -year data for 
all three varieties provided by the United  States , as well as China's arguments against relying on 
such data, before calculating the total value of remedy -year sales.  
3.283.   As regards the domestic variety , China criticizes the United  States ' estimate based on 
USITC Publication 4731 as being of a narrower scope than the CVD order at issue as it refers to only 
26 HTSUS codes, while the original report of the CVD order at issue referred to 38 HTSUS codes. 
China claims that this corresponds to only 68% of HTSUS  codes cited in the original report and 
argues that this is relevant because  the United  States ' proposed 2017 value for domestic shipments 
is 69% of the 2009 value of domestic shipments  verified and reported by USITC . According to China, 
this would suggest  that the shortfall in domestic shipments is related to this alternative scope. Thus, 
China proposes that, if we were to use the United  States ' estimate, such estimate should accordingly 
be scaled by 1/0.68. China adds that the CVD order at issue refers to  domestic shipments of all 
seamless pipe  while the USITC report used by the United  States ' reports domestic shipments only 
for small diameter seamless pipe , which may explain the difference in HTSUS codes.562 China claims 
that, in terms of quantities, small  diameter seamless pipe may account for only 40% of the 
market.563 
3.284.   The United  States  contends that the product scope in both investigations is nearly identical. 
According to the United  States , USITC Publication 4731 covers seamless pipe from Japan and 
Roman ia and only the product scope of imports from Romania is limited to small diameter seamless 
pipe, while the scope for imports from Japan appears to be identical to the scope set out in the CVD 
order at issue in this proceeding. The United  States  argues tha t the difference in HTSUS codes is 
irrelevant. Referring to the USITC reports in both investigations, the United  States  indicates that 
reference HTSUS codes serve primarily customs purposes, whereas the USDOC 's product description 
 
556 Exhibit CHN -120. See also Exhibit CHN -53 for reported GDP deflator  data. 
557 Exhibit CHN -105.  
558 United  States' written submission , para. 146 and Table 10 . 
559 See section 3.4.2.2.1 above . 
560 Exhibits USA -59; USA -60; USA -64 (BCI); and USA -156 (BCI). See also United States' written 
submission, paras. 144 -146 and Table 10, for scope adjustments based on USITC Publication 4595  
(Exhibit s USA-16 and USA -67). 
561 See section 3.4.2.1.1 above.  
562 China's response to Arbitrator question No. 24, para. 62, and Table 5.  
563 China's response to Arbitrator question No. 80, para. 43. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 79 - 
 
 determines the product sc ope. The United  States  adds that it is unreasonable to assume that simply 
because the ratio of HTSUS codes across two USITC reports is 68%, the corresponding values of 
domestic shipments should also equal 68%.564 
3.285.   We note that, as argued by China, the table in USITC Publication 4731 that the United  States  
relies on reports data for small diameter seamless pipe only565, which the report defines as " less 
than or equal to 4.5 inches ".566 We do not consider it relevant that the investigation underlying the 
aforemen tioned  USITC report also covers large seamless pipe since the data for large seamless pipe 
is redacted from the report. As a result, we agree with China that the United  States ' estimate is 
underinclusive. However, we agree with the United  States  that the H TSUS codes are not informative 
for establishing the size of the under -inclusion since we have no information on the actual sales 
values related to each HTSUS code.  
3.286.   As a result, we consider that neither China's nor the United  States ' figures are reasonable 
estimates of remedy -year sales of the domestic variety. While we would rely preferably on 
remedy -year estimates based on data inputs from the actual remedy year, this appears impossible 
in the case of Seamless Pipe. Absent any information on the share of s mall diameter seamless pipe 
sales in total subject sales of the domestic variety in 2017, we cannot use the data provided by the 
United  States . Instead, we have to rely on the latest available market size estimate on the record 
that encompasses the full pr oduct scope, which is the estimate for the year 2009 on the basis of a 
USITC report accepted by both parties, and scale it to obtain an estimate for sales of the domestic 
variety in the remedy year.  
3.287.   Since we do not consider China's GDP deflator to be a rea sonable scaling index, we will rely 
instead on the market size change of the primary 6 -digit NAICS industry associated with 
Seamless  Pipe between 2009 and 2017 to scale the 2009 value.567 This follows the approach we 
have taken for calculating the 2017 US domestic variety sales of Pressure Pipe and Kitchen Shelving, 
where alternative estimates were needed following the rejection of both parties' estimates.  
3.288.   For import varieties data, we not e that, as regards imports from China, the parties' 
disagreements revolve around the use of USCBP data, addressed earlier.568 As explained, if no 
superior data is available, we consider the use of USCBP data for the remedy year to be 
reasonable.569 As we hav e rejected China's GDP deflator approach570, we adopt the United  States ' 
estimate for imports from China based on USCBP data.  
3.289.   As regards imports from the RoW, China criticizes the United  States ' correction for 
out-of-scope product s to its HTSUS -based estima te for imports from the RoW.571 As in the case of 
Pressure Pipe, we note that a scope adjustment seems justified in light of several scope exclusions 
undertaken by the USDOC in the course of its proceedings.572 As explained, we consider such a 
scope adjustme nt to be more reasonable than assuming constant consumption over time as implied 
by China's GDP deflator -based estimate.573 As a result, we adopt the United  States ' estimate for 
imports from the RoW.  
3.290.   Therefore, with regard to  Seamless Pipe, we shall rely on the following variety -specific 
figures for the purposes of calculating the total remedy -year market size : 
 
564 United  States' response to Arbitrator question No. 59, paras. 74 -77. 
565 USITC Publication 4731 (CHN -105), Appendix C, Table  C-1. 
566 USITC Publication 4731 (CHN -105), p.10.  
567 The primary 6 -digit NAICS code is 331110 ( Iron and Steel Mills and Ferroalloy Manufacturing ) in the 
remedy year and 331111  in 2009 due to changes in the NAICS classification in 2012 (see 2007 NAICS to 2012 
NAICS concordance available at: https://www.census.gov/naics/?68967  (accessed 1 October 2021)). This 
results in a scaling factor of 1.48.  See Annex C -5 for the identification of the primary NAICS  code, An nex C -6 
for the calculation of the scaling index, and Annex C -8 for the calculation of the resulting remedy year figure . 
See also fn 498 to  para. 3.240 above.  
568 See section 3.4.2.1.2 above.  
569 See section 3.4.2.1.2 above.  
570 See section 3.4.2.1.1 above.  
571 China's written submission, para. 83; response to Arbitrator question No. 24, paras. 61-63; and 
comments on the United  States' response to Arbitrator question No. 91, paras. 42 -45. 
572 USITC Publication 4190 (Exhibit CHN -32), p. I-9. 
573 See para. 3.225 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 80 - 
 
 Table 22: Remedy -year market sales  for Seamless Pipe  
Varieties  Total sales  
US domestic variety  USD 294,963,000  
Imports from China  [[***]] 
Imports from the rest of the world  USD 390,161,000  
TOTAL MARKET SIZE  [[***]] 
 
3.4.2.2.7   Print Graphics  
3.291.   In the case of Print Graphics, China relies on the 2015 figure for the total sales in the 
US market from USITC  Publication 4656574, and adjusts this figure by a GDP deflator to represent 
remedy year (2017) total sales in the United  States .575 The United  States  calculates its remedy -year 
total market  size figure as the sum of sales estimates for the three varieties .576 The United  States ' 
estimate for sales of the US domestic variety in 2017 is based on 2015 sales in USITC Publication 
4656577, scaled by a growth rate taken to be the average decrease of Print  Graphics shipments of 
the domestic variety from 2010  to 2015 .578 The United  States ' estimates of i mports from China are 
based on USCBP data for 2017579, whereas i mports from  the RoW are  estimated by using HTSUS 
data from the US Census Bureau580, which the United  States  argues  has a larger scope than 
appropriat e, and adjusts it by the average ratio over the years 2007 -2009 of USITC report data with 
the appropriate scope to the aforementioned HTSUS data with a larger scope.581 
3.292.   As explained, we do not consider the use of a GDP deflator, as suggested by China, to be  a 
reliable approach for calculating remedy year sales.582 Hence, we review the remedy -year data for 
all three varieties provided by the United  States , as well as China's arguments against relying on 
such data, before calculating the total value of remedy -year sales.  
3.293.   Regarding sales of the US domestic variety , both parties rely on the same USITC report 
which contains data for 2015 but they disagree on how to scale the data to the  2017 remedy year. 
China relies on a GDP deflator, which the United  States  criticizes and which we, as explained earlier, 
do not consider to be a reliable approach for calculating remedy year sales .583 
3.294.   The United  States  relies on past (2010 to 2015) domestic variety growth rates , assuming 
that these predict growth of domestic variety sales from 2015 to 2017.584 China considers this 
assumption to be unreasonable and notes that the resulting estimate differs substantially f rom the 
estimate used by the arbitrator in US – Anti-Dumping Methodologies (China) (Article 22.6 – US).585 
China adds that, unlike its own index, the United  States ' index is not informed by data from 2016 or 
2017.586 
3.295.   We agree with China's  arguments regarding  the United  States ' scaling index. As is the case 
for the United  States ' scaling index for Pressure Pipe, the United  States ' index for Print Graphics 
does not capture actual changes in consumption levels or prices between 2015 and 2017 and 
assumes that gro wth simply continues linearly.  
3.296.   Therefore, we consider that both parties' scaling indices are inappropriate. As in the case of 
Pressure Pipe, Kitchen Shelving, and Seamless  Pipe, we shall use instead an index that relies on the 
growth rate from 2015 to 2017  of the more aggregate 6 -digit NAICS industry, to which Print Graphics 
 
574 Exhibit CHN -51. 
575 Exhibit CHN -120. See also Exhibit CHN -53 for reported GDP deflator  data. 
576 Exhibit USA -156 (BCI).  
577 Exhibit CHN -51. 
578 Exhibit USA -60. 
579 See Exhibit USA -64 (BCI).  
580 See Exhibit USA -59. 
581 United  States' wr itten submission paras. 144 -146 and Table 9.  
582 See section 3.4.2.1.1 above.  
583 See section 3.4.2.1.1 above.  
584 Exhibit USA -60. 
585 China's response to Arbitrator question No. 80, para. 41. 
586 China's comments on the United  States' response to Arbitrator questio n No. 87, para. 38.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 81 - 
 
 pertains, to calculate the 2017 US domestic variety sales of Print Graphics.587 This index takes into 
account actual consumption level and price developments until the remedy year and is  more specific 
to the product and variety at issue than country -wide indices, such as China's GDP deflator.  
3.297.   For import varieties data, we note that, as regards imports from China, the parties' 
disagreements revolve around the use of USCBP data, addressed e arlier.588 As explained, if no 
superior data is available, we consider the use of USCBP data for the remedy year to be 
reasonable.589 As we have rejected China's GDP deflator approach590, we adopt the United  States ' 
estimate for imports from China based on US CBP data.  
3.298.   As regards imports from the RoW, China criticizes the United  States ' correction for 
out-of-scope product to its HTSUS -based estimate for imports from the RoW. As in the case of 
Pressure Pipe and Seamless Pipe, we consider that a scope adjustment seems justified in light of 
several scope exclusions undertaken by the USDOC.591 As explained , we consider such a scope 
adjustment to be more reasonable than assuming constant consumption over time as implied by 
China's GDP deflator -based estimate.592 
3.299.   We note, however , that the United  States ' scope adjustment relies on data from the USITC 
Publication 4192 report , data  relied upon  by the United States  for the year -prior, even though a 
more recent USITC report, USITC Publication 4656 , is available. Both part ies rely on this more recent 
report for their domestic variety data , which  suggest s that it is a reliable source. We recall  that the 
United  States ' scope adjustment is implemented by multiplying remedy -year imports from the RoW 
under all HTSUS codes pertai ning to the CVD order with the average share of subject product imports 
from the RoW, as reported in the original USITC report, in total imports from the RoW under the 
relevant HTSUS codes over a three -year period. We note though that this share can also b e 
calculated based on the more recent USITC report to obtain a scope adjustment factor that may be 
more representative for the remedy year  due to its recency.  
3.300.   We consider this ratio superior to the one advanced by United States,  not only because of 
its rec ency, but also because it appears to generate a more reasonable estimate. The ratio calculated 
on the basis of the more recent USITC report is approximately three times the size of the ratio 
submitted by the United  States , i.e. 0.92 as opposed to 0.32.593 This produces an estimate for 
imports from the RoW of USD 961,770,000. We consider this estimate more reasonable than the 
United  States ' estimate of USD 500,834,000 , because the more recent USITC Publication 4656  
reports imports from the RoW with the corr ect scope that vary for the years 2011 to 2015 between 
USD 1,224,321 ,000 and USD 1,107,198 ,000, with only slight year -to-year fluctuations, and amount 
to USD 500,810,000 for the first six months of 2016 alone. Hence, we use 0.92 as  the scope 
adjustment fac tor. 
3.301.   Therefore, with regard to  Print Graphics, we shall rely on the following variety -specific figures 
for the purposes of calculating the total remedy -year market size : 
 
587 The primary 6 -digit NAICS code is 322121 ( Paper (except newsprint) mills ). This results in a scaling 
factor of 0.91 reflecting a decrease in the value of domestic shipments. See  Annex C -5 for the identification of 
the primary NAICS co de, Annex C -6 for the calculation of the scaling index, and Annex C -8 for the calculation 
of the resulting remedy year figure . See also fn 498 to  para. 3.240 above.  
588 See section 3.4.2.1.2 above.  
589 See section 3.4.2.1.2 above.  
590 See section 3.4.2.1.1 above.  
591 USITC Publication 4656 (Exhibit CHN -51), p. I -19. 
592 See para. 3.225 above.  
593 We obtain the more recent scope adjustment factor by calculating the 2011 -2015 average ratio of 
US imports from the RoW (" Nonsubject sources of fre e sheet CCP ") as reported in Table I -9 of USITC 
Publication 4656 to imports from the RoW obtained under the HTSUS codes referenced by USITC in fn 19 of 
USITC Publication 4656 as reported by USITC Dataweb. We exclude the year 2010 from the calculation as 
USITC seems to not have relied on HTSUS codes for that year according to fn. 19 of USITC Publication 4656. 
See Annex C -7 for the calculation of the scope adjustment.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 82 - 
 
 Table 23: Remedy -year mark et sales  for Print Graphics  
Varieties  Total sales  
US domestic variety  USD 1,100,263,000  
Imports from China  [[***]] 
Imports from the rest of the world  USD 961,770,000  
TOTAL MARKET SIZE  [[***]] 
 
3.4.2.2.8   Aluminum Extrusions  
3.302.   In the case of Aluminum Extrusions , China relies on the 2015 figure for the total sales in the 
US market from USITC Publication 4677594, and adjusts this figure by a GDP deflator to calculate 
remedy year (2017) total sales in the United  States .595 In turn, t he United  States  calculates its 
remedy-year total US market -size figure as the sum of sales estimates for the three varieties.596 The 
United  States ' estimate for sales of the US domestic variety in 2017 is based on 2015 US domestic 
sales in USITC  Publication 4677 scaled up by year -on-year real growth rates .597 The United  States ' 
estimate for i mports from China is based on USCBP data  for 2017 , whereas imports  from the RoW 
are estimated by  adjusting 2017 imports based on HTSUS data from the US Census  Bureau under 
HTS codes from 2011 to represent imports under older HTS codes that the United  States  considers 
to represent the appropriate  product scope.598 
3.303.   As explained, we do not consider the use of a GDP deflator, as suggested by China, to be a 
reliable approach for calculating  remedy -year sales.599 Hence, we review the remedy -year data for 
all three varieties provided by the United  States , as well as China' s arguments against relying on 
such data, before calculating the total value of remedy -year sales.  
3.304.   Regarding sales of the US domestic variety , both parties rely on the same USITC report , 
which contains data for 2015, but they disagree on how to scale that data to the 2017 remedy year. 
China relies on a GDP deflator, which the United  States  criticizes and which we, as explained earlier , 
do not consider to be a reliable approach for calculating remedy year sales .600 The United  States  
uses real growth rates, i. e. quantity -based growth rates not capturing price changes, from the 
Aluminum Association, a trade association for alumin ium production, fabrication , and recycling 
industries, and their suppliers .601 The growth rate is based on s hipments of alumin ium extrud ed 
products  by US and Canadian producers. China criticizes this growth rate claiming it includes 
shipments by US firms to Canada, and  by Canadian firms to the United  States .602 China adds that 
the United  States ' choice of a real growth rate is entirely arbitrary and inconsistent with the 
United  States ' approach for other products and  with the type of year -to-year price adjustments made 
by prior arbitrators.  China refers to the US – Washing Machines (Article 22.6  – US) as an instance 
of an Article 22.6 arbitrator using a price adjustment.603 
3.305.   We note that, as argued by China, the United  States  attempts to make a market size 
adjustment rather than a price adjustment . We further note that the arbitrator in US – Washin g 
Machines (Article 22.6 – US) used a price adjustment to account for inflation. That, however, is a 
very different exercise from the one that we have been asked to undertake in assessing the size of 
the market in the remedy year based on market size estim ates from previous years. While we agree 
with China that including shipments by US firms to Canada and  by Canadian firms to the 
United  States  is a concern, we also note that the United  States ' proposed scaling index is highly 
product -specific and captures actual market size developments between 2015 and 2017.  
 
594 Exhibit CHN -37, Table I -9. 
595 Exhibit CHN -120. See also Exhibit CHN -53 for reported GDP deflator  data. 
596 Exhibit USA -156 (BCI).  
597 Exhibit USA -149 (BCI).  
598 Exhibits USA -62 (BCI) and USA -63 (BCI).  
599 See section 3.4.2.1.1 above.  
600 See section 3.4.2.1.1 above.  
601 Exhibits USA -149 (BCI) and  USA-156 (BCI).  
602 China's comments on the United  States' response to Arbitrator question No. 93, paras. 48 -49. 
603 China's comments on the United  States' response to Arbitrator question No. 92, para. 46.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 83 - 
 
 3.306.   We further consider that China is correct in stating that "[t]he specific economic issue is how 
the value of sales ( 'p times q ') changes over time ".604 China adds that " one could imagine using 
either a quantity index or a price index to capture change over time ".605 As indicated, we consider 
that if the issue is how the value of sales, i.e. the market size, changes over time, then one should 
optimally account for changes in p(rices) and q(uantities) rathe r than just prices or just quantities, 
which is what the indices by China and the United  States  do. Indeed, when scaling of less recent 
data was necessary, we have relied on indices that capture both changes.606 
3.307.   Therefore, we decide to implement the market size adjustment of the United  States  but to 
complement it with an index that captures changes in prices. We note in that regard that the 
United  States  argues that it would be more accurate for this exercise  to use a wholesale price index 
or consumer price index  than a GDP deflator .607 We note that we neither have these indices on the 
record nor do they appear to be publicly available. However, we consider that the Producer Price 
Index (PPI) data pertaining to "Metal s and Metal Products -Aluminum castings " submitted by China 
can also be applied to this exercise as it is relatively product -specific.608 Hence, we calculate sales 
of the domestic variety by scaling 2015 USITC data with real growth rates provided by the 
United States  and a PPI -based inflation index provided by China.609 
3.308.   For sales of the import  variet ies, we note that, as regards imports from China, the parties' 
disagreements revolve around the use of USCBP data, as addressed earlier.610 As explained, if no 
superior data is available, we consider the use of USCBP data for the remedy year to be 
reasonable.611 As we have rejected China's GDP deflator approach612, we adopt the United  States ' 
estimate for imports from China based on USCBP data.  
3.309.   As regards imports from the RoW, China criticizes the HTSUS codes that the United  States  
uses for its estimate , arguing that they could be potentially underinclusive since the set of HTS codes 
subject to the WTO -inconsistent duty has changed since the duties were originally imposed .613 The 
United  States  responds that the data it relies on has been used by the arbitrator in 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US) and that the HTSUS codes it uses are 
as listed in both USITC Publication 4229 from 20 11 and USITC Publication 4677 from 2017, which 
the parties have relied on in the course of these proceedings.614 
3.310.   We note that the ratio of imports under the HTSUS codes used by the United  States  (as 
reported by USITC Data Web) to the imports from the RoW rep orted in USITC Publication 4677 varies 
between 0.97 and 0.99 in the years 2008 to 2015. Thus, it appears that imports under the HTSUS 
codes used by the United  States  lead to a close approximation of actual non -subject imports from 
the RoW and that the unde r-inclusion issue is negligible. We further note that the United  States ' 
figure is considerably large r than China's figure due to a relevant increase in imports from the RoW 
in 2017615, which suggests that China's figure is even more subject to mismeasureme nt and 
under -inclusion in this instance. Accordingly, and having rejected China's GDP deflator616, we adopt 
the United  States ' estimate for imports from the RoW.  
3.311.   Therefore, with regard to  Aluminum  Extrusions, we shall rely on the following variety -specific 
figures for the purposes of calculating the total remedy -year market size : 
 
604 China's comments on the United  States' response to A rbitrator question No. 92, para. 46.  
605 China's comments on the United  States' response to Arbitrator question No. 92, para. 46.  
606 See Annex C -6 for the scaling indices used for the domestic varieties of  Pressure Pipe, Kitchen 
Shelving, Seamless Pipe, and P rint Graphics.  
607 United  States' response to Arbitrator question No. 92, para. 68.  
608 Exhibit CHN -103. 
609 Based on Exhibit CHN -103, the average PPI for " Metals and Metal Products -Aluminum Castings"  is 
185.6 in 2015 and 184.8 in 2017, implying a scaling factor  of 0.995. We note that China reports in 
Exhibit  CHN-104 a scaling factor of 1.0159  for the identical exercise. We do not know how China has obtained 
this value and, hence, rely on a scaling factor of 0.995.  
610 See section 3.4.2.1.2 above.  
611 See section 3.4 .2.1.2 above.  
612 See section 3.4.2.1.1 above.  
613 China's response to Arbitrator question No. 61, paras. 62 -66. 
614 United  States' response to Arbitrator question No. 61, para. 81.  
615 USITC Publication 4677 (Exhibit CHN -37). 
616 See section 3.4.2.1.1 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 84 - 
 
 Table 24: Remedy -year market  sales  for Aluminum Extrusions  
Varieties  Total sales  
US domestic variety  USD 5,514,091,000  
Imports from China  [[***]] 
Imports from the rest of the world  USD 1,077,900,000  
TOTAL MARKET SIZE  [[***]] 
 
3.4.2.2.9   Steel Cylinders  
3.312.   In the case of Steel Cylinders , China estimates the 2017 total US market size as the sum of 
three  figures.  For the two import varieties, China relies on the figure s for 2016 sales contained in 
USITC Publication 4738617, and adjusts  these figure s by a GDP deflator to represent sales of import 
varieties in 2017.618 For the 2017 sales of the US domestic variety, China uses data from 
TriMas  Corporation's 2018 SEC Annual Report Co  (Form  10-K)619, and uses this data to estimate the 
domestic sales of Norr is Cylinder, which , as indicated in the context of the year -prior620, is a sub -unit 
in the Engineered Components Division of TriMas Corporation, and the only company producing steel 
cylinders in the United  States . Since Form 10 -K does not separate revenue b y different subunits of 
TriMas  Corporation, China assumes that half of TriMas Corporation's Engineered Components 
Division's reported 2017 revenue is attributable to Norris Cylinder, and China further assumes that 
two thirds of Norris Cylinder's estimated revenue stem from domestic sales.621 
3.313.   The United  States  calculates its remedy -year total market  size figure as the sum of sales 
estimates for the three varieties .622 The United  States ' sales of the US domestic variety in 2017 are 
based on actual sales reporte d by Norris Cylinder .623 Sales data for i mports from China are  based 
on USCBP data for 2017 , and imports from the RoW are  based  on 2017 HTSUS aggregated data 
from the US  Census Bureau.624 
3.314.   Regarding sales of the US domestic variety , we have already noted in the section on 
year-prior market shares for Steel Cylinders that the evidence provided by the Unites States seems 
to us to be the best available data on the record, since it contains an exact figure, without requiring 
assumptions or estimation methodologie s, and has been issued directly by Norris Cylinder.625 
Accordingly, we adopt the United  States ' figure for the remedy -year sales of the domestic variety . 
3.315.   For sales of the import  variet ies, we note that, as regards imports from China, the parties' 
disagreeme nts revolve around the use of USCBP data, addressed earlier.626 As explained627, if no 
superior data is available, we consider the use of USCBP data for the remedy year to be reasonable. 
As we have rejected China's GDP deflator approach628, we adopt the United States ' estimate for 
imports from China based on USCBP data.  
3.316.   As regards imports from the RoW, we note that China has not criticized the scope of the 
United  States ' HTSUS -based figure informed by actual data for the remedy year. Hence, and in light 
of our  rejection of China's GDP deflator629, we adopt the United  States ' figure.  
 
617 Exhibit CHN -73, Table I -3. 
618 Exhibit CHN -120. See also Exhibit CHN -53 for reported GDP deflator  data. 
619 Exhibit CHN -56. 
620 See section . 3.4.1.2.9 above.  
621 Exhibits CHN -94 and CHN -120. 
622 Exhibit USA -156 (BCI).  
623 Exhibit USA -116 (BCI).  
624 Exhibits USA -59 and USA -64 (BCI).  
625 See para. 3.189 above.  
626 See section 3.4.2.1.2 above.  
627 See section 3.4.2.1.2 above.  
628 See section 3.4.2.1.1 above.  
629 See section 3.4.2.1.1 above.  WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 85 - 
 
 3.317.   Therefore, with regard to  Steel Cylinders, we shall rely on the following variety -specific 
figures for the purposes of calculating the total remedy -year market size : 
Table 25: Remedy -year market sales for Ste el Cylinders  
Varieties  Total sales  
US domestic variety  [[***]] 
Imports from China  [[***]] 
Imports from the rest of the world  USD 5,200,000  
TOTAL MARKET SIZE  [[***]] 
 
3.4.2.2.10   Solar Panels  
3.318.   In the case of Solar Panels, China relies on 2017 import varieties figures  obtained from 
USITC Publication 4874630, and calculates sales of the domestic variety based on an assumed market 
share of that variety in the total market.631 Similarly, t he United  States  calculates its remedy -year 
total market  size figure as the sum of sales estimates for the three varieties .632 The United  States ' 
estimate for sales of the domestic variety in 2017 is based on prices reported by the US Department 
of Energy , and production q uantity reported by the International Energy Agency .633 The 
United  States ' estimate for i mports from China is based on USCBP data for 2017 , and the estimate 
for imports from the RoW is based on 2017 HTSUS aggregated data from the US  Census Bureau.634 
3.319.   Regardi ng sales of the US domestic variety , China' s estimate is based on the assumption 
that imports account for 90% of the total market size.635 The United  States  criticizes this approach 
as unsupported and not suitable, claiming that China has not provided a bas is for its assumption.636 
China responds that its estimate is based on data from GreenTech Media Research and the Solar 
Energy Industries Association , which indicates that solar panel consumption accounted for by 
domestically produced crystalline silicon ph otovoltaic ( CSPV ) modules is 6.4%.637 China argues that 
the United  States ' estimate, in turn, is from reputable sources but hardly differs from its own 
estimate as to its relative impact on the total market size.638 
3.320.   We note that, although both parties rely on different sources, they report identical production 
quantities and convert them to shipment values based  on an assumption as to how average prices 
apply to these. Given these similarities, we fail to see how the United  States ' estimation methodology 
would be superior to China's methodology. Hence, we adopt China's estimation methodology.  
3.321.   That said, the main input into China's estimation is the quantity -based market share of the 
domestic variety, which China assume s to be 10%. China, however, submits evidence showing that 
the quantity -based market share of the domestic variety is in fact 6.4% rather than 10%, without 
explain this discrepancy between the evidence and its implementation. Accordingly, we rely on the 
6.4% figure supported by China's evidence  to obtain the sales value of the US domestic variety, 
rather than the 10% figure advanced by China.639 
3.322.   As regards the two import varieties , we note that China's estimates rely on a USITC report 
from a sunset review pe rtaining to the CVD order at issue that provides data for the remedy year. 
The United  States  provides estimates based on other sources that differ substantially from China's 
estimates, without explaining why these estimates should be preferable to USITC da ta. The 
United  States  merely refers to the fact that its figures were used by the arbitrator in 
 
630 Exhibit CHN -46, Tabl e I-10. 
631 Exhibit CHN -120. 
632 Exhibit USA -156 (BCI).  
633 Exhibits USA -19; USA -20; and USA -60. 
634 Exhibits USA -59 and USA -64 (BCI).  
635 Exhibit CHN -120. 
636 United  States' response to Arbitrator question No. 23, paras. 131 and 138.  
637 China's response to Arbitrator question No. 63, para. 68; Exhibit CHN -112 (BCI).  
638 China's response to Arbitrator question No. 64, paras. 69 -70. 
639 We obtain an estimate of USD 259,535,000 based on the equation Imports from China + Imports 
from the Row + 0.064*Total Market Size = Total Market Size , using figures for imports submitted by China and 
reported in Table I -10 of USITC Publication 4874  (Exhibit CHN -46). WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 86 - 
 
 US – Anti-Dumping Methodologies (China) (Article 22.6 – US).640 In contrast, China submits 
evidence that, at least with respect to the United  States ' HTSUS -based  estimate for imports from 
the RoW, the difference between the parties' figures arises from the inclusion of out -of-scope 
products by the United  States .641 Hence, we adopt China's figures for the two import varieties.  
3.323.   Therefore, with regard to  Solar Panels,  we shall rely on the following  variety -specific figures 
for the purposes of calculating the total remedy -year market size : 
Table 26: Remedy -year market sales for Solar Panels  
Varieties  Total sales  
US domestic variety  USD 259,535,000  
Imports from China  USD 441,381,000  
Imports from the rest of the world  USD 3,354,314,000  
TOTAL MARKET SIZE  USD 4,055,230,000  
 
3.4.3   Elasticities  
3.324.   The parties  agree that a two -step Armington m odel would require data on three types of 
elasticities for each of the ten products at issue:  (i) supply elasticities for domestic producers , 
Chinese imports, and RoW imports642; (ii) demand elasticities; and  (iii) elasticities of substitution.643 
3.325.   Initial disagreements between the parties regarding the specific values of these elasticities 
were ultimately resolved in the course of the proceedings.644 Accordingly, we rely on the parties' 
shared elasticity values in our own calculation of the level of N/I.  
3.5  Implementation and final N/I calculation  
3.326.   Having  identified the counterfactual and the required data inputs, we proceed to implement 
the Armington model under the two steps.645 
 
640 United  States' re sponse to Arbitrator question No. 94, para. 73.  
641 China's response to Arbitrator question No. 94, paras. 53 -55. See also para. 3.202 above concerning 
the same issue with respect to year -prior market shares.  
642 Both parties use a value of 10 for import suppl y elasticities  for all the CVD orders at issue  
(Exhibits  CHN-120 and USA -159). China explains that this follows the approach adopted by the 
US – Anti-Dumping Methodologies (China) (Article 22.6 – US) arbitrator since those elasticities are not 
provided in the USI TC reports. (China's methodology paper, para. 96).  
643 China's methodology paper, para.  96; United  States ' written submission, para.  128. 
644 From the outset, the parties agreed on supply elasticities for imports from China and from the RoW 
but disagree d on the other elasticity estimates for certain products , mostly because they relied on different 
USITC reports for such products. Specifically, the parties' elasticities data differed with regard to: (i)  domestic 
supply elasticities for OCTG, Print Graphi cs, Aluminum Extrusions , and Solar Panels; (ii)  demand  elasticities for 
OCTG; and (iii) elasticities of substitution for Print Graphics. Subsequently, China indicated that whether to use 
elasticities as originally reported or as later updated in the releva nt USITC reports is a relatively minor issue. 
Ultimately, in its final data exhibit (Exhibit CHN -120), China relied on the values suggested by the 
United  States , thus eliminating any remaining disagreement between the parties on elasticity figures. (China' s 
methodology paper, para. 96 ; United  States ' written submission, paras. 130 and 132 ; China's response to 
Arbitrator question No. 18, para. 60; and No. 79, para. 37 ; United  States' response to Arbitrator question 
No. 16, paras. 108 -109; No. 17, paras. 111-112; No. 18, paras. 115 -116; No. 19, paras. 117 -119; No. 50, 
para. 59; and No. 51, para. 60. See also Exhibits CHN -36; CHN-37; CHN-45; CHN-46; CHN-50; CHN-51; 
CHN-53; CHN-120; USA-46; USA-47 (BCI);  USA-79 (BCI);  and USA -154. 
As regards the related but separate issue of the parties' continued disagreement on the ratio of 
micro - and macro -elasticities, we have concluded that we would be using a "nested approach" to elas ticities of 
substitution with a ratio of the square root of two  (i.e. approximately 1.41) . In other words, we consider that 
elasticities of substitution between imports from different sources ( micro -elasticity ) are approximately 1.41 
times larger than elas ticities of substitution between imports and US domestic goods ( macro -elasticity ). 
See section 3.3.1 above.  
See Exhibits CHN-120 and USA -154 for the final elasticity values provided by the parties.  
645 The GAMS code (do -file) used to implement the Armington model is reported in Annex C -9. It is 
based on Exhibit CHN -54. The relevant data input is reported in Annex C -10. WT/DS437/ARB  
BCI omitted, as indicated [[***]]  
- 87 - 
 
 3.327.   As the first step, we apply the Armington model to the US market as it existed in th e 
year-prior to simulate, for each CVD order, the impact of imposing the relevant WTO-inconsistent 
CVDs on the market shares of imports from China, imports from the RoW, and on sales of the US 
domestic variety.646 We then apply the market shares of imports from China simulated under the 
first step to the actual 2017 total value of the US market in order to obtain the simulated 2017 total 
value of US imports from China.  
3.328.   As the second step, we apply the Armington model to the 2017 US market with the market 
shares simulated under the first step to simulate, for each CVD order, the impact of reducing the 
WTO-inconsistent CVDs  from the actual duty rates to the counterfactual duty rates on the value of 
imports from China, imports from the RoW, and sales of the dome stic variety . The value of imports 
from China simulated under the second step corresponds to the counterfactual value of imports from 
China.  
3.329.   We then estimate the level of N/I concerning the CVD orders at issue by calculating, for each 
order, the difference  between the 2017 value of imports from China, simulated under the first step, 
and the counterfactual value of imports from China, simulated under the second step.  
3.330.   The table below presents the level of N/I estimated for each CVD order at issue by applying 
the two -step Armington model, as well as the total estimated level of N/I. 
Table 27: Estimated level of  nullification and impairment  
CVD order  Level of nullification and impairment (million USD)  
Pressure Pipe  [[***]] 
Line Pipe  [[***]] 
Kitchen Shelving  [[***]] 
OCTG  365.370 
Wire Strand  [[***]] 
Seamless Pipe  [[***]] 
Print Graphics  [[***]] 
Aluminum Extrusions  [[***]] 
Steel Cylinders  [[***]] 
Solar Panels  20.646 
Total level of nullification and impairment  645.121 
  
4  CONCLUSION  
4.1.  For the reasons set out above, we determine that the level of N/I of benefits accruing to China 
as a result of the WTO -inconsistent methodologies used by the United  States  in the CVD proceedings 
concerning products imported from China is USD  645.121 millio n per annum . Therefore, in 
accordance with Article 22  of the DSU, China may request authorization from the DSB to suspend 
concessions or other obligations at a level not exceeding USD  645.121 million per annum . 
 
__________  
 
646 The simulated WTO -inconsistent and WTO -consistent market shares are presented in Annex C -11.