WT/DS397/RW/Add.1  
 
7 August 2015  
(15-4050)  Page: 1/54  
  Original: English  
 
 EUROPEAN COMMUNITIES – DEFINITIVE ANTI-DUMPING MEASURES 
ON CERTAIN IRON OR STEEL FASTENERS FROM CHINA 
RECOURSE TO ARTICLE 21.5 OF THE DSU BY CHINA 
REPORT OF THE PANEL 
Addendum  
This addendum  contains Annexes A to D to the Report of the Panel to be found in document 
WT/DS397/RW. 
  
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 WT/DS397/RW/Add.1 
 
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  LIST OF ANNEXES 
 
ANNEX A 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex A-1 Working Procedures of the Panel A-2 
ANNEX B 
ARGUMENTS OF CHINA 
Contents Page 
Annex B-1 Executive summary of the first written submission of China B-2 
Annex B-2 Executive summary of the second written submission of China B-8 
Annex B-3 Executive summary of the oral statements of China B-14 
ANNEX C 
ARGUMENTS OF THE EUROPEAN UNION 
Contents Page 
Annex C-1 Executive summary of the first written submission of the European Union C-2 
Annex C-2 Executive summary of the second writte n submission of the European Union C-10 
Annex C-3 Executive summary of the opening oral statement by the European Union C-19 
ANNEX D 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex D-1 Integrated Executive summary of the arguments of Japan D-2 
Annex D-2 Integrated Executive summary of the arguments of the United States D-4 
 
  WT/DS397/RW/Add.1 
 
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  ANNEX A 
WORKING PROCEDURES OF THE PANEL 
Contents Page 
Annex A-1 Working Procedures of the Panel A-2 
 
 WT/DS397/RW/Add.1 
 
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  ANNEX A-1 
WORKING PROCEDURES OF THE PANEL 
1.1. In its proceedings, the Panel shall follow the relevant provisions of the Understanding on 
Rules and Procedures Governing the Settlement of  Disputes (DSU). In addition, the following 
Working Procedures shall apply. 
General 
 
1.2. The deliberations of the Panel and the docume nts submitted to it shall be kept confidential. 
Nothing in the DSU or in these Working Procedures shall preclude a party to the dispute (hereafter 
"party") from disclosing statements of its own positions to the public. Members shall treat as confidential information submitte d by another Member to the Panel which the submitting Member 
has designated as confidential. Where a party submits a confidential version of its written 
submissions to the Panel, it shall also, upon request of a Member, provide a non-confidential summary of the information contained in its submissions that could be disclosed to the public. A 
Party submitting confidential information in any written submission (including in any exhibits) shall 
mark the cover and/or first page of the document containing any such information with the words "Contains Confidential Information". The specific information in question shall be enclosed in 
double brackets, as follows: [[xx.xxx.xx]] and th e notation "Contains Confidential Information" 
shall be marked at the top of each page containi ng the confidential information. Before the Panel 
circulates its final report to the Members, the Panel shall give each party an opportunity to ensure that the report does not contain any information that it has designated as confidential. The 
removal of any designated confidential information by the Panel will be indicated in the final report 
through the use of double brackets. 
1.3. The Panel shall meet in closed session. The parties, and Members having notified their interest 
in the dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU (hereafter 
"third parties"), shall be present at the meetings only when invited by the Panel to appear before it.  
1.4. Each party and third party has the right to determine the composition of its own delegation 
when meeting with the Panel. Each party and thir d party shall have responsibility for all members 
of its own delegation and shall ensure that each member of such delegation acts in accordance 
with the DSU and these Working Procedures, particularly with regard to the confidentiality of the 
proceedings.  
Submissions 
 
1.5. Before the substantive meeting of the Panel wi th the parties, each party shall transmit to the 
Panel a first written submission, and subsequently a written rebuttal, in which it presents the facts of the case and its arguments, and counter-arguments, respectively, in accordance with the 
timetable adopted by the Panel.  
1.6. A party shall submit any request for a preliminary ruling at the earliest possible opportunity 
and in any event no later than in its first written submission to the Panel. If China requests such a 
ruling, the European Union shall submit its response to the request in its first written submission. 
If the European Union requests such a ruling, Chin a shall submit its response to the request prior 
to the substantive meeting of the Panel, at a time  to be determined by the Panel in light of the 
request. Exceptions to this procedure shall be granted upon a showing of good cause.  
1.7. Each party shall submit all factual evidence to the Panel no later than during the substantive 
meeting, except with respect to evidence necessar y for purposes of rebuttal, answers to questions 
or comments on answers provided by the other party. Exceptions to this procedure shall be 
granted upon a showing of good cause. Where su ch exception has been granted, the Panel shall 
accord the other party a period of time for comme nt, as appropriate, on any new factual evidence 
submitted after the substantive meeting.  WT/DS397/RW/Add.1 
 
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  1.8. Where the original language of exhibits is not a WTO working language, the submitting party 
or third party shall submit a translation into the WTO working language of the submission at the same time. The Panel may grant reasonable extensions of time for the translation of such exhibits upon a showing of good cause. Any objection as to  the accuracy of a translation should be raised 
promptly in writing, no later than the next filing or meeting (whichever occurs earlier) following 
the submission which contains the translation in question. Any objection shall be accompanied by a detailed explanation of the grounds of objection and an alternative translation. 
1.9. To facilitate the maintenance of the record  of the dispute, and maximize the clarity of 
submissions, each party and third party shall sequentially number its exhibits throughout the course of the dispute. For example, exhibits  submitted by China could be numbered CHN-1, 
CHN-2, etc. If the last exhibit in connection with the first submission was numbered CHN-5, the 
first exhibit of the next submission  thus would be numbered CHN-6.  
Questions 
 
1.10. The Panel may at any time pose questions to the parties and third parties, orally in the 
course of the substantive meeting or in writing.  
Substantive meeting 
 
1.11. Each party shall provide to the Panel the list  of members of its delegation in advance of the 
meeting with the Panel and no later than 5.00 p.m. the previous working day. 
1.12. The substantive meeting of the Panel shall be conducted as follows: 
a. The Panel shall invite China to make an opening statement to present its case first. 
Subsequently, the Panel shall invite the European Union to present its point of view. Before each party takes the floor, it shall provide the Panel and other participants at the 
meeting with a provisional written version of its statement. In the event that 
interpretation is needed, each party shall provide additional copies to the interpreters. Each party shall make available to the Panel and the other party the final version of its 
opening statement as well as its closing statem ent, if any, preferably at the end of the 
meeting, and in any event no later than 5.00 p.m. on the first working day following the meeting. 
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask questions or make comments, through the Panel. Each party shall send in writing, 
within a timeframe to be determined by the Panel, any questions to the other party to which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to the other party's questions within a deadline to be determined by the Panel. 
c. The Panel may subsequently pose questions to the parties. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the parties to which 
it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to such questions within a deadline to be determined by the Panel. 
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with China presenting its statement first.  WT/DS397/RW/Add.1 
 
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  Third parties 
 1.13. The Panel shall invite each third party to tr ansmit to the Panel a written submission prior to 
the substantive meeting of the Panel with the parties, in accordance with the timetable adopted by 
the Panel.  
1.14. Each third party shall also be invited to present its views orally during a session of the 
substantive meeting, set aside for that purpose. Ea ch third party shall provide to the Panel the list 
of members of its delegation in advance of this session and no later than 5.00 p.m. the previous 
working day.  
1.15. The third party session shall be conducted as follows: 
a. All third parties may be present during the entirety of this session.  
b. The Panel shall first hear the arguments of the third parties in alphabetical order. Third 
parties present at the third-party session and intending to present their views orally at that session, shall provide the Panel, the parties and other third parties with provisional 
written versions of their statements before they take the floor. Third parties shall make 
available to the Panel, the parties and other third parties the final versions of their statements, preferably at the end of the session, and in any event no later than 
5.00 p.m. of the first working day following the session.  
c. After the third parties have made their statements, the parties may be given the 
opportunity, through the Panel, to ask the third parties questions for clarification on any matter raised in the third parties' submissions or statements. Each party shall send in 
writing, within a timeframe to be determined by the Panel, any questions to a third party 
to which it wishes to receive a response in writing.  
d. The Panel may subsequently pose questions to the third parties. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to the third parties to 
which it wishes to receive a response in writing. Each third party shall be invited to respond in writing to such questions within a deadline to be determined by the Panel. 
Descriptive part 
 1.16. The description of the arguments of the part ies and third parties in the descriptive part of 
the Panel report shall consist of executive summari es provided by the parties and third parties, 
which shall be annexed as addenda to the report . These executive summaries shall not in any way 
serve as a substitute for the submissions of the pa rties and third parties in the Panel's examination 
of the case.  
1.17. Each party shall submit executive summaries of the facts and arguments as presented to the 
Panel in its written submissions, other than responses to questions, and in its oral statements, in accordance with the timetable adopted by the Panel. Each executive summary of a written 
submission shall be limited to no more than 10 pages, and each summary submitted by each party 
of both opening and closing statements presented at a substantive meeting shall be limited to no 
more than 5 pages. The Panel will not summarize in the descriptive part of its report, or annex to its report, the parties' responses to questions. 
1.18. Each third party shall submit an executive summary of its arguments as presented in its 
written submission and statement in accordance with the timetable adopted by the Panel. This 
summary may also include a summary of response s to questions, where relevant. The executive 
summary to be provided by each third party shall not exceed 6 pages.  
1.19. The Panel reserves the right to request th e parties and third parties to provide executive 
summaries of facts and arguments presented by a party or a third party in any other submissions 
to the Panel for which a deadline may not be specified in the timetable.  WT/DS397/RW/Add.1 
 
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  Interim review  
1.20. Following issuance of the interim report, each party may submit a written request to review 
precise aspects of the interim report and request a further meeting with the Panel in accordance with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no 
later than at the time the written request for review is submitted.  
1.21. In the event that no further meeting with the Panel is requested, each party may submit 
written comments on the other party's written request for review in accordance with the timetable 
adopted by the Panel. Such comments shall be limited to commenting on the other party's written 
request for review.  
1.22. The interim report, as well as the final report prior to its official circulation, shall be kept 
strictly confidential and shall not be disclosed.  
Service of documents  
 1.23. The following procedures regarding service of documents shall apply: 
a. Each party and third party shall submit all do cuments to the Panel by filing them with 
the DS Registry (office No. 2047).  
b. Each party and third party shall file three pape r copies of all documents it submits to the 
Panel. However, when exhibits are provided on CD-ROMS/DVDs, six CD-ROMS/DVDs and 
three paper copies of those exhibits shall be filed. The DS Registrar shall stamp the 
documents with the date and time of the filing. The paper version shall constitute the official version for the purposes of the record of the dispute. 
c. Each party and third party shall also provide an electronic copy of all documents it 
submits to the Panel at the same time as the paper versions, in Microsoft Word format, either on a CD-ROM, a DVD or as an e-mail attachment. If the electronic copy is 
provided by e-mail, it should be addressed to DSRegistry@wto.org, and cc'd to 
xxxxxxxxxx@wto.org and xxxxxxxxxx@wto.org. If a CD -ROM or DVD is pr ovided, it shall 
be filed with the DS Registry.  
d. Each party shall serve any document submitted to the Panel directly on the other party. 
Each party shall, in addition, serve on all third parties its written submissions in advance of the substantive meeting with the Panel. Each third party shall serve any document submitted to the Panel directly on the parties and all other third parties. Each party and 
third party shall confirm, in writing, that copies have been served as required at the time 
it provides each document to the Panel. 
e. Each party and third party shall file its docu ments with the DS Registry and serve copies 
on the other party (and third parties where appropriate) by 5.00 p.m. (Geneva time) on 
the due dates established by the Panel. 
f. The Panel shall provide the parties with an electronic version of the descriptive part, the 
interim report and the final report, as well as of other documents as appropriate. When 
the Panel transmits to the parties or third part ies both paper and electronic versions of a 
document, the paper version shall constitute the official version for the purposes of the record of the dispute. 
 
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   WT/DS397/RW/Add.1 
 
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  ANNEX B 
ARGUMENTS OF CHINA 
Contents Page 
Annex B-1 Executive summary of the first written submission of China B-2 
Annex B-2 Executive summary of the second written submission of China B-8 
Annex B-3 Executive summary of the oral statements of China B-14 
 
 WT/DS397/RW/Add.1 
 
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  ANNEX B-1 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN 
SUBMISSION OF CHINA 
1 INTRODUCTION 
1. China has initiated the present proceedings to seek resolution of a disagreement with the 
European Union ("EU") as to the conformity with  the covered agreements of the measures taken 
by the European Union to comply with the recommendations and rulings of the WTO Dispute 
Settlement Body ("DSB") in this dispute. China considers that the measures taken by the 
European Union have failed to bring the European Union into compliance with its obligations under the Agreement on Implementation of Article VI of the General Agreement on Tariffs and 
Trade 1994 ("the AD Agreement") and the Ge neral Agreement on Tariffs and Trade 1994 
("GATT 1994"). More specifically, China considers that the measures taken by the European Union 
to implement the recommendations and rulings of th e DSB in relation to the anti-dumping duties 
on imports of certain iron or steel fasteners originating in China through Council Regulation (EU) 
No 924/2012 of 4 October 2012 do not fully and correctly implement the recommendations and 
rulings of the DSB and that they are inconsistent with various provisions of the AD Agreement and 
of the GATT 1994. 
 
2 LEGAL CLAIMS 
2.1 The European Union violated Articles 6.5, 6.5.1, 6.4, 6. 2 and 6.1.2 of the 
AD Agreement in relation to information conc erning the products of the Indian producer 
2. China claims that the European Union violated Article 6.5 of the AD Agreement because it 
granted confidential treatment to the information concerning the products of the Indian producer while such information was not confidential and while no "good cause" had been shown. 
 
3. Pursuant to Article 6.5 of the AD Agreemen t two conditions must be fulfilled before any 
information submitted by parties to an investigation is to be treated by the investigating 
authorities as confidential: first, the information mu st be either confidential by nature or submitted 
on a confidential basis and, second, good cause mu st be shown. These conditions are essential to 
secure the balance between, on the one hand, the interests of the party submitting the information in confidentiality and, on the other hand, the need  of the other parties for a level of transparency 
that is essential to defend their rights throughout the investigation. Neither of these conditions has 
been met in the present case in relation to the list of products and the information concerning the characteristics of the products of the Indian producer. 
 
4. First, the list of products actually sold by the Indian producer on its domestic market and the information concerning the characteristics of these products, such as information on the strength 
class, type of coating, chrome, diameter, length, etc., cannot be considered as confidential "by 
nature" as they are both the type of information that is routinely provided to potential customers interested in purchasing fasteners. Second, nothin g in the file suggests that the Indian producer 
officially requested confidential treatment for all types of information concerning its products 
thereby providing them "on a confidential basis". 
 5. In any case, even if the information concer ned is to be treated as being submitted on a 
confidential basis, it is clear that the Indian producer has never provided any reason or 
justification for the confidential treatment of it s information and therefore failed to show "good 
cause" as required by Article 6.5 of the AD Agr eement. As clarified by the Appellate Body in the 
original dispute, the party submitting the confidential information not only has to provide the 
reason why the information should be treated as confidential but such reason must be sufficient to justify the withholding of information. The Indian  producer, however, did not provide any reason 
whatsoever why the information concerning the characteristics of its products and the lists of the 
products should be treated as confidential. The European Union therefore failed to comply with 
Article 6.5 of the AD Agreement.  WT/DS397/RW/Add.1 
 
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  6. Furthermore, if the Panel were to find that the European Union did not violate Article 6.5 of 
the AD Agreement – quod non  -, China submits that the European Union violated Article 6.5.1 to 
the extent that it failed to ensure that the Indi an producer provide a non-confidential summary of 
its information in sufficient detail as to permit a reasonable understanding of the substance of the 
information submitted in confidence. In addition , China notes that the Indian producer did not 
establish that there were "exceptional circumstances" and did not provide a statement of the reasons why, in such exceptional circumstances, summarization was not possible. 
 
7. Furthermore, by failing to provide timely o pportunities to the Chinese exporters to see the 
lists of products sold by the Indian producer as well as the information concerning the characteristics of these products, the European Un ion violated Article 6.4 of the AD Agreement. 
First, the information was relevant to the presenta tion of the interested parties' cases, as shown 
by the numerous requests by the Chinese exporters to see this information during the review investigation. Second, the information was not confidential, in particular in the absence of any 
"good cause" shown by the Indian producer. And th ird, the information was used by the authorities 
for the determination of the normal value and th e comparison between the normal value and the 
export price. Therefore, by failing to provide ti mely opportunities for the Chinese exporters to see 
such information, the European Union violated Article 6.4 of the AD Agreement. 
 8. Moreover, to the extent that the European Unio n violated Article 6.4 of the AD Agreement, it 
s h o u l d  a l s o  b e  f o u n d  t o  h a v e  v i o l a t e d  A r t i c l e  6.2 of the AD Agreement. In China's view, the 
obligation laid down in Article 6.2 is broad and therefore a finding of violation of Article 6.4 
necessarily entails a violation of Article 6.2. Since Chinese exporters have been denied the 
opportunity to see all information that was relevant to the presentation of their cases, they have 
been denied the opportunity to fully defend their interests, as required by Article 6.2 of the 
AD Agreement. Furthermore, even if the Panel we re to find no violation of Article 6.4 of the 
AD Agreement, it should conclude that the European Union nonetheless violated Article 6.2 of 
the AD Agreement. Indeed, in the framework of the review investigation, the European Union 
failed to provide to the Chinese exporters access to the list of products as well as to the information on the characteristics of the products sold by the Indian producer which were used by the European Union in the normal value and dumping determination. As a consequence, the 
Chinese exporters were not in a position to make relevant requests for adjustment necessary to 
ensure that a fair comparison could be made an d were therefore deprived of the opportunity to 
defend their interests, in violation of Article 6.2 of the AD Agreement. 
 
9. With respect to Article 6.1.2 of the AD Agr eement, China considers that the European Union 
failed to ensure that the evidence provided by the Indian producer concerning the characteristics 
of its products was made available promptly to the Chinese exporters and thereby violated that 
provision. The Indian producer should be regarded  as an "interested party" within the meaning of 
Article 6.1.2 since it participated in the investigation by providing a substantial amount of information to the European Union. Furthermore, as examined above, the evidence provided by 
the Indian producer cannot be treated as "confide ntial information". For the foregoing reasons, the 
European Union was under the obligation to make the evidence concerning the characteristics of the products of Indian producer promptly availa ble to the Chinese exporters participating in the 
investigation and by failing to do so, the Eu ropean Union violated Article 6.1.2 of the 
AD Agreement.  
2.2 The European Union violated Article 2.4 of the AD Agreement by failing to provide 
relevant information regarding the dumping margin determination 
10. China claims that by failing to provide relevant information on the characteristics of the 
products of the Indian producer which was used for the determination of the normal value, the 
European Union violated Article 2.4 of the AD Agreement. 
 11. In the original dispute, the Appellate Body stated that in order to ensure a fair comparison 
as required by Article 2.4 of the AD Agreement,  the investigating authority must, at a minimum, 
inform the parties of the products or product groups with regard to which it will conduct the price comparison. According to the Appellate Body, this obligation is particularly important in case of 
anti-dumping investigations of imports from non-market economy countries since without this 
information, the foreign producers under investigation are not in a position to request the necessary adjustments.  WT/DS397/RW/Add.1 
 
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  12. Pursuant to the Appellate Body's finding in th e original dispute, the European Union, in the 
review investigation, initially clarified that, for the purposes of the dumping margin determination, it had grouped products according to the distinction between standard and special fasteners and the strength class. The European Union did not, however, provide any further information 
regarding the products of the Indian producer. Since the comparison had been made on the basis 
of products groups defined initially by only two criteria, there were potentially many other physical differences affecting price comparability which would justify adjustment necessary to ensure a fair 
comparison required by Article 2.4 of the AD Agr eement. It was therefore essential for the Chinese 
exporters to know the characteristics of the produc ts of the Indian producer used in the normal 
value determination.  
13. Despite numerous requests by Chinese export ers, the European Union failed to provide any 
information concerning characteristics that the European Union itself acknowledged as affecting price comparability and which were identified in the original PCNs such as diameter and length, 
types of fasteners or coating and chrome. By  failing to provide this information, the 
European Union made it impossible for the Chinese exporters to identify the possible differences between the fasteners of the Indian producer an d their own products and, if any, to request 
adjustments related to these differences. 
 14. Similarly, the European Union failed to provide any information with respect to characteristics affecting price comparability other than those identified in the original PCNs namely 
traceability, industry standards, unit of defective rate, hardness, bending, strength impact 
toughness and friction coefficient, as identified  by the Chinese exporters. The European Union 
failed to provide information on whether any of the abovementioned characteristics were present, 
and if so, to what extent, in the products sold by the Indian producer. Furthermore, the 
European Union rejected the request for adjustments presented by the Chinese exporters in relation to these characteristics on the basis that they were not sufficiently substantiated. 
However, China submits that once the Chinese exporters had shown that certain technical 
characteristics are known in fasteners industry to affect prices, under the last sentence of the Article 2.4 of the AD Agreement, it was the duty of the European Union to indicate to the Chinese exporters what information their requests should contain so that they could further substantiate 
their requests for adjustments. 
 15. Therefore, by failing to provide the necessa ry information on the characteristics of the 
products sold by the Indian producer affecting price comparability, which were essential for the 
Chinese exporters in order to make or substantiate their requests for adjustments and thereby ensure a fair comparison, the European Union acted inconsistently with Article 2.4 of the 
AD Agreement. 
 2.3 The European Union acted inconsistently with Article 2.4 of the AD Agreement in 
failing to ensure that the export price of standard fasteners was not compared to the 
normal value of special fasteners 
16. Pursuant to Article 2.4 of the AD Agreement, in conducting a fair comparison between the 
export price and the normal value, the investigating authorities should make due allowances for 
differences affecting price comparability. In the present case, the European Union, after having 
noted that there were differences between standard and special fasteners, decided to make due allowances for these differences by grouping similar fasteners models, namely "standard" 
fasteners on the one hand and "special" fasteners on the other hand. 
 17. China takes no issue with the methodology of "grouping" followed by the European Union. It 
claims, however, that the European Union failed to ensure that a fair comparison was being made 
for the following reasons. 
 18. First, the European Union, failed to ensure that fasteners destined for high-end applications 
but not made according to a customer drawing were considered as "special" fasteners and not as 
"standard" fasteners. China submits that such hi gh-end fasteners are much more expensive than 
the standard low-end fasteners produced by the Chinese exporters and therefore should not be 
included in the same group. However, during the review investigation, the European Union failed 
to provide clarifications concerning the criteria on the basis of which it made the distinction between standard and special fasteners and when more precise information was provided, such information was contradictory. Furthermore, the limited information finally provided by the WT/DS397/RW/Add.1 
 
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  European Union shows that fasteners used in high -end applications but not made according to a 
customer's drawing would have been considered as standard fasteners.  19. Second, the European Union could not reasonably and objectively conclude that the lists of 
standard and special fasteners provided by the Indian producer were accurate. As shown by the 
Review Regulation, the European Union was unable to conduct an on-the-spot verification of the split between standard and special fasteners ma de by the Indian producer and accepted the 
accuracy of the split uniquely on the basis of the so-called "walk-through" tests (i.e. in-depth 
verification of a sample of sales transactions included in the sales listing in order to verify its accuracy) and after checking the split of the sales listing against an average price level of the split. However, in China's view, neither of these method s can be considered as objective as they check 
the accuracy of the data by reference to the very same data instead of to an external source. 
 20. In failing to ensure that the export price of standard fasteners produced by the Chinese 
exporters was not compared to the normal value of special fasteners manufactured by the Indian 
producer, and in failing to examine objectively and reasonably the lists of standard and special fasteners provided by the Indian producer, the European Union failed to make a fair comparison 
between export price and normal value. Therefore, the European Union acted inconsistently with 
Article 2.4 of the AD Agreement.  2.4 The European Union acted inconsistently with Articles 2.4 of the AD Agreement and 
VI:1 of the GATT 1994 in failing to make a fair comparison between normal value and 
export price in particular in failing to ma ke allowances for differences affecting price 
comparability 
21. China claims that the European Union violated  Articles 2.4 of the AD Agreement and VI:1 of 
the GATT 1994 since it failed to make a fair comp arison between the normal value and the export 
price and, in particular, since it failed to make allowances for several differences affecting prices 
comparability, namely differences in taxation, differences in certain physical characteristics and 
other differences affecting price comparability.  22. First, in relation to differences in taxation, in the review investigation, the Chinese exporters 
requested an adjustment for the difference in ta xation on the ground that the Indian producer 
used imported raw materials subject to high indirect taxes, while the Chinese exporters used locally sourced wire rode. The European Union, howe ver, rejected this request for the reason that 
the Chinese producers could not demonstrate that first, they used imported raw materials and 
second, that they benefited from a duty drawback scheme.  
23. The difference in taxation was due to the fact that the analogue producer used imported raw 
materials subject to high indirect taxes, while the Chinese exporters used locally produced wire 
rod. China submits that it was the European Union,  by choosing an analogue country producer that 
used as raw materials imported wire rod subject to high import duties and other indirect taxes, 
that created the imbalance between normal value and export price. The European Union should 
therefore have corrected this imbalance by making an adjustment for the difference in taxation.   
24. China further submits that by requiring th e Chinese exporters to demonstrate that their 
exports to the European Union benefited from the non-collection or refund of import charges on 
the raw materials incorporated in the finished product, the European Union not only applied the 
wrong legal test but also imposed an unreasonab le burden of proof on the Chinese producers. 
 25. Second, during the review investigation the Chinese exporters also indicated that several differences in physical characteristics affected price comparability and therefore had to be taken 
into account when making the price comparison be tween normal value and export price. Although 
the European Union acknowledged that the differences originally identified in the PCNs were all d i f f e r e n c e s  t h a t  h a d  a n  e f f e c t  o n  p r i c e s ,  i t  f a i l e d  t o  t a k e  t h e m  p r o p e r l y  i n t o  a c c o u n t .  M o r e  
specifically, the European Union failed to make necessary adjustments related to the differences in 
the types of fasteners, coating and chrome as we ll as the diameter and length of fasteners. 
 
26. The European Union also rejected the requests for adjustments related to the physical 
characteristics other than those identified in th e PCNs arguing that the requests had not been 
substantiated. The Chinese exporters noted that the characteristics such as traceability, industry standards, unit of defective rate, hardness, bending strength, impact toughness and friction WT/DS397/RW/Add.1 
 
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  coefficient affect price comparability, even though in the absence of any information as to the 
products of the Indian producer, it was impossible for them to further substantiate their requests 
for adjustment. China submits that in requiring that the Chinese exporters provide further evidence on the existence of differences in price,  without providing precise indications on how the 
interested parties were to substantiate their requests and without providing any information 
whatsoever on the characteristics of the product types used for normal value determination, the European Union imposed an unreasonable burden of proof on the interested parties. 
 
27. Finally, the European Union acted inconsiste ntly with Article VI:1 of the GATT 1994 and 
Article 2.4 of the AD Agreement in failing to make necessary adjustments for other differences affecting price comparability, namely differences resulting from the easier access to raw material, 
differences resulting from an additional production process, i.e. the fact that the analogue 
producer used self-generated electricity, and di fferences in efficiency and productivity, more 
specifically efficiency of consumption of raw material, electricity consumption and productivity per 
employee. The European Union rejected these requests for adjustments claiming that the Chinese 
producers failed to provide evidence that those differences affected price comparability. Additionally, the European Union rejected the re quests based on the assertion that this was 
necessary to prevent the prices and costs in a non-market economy from being taken into account 
when establishing normal value. China strongly disagrees with both of these assertions. As to the first assertion, the Chinese producers provided ex tensive information on the differences in costs, 
along with evidence that these differences translated into differences in prices. As to the second 
assertion, China notes that the requests for adjustment were not based on the Chinese exporters' 
prices or costs.   
28. For all the abovementioned reasons, by failing to make allowances for differences affecting 
price comparability, the European Union failed to make a fair comparison between the normal value and the export price and therefore, violated  Article VI:1 of the GATT 1994 and Article 2.4 of 
the AD Agreement. 
 2.5 The European Union violated Articles 2.4 and 2.4.2 of the AD Agreement in failing to take into account all compar able export transactions 
29. China claims that the European Union acted in consistently with Articles 2.4.2 and 2.4 of the 
AD Agreement since it did not take into account all export transactions in determining the dumping margin of each of the Chinese exporters concerned. 
 
30. In determining the margin of dumping, the European Union did not take into account "all" 
export transactions of the Chinese exporters since the comparison between export price and 
normal value was made on a weighted average basis only for those fasteners types exported by 
each Chinese producer for which a matching type was produced and sold by the Indian producer. 
 31. The European Union's failure to take into account "all" export transactions is based on the 
fact that where there is no fastener type produced  by the Indian producer "matching" the fastener 
types produced by the Chinese exporter, there is a lack of comparability and the export 
transactions must be left out. 
 
32. This approach, however, is inconsistent with the requirements of Article 2.4.2 of the AD Agreement. As stated by the European Union itself, all export types of the Chinese producers 
are "like" the normal value product types of the Indian producer. They are therefore "comparable" 
within the meaning of Article 2.4.2 of the AD  Agreement. As a consequence, all of these 
comparable types should have been taken into account in the dumping margin calculation. This is further required by the fact that dumping and margins of dumping must be established for the 
product under investigation as a whole. 
 33. In failing to base its dumping margin determination on a comparison of all comparable 
export transactions, the European Union has thus acted inconsistently with Article 2.4.2 of the 
AD Agreement.  
34. Furthermore, by failing to take into account the prices of "all" comparable export 
transactions, the European Union also failed to make a fair comparison between export price and normal value thereby violating Article 2.4 of the AD Agreement. WT/DS397/RW/Add.1 
 
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  2.6 The European Union violated Article 4.1 and Article 3.1 of the AD Agreement 
35. In the original proceedings, the Appellate  Body found that the European Union acted 
inconsistently with Article 4.1 of the AD Agreement by linking the eligibility to be included in the domestic industry definition to the producer's willingness to be part of the sample. 
 
36. To remedy this situation, in the review investigation, the European Union re-defined its domestic industry on the basis of the producers which had come forward within the deadline 
imposed by the Notice of Initiation of the original investigation regardless of whether they 
indicated that they were prepared to be part of the sample.  37. This approach, however, disregards the fact that the Notice itself had mixed the issue of the 
domestic industry definition and the sampling determination. Therefore, it is clear that producers 
may have decided not to come forward and provid e the requested information because they knew 
that their unwillingness to be included in the sample would automatically exclude them from the 
definition of the domestic industry. 
 38. For these reasons, in order to properly implem ent the findings of the Appellate Body and, in 
order to act in compliance with Article 4.1 of th e AD Agreement, the European Union was required 
to start the selection process of the domestic industry anew, instead of limiting itself to use the data received from the EU producers that came within the deadline imposed in the original investigation. 
 
39. Therefore, the European Union's re-determination of its domestic industry is inconsistent with Article 4.1 of the AD Agreement since it remains based on a self-selection process among the 
domestic producers that introduces a material risk of distortion. 
 40. As a consequence, the European Union also violated Article 3.1 of the AD Agreement since 
the analysis of injury is based on information relating to a wrongly defined industry. Such analysis 
is therefore necessarily distorted and does not involve an objective examination as required by Article 3.1 of the AD Agreement.  
3 CONCLUSIONS 
41. China respectfully requests the Panel to  find that the measures adopted by the 
European Union to implement the recommendations an d rulings of the DSB in relation to the anti-
dumping duties on imports of certain iron or steel fasteners originating in China through Council 
Regulation (EU) No 924/2012 of 4 October 2012 are inconsistent with Articles 6.5, 6.5.1, 6.4, 6.2, 6.1.2, 2.4, 2.4.2, 4.1 and 3.1 of the AD Agreem ent and with Article VI:1 of the GATT 1994. For 
this reason, China further requests the Panel to find that the European Union has failed to comply 
with the recommendations and rulings of the DSB.  42. China also respectfully requests the Panel to recommend that the DSB requests the 
European Union to bring its measures into conf ormity with the AD Agreement and the GATT 1994. 
  
 WT/DS397/RW/Add.1 
 
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  ANNEX B-2 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN 
SUBMISSION OF CHINA  
1. INTRODUCTION 
 
1. In the second written submission, China addresses and rebuts the EU's defence and the arguments it advances in its first written submission. In so doing, China addresses the arguments 
of the EU in the same order as they have been presented. 
 2. LEGAL CLAIMS  
2.1 The EU violated Articles 6.5, 6.5.1, 6.4, 6.2 and 6.1.2 of the AD Agreement in 
relation to information concerning th e products of the Indian producer 
 
2. China claims that the EU violated Article 6.5 of the AD Agreement because it has granted 
confidential treatment to the information concerning the products of the Indian producer while such information was not confidential and no "good cause" has been shown. 
 
3. First, China submits that, contrary to the EU's assertion, it is not prevented from raising this claim in the context of the compliance proceedings.  China notes that while in the original dispute 
the claim under Article 6.5 concerned the confiden tial treatment of information on the "product 
types", it is now challenging the confidential treatment afforded to the list of products and the 
information concerning the characteristics of the products sold by the Indian producer. Thus, the claim relates to a different, or at least changed, component. Second, China could not have 
challenged these aspects during the original proceedings since the Chinese exporters only became 
aware of them during the Review Investigation. Finally, unlike in EC – Bed Linen , the confidential 
treatment of the information concerned is an inseparable aspect of the measure taken to comply in 
the present dispute. 
 4. Second, contrary to what the EU is arguing, the information concerned is neither confidential "by nature" nor has it been submitted on a confidential basis and, in any case, no good cause has 
been shown by Pooja Forge. China submits that th e information concerning the list of products and 
the information concerning the products characteristics is routinely provided to potential customers willing to purchase fasteners on unrestricted ba sis and the EU failed to prove otherwise. The 
argument that it is proprietary information that, allegedly, companies do not like sharing with their 
competitors cannot stand, and even if it is the case, it does not render such information confidential by nature. 
 
5. Furthermore, the EU fails to precisely show  that each piece of information concerned has 
been provided on a confidential basis. Finally, Ch ina reiterates that no good cause has been ever 
shown by Pooja Forge and that the a posteriori  justification provided by the EU cannot be 
considered as "good cause" within the meaning of  Article 6.5 of the AD Agreement. The EU has 
also failed to objectively assess the alleged good cause and instead considered that the 
confidential treatment was justified merely because Pooja Forge cooperated on a voluntary basis.  
 
6. China further submits that if the Panel were to conclude that the EU did not violate Article 6.5 of the AD Agreement – quod non  –  i t  s h o u l d  c o n c l u d e  t h a t  t h a t  t h e  E U  v i o l a t e d  
Article 6.5.1 of the AD Agreement to the extent th at it failed to ensure that the Indian producer 
provide a non-confidential summary. China notes that the file does not contain any indication that the Indian producer was not able to furnish a non-confidential summary nor a statement of reasons why summarization was not possible. Moreover, the excerpt from Pooja Forge's 
Questionnaire Response does not constitute an ad equate summary. Finally, China notes that the 
arguments put forward by the EU only deal with the list of products but not with the information concerning the characteristics of those products. 
 
7. China maintains that by failing to provide th e opportunities to the Chinese exporters to see 
the list of products sold by Pooja Forge as well as the information concerning the characteristics of WT/DS397/RW/Add.1 
 
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  those products which were used for the normal value determination, the EU violated Article 6.4 of 
the AD Agreement. First, China notes that contrary to the EU objection it does not expand the scope of its claim since the Panel Request clearly refers to the information concerning the products sold by the Indian producer, thus including information on the list of such products as well as 
information on their characteristics. China further submits that the information concerned is 
relevant to the presentation of the Chinese export ers' case and in particular for identifying the 
differences affecting price comparability. Moreover, the information is not confidential within the 
meaning of Article 6.5 and was used by the investigating authorities since the Commission 
examined such information in order to make the normal value and dumping determinations. Finally, China notes that the EU did not respond to its claim under Article 6.2 and refers to its arguments developed in China's first written submission. 
 
8. China claims that since the evidence provided by Pooja Forge concerning its products has not been made available promptly to the Chinese exporters, the EU violated Article 6.1.2 of the 
A D  A g r e e m e n t .  I n  t h a t  r e s p e c t ,  P o o j a  F o r g e  i s  t o  b e  r e g a r d e d  a s  a n  i n t e r e s t e d  p a r t y  s i n c e  i t  
participated in the investigation at the request of the EU and provided substantial amount of information that was used as the basis for determ ining normal value. Furthermore, the information 
concerned was not confidential and it has never been provided to the Chinese exporters. For these 
reasons the Panel should conclude that the EU violated Article 6.1.2 of the AD Agreement. 
 2.2 The EU violated Article 2.4 of the AD  Agreement by failing to provide relevant 
information regarding the dumping margin determination 
 9. China claims that by failing to provide relevant information regarding the products of Pooja 
Forge which was used for the determination of the normal value, the EU violated Article 2.4 of the 
AD Agreement and failed to implement the DSB recommendations and rulings. The EU's arguments presented in its first written submission are based on an erroneous interpretation of the 
findings of the Appellate Body and fail to take into account the purpose of the role to be played by 
the authorities and the interested parties in the co ntext of the "dialogue" under Article 2.4 of the 
AD Agreement.   
10. At the outset China clarifies that its claim under Article 2.4 relates to the role an 
investigating authority must play in the context of the fair comparison obligation, in particular, taking into account the requirement that the authorities shall indicate what information is 
necessary to ensure a fair comparison and shall not impose an unreasonable burden of proof on 
the interested parties. In any event, however, Ch ina submits that contrary to what the EU argues, 
there has been no "active and engaged" dialogue. 
 
11. Pursuant to the Appellate Body's finding in the original dispute, in anti-dumping 
investigations involving imports from NMEs, producers must be informed of the specific products with regard to which the normal value is determ ined and not only of the product types, since 
without such information the interested parties are not in a position to request necessary 
adjustments and to substantiate their requests.   
12. The EU, however, failed to provide relevant information regarding characteristics affecting 
price comparability identified in the original PCNs, namely diameter and length, types of fasteners and coating and chrome. China submits that this information was crucial for the Chinese exporters 
and that the alleged confidential character of the information is not an excuse for not providing 
this information to the extent that the provision of such information is necessary under Article 2.4 of the AD Agreement.   
13. Similarly, the EU failed to provide relevant information regarding characteristics affecting 
price comparability not identified in the original PCNs. China notes that the EU did not address China's claim and instead argued that the Chines e exporters failed to show how these product 
characteristics affect price comparability. China submits that the exporters provided evidence that 
characteristics such as traceability, hardness or unit of defective rate had an impact on price and therefore should be taken into account. However, because the Commission did not provide any 
information concerning these characteristics in Pooja Forge's products, it was impossible for the 
Chinese exporters to substantiate further their request for adjustments.  WT/DS397/RW/Add.1 
 
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  14. Therefore, by failing to indicate to the Ch inese exporters the information that their request 
should contain, the EU violated Article 2.4 of the AD Agreement and failed to comply with the recommendations and rulings of the DSB.  
2.3 The EU acted inconsistently with Articl e 2.4 of the AD Agreement in failing to 
ensure that the export price of standard fasteners was not compared to the normal 
value of special fasteners 
 
15. China submits that it is allowed to raise this claim before the Panel. The EU's argument that China is raising the same issues as those it raised before the Panel in the original proceedings and the argument that it could have, but did not raise this claim in the course of the original 
proceeding, are contradictory. Indeed, China could not be raising issues "again" which it did not 
raise during the original proceedings.   
16. The claims raised in the present proceedin gs concern the dumping determination and the 
comparison between the export price of Chinese fasteners and the normal value of Pooja Forge's 
fasteners. This claim is very different from those raised in the original proceedings, which 
concerned the analysis of the price effects in the framework of the injury determination and 
involved a comparison between the prices of fast eners exported to the EU and those produced by 
the EU industry.  
17. The argument that China could have raised this claim during the original Panel proceedings 
is unconvincing, as the EU did not inform interested parties how it made the distinction between Pooja Forge's special and standard fasteners during the Original Investigation. It is also incorrect 
to characterize the distinction between special and standard fasteners as an unchanged aspect of 
the original measures. The claim China is raising is a result of the further information on how the distinction had been made, information that the EU was obliged to provide following the 
recommendations and rulings of the DSB. 
 18. The EU's arguments that it entered into a substantive dialogue as required by Article 2.4 of the AD Agreement are equally unconvincing. Through different phases of the dialogue the EU first 
refused to engage with the interested parties, thereafter provided conflicting information and 
ultimately showed that it failed to ensure that fasteners not made to a customer drawing but used in high-end applications were not grouped with standard fasteners.  
 
19. Finally, a reasonable and objective investigating authority could not conclude that the lists of standard and special fasteners provided by Pooja Forge were accurate and would allow for a fair 
comparison within the meaning of Article 2. 4 of the AD Agreement. Indeed, during the in situ 
verification, the EU had not even considered the po ssibility of distinguishing special from standard 
fasteners. The distinction was introduced at a later stage, based only on the criterion of a customer drawing. The lists did not contain customer names nor did the product codes allow to 
identify fasteners that were special on the account of their use in high end-applications. 
 20. Against this background, walk-through tests could not show that the information provided 
was accurate as they were conducted to verify the split against information that was obtained prior 
to the distinction between standard and special fasteners. The average price check is equally 
unsatisfactory, as the establishment of the aver age itself likely included special fasteners. 
 
2.4 The EU acted inconsistently with Articl e 2.4 of the AD Agreement and Article VI:1 
of the GATT 1994 in failing to make a fair co mparison between normal value and export 
price in particular in failing to make due allowances for differences affecting price 
comparability 
 21. China claims that the EU violated Articl es 2.4 of the AD Agreement and VI:1 of the 
GATT 1994 since it failed to make a fair comparison between the normal value and the export 
price and, in particular, since it failed to make due allowances for several differences affecting price comparability, namely differences in taxation, differences in certain physical characteristics 
and other differences affecting price comparability.  
 22. China further claims that the EU's argument that China re-litigates the issue and disregards the standard of review under Article 17.6 of the AD Agreement must be rejected. China clarifies 
that it does not ask the Panel to make a de novo  review, but instead, in line with the standard WT/DS397/RW/Add.1 
 
- B-11 - 
 
  established under Article 17.6 of the AD Agreement, requests the Panel to find that the conclusion 
reached by the EU was not one that an objective and unbiased investigating authority could have reached and therefore the EU violated  Article 2.4 of the AD Agreement. 
 
23. First, with respect to differences in taxati on, China submits that by ignoring the evidence 
presented by the Chinese exporters and requiring them to demonstrate that their exports to the 
EU actually  benefited from the non-collection or refund of import charges on wire rod, the EU 
applied the wrong legal test and imposed an unreasonable burden of proof on the Chinese 
exporters thereby acting inconsistently with the la st sentence of Article 2.4 of the AD Agreement. 
 24. Furthermore, contrary to what the EU argues, the difference in taxation has nothing to do 
with the alleged "distorted raw material situation of the Chinese fasteners producers." Moreover, 
any alleged distortions in the raw material prices of the Chinese producers are irrelevant for the export price determination. In that respect China notes that paragraph 15 of China's Accession 
Protocol allows to treat China differently only with respect to the domestic aspect of the price 
comparability (namely normal value), but not with respect to the export price determination or the comparison between export price and normal value once these have been established. 
 
25. By determining normal value on the basis of  the domestic sales of an analogue country 
producer that used as raw material imported wire rod subject to high import duties, the EU created imbalance between the normal value and the export  price. Therefore, the obligation to ensure a 
"fair comparison" rested squarely on the EU that should have corrected this imbalance by making 
appropriate adjustment, in accordance with Article 2.4 of the AD Agreement.  
26. Second, China submits that the EU based its allowances for certain differences in physical 
characteristics as identified in the original PCNs on an improper factual basis. More specifically China submits that an objective investigating authority could not reasonably conclude, on the basis 
of the elements on the record, that all fastener s of the Indian producer were electroplated and 
contained only chrome Cr3. Moreover, the EU failed  to take fully into account the differences in 
diameter and length while acknowledging that su ch differences affected price comparability. 
Finally, the methodology followed by the EU to di stinguish between different types of fasteners and 
to make allowances accordingly was not satisfactory. The EU, in its first written submission, failed 
to address the arguments presented by China and therefore failed to rebut that it acted 
inconsistently with Article 2.4 of the AD Agreement and Article VI:1 of the GATT 1994. 
 
27. Third, with respect to differences in physical characteristics other than those identified in the PCNs, China submits since the EU did not clearly indicate the basis on which the price comparison 
was going to be made until very late in the proc eedings, the Chinese producers were not able to 
request the necessary adjustments in the course of  the original anti-dumping investigation, and, 
as a result, during the original dispute. Furthermore, China submits that the EU could not, as it did, merely claim that the requests for adjustments concerning these other characteristics had not 
been properly substantiated. The Chinese expo rters explained that characteristics such as 
traceability, standards or unit of defective rate have a significant impact on price, even though in the absence of any information as to the products of Pooja Forge, the evidence they were able to 
submit was necessarily limited. 
 28. Fourth, in its first written submission, the EU did not address the detailed arguments 
presented by China in support of its claims that the EU failed to make due allowances for 
differences resulting from the easier access to raw materials, differences in efficiency and productivity and differences arising from the self-generated electricity of the Indian producer. China notes that in particular the EU did not respond at all to the claim relating to the adjustments 
for differences in the efficiency of the consumpt ion of wire rod and productivity per employee.  
 29. China further submits that the EU's argu ments for rejecting those requests cannot be 
accepted by the Panel. First, China notes that the two Chinese producers submitted comprehensive 
evidence on the differences in costs as well as demonstrated that such differences in costs translated into differences in prices and that thei r requests were in line with the well-established 
practice of the EU. Second, China notes that the NME status of China is irrelevant to the fact that a 
fair comparison must be made between the normal  value and the export price in accordance with 
Article 2.4 of the AD Agreement and that in any ev ent Chinese exporters relied only on data of the 
Indian producer's prices and prices applicable in India. China further submits that the fact that the 
production processes were similar and that the Indian market was competitive, even if deemed WT/DS397/RW/Add.1 
 
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  right, do not refute the fact that there were several differences in costs which affected price 
comparability. As explained by the Chinese exporters, differences related to the easier access to raw materials, self-generated electricity and differe nces in efficiency and productivity all translate 
into differences in prices and therefore should be treated equally to the differences in quality 
control, for which adjustment was made in the original proceedings.  
 2.5 The EU violated Articles 2.4 and 2.4.2 of  the AD Agreement in failing to take into 
account all comparable export transactions 
 30. China claims that the EU acted inconsiste ntly with Article 2.4.2 of the AD Agreement 
because it did not take into account all comparable export transactions in determining the 
dumping margin of the Chinese exporters. 
 31. China submits that the appropriate legal standard for identifying "comparable export 
transactions" is the one elaborated by the Appellate Body in EC – Bed Linen . Given that all export 
types of fasteners of the Chinese producers are "like" normal value fasteners types of Pooja Forge, as acknowledged by the EU itself, they are all "com parable" for the purpose of Article 2.4.2 of the 
AD Agreement. It logically follows that the rela ted export transactions should be treated as 
"comparable" and thus, should be included in the comparison under Article 2.4.2. This approach is 
further required by the fact that the dumping an d margins of dumping must be established for the 
product under investigation as a whole.  
 
32. China submits that, when using the multiple averaging methodology, the investigating authority cannot simply ignore some of the product types or models, and contrary to what the EU 
argues, this is inherently "unfair". Therefore, the fact that the EU decided to group fasteners into 
different product types for the calculation of the dumping margin does not imply that the export transactions related to those products that did not have a corresponding Indian type could be 
simply left out. 
 33. In response to the EU's arguments under Arti cle 6.10 of the AD Agreement, China notes that 
this provision allows for sampling only as an exception to the obligation to determine individual 
margins of dumping, however, it does not provide an exception to Article 2.4.2 and the obligation 
to take into account all comparable export transactions. China also notes that the EU used only certain types of products not because their overall number was too large, as required by 
Article 6.10, but rather because Pooja Forge did no t produce all of the product types produced by 
the Chinese exporters. Finally, China wishes to stress that the EU has never indicated that it was wishing to use sampling techniques in the present investigation. 
 
34. China disagrees with the EU that the partial comparison of export prices was the most reliable basis for establishing the level of dumping. In that respect China observes that Article 2 of the AD Agreement provides for alternative method ologies to establish margin of dumping when 
there is no matching normal value. These meth odologies, however, were ignored by the EU.  
  
35. With regard to the "matching problem" referre d to by the EU, China submits that it was the 
EU's responsibility to ensure that the products of  Pooja Forge, selected as a market economy third 
country producer, were comparable to those of the Chinese exporters and to conduct a fair 
comparison of all comparable export transactions. 
 36. China further notes that, in its first written submission, the EU did not provide any facts or reasoning supporting its conclusion that the dumping margin calculated on the basis of the 
matching products was representative for the export sales as a whole. To the contrary, China 
submits that there are both qualitative and quantitative reasons why the export sales that were compared with normal value are not representative. 
 
37. Finally, China considers that by failing to take into account all comparable export transactions, the EU acted inconsistently with the fair comparison obligation under Article 2.4 of 
the AD Agreement. In particular, since the compar ison made by the EU resulted in a presumption 
of dumping for those export transactions that were not used in the dumping determination, it must necessarily be qualified as "unfair".  WT/DS397/RW/Add.1 
 
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  2.6 The EU violated Articles 4.1 and 3.1 of the AD Agreement 
 38. China considers that the EU's re-determination of its domestic industry is inconsistent with Articles 4.1 and 3.1 of the AD Agreement since it remains based on a self-selection process that 
introduces a material risk of distortion. This is because, contrary to the EU's assertions, the 
material risk of distortion does not stem exclusiv ely from the actual exclusion of the producers not 
willing to participate in the sample from the defini tion of the domestic industry but rather from the 
approach linking the eligibility to be included in the domestic industry to the willingness to be part 
of the sample.  39. China submits that the approach of the EU disr egards the fact that the Notice of Initiation 
and the sampling forms sent to the domestic producers in the Original Investigation had confused 
the issue of sampling and the definition of the domestic industry and therefore, some of the 
producers who could be included in the domestic industry did not even come forward within the 
15-day deadline. Contrary to the EU's assertion, the possibility that producers did not come 
forward because of the linkage between the unwillingness to be part of the sample and the definition of the domestic indust ry is not merely speculative. 
 
40. China also submits that contrary to the EU's assertion the participation rate of 36% remains very low and that the fragmented nature of the fasteners industry cannot serve as a justification for not ensuring that the process of defining the domestic industry does not give rise to a material 
risk of distortion. 
 41. In light of the above, China considers that in order to fully implement the Appellate Body's 
findings in the original dispute and in order to comply with its obligations under Article 4.1 of the 
AD Agreement, the EU was required to start the selection process of the domestic industry anew 
instead of limiting itself to using the data received in the Original Investigation. 
 
42. Furthermore, the argument advanced by the EU that the violation of Article 4.1 of the 
AD Agreement would not result in the automatic violation of Article 3.1, because the sample of domestic producers would still be representative only shows the continuing confusion by the EU 
between the definition of the domestic industry, on the one hand, and the selection of the sample, 
on the other hand. In fact, the domestic industry must  be defined first and it is only on the basis of 
the domestic industry thus defined that a sample can be selected that is representative of the 
domestic industry initially defined. Therefore, since the analysis of injury is based on information 
relating to a wrongly defined industry, the EU viol ated Article 3.1 of the AD Agreement. Such an 
analysis is necessarily distorted and does not involve an objective examination.  
 
3. CONCLUSIONS  43. For the reasons set forth in its second written submission, China respectfully requests the 
Panel to find that the measures adopted by the European Union to implement the 
recommendations and rulings of the DSB in relation to the anti-dumping duties on imports of certain iron or steel fasteners originating in Ch ina through Council Regulation (EU) No 924/2012 of 
4 October 2012 are inconsistent with Articles 6.5, 6.5.1, 6.4, 6.2, 6.1.2, 2.4, 2.4.2, 4.1 and 3.1 of 
the AD Agreement and with Article VI:1 of the GATT 1994. For this reason, China further requests the Panel to find that the EU has failed to comply with the recommendations and rulings of the 
DSB. 
 44. China also respectfully requests the Panel to recommend that the DSB requests the EU to 
bring its measures into conformity with the AD Agreement and the GATT 1994. 
 
  WT/DS397/RW/Add.1 
 
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  ANNEX B-3 
EXECUTIVE SUMMARY OF THE ORAL 
STATEMENTS OF CHINA 
Opening Statement of the People's Republic of China 
 
1. Introduction  
1. The present proceedings concern the European Union's failure to comply with the 
recommendations and rulings of the DSB in relation to the anti-dumping duties imposed by the European Union on imports of fasteners originating in China. Despite the clear and straightforward ruling of the Appellate Body in July 2011,  the implementing measures taken by the 
European Union have failed to bring it into comp liance with its obligations under the AD Agreement 
and the GATT 1994.  
2. The European Union violated Articles 6.5, 6.5.1, 6.4, 6. 2 and 6.1.2 of the 
AD Agreement in relation to the information concerning the products of the Indian producer 
 
2. China claims that the European Union violated Article 6.5 of the AD Agreement because it has granted confidential treatment to the informat ion provided by the Indian producer concerning 
its products, while such information was not confidential by nature, had not been submitted on a 
confidential basis. Neither has "good cause" been shown. China is not prevented from raising this 
claim and has demonstrated that the conditions laid down in Article 6.5 were not met and therefore, the European Union erred in provid ing confidential treatment to the information 
concerning Pooja Forge's products. 
 3. If the Panel where to conclude that there is no violation of Article 6.5, it should be found 
that the European Union violated Article 6.5.1 sinc e it failed to ensure that Pooja Forge provide a 
non-confidential summary of the information concerned or, alternatively, establish that there were "exceptional circumstances" and provide a statemen t of the reasons why, in such circumstances, 
summarization was not possible. 
 
4. Furthermore, the European Union violated Article 6.4 because it failed to provide opportunities to the Chinese exporters to see the list of products and the information concerning 
the characteristics of Pooja Forge's products, despite the fact that such information was not 
confidential, was relevant and used by the Comm ission. As a consequence, the Chinese exporters 
have also been denied the opportunity to fully de fend their interest as required by Article 6.2. 
 
5. Finally, the European Union violated Article 6. 1.2 of the AD Agreement because it failed to 
ensure that the evidence presented by the Indi an producer concerning its products was made 
available promptly to the Chinese exporters participating in the investigation. 
 
3. The European Union violated article 2.4 of the AD Agreement by failing to provide relevant information regarding the dumping margin determination 
 
6. China now turns to the claim that the European Union acted inconsistently with Article 2.4 of the AD Agreement by failing to provide information on the product characteristics of Pooja Forge's 
domestic sales that were used in the normal value determination.  
 7. In the original dispute, the Appellate Body unambiguously stated that informing which particular method the authority will use to categorize the products for purposes of the price 
comparison was a minimum  under Article 2.4 of the AD Agreement. In addition to this minimum , 
the Appellate Body referred to the specific situation of anti-dumping investigations of imports from non-market economies. The Appellate Body stated that foreign producers are unlikely to have 
knowledge of the specific products and pricing prac tices of the producer in an analogue country, as 
is indeed the case in this investigation. Based on this consideration, the Appellate Body found that WT/DS397/RW/Add.1 
 
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  exporters will not be able to request adjustments, unless they are informed of the specific products 
with regard to which normal value is determined.  8. However, during the review investigation, in stead of informing the exporters of the specific 
products used for the normal value determination, the European Union limited itself to explaining 
on which basis it "grouped" transactions for the basis of the dumping determination. In so proceeding, the European Union both failed to bring its measures into conformity with the covered 
agreements and prevented the Chinese exporter s from substantiating their requests for 
adjustments.  4. The European Union violated Article 2. 4 of the AD Agreement since it failed to 
ensure that the export price of standard fasteners was not compared to the normal 
value of special fasteners  
9. China claims that the European Union acted inconsistently with Article 2.4 in making a 
distinction between standard and special fasteners th at failed to ensure that the export price of 
standard fasteners was not compared to the normal value of special fasteners. The failure to 
ensure that a fair comparison be made results from the fact that a distinction between the 
standard and the special fasteners sold by Pooja Forge was drawn on the sole basis of a customer 
drawing, which is an inadequate criterion that does not capture all special fasteners. As a result, the European Union failed to ensure that the price of Pooja Forge's domestic sales of special 
fasteners was not compared with the export price of standard fasteners of the Chinese producers. 
 10. China suggests that the Panel exercise its fact-seeking powers under Article 13 of the DSU 
by requesting the European Union to provide it wi th a copy of the DMSAL listing, as well as the 
brochure and other information that has been relied upon to first make the distinction between standard and special fasteners and second, to verify the accuracy of the split made by 
Pooja Forge. 
 5. The European Union violated Article 2.4 of the AD Agreement and Article VI:1 of 
the GATT 1994 since it failed to make a fa ir comparison between export price and 
normal value in particular si nce it failed to make allowances for differences affecting 
price comparability  
11. The European Union failed to make a fair comparison as required by Article 2.4 of the 
AD Agreement and Article VI:1 of the GATT 1994 for the three following reasons.  
12. First, the European Union acted inconsistent ly with Article 2.4 of the AD Agreement and 
Article VI:1 of the GATT 1994 because it based its allowances for certain differences in physical characteristics identified in the original PCNs on an improper factual basis. The European Union has 
acknowledged that differences in characteristics such as coating, chrome, diameter, length and 
type of fasteners are all differences affecting price comparability. Nevertheless, it failed to ensure 
that these price differences were eliminated, by making appropriate adjustments.  
13. Second, with respect to the adjustments for differences in physical characteristics not 
reflected in the original PCNs, the European Union failed to communicate what kind of information or evidence was required to substantiate the requests for adjustments and imposed unreasonable 
burden of proof on the interested parties.  The Chinese exporters explained that these 
characteristics have a significant impact on price, however, in the absence of any information as to the products of Pooja Forge, it was simply im possible for them to differentiate between their 
products and the products of the Indian producer so as to provide additional information to further 
substantiate their request for adjustments. 
 14. Third, the European Union failed to make adjustments for differences that had been shown 
to affect price comparability. In particular, the European Union failed, despite the requests made 
by the Chinese exporters, to make due allowances for differences in taxation related to the fact 
that the normal value of the Indian analogue pr oducer included a significant amount of import 
duties on wire rod, while the export price of fa steners produced by the Chinese manufacturers did 
not. The European Union also failed to make due allowances for differences related to the easier access to raw materials, efficiency of energy consumption, productivity per employee and self-generated electricity of Pooja Forge. The European Union ignored evidence and arguments 
presented by the Chinese exporters and failed to make the necessary adjustments. WT/DS397/RW/Add.1 
 
- B-16 - 
 
   
6. The European Union violated articles 2. 4 and 2.4.2 of the AD Agreement since it 
failed to calculate the dumping margin on the basis of all comparable export transactions 
 
15. The European Union also acted inconsiste ntly with Articles 2.4 and 2.4.2 of the 
AD Agreement because it did not take into account all comparable export transactions in 
determining the dumping margins of the Chinese exporters. 
 16. The fact that the European Union decided to conduct a comparison by grouping product types does not imply that the export transactions  related to those products that did not have a 
corresponding type on the Indian domestic market could simply be left out. As clarified by the 
Appellate Body in EC – Bed Linen "all types or models falling within the scope of a "like" product" 
must necessarily be "comparable"" and therefore taken into account in the dumping 
determination. This approach is further required by the fact that dumping and margins of dumping 
must be established for the product under investigation as a whole.  
17. The European Union attempts to raise secondary arguments with a view to show that it is 
not so that all domestic and export sales of the "like product" are necessarily always "comparable". These arguments, related to sampling under Article 6.10 or the timing of sales, are manifestly inapposite. 
 
18. The European Union fails to rebut China's arguments that the export sales that were compared with the normal value are not represen tative for both qualitative and quantitative 
reasons and seeks to mislead the Panel by providin g extremely unclear chart and incorrect data. In 
any event, it should be stressed that Article 2.4. 2 of the AD Agreement requires the comparison of 
"all comparable export transactions" and does not allow for a calculation of the dumping margin 
only on the basis of "representative" transactions. 
 19. By failing to take into account the prices of all comparable export transactions the European Union failed to make a fair comparison between export price and normal value and 
thereby violated Article 2.4 of the AD Agreement. 
 7. The European Union violated articles 4.1 and 3.1 of the AD Agreement since the 
re-determination of the domestic industry re mains based on a self-selection process that 
introduces a material risk of distortion  
20. The European Union violated Article 4.1 of the AD Agreement because it defined the 
domestic industry on the basis of the data received in the original investigation pursuant to the notice of initiation and sampling forms which confused the issue of sampling and the definition of the domestic industry. 
 
21. China considers that the European Union's re-d etermination of its domestic industry remains 
based on a self-selection process that introduces a material risk of distortion. It is the link between 
the producer's willingness to be included in the sa mple and the definition of the domestic industry 
which creates the self-selection process and introduces the material risk of distortion. This is confirmed by the Appellate Body's finding that the selection of the sample and the determination 
of the domestic industry constitute two different steps. 
 22. The European Union also violated Article 3.1 of the AD Agreement since the analysis of injury is based on information relating to a wrongly-defined domestic industry. 
 
Closing Statement of the People's Republic of China  
23. As has become clear, and as the European Union itself confirmed today, the 
European Commission tried to do "its best" on the basis of the information provided to it by Pooja Forge. However, the issue before this Panel is not whether the European Commission "did its 
best", but whether it substantively complied with the obligations incumbent on it pursuant to the 
Anti-Dumping Agreement and Article VI of the GATT.  WT/DS397/RW/Add.1 
 
- B-17 - 
 
  24. As demonstrated by China in its writte n submissions and during this meeting, the 
European Union failed to comply with its obligations, in stark contradiction with the DSB rulings and recommendations in the original dispute.  
_______________ 
  
 
  WT/DS397/RW/Add.1 
 
- C-1 - 
 
  ANNEX C 
ARGUMENTS OF THE EUROPEAN UNION 
Contents Page 
Annex C-1 Executive summary of the first written submission of the European Union C-2 
Annex C-2 Executive summary of the second writte n submission of the European Union C-10 
Annex C-3 Executive summary of the opening oral statement by the European Union C-19 
 
 WT/DS397/RW/Add.1 
 
- C-2 - 
 
  ANNEX C-1 
EXECUTIVE SUMMARY OF THE FIRST WRITTEN 
SUBMISSION OF THE EUROPEAN UNION 
1 INTRODUCTION 
1. The European Union considers that it has fully complied in good faith with the DSB 
recommendations and rulings in the original dispute. The present submission addressed China's claims in the order followed by China in its first written submission. 
 
1.1 Claims under Articles 6.5 and 6.5.1 of th e AD Agreement: information relating to the 
Indian producer (Pooja Forge) 
2. Article 6.5.1 of the AD Agreement imposes an  obligation on the investigating authorities to 
ensure that sufficiently detailed non-confidential summaries are submitted to permit a reasonable 
understanding of the substance of the confidential information; and, in exceptional circumstances, 
to ensure that parties provide a statement appr opriately explaining the reasons why particular 
pieces of confidential information are not susceptible of summary. 
 3. The European Union has complied with this legal standard in the current investigation. 
Information about internal company codes for its transactions and products (including the product 
description text string used by the company in question) is proprietary information. It is the typical sensitive information that companies do not like sharing with their competitors. The European Union considers that the information concerning the list of products sold as well as 
information provided by Pooja Forge concerning th e characteristics of the products sold in the 
Indian market was "by nature" confidential and, in any event, the information in question was provided "on a confidential basis". The European Union considers that in examining the good cause 
alleged by Pooja Forge objectively in this case , there were reasons to grant such information 
confidential treatment. Thus, China's claim under  Article 6.5 of the AD Agreement should be 
rejected. The same should be concluded with resp ect to China's claim under Article 6.5.1 of the 
AD Agreement. 
 1.2 Claims under Articles 6.4 and 6.2 of the AD Agreement: the alleged lack of 
opportunities to see all relevant  non-confidential information 
4. China claims that the European Union violated  Articles 6.2 and 6.4 of the AD Agreement by 
failing to provide to the Chinese interested parties a full opportunity for the defence of their interests and by failing to provide timely opportunities for them to see all information that was not 
confidential. 
 5. Article 6.2 of the AD Agreement provides that throughout the anti-dumping investigation all 
interested parties shall have a full opportunity for the defence of their interests. To this end, this 
provision foresees the possibility to have hearings by interested parties where opposing views may be presented and rebuttal arguments offered. Provision of such opportunities must take account of the need to preserve confidentiality and of the convenience to the parties. 
 
6. Article 6.4 of the AD Agreement imposes the obligation upon investigating authorities to 
provide timely opportunities for all interested parties to see all information (i) that is relevant to 
their presentation of their cases, (ii) that is not confidential as defined in Article 6.5 of the 
AD Agreement, and (iii) that is used by the authorities in an anti-dumping investigation.  
7. The European Union notes that China appears to have expanded the scope of its dispute in 
its first written submission when compared with its Panel Request. Indeed, China's Panel Request defined the scope of the claims under Articles 6. 2 and 6.4 of the AD Agreement "with regard to, 
inter alia , the products sold by the Indian producer". In contrast, in its first written submission, 
China takes issue with internal company's item codes and product description text strings which, 
unless the internal reference to match the codes is obtained from Pooja Forge, do not say much WT/DS397/RW/Add.1 
 
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  about the products sold by Pooja Forge. The Panel should thus refrain from examining this aspect 
of China's claim.  8. Regardless, the European Union considers that the conditions set out in Article 6.4 of the 
AD Agreement are not met in this particular case . The Chinese exporters could see the information 
relating to the characteristics of the products sold by Pooja Forge and which was used in determining the normal value. As a result, the European Union considers that China's claim under 
Article 6.4 of the AD Agreement should be reje cted. On the same basis, the European Union 
requests the Panel to reject China's claim under Article 6.2 of the AD Agreement.   1.3 Claim under Article 6.1.2 of the AD Agreem ent: prompt availability of the evidence 
presented by the Indian producer concerni ng its products to interested parties 
9. China argues that, because the evidence conc erning the characteristics of the products of 
Pooja Forge was not confidential and was not made available during the investigation – and thus a 
fortiori  not been made available "promptly" – to the Chinese exporters, the European Union 
violated Article 6.1.2 of the AD Agreement.  
10. Article 6.1.2 of the AD Agreement provides  that, subject to the requirement to protect 
confidential information, evidence presented in writing by one interested party shall be made available promptly to other interested parties participating in the investigation. The European Union considers that China's claim under  Article 6.1.2 of the AD Agreement is without 
merit. The European Union disagrees with China th at Pooja Forge falls under the definition of an 
"interested party" within the scope of Article 6.1.2 of the AD Agreement. The European Commission did not designate Pooja Forge as an interested party in the implementation 
proceeding. 
 11. In any event, China's claim under Article 6.1.2 of the AD Agreement is baseless on 
substance. First, the information provided by Pooja Forge about its products sold in the Indian 
market during the relevant investigation period was confidential under Article 6.5 of the AD Agreement. Second, the information about the ch aracteristics of Pooja Forge's products sold in 
India and which was used for the normal value determination was provided promptly to the 
Chinese exporters. Consequently, the European Union requests the Panel to reject China's claim 
under Article 6.1.2 of the AD Agreement.  
1.4 Claim under Article 2.4 of the AD Agreemen t: failure to indicate information that was 
necessary to ensure a fair comparison 
12. China argues that the European Union violated  Article 2.4 of the AD Agreement by failing to 
provide relevant information on the product characteristics of the Indian producer which was used 
for the determination of the normal value. The European Union considers that the European Commission disclosed all of the necessa ry information on the product groupings that 
were used in the normal value determination to the Chinese exporters and engaged in an active 
dialogue with the Chinese interested parties, as re quired by Article 2.4 of the AD Agreement. In so 
doing, the European Commission fully implemente d the recommendations and rulings of the DSB 
and complied with its obligations under Article 2.4 of the AD Agreement. China's arguments must 
therefore be rejected. 
 13. Article 2.4 of the AD Agreement places an obligation on the investigating authority to make 
a fair comparison between normal value and export price. In particular, it requires the authority to 
make due allowances, in each case, on its merits, for differences which "are demonstrated to affect" price comparability. Article 2.4 of the AD Agreement does not impose specific obligations in terms of providing information submitted by in terested parties to other interested parties 
requesting adjustments.  
 14. The Appellate Body explained that it was of the view that the last sentence of Article 2.4 
adds "a procedural requirement" and requires a "dialogue" between the investigating authority and 
the interested parties. In the implementing investigation the European Commission more than complied with the Appellate Body's holding by engaging in an extensive dialogue with the 
interested parties that led to the development of detailed product categories that took into 
consideration many of the suggestions made by Chinese interested parties to ensure a fair comparison. Furthermore, information on the characteristics of the product categories used in the WT/DS397/RW/Add.1 
 
- C-4 - 
 
  dumping margin determination as well as information on the sales of these product categories by 
the Indian producer that were used in the normal value determination was made available to the Chinese interested parties. The European Union therefore complied with its obligations under Article 2.4 of the AD Agreement.  
 
15. The Commission fully engaged in the required "dialogue" by constructively addressing the comments received and providing at every step  of the proceeding reasoned and reasonable 
explanations of the decisions that led to the ad option of product categories. The European Union 
therefore fully implemented the rulings and reco mmendations of the DSB and complied with the 
obligation to enter into "dialogue" under Article 2.4 of the AD Agreement. The European Commission also complied with the substa ntive obligation that the Appellate Body read 
into Article 2.4 of the AD Agreement requiring the investigating authority to provide information on 
the product groups that would be used for purposes of the normal value determination. China's argument that the European Union violated Articl e 2.4 of the AD Agreement by failing to provide 
relevant information regarding the dumping margin determination is therefore without merit.  
 1.5 Claim under Article 2.4 of the AD Agreement:  fair comparison - failure to ensure that 
an export price of standard fasteners was no t compared to the normal value of special 
fasteners 
16. In the context of the original investigation, the Chinese exporters raised the need to 
distinguish between "special" and "standard" fasten ers. Even though this distinction was raised 
relatively late in the proceeding and had not been part of the original PCN, the 
European Commission considered that it was useful to include it in the product types as this distinction was considered to affect price comparability. The original final determination reflects 
the fact that "customer drawing" is the basic difference between special and standard fasteners. 
Special fasteners are fasteners "on demand" while standard fasteners are simply fasteners that meet certain general industry standards. 
 
17. China argues that in the implementation pr oceeding the European Union failed to ensure 
that a fair comparison was made between export pric e and normal value as it failed to ensure that 
the export price of the Chinese standard fasteners was not compared to the normal value of 
special fasteners produced by the Indian analogue producer. China's claim is without merit. The 
distinction between standard and special fastener s on the basis of customer drawings was clear 
from the definitive determination. China's claims of violation of Article 2.4 of the AD Agreement 
relating to the distinction between standard and special fasteners must therefore be rejected. 
Investigating authorities are given discretion to determine the comparison methodology. If the selected methodology makes a "fair comparison", in which "due allowance" is made for differences 
demonstrated to affect price comparability, then the methodology is consistent with Article 2.4 of 
the AD Agreement.  18. The question before the Panel is whether in the light of the circumstances of the case, the 
European Commission's treatment of the distinct ion between standard and special fasteners was 
reasoned and adequate and whether the European Commission acted as an objective and unbiased investigating authority when using the information provided by the Indian producer. In this 
respect, it is recalled that the Indian producer provided information enabling the 
European Commission to distinguish special and standard fasteners and the European Commission verified and cross-checked the information that wa s provided to ensure accuracy. The main risk 
was to avoid including special fasteners within the standard list as this would have affected the 
ultimate dumping calculation, i.e. it would have increased the normal value and thus the possible margin of dumping. By taking all reasonable steps to ensure that this did not happen, the 
European Commission did what was reasonable and adequate. 
 
19. The European Commission acted as an active, objective and reasonable investigating authority in obtaining confirmation of the accuracy and reliability of the distinction between 
standard and special fasteners as made by the Indian producer thus complying with its obligations 
under Article 2.4 of the AD Agreement. Therefore, even though it may have been done differently, 
such as through an on-spot verification, under the Panel's standard of review, and in light of the 
obligations imposed under the Agreement, China's claims under Article 2.4 of the AD Agreement 
relating to the split between special and standard fasteners are to be rejected. 
 WT/DS397/RW/Add.1 
 
- C-5 - 
 
  1.6 Claim under Article 2.4 of the AD Agreem ent and Article VI:1 of the GATT 1994: fair 
comparison - failure to make adjustments fo r differences affecting price comparability  
20. China argues that the European Union failed to  fulfil its obligations pursuant to Article 2.4 of 
the AD Agreement and Article VI:1 of the GATT 1994 by "refusing to make adjustments for 
differences in taxation, differences in physical characteristics and certain other differences 
affecting price comparability". According to China, all of the adjustments that were requested by the Chinese exporters were fully supported by the evidence before the European Commission. 
China also argues that alleged "imbalances" th at are created by choosing an analogue country 
producer should be corrected  by making an adjustment. 
 21. The European Union considers that Article 2.4 of the AD Agreement requires only that 
adjustments be made when it concerns differences that have been demonstrated to affect price 
comparability. The Chinese exporters did not provide the information necessary to substantiate their request for adjustments. China disagrees with the decisions taken by the 
European Commission in the proceeding but fails to demonstrate that the European Commission's 
detailed and substantiated explanation of why it did not consider that adjustments were required to address these alleged differences was not reasoned and reasonable. The European Commission 
acted as an objective and unbiased investigating authority in addressing the claimed adjustments 
and requesting additional information to be provid ed in order to substantiate the request. China's 
claim under Article 2.4 and Article VI of the GATT 1994 must therefore be rejected.  
22. Article 2.4 of the AD Agreement and Article VI:1 of the GATT 1994 concern the comparison 
by the investigating authority of the export price and the normal value. Pursuant to these provisions, an investigating authority is under an obligation to ensure "a fair comparison" between 
the export price and the normal value and to make "due allowance" for certain factors affecting 
price comparability including differences in conditions and terms of sale, and in taxation. Neither Article 2.4 of the AD Agreement nor Article VI:1 of the GATT 1994 mandates a methodology that 
the investigating authority must use in ensuring "a fair comparison". Under the fair comparison 
obligation, the authority "must take steps to achieve clarity as to the adjustment claimed and then determine whether and to what extent that adjustment is merited". Thus, if an adjustment is requested but to a difference which is not shown to affect price comparability, or if the 
investigating authority determines that an adjustment is not merited, no adjustment to the export 
price and/or normal value needs to be made. It is through examining the requests for adjustment and by communicating with the interested parties the kind of information and evidence that may 
be required to substantiate their requests that the investigating authority complies with the fair 
comparison obligation under Article 2.4 of the AD Agreement.  
23. In light of this obligation and given the applicable standard of review under Article 17.6 of 
the AD Agreement, it is to be examined whether the investigation authority acted in an objective, reasonable and reasoned manner such that its approach to the request for adjustments can be said to have been that of an unbiased and objective investigating authority. A decision with 
respect to adjustments does not lead to an unfair comparison simply because a different approach 
could have been adopted.  
24. China essentially disagrees with the manner in which the European Commission addressed 
the request for adjustments and re-litigates the issue that was before the European Commission, disregarding the standard of review under Articl e 17.6 of the AD Agreement. The European Union 
therefore requests the Panel to reject China's claim of violation of Article 2.4 of the AD Agreement, 
similar to what the Panel did in the original dispute when it rejected China's unfounded challenge of the European Commission's decision not to make adjustments for alleged quality differences other than quality control. 
 
1.6.1.1 China's claims relating to allo wances for differences in taxation are 
unfounded 
25. China argues that an adjustment should have been made for the import duties paid by the 
analogue producer to acquire wire rod –an important raw material for the production of fasteners– because the Chinese exporters do not import wire rod. The European Commission examined the 
arguments of the Chinese interested parties that adjustments had to be made under 
Article 2(10)(b) of the EU's Basic Regulation for th e indirect taxes incurred on the import of wire 
rod into India. It explained that such an adjustment is claimable if the import charges borne by the WT/DS397/RW/Add.1 
 
- C-6 - 
 
  like product when intended for consumption on the domestic market would not be collected or 
would be refunded when the like product is exported to the European Union. The European Union complied with Article 2.4 of the AD Agreement and acted in a reasonable and reasoned manner 
when rejecting the request for adjustment  for alleged differences in taxation. 
 
26. It appears as if China is complaining that the use of an analogue country is "unfair" or "unreasonable". That debate, however, is not related to Article 2.4 of the AD Agreement but has 
been settled at the time of China's accession to the WTO and was never in doubt during the 
original dispute. Absent evidence relating to a difference in taxation affecting price comparability between the Indian producer's domestic sales an d Chinese export sales, the European Commission 
acted as a reasonable and objective investigating authority when taking the decision to reject the 
requested adjustment. 
 
1.6.1.2 China's claims relating to adjust ments for alleged differences in physical 
characteristics are unfounded 
27. China argues that the European Commission failed to take the differences in physical 
characteristics into account, both physical characteristics included in the product categories and 
those that were not included. It alleges that the European Commission thus failed to make a fair 
comparison as required by Article 2.4 of the AD  Agreement. However, China fails to demonstrate 
that the decision by the European Commission not to make the requested adjustment for physical 
characteristics was unreasonable or biased or that the European Commission did not engage in an 
active and substantive dialogue with the interested parties on these matters. 
 28. China's main arguments actually relate to the alleged "limited evidence" and the fact that 
certain evidence was "not verified", on the one hand, and the additional detailed PCNs that could 
have been developed by the European Commission, on the other hand. However, as explained above, Article 2.4 of the AD Agreement does not impose any particular evidentiary burden on the 
investigating authority. An investigating authority must be entitled to rely on information provided 
by the relevant interested parties and draw conclusions on the basis of this information. The European Commission satisfied itself of the accuracy of the information provided and was thus permitted to rely on such evidence. In any case, China did not include any claims of violation of, 
for example, Article 6.6 or 6.7 of the AD Agreemen t that concerns verification of the accuracy of 
the information provided. The European Commission may thus be assumed to have acted in accordance with the requirements to have satisfied itself of the accuracy of the information 
provided. The Implementing Regulati on explains how that was done for each of the issues raised 
by China and China fails to demonstrate that this method of proceeding was not objective or was biased. 
 
29. Turning to the specific arguments of China on the need for additional adjustments for physical characteristics reflected in the product categories, the European Union considers that China's arguments are self-defeating and fail to demonstrate that the European Commission did 
not act as a reasonable and objective investigating authority when examining and ultimately 
rejecting these requests.  
1.6.1.2.1 Coating and Chrome 
30. China takes issue with the European Commission's conclusion that no adjustment for coating 
was required because all domestic sales were electroplated. China asserts that the Commission's 
conclusion was based on "confidential evidence" and on "declarations of representatives and 
production brochures which have not been verified". China argues that the evidence should have "been verified" and that the evidence relied on was limited. However, there is no verification in the sense of "on-spot" verification required and China did not challenge the European Commission's 
verification under Article 6.6 of the AD Agreement. 
 31. With respect to the European Commission's conclusion that all fasteners of the Indian 
producer used only Chrome CR3 and not the more expensive Chrome VI, China argues that the 
European Commission "should have gathered and verify [sic] detailed and precise information regarding the type of chrome used on the fasteners in relation to which normal value was 
established". China argues that "by failing to do so, the European Union acted inconsistently with 
Article 2.4 of the AD Agreement". This is clearly incorrect. The European Commission examined the information available. The fact that the information was confidential does not make it less WT/DS397/RW/Add.1 
 
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  reliable of course. The European Commission acted as a reasonable and objective investigating 
authority in addressing chrome and coating in a ccordance with Article 2.4 of the AD Agreement. 
 
1.6.1.2.2 Diameter and length 
32. China argues that actual figures for diameter and length should have been used rather than 
ranges as there are still price differences within the ranges used. However, the fact that prices may still differ within a range of diameter and leng th does not mean that it is "unreasonable" of 
the investigating authority to use ranges to distinguish between product categories for purposes of 
making a fair comparison. In fact, the interested parties themselves indicated some ranges that could be used.  
1.6.1.2.3 Types of fastener 
33. China takes issue with the way in which the types of fasteners were identified and included 
in the product categories, but fails to demonstrate that the methodology followed for distinguishing 
between different types of fasteners (hexagon screw s, wood screws, bolts, etc.) as per the request 
of Chinese interested parties was unreasonable. The European Commission developed an alternative methodology looking at the main types of fasteners sold on the EU market. The 
information provided by the Indian producer enabled the European Commission to make these 
distinctions.  34. China does not appear to disagree with th e fact that the different types of fasteners 
identified in the product categories reflect main types of fasteners; it simply suggests that the 
European Commission did not develop "evidence" to confirm that this was the case. China again seems to place an undue burden on the authorit y, which, in the absence of evidence to the 
contrary, was entitled to rely on the informatio n provided. China therefore failed to demonstrate 
that there was anything improper or "unreasonable" in the way the Commission made its fair comparison. 
 
1.6.1.2.4 Other features not part of the PCN 
35. Finally, with respect to certain other possible fe atures of fasteners that were not included in 
the revised product categories, China asserts that it was not sufficient for the 
European Commission to request that the Chinese interested parties substantiate their arguments 
about the need for adjustments. According to China, the European Commission "failed to provide information concerning the characteristics of the fasteners sold by the Indian producer" thereby 
allegedly making it impossible for the Chinese interested parties to provide the requested 
substantiation.  
The European Union notes that these non-PCN features were either not substantively raised in the 
context of the original investigation or to the extent that some were raised, they were adequately dealt with by the European Commission in the original proceeding. In any case, China is in respect of these characteristics again complaining about an alleged lack of information relating to the 
products sold by the Indian producer. It is not enough for an interested party to simply raise a 
feature of a product that may have some effect on price to suggest that the burden is then on the 
investigating authority to develop the evidence to substantiate the need for an adjustment. What 
needs to be demonstrated is that there are reasons to believe that the presence or absence of 
these features in the models sold by the Chinese interested parties may have affected price comparability. The Chinese interested parties never did so. The European Commission's rejection 
of the requested adjustments for lack of substantiation was therefore entirely reasonable and 
China failed to demonstrate that the European Commission did not act as an objective and unbiased investigating authority.  
1.6.1.3 China's claims relating to adjustme nts for other differences with the Indian 
analogue country producer are unfounded 
36. China argues that the European Union acted inconsistently with Article 2.4 of the GATT 1994 
and Article 2.4 of the AD Agreement in failing to make adjustments for alleged differences between 
the analogue country producer and Chinese exporters resulting from easier access to raw materials, differences in energy consumption affe cting productivity, and differences arising from 
self-generated electricity. WT/DS397/RW/Add.1 
 
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37. The European Union resorted to the use of  an analogue country producer to determine 
normal value because of the cost related market distortions in China for fasteners. The Indian 
producer's electricity self-generation is a minor difference. 
 
38. None of China's arguments demonstrate that the European Commission's determination was unfair or incorrect. China has failed to demonstrate that the European Union acted inconstantly 
with Article 2.4 of the AD Agreement and Article VI:1 of the GATT 1994. The 
European Commission examined the requests as a reasonable and objective investigating authority and enquired about the information available to substantiate the requests before rejecting the request based on the record of the investigation. 
 
1.7 Claim under Articles 2.4 and 2.4.2 of the AD Agreement: failure to calculate the 
dumping margin on the basis of all comparable  export transactions and the imposition of 
anti-dumping duties on this basis 
39. China argues that the European Union acted inconsistently with Article 2.4.2 of the 
AD Agreement by failing to take into account all export transactions in its dumping calculations. 
 
40. The European Union observes that the approa ch of "multiple averaging" based on examining 
product types and determining margins of dumping for different models that are then consolidated in a weighted average to weighted average comparison is clearly WTO consistent. In addition, 
Article 6.10 of the AD Agreement allows for sampling. It provides that, when the number of "types 
of products involved is so large to make such a determination impracticable", the authorities may limit their examination to only a certain number of products or the largest volume of exports that 
can reasonably be investigated. Article 6.10.1 of the AD Agreement expressly refers to a limitation 
based on the "types of products". Given that such sampling techniques are permissible and as long as all comparable export transactions are taken into consideration, it is not inconsistent with 
Article 2.4.2 of the AD Agreement not to includ e in the dumping margin determination export 
transactions for which no comparable domestic sales transaction exists. The obligation is to compare only comparable  transactions but to make sure to compare and use all of such 
comparable transactions . That is exactly what the European Commission did. 
 
41. The European Commission included only the comparable export transactions in its dumping calculation in order to ensure the accuracy of the calculations. Given that China failed to 
demonstrate that any comparable export transact ions were excluded from the dumping margin 
determination, China's claim under Article 2.4 and 2.4.2 of the AD Agreement must be rejected.  
1.8 Claim under Articles 4.1 and 3.1 of th e AD Agreement: definition of domestic 
industry 
42. With respect to the original determination, the Appellate Body found that the exclusion from 
the definition of the domestic industry of domestic  producers that indicated that they would not be 
willing to be part of the sample and be verified constituted a violation of the EU's obligations under 
Article 4.1 and 3.1 of the AD Agreement.  In the Implementing Regulation, the 
European Commission therefore re-examined the file and included all previously excluded domestic 
producers into the definition of the domestic industry. Following a re-examination, it found that in 
the context of a fragmented industry these domestic producers represented a major proportion of the domestic industry and that the sample originally examined remained sufficiently representative 
of the domestic industry, also under the new definition of the domestic industry. 
 43. China, however, considers that despite allowing  the previously excluded producers to be part 
of the domestic industry in the implementation pr oceeding, as required by the Appellate Body, the 
European Union still failed to comply with its obligations under Article 4.1 and 3.1 of the 
AD Agreement. According to China, as a result of the European Commission's approach, certain producers "may have" decided not to come forward and this approach "may have" discouraged 
producers from coming forward because they alle gedly knew they would be rejected from the 
definition of domestic industry if they were not willing to be part of the sample. China's speculative argument is unfounded and over-states the obligations that result from the limited findings of the 
Appellate Body. China's argument that the Europe an Union violated Articles 4.1 and 3.1 of the 
AD Agreement must therefore be rejected.  WT/DS397/RW/Add.1 
 
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  44. The task of the European Union was to bring its measure into conformity with the 
recommendations and rulings of the Appellate Body, also in respect of the definition of the domestic industry. The European Commission did not simply reject the request to start the process anew because this was clearly not required by the Appellate Body, as it could have done. The 
European Commission included the information from all responsive domestic producers in the 
fragmented fastener industry. The inclusion of this additional information increased the percentage of total production included in the injury anal ysis. Given that all producers that came forward 
within the deadline and that provided the relevant information were included in the definition of 
the domestic industry, the previously highlig hted material risk of distortion in the 
European Commission's injury analysis as a result of the deliberate exclusion of domestic producers for the sole reason that they were not willing to be part of the sample was adequately 
addressed. 
 45. The European Commission's revised domestic industry definition and consequent injury 
determination is based on all producers that came forward within the deadline and provided the 
relevant information, in line with the EU's obligation under Article 4.1 and 3.1 of the AD Agreement. In view of the fragmented natu re of the fasteners industry, these producers 
represented a major proportion of the domestic in dustry's production. The previously identified 
material risk of distortion that resulted from the exclusion of domestic producers that had come forward within the deadline and that had provided the relevant information was thus taken care of. China's claims of violation of Articles 4.1 and 3. 1 of the AD Agreement must therefore be rejected. 
 
  WT/DS397/RW/Add.1 
 
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  ANNEX C-2 
EXECUTIVE SUMMARY OF THE SECOND WRITTEN 
SUBMISSION OF THE EUROPEAN UNION 
1. Claims under Articles 6.5 and 6.5.1 of the AD Agreement: information relating to the 
Indian producer (Pooja Forge) 
 1. The European Union considers that China's claims under Articles 6.5 and 6.5.1 of the 
AD Agreement must be rejected. Pooja Forge agreed to cooperate in the investigation provided 
that all its company details remained confidential and, thus, not disclosed to any interested 
parties. It also provided specific reasons as to why such a disclosure should not take place, i.e., 
since otherwise that would provide an advantage to its competitors. The European Commission 
objectively assessed those reasons and concluded that there was "good cause" to treat such 
information as "confidential". The European Commission also provided information regarding the characteristics of the products sold by Pooja Forge to interested parties to its best ability within the 
margins of not disclosing such confidential information, and yet striking a balance with the right of 
those other parties to know the necessary information to protect their interests accordingly.   
1.1.1. China is prevented from raising the same claim in these compliance proceedings 
 2. The European Union recalls that Article 21.5 reports by the Appellate Body and panels have 
consistently found that a compliance panel must  not re-examine the WTO-consistency of an 
unchanged aspect that was not found to be WTO-in consistent in that dispute. Similarly, when a 
WTO Member has failed to make a prima facie  case against the measure at issue, the same 
WTO Member cannot have a "second chance" and re-litigate the same issue. The Appellate Body 
and panels have stressed the importance of th e principles of fundamental fairness and due 
process, as well as the purpose of Article 21.5 which is to provide an "expeditious" resolution of the dispute. 
 
3. China argues that in the original proceeding, it only challenged "the confidential treatment of the information on 'product types' provided by Pooja Forge". China considers that in these compliance proceedings it "disputes the confidential treatment afforded to the list of products as 
well as of the information concerning the characteristics of the products sold by the Indian 
producer". China thus tries to draw a distinctio n, based on the fundamental premise that in the 
original panel proceedings, it did not take issue wi th the treatment of all the information submitted 
by Pooja Forge regarding its products, and in particular the information provided in the context of 
Pooja Forge's Questionnaire Response. If this premise falls, then China's argument falls. 
 
4. China's fundamental premise is contradicted by the Original Panel's record. The Original 
Panel explicitly found that "China takes issue with the treatment of all the information in Pooja 
Forge's questionnaire response". The Panel stated explicitly that China's claim was not limited to 
"product types". The Panel quotes, for example,  China's second written submission, para. 1110, 
where China claimed that the non-confidential ve rsion of Pooja Forge's questionnaire response 
"does not contain any information , and in particular information on the 'product types' on the basis 
of which the information has been provided by this producer which is obviously not confidential". 
In the original panel proceeding China raised a broad claim with regard to the treatment of all the 
relevant information provided by Pooja Forge, not limited to "one" category of information, such as "product types". 
 
5. After having taken "issue with the treatment of all the information in Pooja Forge's 
questionnaire response" already in the original panel proceedings, China wants to adduce additional evidence and arguments in the 21.5 proceedings, after having failed to do so in the 
original panel proceedings. This is precisely that sort of attempt at getting a "second chance" 
which neglects the importance of the principles of fundamental fairness and due process, as well 
as the purpose of Article 21.5 which is to provide an "expeditious" resolution of the dispute. 
 WT/DS397/RW/Add.1 
 
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  1.1.2. China's claim under Article 6.5 of the AD Agreement also fails on substance 
 
1.1.2.1. The information provided by P ooja Forge is confidential by nature 
 
1.1.2.1.1. " List of products " 
 6. With respect to the "list of products", th e European Union had argued that "information 
about internal company codes for its transactions and products (including the product description 
text string used by the company in question) is the typical sensitive information that companies do not like sharing with their competitors. Knowing how a company arranges its internal administration could provide an advantage to a competitor (e.g. by learning a more efficient 
manner to organise its internal records) and may have an adverse effect upon a person supplying 
the information (e.g. if such information is provided to a competitor, such as the Chinese exporters in this case)". 
 
7. China argues that these explanations are "ex post reasons" and selectively quotes one single 
instance in the Review Regulation. China forgets to cite any of the other passages where reasons 
were given to maintain the information as confidential. China also forgets to refer to the specific 
request by the Indian producer that it "would not like to disclose our company details to interested 
parties" and thus to maintain all "details" (and thus any particulars or information) concerning its company confidential. Thus, there were clear references on record that Pooja Forge requested the 
European Commission to maintain all information regarding its company confidential as the basis 
for its cooperation.  
8. China further alleges that the information in question (i.e. the item codes and product 
description text strings per transaction) "is routinely provided to potential customers willing to purchase fasteners on an unrestricted basis". However, the European Union submits that Pooja 
Forge did not routinely provide the information in question (i.e. the item codes and product 
description text strings per transaction) on an unrestricted basis. In its business dealings at the time Pooja Forge would not disclose this information on an unrestricted basis. This is the reason why it insisted upon confidential treatment. This is the type of information that is of no concern to 
customers. Also Chinese exporters did not want this kind of information to be disclosed. China 
remains silent in this respect.  
9. The European Union has not argued that "proprietary information" always amounts to 
"inherently confidential" information. In the current case this proprietary information in question is such that it is at the same time inherently confidential information.  
 
10. China pretends that it is difficult to un derstand why the European Union requested Pooja 
Forge whether its list of products and the co mpany brochure provided during the Original 
Investigation could be disclosed to interested parties. To the European Union, it seems good 
administrative practice to ask first and only then to make assessments. Just as in panel 
proceedings, parties are not supposed to draw conclusions from the fact that a panel may ask question. 
 
1.1.2.1.2 Information regarding the characterist ics of the products sold by Pooja 
Forge 
 
11. China claims that the European Union di d not provide "any argument as to why the 
information in question, that is the evidence provided by Pooja Forge with respect to the 
characteristics such as the type of coating, chrome, and other characteristics of the products, was 
confidential by nature".  
 12. The European Union respectfully disagrees. In this respect, the European Union refers China 
inter alia  to para. 46 of the EU's first written submission. What China is asking for is disclosure of 
commercially valuable market information which is proprietary to Pooja Forge. Knowing in detail the whole set of products sold by Pooja Forge on  the market provides competitors with valuable 
market information. This kind of detailed information may indicate to competitors which kind of 
products a competitor could offer in that market. At the same time, it may allow a competitor to 
identify which products are not sold so that th e competitor can identify potential weaknesses of 
Pooja Forge and an unsatisfied demand on the market. The disclosure of this detailed information 
would therefore be of significant competitive advantage to a competitor and could have a WT/DS397/RW/Add.1 
 
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  significantly adverse effect upon a person supplying  the information, pursuant to Article 6.5 of the 
AD Agreement.  13. China's claim concerning the information provided by Pooja Forge is very broad. China 
mostly fails to identify the specific documents where the information provided by Pooja Forge was 
kept as confidential. China's claim amounts to arguing that an investigating authority has to ensure that any information regarding the characteristics of the product sold by all producers in an 
investigation must be disclosed to all parties. This seems unreasonable and also inconsistent with 
the position adopted by the Chinese exporters in this investigation.   14. China's second written submission refers to the fact that one domestic producer enclosed a 
product catalogue as an annex to its questionnaire response. The European Union fails to see the 
relevance. The information that is in question here is Pooja Forge's company brochure, and it is uncontested that at the time of the investigation Pooja Forge did not typically disclose it in an 
unrestricted way in the normal course of business. The fact that one producer decides to disclose 
all its prices to its competitors does not mean that Pooja Forge's price information cannot be considered as "confidential" by nature. 
 
15. Finally, China's reference to recent European Union guidelines is inapposite. These are (1) very recent "guidelines" (and thus subject to change in view of the specific circumstances of each party) which were not used in respect of Pooja Forge; (2) at the time of the Fasteners 
investigation the European Commission made no su ch statement; (3) administrative guidelines by 
one WTO Member do not constitute an authoritative interpretation of the WTO Antidumping Agreement and are thus not dispositive of the ques tion which China has raised before this Panel. 
 
1.1.2.2. Pooja Forge provided the information at issue on a confidential basis 
 
16. The European Union observes that the information in question was provided "on a 
confidential basis". China takes issue with this and argues that the European Union "fails to demonstrate that confidential treatment has been requested precisely with respect to sub-section B.2 'Specifications of the product concerned'". 
 
17. Pooja Forge agreed to cooperate in the or iginal investigation as an analogue country 
producer, provided that no company details would be  disclosed to interested parties. This request 
was reiterated a number of times both orally and in writing, see for example Exhibit CHN-25, a 
communication from Pooja Forge to the European Commission dated 2 July 2012. As is apparent from this communication, the case handlers had asked which information could be treated as non-
confidential, and Pooja Forge had replied that "it would not like to disclose our company details to 
interested parties as requested by you". Thus, it is clear that all the information provided by Pooja Forge in this case was provided on a confidential basis.  
18. With respect to sub-section B.2 referred to by  China, China ignores the fact that Pooja Forge 
did not fill in this part of its Questionnaire Resp onse. The non-confidential version of the "blanked" 
response showed precisely the same result.  
 
1.1.2.3 The "good cause" requirement is met in this case 
 
19. Regarding the list of products, the Europe an Union has explained that "disclosing such 
information could provide an advantage to Pooja Forge's competitors and may cause an adverse effect on Pooja Forge".   
20. China further considers that the "good cause" test is not met because, in China's view, 
"good cause" must be shown by the party seeking confidential treatment for information, not by the European Union. However, as the Appellate Body found, it is up to the investigating authority  
to determine objectively "good cause". A party can never itself determine the existence of "good 
cause" in the sense of Article 6.5 AD Agreement.  The purpose of the "good cause" requirement is, 
in the words of the Appellate Body, that the "inv estigating authority must seek to balance the 
submitting party's interest in protecting its confidential information with the prejudicial effect that 
the non-disclosure of the information may have on  the transparency and due process interests of 
other parties involved in the investigation to present their cases and defend their interests". If this balance is done properly, then it seems mere formalism whether it is the investigating authority – 
in the exercise of its balancing duty under Arti cle 6.5 of the AD Agreement – that has correctly WT/DS397/RW/Add.1 
 
- C-13 - 
 
  interpreted the interests of the submitting party in order to establish a clearer balancing of the 
interests, in the interest of the strength and accuracy of the balancing exercise.  21. The point by China must therefore be rejected, even if one were not to share Japan's 
consideration that "the authorities may not be prevented from treating relevant information as 
confidential on its own initiative, provided th at 'good cause [is] shown' by themselves". 
 
22. China argues that the Panel must disregar d Pooja Forge's e-mail dated 3 July 2012 because 
it was not in the administrative file. However, the question of how to deal with such a situation has already been clarified by the panel in EC – Salmon . 
 
23. The arguments that China raises in its second written submission with regard to information 
about the characteristics of the products sold by  Pooja Forge are to be rejected for the same 
reasons as those arguments relating to the list of products.  
 
1.1.3. China's claim under Article 6. 5.1 of the AD Agreement also fails 
 
24. At the time of the verification visit in Apri l 2008, Pooja Forge insisted on the confidentiality 
of its information in order to continue its cooperation and expressed its views about the impossibility of summarising the information about its list of products and product characteristics without revealing too much to its competitors. The facts and events to which the European Union 
needs to refer in this case refer to back 2008. At that time, the European Commission did not have 
the means to archive all the documents and comm unications provided by interested parties. 
Furthermore, many of the observations made by  Pooja Forge regarding the information about its 
products and the impossibility to provide any meaningful summary (other than "fasteners") were 
made orally to the European Commission's case-handlers that visited the facilities of the Indian producer, so no written record was left other than the case-handlers' verification notes. 
 
25. Pooja Forge provided the summary "fasteners" as a general statement contained in its response to the questionnaire about its product range. Upon request of the European Commission, Pooja Forge expressed its views about the impossibility of summarising the information about its 
list of products and product characteristics in a way other than by means of this general 
statement. The European Union considered that, other than the general statement "fasteners", Pooja Forge could not provide another, more meanin gful confidential summary of a list of 80,000 
item codes relating to specific transactions as well as their product description text strings without 
either revealing internal company details or other sensitive market information to competitors. Yet throughout the whole investigation, the European Commission provided information regarding the 
characteristics of the products sold by Pooja Forge to interested parties to its best ability within the 
margins of not disclosing such confidential information.   2. Claims under Articles 6.4 and 6.2 of the AD Agreement: the alleged lack of 
opportunities to see all relevant  non-confidential information 
 26. China continues to ignore the fact that the information about the characteristics of the 
products sold by Pooja Forge and that was used for the normal value determination (i.e. the 
specific claim made by China) was provided to the interested parties through the company specific disclosures. 
 
2.1.1. China's claim with respect to the "list of products" is not within the Panels' terms of reference  
27. The scope of China's claims under Articles 6. 2 and 6.4 of China's Panel Request is limited to 
"information … with regard to, inter alia , the products sold by the Indian producer", that is, 
information specifically  with respect to the products sold by Pooja Forge. It does not cover the 
item codes and product description text strings. The item codes are a combination of letters and 
numbers (e.g. Z1234), whereas the product description text string is also a combination of letters and numbers indicating some product characterist ics, such as diameter and length. These codes 
and text strings are therefore part of the internal administrative set-up; in themselves they do not 
say much about the products sold by Pooja Forg e. While sometimes the product description text 
string could indicate some of the features of the products sold, further information is required to understand the characteristics Pooja Forge considered as relevant to be included in such a product WT/DS397/RW/Add.1 
 
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  description. The Panel should limit its examination to China's claim regarding the information 
submitted by Pooja Forge on the characteristics of the products sold in the Indian market. 
 2.1.2. China's claim under Articl e 6.4 of the AD is unwarranted 
 
28. China argues that the item code, product description text strings as well as the characteristics of the products sold by the Indian  producer were all "used" by the investigating 
authorities. First the European Union would like to remind China of the scope of its claim. China 
stated its claim as follows: "it is clear that the list of products as well as the information concerning the characteristics of the products sold by the Indian producer used for the 
determination of normal value constitutes information that was relevant to the presentation of the 
exporters' cases, that was not confidential and th at was used by the investigating authorities in 
the anti-dumping investigation. By failing to provide timely opportunities for the Chinese exporters 
to see such information despite the numerous requ ests made by the Chinese exporters during the 
review investigation, the European Union violated Article 6.4 of the AD Agreement". Pursuant to its 
claim under Articles 6.4 and 6.2, China does not take issue with the "raw data" concerning the products sold by Pooja Forge, but rather it takes issue with information relating to the products 
sold by the India producer which was used by the European Commission when making the normal 
value determinations. Such information was actually disclosed to the Chinese exporters in their 
specific disclosures.  
 
29. China creates confusion between the standards under Articles 6.4 and 6.9 of the 
AD Agreement. However, while through those specific disclosures the European Commission informed interested parties of the essential facts underlying its determination, it also provided 
information about the characteristics of the products  sold by Pooja Forge and that were used in the 
normal value determinations. Any other information that was provided by the Indian producer was, thus, not "used" by the European Commission. 
 
2.1.3. China's consequential claim under Arti cle 6.2 of the AD Agreement must also fail 
 30. The European Union has requested the Panel to reject China's claim under Article 6.2 of the 
AD Agreement on the same basis as argued with re gard to Article 6.4 of the AD Agreement, since 
China's claim is entirely consequential.  
3. Claim under Article 6.1.2 of the AD Agreem ent: prompt availability of the evidence 
presented by the Indian producer concerni ng its products to interested parties 
 
31. The text of Article 6.1.2 only refers to ev idence presented by an "interested party" which 
Pooja Forge clearly is not. Further, the informatio n provided by Pooja Forge was confidential under 
Article 6.5 of the AD Agreement. Finally, the type  of information against which China takes issue 
was provided promptly to the Chinese exporters through the specific disclosures. 
 
4. Claim under Article 2.4 of the AD Agreem ent: failure to indicate information that 
was necessary to ensure  a fair comparison  
 
32. The European Commission disclosed all of  the necessary information on the product 
groupings (including the detailed product characteristics) that were used in the normal value 
determination to each of the Chinese exporters and engaged in an active dialogue with the 
Chinese interested parties, as required by Article 2.4 of the AD Agreement. In so doing, the European Commission fully implemented the re commendations and rulings of the DSB and 
complied with its obligations under Article 2.4 of the AD Agreement.  
 
33. China acknowledges that the European Commission provided information about the "product groups" in the Implementation Review as requir ed by the Appellate Body. However, China now 
asserts that the next step required by the Appellate Body in the context of investigations involving 
NME countries was to provide information "also of the 'specific products' with regard to which the normal value was determined". This is not correct. China's presentation of the "procedural 
requirement" of the last sentence of Article 2.4 of the AD Agreement as requiring a full disclosure 
of the "full information" or "raw data" of the analogue country producer, even if this information is provided on a confidential basis is in error. There is no basis in the Appellate Body report in the original dispute or in any other dispute that would support such a requirement, and China cannot 
point to one. In the second written submission, China concedes that the European Commission WT/DS397/RW/Add.1 
 
- C-15 - 
 
  disclosed the basis for the price comparison by pr oviding the calculation sheets. Therefore, China 
acknowledges that the European Commission complied with the obligation identified by the Appellate Body and provided the required informat ion on the product types that were used from 
the Indian analogue country producer. 
 
34. China fails to provide any relevant evidence in  respect of the alleged differences relating to 
the characteristics that were part of the PCNs . China therefore does not provide evidence to 
support its allegation that the use of the PCNs led to an "unfair" comparison. And the same is true 
for the additional characteristics not originally included in the PCNs. China makes a lot of noise about additional aspects of fastener products that may affect prices but fails to show how those alleged differences affected price comparability for example because Chinese interested parties 
would have sold only one specific type. That is the evidence and information the Commission was 
asking for and never received. That is not an "undue  burden" on interested parties. Finally, in light 
of the fact that the sales information was provid ed on a confidential basis, the product type 
information that was provided to China shows the kind of products sold by the Indian analogue 
country producer and that were used for the no rmal value determination without disclosing any 
confidential information.  
 
35. China's argument that the European Union violated Article 2.4 of the AD Agreement by 
failing to provide relevant information regarding the dumping margin determination is therefore without merit and must be rejected.  
 
5. Claim under Article 2.4 of the AD Agreem ent: fair comparison - failure to ensure 
that an export price of standard fastener s was not compared to the normal value of 
special fasteners 
 36. The original final determination reflects the fact that "customer drawing" is the basic 
difference between special and standard fasteners. Special fasteners are fasteners "on demand" 
while standard fasteners are simply fasteners that meet certain general industry standards. In its 
second written submission, China continues to argue that the European Commission failed to ensure that the export price of the Chinese standard fasteners was not compared to the normal 
value of special fasteners produced by the Indian analogue producer. China fails to explain why 
this matter is different from the one already decide d upon by the Original Panel in the context of 
the injury examination and cannot explain why it did not raise this same matter also with respect 
to the dumping determination in the original disput e. It thus fails to rebut any of the procedural 
and substantive arguments developed in the EU's first written submission.   
37. In fact, China's arguments in the second written submission have confirmed that the 
distinction between special and standard fasteners was actually "clear": orders made on the basis of customer's drawings is what makes a fastener a "special" fastener. China's allegation in the second written submission that the criteria used for distinguishing special and standard fasteners 
failed to ensure that the export price of standa rd fasteners was not compared to the normal value 
of special fasteners is based on an erroneous interpretation of what is a "special" fastener and is contradicted by the facts on the record. The use th at is ultimately made of a fastener that is 
ordinary and not otherwise made "on demand" ("special") has no effect on its price, and is thus 
irrelevant.   
38. The European Commission undertook to test the sales information from the analogue 
producer and conducted additional reasonable anal ysis to confirm that special fasteners were not 
included in the sales listing for standard fasteners used for the normal value determination. It thus acted as a reasonable and objective investigating authority in response to demands of the Chinese 
interested parties that a distinction be made between special and standard fasteners in addition to 
the use of PCNs. The European Union therefore co mplied with its obligations under Article 2.4 of 
the AD Agreement when making the distinction between special and standard fasteners.  
 
6. Claim under Article 2.4 of the AD Agreem ent and Article VI:1 of the GATT 1994: fair 
comparison - failure to make adjustments fo r differences affecting price comparability  
 
39. In its second written submission, China continues to disagree with the decisions taken by the European Commission in the review proceeding but fails to demonstrate that the European Commission's detailed and substantiated explanation of why it did not consider that WT/DS397/RW/Add.1 
 
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  adjustments were required to address these alleged differences was not reasoned and reasonable. 
China's claim under Article 2.4 and Article VI of the GATT 1994 must therefore be rejected.  40. The European Commission examined the reques ts for adjustments and took steps to achieve 
clarity by requesting that evidence be provided of  the effect of these alleged differences on price 
comparability. It found that China failed to meet the evidentiary requirements to support the claimed adjustment or failed to demonstrate how these alleged differences affected price 
comparability and therefore rejected the requests for adjustments. In so doing, and as explained 
in our first written submission, the European Commission acted as an objective and unbiased investigating authority and provided a reasoned an d adequate explanation of its decision not to 
accept the requested adjustments.  
 
41. On the alleged need for adjustments re lating to alleged taxation differences, 
Article 2(10) (b) of the EU Basic Regulation does not allow, as a matter of EU law, taking into 
account hypothetical import duties that were not actually incurred by Chinese exporters. 
Furthermore, the European Union maintains its position that China is actually challenging the use of an analogue country producer as the basis for making a dumping determination, in disregard of 
China's Accession Protocol. The Indian producer operates in a competitive market environment and 
prices its products accordingly. The price used as the basis of the dumping comparison is thus the price of the fasteners sold by th e Indian producer on its competitive home market, irrespective of 
whether it had to import part of the wire rod used in the production of the fasteners or not. Absent 
evidence relating to a difference in taxation affecting price comparability between the Indian 
producer's domestic sales and Chinese export sales, China failed to rebut the EU's argument that the European Commission acted as a reasonable and objective investigating authority when taking 
the decision to reject the requested adjustment.  
 42. China also fails to demonstrate that the decision by the European Commission not to make 
the requested adjustment for alleged differences in physical characteristics was unreasonable or 
biased. China essentially doubts the accuracy of the information provided and considered that the 
European Union should have done more to veri fy the information on the record. However, an 
investigating authority must be entitled to rely on information provided by the relevant interested 
parties and to draw conclusions on the basis of this information. China does not provide any 
evidence that would be able to suggest that the European Commission's conclusions are not correct or are contradicted by other evidence on the record.  
 
43. China also repeats its arguments relating to the lack of adjustments for alleged differences affecting price comparability that were not part of the PCNs, but fails to rebut the 
European Union's procedural and substantive arguments. First, throughout the original 
proceedings, interested parties could have raised non-PCN features and could have requested non-PCN adjustments, as they did for the distinct ion between special and standard fasteners for 
example or for quality control. They did not do so  for these other non-PCN features and neither did 
China in the original dispute. On substance, Article 2.4 of the AD Agreement concerns price 
comparability and not just difference in prices for products based on certain features. What needs to be demonstrated is that there are reasons to believe that the presence or absence of these 
features in the models sold by the Chinese interested parties may have affected price 
comparability because these features were or were not present in the products used for purposes of the normal value determination. The Chinese interested parties never did so. They could have 
pointed to unique features of the products exported  by the Chinese interested parties that required 
a further distinction or an adjustment. No such evidence was provided.  44. Furthermore, all three aspects of China's claim relating to access to raw materials and costs 
of energy (electricity) have been rebutted by the European Union in its first written submission on 
the same basis: raw materials and energy distortions are among the typical features of a non-market economy and, if no evidence is adduced th at the alleged differences in costs affect price 
comparability, no adjustments will be made. The fact that in the European Union's practice 
involving NME countries cost-related differences between analogue country producers and NME exporters have sometimes and under specific circumstances led to adjustments being made is not 
relevant from a WTO perspective and that is why the European Union did not engage with China 
on its arguments relating to this EU practice. In any case, in all of the cases where such adjustments were made, it concerned differences in costs that were reflected in the prices of the analogue country producer. The situation is entire ly different here. China tries to use adjustments 
to partly undo the recourse to the analogue country method which is to replace the entire data set WT/DS397/RW/Add.1 
 
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  of the exporter in the non-market economy country by the data set of a producer in an analogue 
market economy country, and not to merely replace the costs of the production factors, as used by the non-market economy producer, by market costs. China has therefore failed to demonstrate that the European Union acted in a manner that is inconsistent with its obligations under 
Article 2.4 of the AD Agreement and Article VI:1 of the GATT 1994. 
 7. Claim under Articles 2.4 and 2.4.2 of th e AD Agreement: failure to calculate the 
dumping margin on the basis of all comparable  export transactions and the imposition of 
anti-dumping duties on this basis  45. The European Union recalls that the European Commission included all export transactions 
of product types for which it could identify a comparable product type sold domestically by the 
Indian analogue country producer. For the export sales of product types for which no match was found on the normal value side, no comparison was made for lack of a comparable domestic 
transaction. No export transactions for which a comparable domestic sale existed were excluded. 
China acknowledges the important difference between the zeroing situation and the issue at stake in the current dispute but fails to otherwise respond to the European Union's arguments in this 
respect. China also fails to respond to the European Union's reference in paragraph 211 of its first 
written submission to the clear finding by the Appellate Body in US – Softwood Lumber V  that only 
"comparable" export transactions need to be taken into consideration. The European Commission did not exclude any comparable transactions or otherwise sought to skew the averaging that 
followed the model-to-model comparison as had b een the issue in the zeroing disputes. There is 
therefore nothing "inherently unfair" about this approach. The panel in US – Stainless Steel 
(Korea) also emphasised the need to compare only those transactions that are comparable and 
found that the timing of sales could lead to problems of comparability. Thus, it is not so, as China 
seems to argue that all domestic and export sales of the "like product" are necessarily always "comparable". Finally, the European Union demonstrat es that both qualitatively and quantitatively, 
the amount of matching sales was such as to ensure a fair comparison between comparable sales. 
The non-matching is made up of a variety of product types that were sold in very small quantities, whereas the matching is made up of a number of ma in product types that were sold in very large 
quantities. Thus, the matched and included export transactions are both qualitatively and 
quantitatively representative of the product as a whole. China's claims under Articles 2.4 and 2.4.2 
of the AD Agreement must be rejected.   
8. Claim under Articles 4.1 and 3.1 of th e AD Agreement: defi nition of domestic 
industry   
46. In the Implementation Review, the European  Union complied with the Appellate Body's 
findings relating to the definition of the domestic industry by including all producers that presented themselves within the deadline to be part of the domestic industry. Contrary to what China argues, the material risk of distortion to which the Appellate Body referred in the original dispute does not 
stem from the mere presence of a question on participation in the sample in the sampling form. 
China does not present any evidence of such risk of distortion either to support its speculative 
argument that certain producers may have decided not to come forward because of a question in 
the sampling form. The 25 producers that came forward within the deadline but indicated that they 
would not be willing to be part of the sample  clearly had a sufficient incentive to provide 
information. Contrary to China's speculative assertion, these producers were willing to provide the 
information, notwithstanding the question on sampling. In this respect, the European Union 
considers relevant the Appellate Body's findings in its report on US – Offset Act (Byrd Amendment)  
warning against an attempt to examine the motives of domestic producers. All that matters is that the domestic producers that come forward and that are included in the domestic industry 
represent a significant proportion of total domestic production. 
 47. China fails to rebut the European Union's argument that the European Commission's revised 
domestic industry definition and consequent injury determination is based on all producers that 
came forward within the deadline and that provided the relevant information, in line with the European Union's obligation under Article 4.1 an d 3.1 of the AD Agreement. In view of the 
fragmented nature of the fasteners industry, th ese producers represented a major proportion of 
the domestic industry's production. The previously  identified material risk of distortion that 
resulted from the exclusion of domestic producer s that had come forward within the deadline and 
that had provided the relevant information was thus taken care of. China's claims of violation of 
Articles 4.1 and 3.1 of the AD Agreement must therefore be rejected.  WT/DS397/RW/Add.1 
 
- C-18 - 
 
   
9. Conclusions 
 48. For the reasons stated in this submission, the European Union respectfully requests the 
compliance Panel to reject China's claims and therefore declares that the European Union has fully 
implemented the original DSB recommendations and rulings.  
 
 WT/DS397/RW/Add.1 
 
- C-19 - 
 
  ANNEX C-3 
EXECUTIVE SUMMARY OF THE OPENING ORAL STATEMENT 
BY THE EUROPEAN UNION 
Mr. Chairman, distinguished Members of the Panel, 
1. Introduction 
 1. Following the structure of China's submissions, today we will recall first our position with 
respect to China's claims regarding the lack of transparency in this case, in particular with respect 
to China's claims under some of the obligations und er Article 6 of the AD Agreement. Then, we will 
address China's concerns with respect to the fair comparison requirement under Article 2.4 as well as the definition of domestic industry in Article 4.1 of the AD Agreement. 
 
2. Claims under Articles 6.5 and 6.5.1 of the AD Agreement: Information relating to 
the Indian producer (Pooja Forge) 
 
2. First, China claims that the European Union should not have granted confidential treatment 
to the information concerning the products of the Indian producer. 
 
3. The European Union considers that China is prevented from raising this Article 6.5 claim as the Panel found explicitly that China raised a broad claim with regard to all relevant information but only managed to substantiate, with evidence an d arguments, part of the claim, i.e. those bits 
that relate to the "product types". 
 4. In any event, the European Union is of the vi ew that such an Article 6.5 claim also fails on 
substance since (i) the information provided by Pooja Forge China takes issue with indeed is 
confidential "by nature"; (ii) the record of the investigation clearly shows that Pooja Forge provided the information at issue on a confidential basis; and (iii) it is up to the investigating 
authority and not China to determine the existence of "good cause" in the sense of Article 6.5. 
 5. To sum up: the European Union considers that China is barred from re-litigating its Article 6.5 claim in these compliance proceedings, and even if it were not barred from raising it 
again, its claim should not be upheld on substance. 
 6. China further argues that the European Union also violated Arti cle 6.5.1 by failing to ensure 
that the Indian producer provided a non-confidential summary. However, throughout the whole 
investigation, the European Union provided information regarding the characteristics of the products sold by Pooja Forge to interested parties within the limits of this balancing exercise. 
China's claim under Article 6.5.1 should thus equally be rejected. 
 3. Claims under Articles 6.4 and 6.2 of the AD Agreement: The alleged Lack of 
Opportunities to see all relevant  non-confidential information 
 
7. China alleges that the European Union fail ed to provide opportunities to the Chinese 
exporters to see the "list of products" sold by P ooja Forge as well as the information concerning 
the characteristics of the products of Pooja Fo rge, and which were used for the normal value 
determination. In that regard, the European Union recalls that China's Panel Request is limited to "information … with regard to, inter alia, the products sold by the Indian producer", and does not 
stretch to encompass Pooja Forge's internal administrative set-up. 
 8. Moreover, China's claim fails also on substance as (i) the so-called "list of products" is not relevant to the presentation of the cases of the interested parties; (ii) both the list of products as 
well as the characteristics of the products sold by  Pooja Forge are confidential under Article 6.5 of 
the AD Agreement; and (iii) what the European Un ion actually did use in its determination of the 
Chinese exporters' normal values was disclosed to the Chinese exporters.  
 
9. Consequently, China's claim under Article 6.4 of the AD Agreement must be rejected.  WT/DS397/RW/Add.1 
 
- C-20 - 
 
  10. On similar grounds as argued with respect to Article 6.4 of the AD Agreement, the 
European Union requests the Panel to reject China's claim under Article 6.2 of the AD Agreement.  4. Claim under Articles 6.1.2 of the AD  Agreement: Prompt availability of the 
evidence presented by the Indian producer conc erning its products to interested parties  
 11. China argues that the European Union violated this provision by not making available 
"promptly" to the Chinese exporters th e evidence provided by Pooja Forge. 
 12. The European Union reminds that it has never designated Pooja Forge as an "interested party" in the implementing procedure. Pooja Forge is therefore not an "interested party" within the 
meaning of Article 6.1.2. 
 13. China's claim under Article 6.1.2 is also baseless on substance since (i) the information 
provided by Pooja Forge about its products sold  in the Indian market was confidential under 
Article 6.5 of the AD Agreement; and (ii) the info rmation about the characteristics of Pooja Forge's 
products sold in India was provided promptly to the Chinese exporters, i.e. at the time of the 
company specific disclosure. 
 14. Consequently, the European Union requests  the Panel to reject China's claim under 
Article 6.1.2 of the AD Agreement. 
 
5. Claim under Article 2.4 of the AD Agreem ent: failure to indicate information that 
was necessary to ensure  a fair comparison 
 
15. Concerning Article 2.4 of the AD Agreement, Ch ina firstly argues that the lack of information 
provided by the European Commission to Chinese interested parties amounts to a violation of 
Article 2.4 of the AD Agreement. However, prov iding such information in a case where the one 
cooperating analogue country producer undisputedly provided the data on a confidential basis would not be consistent with Article 6.5 of the AD Agreement.   
16. Moreover, the European Commission fulfilled its obligation under Article 2.4 of the 
AD Agreement to engage in an active dialogue to  ensure a fair comparison between normal value 
and export price. Furthermore, the European Commission also entered into a dialogue with 
Chinese interested parties on the alleged differences other than those included in the revised PCNs 
and provided the required information on the pr oduct types that were used from the Indian 
analogue country producer.  
 
17. Consequently, the European Union respected its obligation under Article 2.4 of the AD Agreement.  
6. Claim under Article 2.4 of the AD Agreem ent: fair comparison - failure to ensure 
that an export price of standard fastener s was not compared to the normal value of 
special fasteners 
 
18. A second claim of China under Article 2.4 of the AD Agreement re-starts the "old" debate about the distinction between special and standard fasteners.  
 
19. It is submitted that China fails in its argument that the European Commission did not ensure that special fasteners sold by the Indian producer were not compared with standard fasteners exported by China. The European Commission acted as a reasonable and objective investigating 
authority in response to demands of the Chinese interested parties that a distinction be made 
between special and standard fasteners in addition to the use of PCNs. Consequently, the European Union acted in accordance with its obli gations under Article 2.4 of the AD Agreement. 
 
7. Claim under Article 2.4 of the AD Agreem ent and Article VI:1 of the GATT 1994: fair 
comparison - failure to make adjustments for differences affecting price comparability 
 
20. In its third claim China also fails to demonstrate that the European Commission's detailed and substantiated explanation of why it did not consider that adjustments were required to address the alleged differences that China pointed to was not reasoned and reasonable. This 
follows from the following reasons.  WT/DS397/RW/Add.1 
 
- C-21 - 
 
  21. First, China refers to allege d differences in taxation on input products between the analogue 
country producer and Chinese producers. But that is not the relevant issue in the context of a non-market economy where the authority will take the price of the product in the analogue country as the ordinary, "normal" market price, and is not required to adjust for differences that 
are related to the market economy environment of the analogue country.  
 22. Second, China's claim that adjustments were required to take into account alleged 
differences in physical characteristics is focused on an alleged lack of verification of the record by 
the authority. However, China does not provide any evidence that would suggest that the European Commission's conclusions are not correct or are contradicted by other evidence on the record.  
 
23. Third, China fails to demonstrate that ther e are reasons to believe that the presence or 
absence of PCNs in the models sold by the Chinese interested parties may have affected price 
comparability. 
 24. Fourth, China makes a cluster of claims relati ng to differences in access to raw materials and 
costs of energy (electricity) between the Indian producer and Chinese producers. China tries to 
use adjustments partly to undo the recourse to the analogue country method, which is a method that replaces the entire data set of the exporter  in the non-market economy country with the data 
set of a producer in an analogue market econom y country. Accordingly, China's attempt should be 
rejected. 
 25. Consequently, also with respect to its third claim under Article 2.4 of the AD Agreement, 
China failed to demonstrate that the European Union acted in a manner that is inconsistent with its 
obligations under Article 2.4 of the AD Agreement and Article VI:1 of the GATT 1994.  
8. Claim under Articles 2.4 and 2.4.2 of th e AD Agreement: failure to calculate the 
dumping margin on the basis of all comparable  export transactions and the imposition of 
anti-dumping duties on this basis  
26. A fourth and final claim of China under Article 2.4 concerns the European Commission's 
decision to compare all export transactions of product types for which it could identify a comparable product type sold domestically by the Indian analogue producer.  
 
27. In that regard, The Appellate Body has in th e past made it clear that only "comparable" 
export transactions need to be taken into consideration. Since the European Union ensured that 
the matched and included export transactions are both qualitatively and quantitatively 
representative of the product as a whole, China's fourth and final claim under Article 2.4 must also be rejected.   
9. Claim under Articles 4.1 and 3.1 of th e AD Agreement: defi nition of domestic 
industry   
28. The Appellate Body considered that the European Commission should not have excluded 
those domestic producers that provided information within the deadline simply because they had indicated that they did not want to be part of th e sample. As a result of this, in the implementing 
review, the European Commission went back to the file, included all producers that presented 
themselves within the deadline and examined their information as part of the information provided by the domestic industry.   
29. China argues now that the real problem was that the questionnaires sent to the domestic 
producers included a question about whether they would be willing to be part of a sample and cooperate with the investigators if selected. That question caused a "material risk of distortion", 
ac c ord ing  to China. Ho w e ve r, (i) this  arg ume nt is c ontrad ic te d b y the  facts on the  re c ord  as  a 
major proportion of producers did provide informatio n despite this question; (ii) this argument is 
not supported by the text of Article 4.1 of the AD Agreement, which imposes a requirement that 
the definition of the domestic industry includes a major proportion of domestic production; and 
(iii) this argument is not supported by the Appellate Body's findings in this or other relevant disputes.   WT/DS397/RW/Add.1 
 
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  30. China's claims of violation of Articles 4.1 and 3.1 of the AD Agreement must therefore be 
rejected.  10. Conclusions 
 
31. For the reasons stated in our submissions, as summarised and further clarified here today, the European Union respectfully requests the compliance Panel to reject China's claims. We look 
forward to answering any questions that you may have. 
 
_______________ 
 
 
 WT/DS397/RW/Add.1 
 
- D-1 - 
 
  ANNEX D 
ARGUMENTS OF THIRD PARTIES 
Contents Page 
Annex D-1 Integrated Executive summary of the arguments of Japan D-2 
Annex D-2 Integrated Executive summary of the arguments of the United States D-4 
 WT/DS397/RW/Add.1 
 
- D-2 - 
 
  ANNEX D-1 
INTEGRATED EXECUTIVE SUMMARY OF  
THE ARGUMENTS OF JAPAN 
1. Since we have already provided our views in our written Third Party Submission, we will not 
repeat all of those comments today. Rather, Japan would like to use this oral statement to provide 
some reactions to the parties' arguments addressi ng Japan's Third Party Submission regarding the 
issues of (1) how to treat confidential informat ion, and (2) the scope of the domestic industry. 
 
2. We begin with the treatment of confidential  information. In Japan's view, the relevant 
Appellate Body precedent makes clear that the investigating authorities have the burden of ensuring that "good cause" for confidential treatment has been shown.
1 The party submitting the 
information may provide relevant information that helps to establish the factual basis for the 
authority to find "good cause". But the legal conclusion finding "good cause" must be made by the authorities themselves, based on any facts submitte d by the party claiming confidential treatment 
and any other facts properly before the authorities. This is clear from the text of Article 6.5 that 
provides "Any information ... shall ... be treated as such by the authorities." Thus, in Japan's view, China's argument that only the party seeking confidential treatment can make the "good cause" 
showing, confuses the distinction between the factual basis for the authority to find "good cause" 
and the legal conclusion of the existence of "good  cause" itself. In order for the requirement of 
Article 6.5 with regards to "good cause" to be satisfied, the authorities must conclude that a 
sufficient factual basis on the record demonstrates the existence of "good cause." The text of 
Article 6.5 itself refers only to "upon good cause shown", without specifying who must show what. 
Moreover, Article 6.5.2 states "if the authorities find that a request for confidentiality is not warranted" and footnote 18 provides "Members agree that requests for confidentiality should not 
be arbitrarily rejected". These contexts for Article 6.5 make clear that request for confidential 
treatment may be rejected; even if confidential tr eatment is requested by the party submitting the 
information, the request is up to the authorities to "find" whether such treatment is "warranted". 
This language suggests that "good cause" must be found or determined by the authority. Nothing 
in the text of Article 6.5 would require an authority to ignore facts otherwise properly on the record when making its determination of "good cause", even if those facts came from someone 
other than the party claiming confidential treatment for information. 
 
3. At the same time, this discretion to consider the factual information only extends to those facts properly before the authority.
2 Japan is of the view that "before" should mean not merely 
that the factual information is in the hand of the authority at the time of determination, but also that the authority took into consideration the information at that time. The factual information not included in the record should be presumed not to  have been "before" the authority, or otherwise 
the interested party would have no opportunity to object to the treatment of confidential 
information. Thus, the factual basis for the authority to find "good cause" should be included in the investigation record.   
4. Let us now turn to the issue of the proper scope of the domestic industry. Japan would like 
to stress the Appellate Body's explanation that the phrase "major proportion" in Article 4.1 
"… should be understood as a proportion defined by  reference to the total production of domestic 
producers as a whole." The benchmark is "the total production of domestic producers as a whole", 
and not some subset thereof. The Appellate Body we nt on to note that "the lower the proportion, 
the more sensitive an investigating authority will have to be to ensure that the proportion used 
substantially reflects the total production of the producers as a whole."
3 Again the focus remains 
on "the total production of the domestic producers as a whole." Japan believes an investigating authority must ensure that the proportion used in the definition of a domestic industry substantially reflects the total production of the producers as a whole so as to remove any material 
risk of distortion. 
 
                                               
1 EC – Fasteners , Appellate Body Report, para. 537. 
2 EC – Salmon , Panel Report, paras.7.837-7.839 
3 EC – Fasteners , Appellate Body Report, para. 412. WT/DS397/RW/Add.1 
 
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  5. In Japan's view, the EU authorities were  not sufficiently concerned with crafting a 
methodology that substantially reflects "the total production of the producers as a whole". In particular, a methodology that allows self-selection – with companies deciding themselves to provide information or not – poses a serious risk of  distortion. If the resulting proportion of the 
total domestic production is high enough, the materiality of any distortion fades. If the proportion 
remains low, however, then the risk of material di stortion becomes very real. When an industry is 
fragmented, that fact just underscores the importance of using neutral methods to gather the 
necessary information, not methods that emphasiz e administrative convenience over the need to 
avoid self-selection bias.  6. Moreover, the Appellate Body's discussion of the role of motive in another context
4 does not 
change this analysis, because the motive of domestic firms deciding to come forward or not cannot 
objectively determine the scope of the domestic industry. Rather, the issue under Article 4.1 is 
whether the method adopted by the authority is neut ral on its face, or has a material risk of bias. 
One source of bias is self-selection. The potential problems from self-selection are made even 
worse if the request to participate is phrased in such a way as to make companies with a certain perspective more willing or less willing to participate in order to be included in the scope of the 
domestic industry. The method that allows self-selection to skew the information being gathered 
can create a material risk of distortion, and can be inconsistent with Article 4.1, particularly when the resulting percentage of the industry as a whole remains small.  
                                               
4 US – Offset Act , Appellate Body Report, para. 291. WT/DS397/RW/Add.1 
 
- D-4 - 
 
  ANNEX D-2 
INTEGRATED EXECUTIVE SUMMARY OF TH E ARGUMENTS OF THE UNITED STATES 
I. China's Claims Under Article 6 of the AD Agreement  
 
A. Article 6.5 
 1. The United States disagrees with China's assertion that that "information routinely provided 
to potential customers… cannot  be by nature confidential," as a categorical matter, for purposes of 
Article 6.5 (emphasis added). China's position is not supported by the text of Article 6.5. The 
article is clear in stating that information is "by nature confidential" where, inter alia , "disclosure 
would be of significant competitive advantage to a competitor or because its disclosure would have 
a significantly adverse effect upon a person supplying the information…" The text of the provision 
contains no carve out, as China proposes, for confidential information provided to potential customers. Indeed, the United States can envision commercial scenarios where proprietary 
information is routinely provided to potential customers, perhaps with the proviso that the 
information not be further disclosed by the recipient.  
B. Article 6.5.1 
 2. The first sentence of Article 6.5.1 makes clear that the requirement to "furnish non-
confidential summaries" applies only to information submitted by "interested parties." China, 
however, has not established that Pooja Forge is an "interested party" for purposes of the 
AD Agreement.  
3. The phrase "interested parties" is expressly de fined in Article 6.11 of the AD Agreement. The 
definition set forth in Article 6.11 applies to the AD Agreement as a whole , including therefore to 
Article 6.5.1. Pooja Forge does not fall under any of the "interested party" categories listed in 
Article 6.11. That is, Pooja Forge is (i) not an ex porter or foreign producer of the product subject 
to investigation, (ii) not the government of the exporting Member ( i.e., China), and (iii) does not 
reside in the territory of the importing Member ( i.e., in the EU). Moreover, in its submission China 
made no attempt to establish that Pooja Forge met the definition of "interested party" as defined 
in Article 6.11.  
 4. Therefore, because Pooja Forge does not appear to be an "interested party" for purposes of 
the AD Agreement, the United States disagrees with China's assertion that the European Union 
was obligated, by virtue of Article 6.5.1, to require that Pooja Forge furnish non-confidential 
summaries of information submi tted to the EU Commission.  
 
C. Articles 6.2 and 6.4  5. In an antidumping investigation, the ability of an interested party to defend its interests is 
especially critical with respect to information related to the calculation of normal value and the 
price comparisons that are conducted. The United States thus agrees with the Appellate Body's decision in EC – Pipe Fittings , where the Appellate Body recognized that the relevancy of 
information covered by Article 6.4 is to be determined from the perspective of the interested 
parties, not the investigating authority.  
6. Accordingly, Article 6.4 generally requires that an investigating authority give interested 
parties access to all non-confidential information submitted during an investigation that an 
interested party could view as relevant to the presentation of their positions or the outcome of the investigation. Failure to provide such access is not only inconsistent with Article 6.4, but also 
Article 6.2, because without access to information described in Article 6.4, interested parties are 
necessarily denied "a full opportunity for the defense of their interests."  
7. The United States takes no position on whether the information at issue was properly 
accorded confidential treatment under Article 6.5. To the extent that confidential treatment was not properly accorded, the United States is of the view that the EU Commission was obligated, WT/DS397/RW/Add.1 
 
- D-5 - 
 
  under Article 6.4, to make such information available to Chinese exporters during the review 
investigation, and in a timely fashion. On the other hand, if the information from the Indian producer was properly accorded confidential tr eatment under Article 6.5, Article 6.4 would not 
require disclosure of such information.  
 
8. Nonetheless, even if the information provided  by the Indian producer could not be disclosed 
in full, this does not mean that the EU Commission could conduct an investigation in a manner that 
completely denied the respondents any opportunity to participate meaningfully in the investigation 
or to defend their interests as contemplated in Article 6.2 of the AD Agreement. The United States recalls that it was the choice of the EU Commission to rely on confidential information from a party that was not an "interested party" under Article 6.11. If the EU decided to rely on such 
information, and if access to such information was necessary for the respondents to participate 
meaningfully or defend their interests in the investigation, the United States understands Article 6.2 to require that an authority adopt some sort of mechanism that would allow the 
respondents an opportunity to do so.
 For example, perhaps the Commission could have provided 
its own summary of the information obtained from the Indian producer, or could have disclosed the information under a narrowly-drawn protective order ( see AD Agreement, note 17).  
 
D. Article 6.1.2  9. The United States believes that transparency is a key principle reflected in the provisions of 
the AD Agreement, including Article 6.1.2. Accord ingly, the United States is of the view that 
transparency is best ensured by requiring all non-confidential information presented to, or obtained by an investigating authority to be on the record of antidumping proceedings, and should 
be made available to all interested parties.  
 10. The United States, however, disagrees with China's further suggestion that where a party 
presents evidence to an investigating authority that party is, ipso facto , an "interested party" for 
purposes of Article 6.1.2. Specifically, China argues that Pooja Forge "should be regarded as an 'interested party' for purposes of Article 6.1.2" because  Pooja Forge submitted evidence used by 
the EU Commission during the antidumping investigation. 
 
11. As discussed above, however, the phrase "i nterested parties", is expressly defined in 
Article 6.11 of the AD Agreement. Simply put, a "party that provides information to investigating 
authorities" is not among the list of "interested parties" listed in Article 6.11. Thus, the fact that a 
party provides information to an investigating authority does not ipso facto  render said party an 
"interested party" for purposes of the AD Agreement. 
 
II. China's Claims under Article 2 of the AD Agreement  A. Claim that European Union failed to pr ovide relevant information regarding the 
products of the Indian analogue producer 
 12. The United States understands Article 2.4 as generally obligating an investigating authority 
to solicit information regarding what differences in physical characteristics affect price 
comparability. The investigating authority can fulfill th is obligation by asking interested parties to: 
(1) identify and explain the differences in physical characteristics; and (2) identify which of those 
differences in physical characteristics may affect price comparability. Taking into consideration the 
responses the parties provide and the investigating authority's own analysis of the record evidence, the investigating authority may then develop appropriate product comparison criteria for the dumping margin calculation. 
 
13. An investigating authority must exercise tran sparency with respect to the products used in 
the determination of normal value, the considered physical differences between those products, 
and how those differences informed the investigating authority's determination of price 
comparability and ultimately normal value. This transparency obligation is found in the provisions of Article 6 of the AD Agreement, and is reinfo rced by the last sentence of Article 2.4. The 
United States understands that transparency within the confines of Article 2.4 requires an 
investigating authority to provide the necessary information regarding the products and transactions at issue so that the parties can provide relevant information and argument in response. Failure to ensure transparency in this context could prevent an interested party from 
being able to meaningfully defend its interest.  WT/DS397/RW/Add.1 
 
- D-6 - 
 
  14. The United States therefore agrees with th e statement of the Panel and Appellate Body in 
this dispute that "without knowing what constitu ted product types, it would be difficult if not 
impossible, for foreign producers to request adjustments that they consider necessary in order to ensure a fair comparison."  
 
15. To the extent that the EU Commission, as a lleged, has not provided Chinese exporters with 
information on the full range of product characteristics considered in the Commission's assessment 
of price comparability, the United States finds it difficult to see how the Commission could have 
met its obligation to conduct a fair comparison with respect to physical differences.  B. Claim that the European Union improper ly grouped standard and special fasteners 
in its determination of normal value 
 16. The United States understands that a mere statement by an investigating authority that a 
certain product grouping is defined the same in both markets, without providing further 
information, is likely to be inconsistent with th e requirements of Article 2.4. In addition, without 
knowing the details of the comparison product, the party may have no way of knowing whether a 
standard product (or special product) in the export market is defined under the same parameters 
as a standard product (or special product) in the comparison market.  
 C. Claim that the European Union faile d to make warranted adjustments for 
differences that affected price comparability 
 17. The Appellate Body has stated that, "under Article 2.4, the obligation to ensure a 'fair 
comparison' lies on the investigating authorities, and not the exporters. It is those authorities 
which, as part of their investigation, are char ged with comparing normal value and export price 
and determining whether there is dumping of imports." It is important to understand, however, 
that although the investigating authority has a burden to ensure a fair comparison, the interested 
parties also have the burden to support any requested adjustments for differences that affect price comparability.   
18. Thus, when requesting adjustments to reflec t the "due allowance" within the meaning of 
Article 2.4, an interested party is responsible for explaining to the investigating authority why such 
adjustment is warranted. Moreover, while the investigating authority is required to make "due 
allowance" for differences that affect price, Article 2.4 does not require the authority to accept, 
without evaluation, an interested party's argu ment that a certain difference affects price 
comparability and that adjustment is thereby warranted.  
 
EXECUTIVE SUMMARY OF U.S. THIRD-PARTY STATEMENT 
I. Exclusion of one or more export transactions 
 
19. The United States does not agree with Ch ina that an administering authority breaches 
Article 2.4.2 unless each and every export transaction is included in a weighted average to weighted average comparison methodology. This view  is too extreme, and does not reflect the text 
of the agreement or the realities of the administ ration of anti-dumping measures. On the other 
hand, the other extreme – such as basing a dumpin g margin on just one export transaction out of 
a thousand total export transactions – would also not be appropriate. As the United States will 
describe, the text of the agreement does provid e guidance on instances where certain export 
transactions might be excluded from a margin calculation.  20. Turning first to Article 2.4.2, the text provid es that "margins of dumping…shall normally be 
established on the basis of a comparison of a weighted average normal value with a weighted 
average of prices of all comparable export transactions…." Notably, the text limits the comparison to "comparable" export transactions, which clearly indicates that this requirement does not extend 
to "all" export transactions. Indeed, if WTO Members had intended for the requirement to extend 
to "all transactions", they would have not limited Article 2.4.2 by including the modifier "comparable" before the term "export transactions." 
 
21. The Appellate Body has also interpreted the text of Article 2.4.2 in this manner. In particular, the Appellate Body has recognized that this provision allows investigating authorities to use "multiple averaging" under the weighted  average-to-weighted average comparison WT/DS397/RW/Add.1 
 
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  methodology. Under this approach, an investigating authority can divide transactions into groups 
according to model or product type.  22. The basic definition of dumping is set out in Article 2.1 of the AD Agreement, and Article 2.2 
sets out the basic rules covering the situation where a "proper comparison" cannot be made 
between export price and the price of the like produc t in the domestic market. Further, Article 6.10 
provides important context, and indicates a number of factors which may be relevant when certain 
export transactions are excluded. To recall, Articl e 6.10 provides "where the number of exporters, 
producers, importers or types of products involved is so large as to make such a determination impracticable" the investigating authority "may limit [its] examination … to a reasonable number of … products by using samples which are statistically valid on the basis of information available to 
the authorities at the time of the selection, or to the largest percentage of the volume of the 
exports from the country which can reasonably be investigated." From this language, at least the following factors may be relevant in examining a situation where certain export transactions are 
excluded. 
 23. First, the number of different types of produc ts is relevant; a large number of different types 
may support a limitation of the examination. Second, the difficulties involved in conducting an 
investigation of each and every product type are a relevant factor. The text notes that one consideration is whether an examination of each export sale is "impracticable." And at the end of this second sentence of Article 6.10, the language repeats this theme, noting that the limitation of 
an examination may be tied to what "can reasonably be investigated." Third, where the 
examination is so limited, the authority must still  examine a "reasonable" number. Fourth, the text 
indicates that what is a "reasonable" number may depend on whether the examined transactions 
represent a statistically valid sample. Fifth, the text  also indicates that the percentage of the total 
volume of exports investigated is relevant, and is tied to what can "reasonably" be investigated. Sixth, Article 6.10.1 states that it is "preferable" for any selection of product types to be made "in 
consultation with, and the consent of," the ex porters, producers or importers concerned.  
 24. The United States suggests that the Panel a pply these types of factors in examining China's 
claim with respect to the EU's exclusion of certain export sales. Because this involves a close 
examination of the facts and circumstances of the dispute, the United States takes no position on 
the ultimate question of whether China has made out its claim with respect to the exclusion of certain sales. Nonetheless, the United States does note its agreement with the EU that in the 
circumstances of this case, one particularly important factual circumstance is that China is a 
nonmarket economy. As a result, the EU was not able to rely on prices charged in China's domestic market, and was required to employ information from an analogue country. The use of 
this type of methodology appears to have made it  more difficult for the EU to examine all product 
types.  II. Alleged differences in production costs 
 
25. China claims that the EU acted inconsistently with Article 2.4 of the AD Agreement in failing 
to make adjustments for alleged differences relating to the production of fasteners in China and 
the production of fasteners in India, which was the analogue country used by the EU. 
 26. As an initial matter, the United States notes that the issue raised by China is not governed 
by Article 2.4. By its plain terms, Article 2.4 sets  forth the obligation of an investigating authority 
to make a "fair comparison" between the export pric e and the normal value. In the investigation at 
issue, the export price of course is the price to  the EU, and the basis of normal value – under the 
EU's analogue country methodology – were domestic  sales in India by an Indian producer. Here, 
China's complaint is not with respect to physical differences, or differences in terms of sale, 
between the sales to the EU and the domestic sales in India. Rather, China raises a completely different issue, regarding – in essence – whether the domestic sales in the analogue country were 
an appropriate basis of normal value.  
 27. Furthermore, Article 2.4 provides that "[d]ue allowance shall be made in each case, on its 
merits, for differences which affect price comparability, including differences in conditions and 
terms of sale, taxation, levels of trade, quan tities, physical characteristics, and any other 
differences which are also demonstrated to affect price comparability." But here, China is alleging difference in production costs between China and the analogue country (India); such alleged cost 
differences do not themselves affect "price compar ability" between sales of two sets of products. WT/DS397/RW/Add.1 
 
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  Rather, these alleged differences go to the issue of whether or not the Indian domestic sales are 
an appropriate surrogate for normal value.   28. Turning to the merits of China's factual assertions, we agree with the EU that an 
investigating authority may determine that normal value cannot be based on sales in a nonmarket 
economy because of, inter alia , a distorted market for raw materials, and that making adjustments 
to the dumping calculation based on such distorti ons would be inappropriate. Accordingly, China's 
argument is fundamentally circular. 
 29. China argues that India is not an appropriate analogue country because of alleged differences – as compared to China – in costs of raw materials and electricity. However, China fails 
to acknowledge that the very reason the EU has resorted to India as an analogue country is that 
the costs in China are distorted because China is a nonmarket economy. Accordingly, any calculation of the "true" costs in China – that is, the costs that would have been incurred if China 
were a market economy – are not knowable. Thus, in the facts of this dispute, it appears that 
China cannot establish that costs in China would be lower – or for that matter higher – than the costs incurred by the Indian producer. 
 
30. In short, China's argument, if accepted, would defeat the underlying purpose of not relying on cost and sales data from a nonmarket economy.  
 
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