WT/DS504/R/Add.1  
12 Avril 2018  
(18-2224) Page: 1/82 
   
 
KOREA - ANTI -DUMPING DUTIES ON PN EUMATIC VALVES FROM JAPAN  
REPORT OF THE PANEL  
Addendum  
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This addendum  contains Annexes A to D to the Report of the Panel to be found in document 
WT/DS504 /R. 
 
 
 
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LIST OF ANNEXES  
ANNEX A  
WORK ING PROCEDURES OF TH E PANEL AND INTERIM REVIEW  
Contents  Page  
Annex A -1 Working Procedures of the Panel  A-2 
Annex  A-2 Additional Working Procedures on Business Confidential Information  A-7 
Annex  A-3 Interim Review  A-9 
 
ANNEX B  
ARGUMENTS OF JAPAN  
Content s Page  
Annex B-1 First integrated executive summary of the arguments of Japan  B-2 
Annex  B-2 Second integrated executive summary of the arguments of Japan  B-10 
 
ANNEX C  
ARGUMENTS OF KOREA  
Contents  Page  
Annex C-1 First integrated executive summary of the  arguments of Korea  C-2 
Annex  C-2 Second integrated executive summary of the arguments of Korea  C-12 
 
ANNEX D  
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex D -1 Integrated executive summary of the arguments of Brazil  D-2 
Annex D -2 Integrated execut ive summary of the arguments of Canada  D-4 
Annex D -3 Integrated executive summary of the arguments of Ecuador  D-7 
Annex D -4 Integrated executive summary of the arguments of the European Union  D-9 
Annex D -5 Integrated executive summary of the arguments o f the United States  D-12 
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ANNEX  A 
WORKING PROCEDURES O F THE PANEL  AND INTERIM REVIEW  
Contents  Page  
Annex A -1 Working Procedures of the Panel  A-2 
Annex  A-2 Additional Working Procedures on Business Confidential Information  A-7 
Annex  A-3 Interim Review  A-9 
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ANNEX  A-1 
WORKING PROCEDURES O F THE PANEL  
KOREA — ANTI -DUMPING DUTIES ON PN EUMATIC VALVES FROM JAPAN  (DS504) 
 
Adopted on 15 November 2016  
 
 
1.  In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules 
and Proce dures Governing the Settlement of Disputes (DSU). In addition, the following Working 
Procedures shall apply.  
General  
 
2.  The deliberations of the Panel and the documents submitted to it shall be kept confidential. 
Nothing in the DSU or in these Working Pr ocedures 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 submitted to the Panel by another Member which the submitting Member 
has desig nated 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. The 
parties and third parties shall treat business confidential information in accordance with the 
procedures set forth in the Additional Working Procedures of the Panel Concerning Business 
Confidential Information.  
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. 
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 third party shall have the responsibility for all 
members of its own delegation and shall ensur e 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  
 
5.  Before the first substantive meeting of the Panel with the parties, eac h party shall submit a 
written submission in which it presents the facts of the case and its arguments, in accordance with 
the timetable adopted by the Panel. Each party shall also submit to  the Panel, prior to the 
second  substantive meeting of the Panel, a written rebuttal, in accordance with the timetable 
adopted by the Panel.  
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 Japan requests such a 
ruling, Korea  shall submit its response to the request in its first written submission. If Korea  
requests such a ruling, Japan  shall submit its response to the request prior to the first 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.  
7.  Each party shall submit all factual evidence to the Panel  no later than during the 
first substantive meeting, except with resp ect to evidence necessary 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 such exception has been 
granted, the Panel shall accord the other party a period of time for comment, as appropriate, on 
any new factual evidence submitted after the first substantive meeting.  WT/DS504/R/Add.1  
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8.  Where the original language of exhibits is not a WTO working language, the submitting party or 
third party s hall submit a translation  of such exhibits or of their relevant parts  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. The Panel may grant exceptions to this procedure upon a showing of good cause. Any 
objection shall be accompanied by a detailed explanation of the grounds of objection and an 
alternative translation. Should a party become aware of any inaccuracies in the translations of the 
exhibits submit ted by that party, it shall inform the Panel and the other party promptly, and 
provide a new translation.  
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 , indicating the submitting Member and the number of each exhibit on its 
cover page. For example, exhibits submitted by Japan  could be numbered JPN-1, JPN-2, etc. If the 
last exhibit in connection wit h the first submission was numbered JPN-5, the first exhibit of the 
next submission thus would be numbered JPN-6. 
Questions  
 
10.  The Panel may at any time pose questions to the parties and third parties, orally or in writing, 
including prior to each subst antive meeting.  
Substantive meetings  
 
11.  Each party shall provide to the Panel the list of members of its delegation in advance of each 
meeting with the Panel and no later than 12h00 (noon) the previous working day.  
12.  The first substantive meeting of  the Panel with the parties shall be conducted as follows:  
a. The Panel shall invite Japan  to make an opening statement to present its case first. 
Subsequently, the Panel shall invite Korea  to present its point of view. Before each party 
takes the floor, i t 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 for the interpreters, through the Panel 
Secretary. E ach party shall make available to the Panel and the other party the final 
version of its opening statement as well as its closing statement, if any, preferably at the 
end of the meeting, and in any event no later than 17h00 on the first working day 
followi ng the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each par ty 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 written questions withi n a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. 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 a fford each party an opportunity to 
present a brief closing statement, with Japan  presenting its statement first.  
13.  The second substantive meeting of the Panel with the parties shall be conducted as follows:  WT/DS504/R/Add.1  
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a. The Panel shall ask Korea  if it wishes to avail itself of the right to present its case first. If 
so, the Panel shall invite Korea  to present its opening statement, followed by Japan. If 
Korea  chooses not to avail itself of that right, the Panel shall invite Japan  to present its 
opening statement first. 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 for the 
interpreters, through the Panel Secretary. Each party shall make available to the Panel 
and the other party the final version of its opening statement as well as its closing 
statement, if any, preferably at the end of the meeting, and in any event no later than 
17h00 of the first working day following the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity  to answer these questions orally. 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 t o the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. 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 q uestioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with the party that presented its opening statement 
first, presenting its closing statement first.  
Third parties  
 
14.  The Panel shall invite each third party to transmit to the Panel a written submission prior to 
the first substantive meeting of the Panel with the parties, in accordance with the timetable 
adopted by the Panel.  
15.  Each third party shall also be invited to present its views ora lly during a session of this first 
substantive meeting, set aside for that purpose. Each third party shall provide to the Panel the list 
of members of its delegation in advance of this session and no later than 12h00 (noon) the 
previous working day.  
16.  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 parti es 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 Pa nel, 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 
17h00 of the first working day following the session.  
c. After the third parties have made their statement s, 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. Each third party shall 
then have an opportunity to answer these questions orally. The Pane l shall send in 
writing, within a timeframe to be determined by it, any questions to the third parties to WT/DS504/R/Add.1  
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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 de termined by the Panel.  
Descriptive section  
 
17.  The description of the arguments of the parties and third parties in the descriptive section  of 
the Panel report shall consist of executive summaries 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 parties and third parties in the Panel's examination 
of the case.  
18.  Each party shall submit an integrated executive summar y of the facts and arguments as 
presented to the Panel in its first written submission, first opening and closing oral statements and 
responses to questions following the first substantive meeting, and a separate integrated executive 
summary of its written  rebuttal, second opening and closing oral statements and responses to 
questions following the second substantive meeting, in accordance with the timetable adopted by 
the Panel. Each integrated executive summary shal l be limited to no more than 15  pages. T he 
Panel will not summarize in a separate part of its report, or annex to its report, the parties' 
responses to questions.  
19.  Each third party shall submit an integrated executive summary of its arguments as presented 
in its written submission and statem ent in accordance with the timetable adopted by the Panel. 
This integrated executive summary may also include a summary of responses to questions, if 
relevant. The executive summary to be provided by each third party shall not exceed six pages.  
20.  The Pa nel reserves the right to request the 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.  
Interim review  
 
21.  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 ri ght to request such a meeting shall be exercised no 
later than at the time the written request for review is submitted.  
22.  In the event that no further meeting with the Panel is requested, each party may submit 
written comments on the other party's writt en 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.  
23.  The interim report, as well as the final report prior to its official circulati on, shall be kept 
strictly confidential and shall not be disclosed.  
Service of documents  
 
24.  The following procedures regarding service of documents shall apply:  
a. Each party and third party shall submit all documents to the Panel by filing them with 
the DS Registry (office No. 2047).  
b. Each party and third party shall file three  paper copies of all documents it submits to the 
Panel. Exhibits may be filed in two copies on CD -ROM or DVD and two paper copies. The 
DS Registrar shall stamp the documents wit h the date and time of the filing.  
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, preferably 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, with a copy 
to xxx@wto.org , xxx@wto.org and xxx@wto.org. If a CD -ROM or DVD is provided, it WT/DS504/R/Add.1  
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shall be filed with the DS Registry. The paper versio n of documents shall constitute the 
official version for the purposes of the record of the dispute.  
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 wri tten submissions in advance 
of the first 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 co pies have been served as required 
at the time it provides each document to the Panel.  
e. Each party and third party shall file its documents with the DS Registry and serve copies 
on the other party (and third parties where appropriate) by 17h00 (Geneva tim e) on the 
due dates established by the Panel. A party or third party may submit its documents to 
another party or third party in electronic format only, subject to the recipient party or 
third party's prior written approval and provided that the Panel Secr etary is notified.  
f. The Panel shall provide the parties with an electronic version of the descriptive section, 
the interim report and the final report, as well as of other documents as appropriate. 
When the Panel transmits to the parties or third parties  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.  
25.  The Panel reserves the right to modify these procedures as necessary, after consultation with 
the parties.  
 
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ANNEX A -2 
ADDITIONAL WORKING P ROCEDURES ON BUSINESS  
CONFIDENTIAL INFORMA TION 
KOREA — ANTI -DUMPING DUTIES ON PN EUMATIC VALVES FROM JAPAN  (DS504) 
 
Adopted on 15 November 2016  
 
 
The following procedures apply to any business confidential informat ion (BCI) submitted in the 
course of the Panel proceedings in DS 504. 
 
1. For the purposes of these Panel proceedings, BCI includes  
 
a. any information designated as such by the party submitting it that was previously 
treated as confidential by the investig ating authority in the anti -dumping investigation 
at issue in this dispute unless the Panel decides it should not be treated as BCI for 
purposes of these Panel proceedings based on an objection by a party pursuant to 
paragraph 3 below.  
b. any other inform ation designated as such by the party submitting it, unless the Panel 
decides it should not be treated as BCI for purposes of these Panel proceedings based 
on an objection by a party pursuant to paragraph 3 below .  
 
2. Any information that is available in the public domain may not be designated as BCI. In 
addition, information previously treated as confidential by the investigating authority in the anti -
dumping investigation at issue in this dispute may not be designated as BCI if the person who 
provided th e information in the course of that investigation agrees in writing to make the 
information publicly available.  
 
3. If a party or third party considers that information submitte d by the other party or a 
third party should have been designated as BCI and ob jects to its submission without such 
designation, it shall forthwith bring this objection to the attention of the Panel, the other party, 
and, where relevant, the third parties, together with the reasons for the objection. Similarly, if a 
party or third pa rty considers that the other party or a third party designated information as BCI 
which should not be so designated, it shall forthwith bring this objection to the attention of the 
Panel, the other party, and, where relevant, the third parties, together wi th the reasons for the 
objection. The Panel, in deciding whether information subject to an objection should be treated as 
BCI for purposes of these Panel proceedings, will consider whether disclosure of the information in 
question could cause serious harm to the interests of the originator(s) of the information .  
 
4. No person may have access to BCI except a member of the Secretariat assisting the Panel or 
the Panel, an employee of a party or third party, or an outside advisor to a party or third party for 
the purposes of this dispute.  
 
5. A party or third party having access to BCI in these Panel proceedings shall not disclose that 
information other than to persons authorized to have access to it pursuant to these procedures. 
Any information designated as BCI under these procedures shall only be used for the purposes of 
this dispute. Each party and third party is responsible for ensuring that its employees and/or 
outside advisors comply with these procedures to protect BCI.  
 
6. An outside advisor of a part y or third party is not permitted access to BCI if that advisor is 
an officer or employee of an enterprise engaged in the production, sale, export, or import of the 
product(s) that was/were the subject of the investigation at issue in this dispute, or an o fficer or 
employee of an association of such enterprises. All third party access to BCI shall be subject to the 
terms of these working procedures.  
 
7. The party submitting BCI shall mark the cover and/or first page of the document 
containing  BCI, and each page of the document, to indicate the presence of such information. The WT/DS504/R/Add.1  
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specific information in question shall be placed between double brackets, as follows: [[xx,xxx.xx]] . 
The first page or cover of the document shall state "Contains Business Confidential  Information ", 
and each page of the document shall contain the notice "Contains Business Confidential 
Information " at the top of the page.  
 
8. Any BCI that is submitted in binary -encoded form shall be clearly marked with the 
statement "Business Confidentia l Information " on a label of the storage medium, and clearly 
marked with the statement "Business Confidential Information " in the binary -encoded files.  
 
9. In the case of an oral statement containing BCI, the party or third party making such a 
statement sh all inform the Panel before making it that the statement will contain BCI, and the 
Panel will ensure that only persons authorized to have access to BCI pursuant to these procedures 
are in the room to hear that statement. The written versions of such oral s tatements submitted to 
the Panel shall be marked as provided for in paragraph 7.  
 
10. Any person authorized to have access to BCI under the terms of these procedures shall store 
all documents containing BCI in such a manner as to prevent unauthorized acces s to such 
information.  
 
11. The Panel will not disclose BCI, in its report or in any other way, to persons not authorized 
under these procedures to have access to BCI . The Panel may, however, make statements of 
conclusion drawn from such information . Befor e the Panel circulates its final report to the 
Members, the Panel will give each party an opportunity to review the report to ensure that it does 
not contain any information that the party has designated as BCI.  
 
12. Submissions containing BCI will be incl uded in the record forwarded to the Appellate Body in 
the event of an appeal of the Panel's Report.  
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ANNEX A -3 
INTERIM REVIEW  
1  INTRODUCTION  
1.1.  In accordance with Article 15.3 of the DSU, this Annex sets out the Panel's discussion of the 
arguments made  at the interim review stage. We have modified certain aspects of the Report in 
light of the parties' comments where we considered it appropriate, as explained below. In addition, 
we have made a number of changes of an editorial nature to improve the clari ty and accuracy of 
the Report or to correct typographical and other non -substantive errors, certain of which were 
suggested by the parties.1 
1.2.  As a result of the changes that we have made, the numbering of paragraphs and footnotes in 
the Final Report h as changed from that in the Interim Report. References to footnotes and 
paragraph numbers in this section relate to the Final Report, unless otherwise indicated.  
2  SPECIFIC REQUESTS FO R REVIEW SUBMITTED B Y THE PARTIES  
2.1  Paragraph 7.41  
2.1.  Japan reque sts the Panel to modify paragraph 7.41 to more completely reflect the nature and 
structure of its arguments concerning the definition of the domestic industry. Korea objects to the 
proposed modifications. Korea argues that Japan's request does not explain why these 
modifications are necessary or in what way the Panel would have erred in describing Japan's 
arguments. Korea contends that the proposed changes are either not supported by Japan's written 
submissions, or are already accurately reflected in the Pa nel's characteri zation of 
Japan's  arguments, or are in error.  
2.2.  In light of Japan's request, we have modified paragraph 7.41 to more completely reflect 
Japan's arguments.  
2.2  Paragraph 7.49  
2.3.  Japan requests the Panel to modify paragraph 7.49 to re flect the fact that Japan challenged 
the objectivity of the 55.4% share of the domestic production by the two applicants forming part 
of the domestic industry. Korea does not support the proposed modifications. Korea argues that 
the proposed modifications are not accurate. Moreover, according to Korea, Japan fails to explain 
why its proposed additions are necessary in light of the already lengthy explanation provided by 
the Panel. Korea proposes alternative texts, in case the Panel accepts Japan's request.  
2.4.  In light of Japan's request, we have modified paragraph 7.49 to describe more completely the 
relevant facts.  
2.3  Paragraph 7.52  
2.5.  Japan requests the Panel to modify paragraph 7.52 to record the details of the process in 
which the OTI examined th e status of two domestic producers. Korea does not support the 
proposed modifications, which it considers to be unwarranted.  
2.6.  We have decided not to grant Japan's request. In our view, the proposed changes are not 
necessary and go beyond a factual des cription.  
                                                
1 These include changes in paragraphs 7.59; 7.100; 7.112 (b) and (d); 7.130(d) ; 7.191; 7.192; 7.218 ; 
7.330; 7.392; 7.542; and 8.2(a) , and in footnotes 32; 68; 86; and 191. WT/DS504/R/Add.1  
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2.4  Paragraph 7.68  
2.7.  Japan requests the Panel to modify paragraph 7.68 to more completely reflect the nature and 
structure of its arguments concerning the volume of the dumped imports. Korea objects to the 
proposed modifications. According t o Korea, the Panel accurately summari zed Japan's claims 
concerning the volume of the dumped imports, which is based on Japan's own summary of its 
claim in its first written submission.  
2.8.  With respect to the same paragraph, Korea requests that the Panel  clarify that 
Japan's  arguments were developed and submitted only in the course of the proceedings.  
2.9.  We have decided not to grant Japan's request. In our view, the text contains an accurate 
summary of Japan's arguments. Likewise, we have decided not t o grant Korea's request. It is 
understood that the parties' arguments as set out by the Panel in the report are those developed 
and submitted in the course of the proceedings.  
2.5  Paragraph 7.81  
2.10.   Japan requests the Panel to modify the wording in par agraph 7.81. According to Japan, the 
issue of whether the KTC considered if there was a significant increase in du mped imports is 
heavily contested . Korea objects to the proposed modifications. In Korea's view, the language 
used is accurate.  
2.11.   With re spect to the third sentence of same paragraph, Korea requests that the Panel either 
delete the reference to the end -point to end -point market share or use the language in the 
KTC's  Final Resolution. Korea suggests a revised text.  Japan does not comment on this request.  
2.12.   We have decided not to grant Japan's request. T he proposed changes are unnecessary, as 
the paragraph  accurately reflects the Panel's understanding of the facts. With respect to Korea's 
request, we have adjusted the language used in the  third sentence of paragraph  7.81 to reflect 
more closely the language used in the KTC's Final Resolution.  
2.6  Paragraphs 7.98, 7.99 , and 7.100  
2.13.   Japan requests the Panel to modify paragraphs 7.98 to 7.100 to better clarify its arguments. 
Korea objec ts to the proposed modifications. Korea argues that paragraphs 7.98 to 7.100 correctly 
summari ze Japan's claim concerning price effect under Article 3.2 of the Anti -dumping Agreement 
as presented in Japan's submissions.  
2.14.   We have decided not to grant Japan's request. T he proposed changes are unnecessary, as 
the paragraphs in question accurately reflect Japan's arguments concerning price effects as 
articulated in Japan's submissions.  
2.7  Paragraph 7.99(b)  
2.15.   Japan requests the Panel to modify parag raph 7.99(b) to better clarify its arguments. Korea 
objects to the proposed modifications. In Korea's view, the suggested changes are an attempt by 
Japan to reconstruct its claims and arguments.  
2.16.   In light of Japan's request, we have modified paragrap h 7.99(b) to more clearly reflect 
Japan's arguments.  
2.8  Paragraph 7.103  
2.17.   Korea requests the Panel to modify paragraph 7.103 to clarify that it generally disagrees on 
the existence of a widely divergent price trend between the dumped imports and the domestic like 
product s that would have undermined the explanatory force of the imported products for purposes 
of analysing developments in domestic prices. Japan does not comment on this request.  
2.18.   We have decided not to grant Korea's request. In our  view, Korea's suggested addition is 
unnecessary and does not reflect the arguments of Korea as articulated in the course of the WT/DS504/R/Add.1  
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proceedings. As noted in other sections of the Report and in the submissions quoted by Korea in 
its request, Korea did not disp ute that there was some degree of divergence between the price 
trends of the dumped imports and the domestic like product s. Korea's argument was that such 
divergent price trends did not undermine  the KTC 's finding of " market interaction".  
2.9  Paragraph 7. 108 
2.19.   Korea requests the Panel to modify paragraph 7.108 to more accurately reflect the findings 
in the KTC's Final Resolution. Japan does not comment on this request.  
2.20.   In light of Korea's request and the lack of objection from Japan, we have mo dified 
paragraph 7.108 to better reflect the language used in the KTC's Final Resolution and in 
Korea's  own submissions.  
2.10  Paragraph 7.109  
2.21.   Korea requests the Panel to modify paragraph 7.109 to indicate that the KTC was not, as 
argued by Japan, u nder an additional obligation to consider a counterfactual scenario under 
Article  3.2 of the A nti-Dumping  Agreement. Japan does not comment on this request.  
2.22.   We have decided not to grant Korea's request. T he paragraph in question accurately reflects 
Korea's arguments concerning price effects as articulated in Korea's submissions.  
2.11  Paragraph 7.112  
2.23.   Japan requests the Panel to include a footnote to paragraph 7.112(b) to provide an 
explanation of the concept of the "price fluctuation index". K orea agrees with Japan that the 
mechanism of "price fluctuation index" should be explained in the Panel Report. Korea disagrees, 
however, with the inclusion in the footnote of a proposed factual finding regarding the price 
fluctuation index.  
2.24.   With re spect to the same paragraph, Korea requests the Panel to modify subparagraphs (d) 
and (e), and to include a new subparagraph (f), to better reflect the KTC's considerations. Japan 
disagrees with the changes proposed by Korea at the end of subparagraph (d) and in 
subparagraph (e), as in its view this language is not part of the KTC's Final Resolution.  
2.25.   In light of Japan's request, we have inserted a footnote to paragraph 7.112(b) to explain 
the "price fluctuation index". We have decided not to grant Ko rea's request with respect to 
subparagraph (d), because the additional text suggested is not found in the part of the KTC's Final 
Resolution quoted in that section. In light of Korea's request, we have modified subparagraph (e) 
and added a new subparagraph  (f), albeit not in the exact terms proposed by Korea, to better 
reflect the language used in the KTC's Final Resolution.  
2.12  Paragraph 7.113  
2.26.   Korea requests the Panel to modify paragraph 7.113 to better reflect the 
KTC's  considerations. Japan disa grees with the changes proposed by Korea, which in Japan's view 
are not part of the terms used in the KTC's Final Resolution.  
2.27.   We have decided not to grant Korea's request. T he paragraph in question accurately reflects 
the language used in the KTC's Final Resolution. Also, some of the suggestions made by Korea 
refer to matters that are reflected elsewhere in the Report, but are not relevant for the 
Panel's  findings in this section. We have, however, added to the second sentence in the paragraph 
the ex pression " inter alia " to reflect that this was not the only consideration for the KTC's findings 
of price suppression and price depression.  
2.13  New paragraph between paragraphs 7.114 and 7.115  
2.28.   Japan requests the Panel to insert a new paragraph bet ween paragraphs 7.114 and 7.115 to 
describe some facts, which in its view are relevant in assessing the objectiveness of the 
KTC's  findings of "fierce competition" on the basis of the price differences. Korea objects to the WT/DS504/R/Add.1  
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proposed modification. Korea arg ues that by including the proposed new paragraph, Japan is 
requesting the Panel to make a finding on an issue that was not raised or discussed during the 
course of the proceedings.  
2.29.   We have decided not to grant Japan's request. T he proposed changes a re unnecessary and 
Japan has not explained why the additional language is relevant to the question of "fierce 
competition ". 
2.14  Paragraph 7.115 and new paragraph between paragraphs 7.115 and 7.116  
2.30.   Japan requests the Panel to modify paragraph 7.115  and to insert a new paragraph between 
paragraphs 7.115 and 7.116 to more accurately reflect the facts on the record. Korea objects to 
the proposed modifications. Korea argues that Japan has not contested any of the facts described 
in this paragraph. Korea  also considers that the text in Japan's proposed a new paragraph is 
misleading.  
2.31.   In light of Japan's request, we have made a small modification to paragraph 7.115. W e see 
no reason to make other changes requested by Japan, as the text accurately ref lects the 
Panel's  understanding of the relevant facts.  
2.15  Paragraph 7.116  
2.32.   Japan requests that the Panel modify paragraph 7.116 so that the "reasonable sales price " 
is not referred to as a "target domestic industry price". Korea objects to the pro posed modification. 
In Korea's view, the paragraph in question merely summari zes the relevant facts based on the 
evidence.  
2.33.   We have decided not to grant Japan's request. In our view, the "reasonable sales price" 
constructed by the OTI can be properly  referred to as a "target price".  
2.16  New paragraph between paragraphs 7.116 and 7.117  
2.34.   Japan requests the Panel to insert a new paragraph between paragraphs 7.116 and 7.117 to 
provide further explanation as to "how and why the KTC used the Japanes e respondents' profit 
ratio, as a basis of the 'reasonable sales price'". Korea objects to the proposed modification. In 
Korea's view the proposed new paragraph is misleading and unwarranted.  
2.35.   We have decided not to grant Japan's request. This sectio n sets out the relevant facts 
concerning the Korean Investigating Authorities' consideration of price effects. It is not appropriate 
to include in this section the parties' arguments concerning whether the Japanese 
respondents'  profit ratio was a proper el ement in calculating the "reasonable sales price", which 
the KTC used in considering price suppression.  
2.17  Paragraph 7.140  
2.36.   Korea requests the Panel to modify paragraph 7.140 to more completely reflect its 
counter -arguments, which in its view are described in a short manner compared with the 
Panel's  summary of Japan's arguments . Japan does not comment on this request.  
2.37.   In light of Korea's request and the lack of objection from Japan, we have modified 
paragraph 7.140 to more completely  reflect  Korea's counter -arguments.  
2.18  Paragraph 7.142  
2.38.   Korea requests the Panel to modify paragraph 7.142 to more completely reflect its 
counter -arguments, which in its view are described in a short manner compared with the 
Panel's  summary of Japan's arg uments . Japan does not comment on this request.  
2.39.   In light of Korea's request and the lack of objection from Japan, we have modified 
paragraph 7.142 to more completely  reflect Korea's counter -arguments.  WT/DS504/R/Add.1  
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2.19  Paragraph 7.151  
2.40.   Japan requests that  the Panel modify the wording in paragraph 7.151. Japan argues that 
whether the Korea n Investigating Authorities evaluated two of the factors set out in Article 3.4 is a 
contested issue. Korea objects to the proposed change as unwarranted.  
2.41.   We have d ecided not to grant Japan's request. The language used in the paragraph 
accurately reflects both Japan's arguments as articulated in the course of the proceedings and the 
Panel's understanding of the relevant facts.  
2.20  Paragraph 7.180  
2.42.   Japan reque sts that the Panel modify paragraph 7.180 to more accurately reflect its 
arguments. Korea does not support Japan's request. Korea argues that the Panel's summary and 
characteri zation of Japan's arguments is correct.  
2.43.   We have decided not to grant Japa n's request. While in some sections of its submissions 
Japan argued that the KTC did not evaluate the two factors at all, Japan also argued that the 
KTC's  evaluation of these two factors was "conclusory" and "not sufficient". We understand from 
these argum ents that Japan essentially challenged the adequacy of the KTC's evaluation. The 
language used in the paragraph accurately reflects Japan's arguments as articulated in the course 
of the proceedings. It is clear to us that, in Japan's view the KTC needed to  evaluate these factors 
more thoroughly than it did in its Final Resolution. We are not persuaded by Japan's argument that 
an inadequate evaluation is no evaluation at all.  
2.21  Paragraph 7.181  
2.44.   Japan requests that the Panel modify paragraph 7.181 t o add another argument made by 
Japan concerning the domestic industry's ability to raise capital, and to make a finding concerning 
that argument. Korea does not support Japan's request. In Korea's view, the paragraph in 
question contains the Panel's evalua tions and findings and not the parties' arguments.  
2.45.   In light of Japan's request, we have modified paragraphs 7.181 and 7.186 to better reflect 
Japan's arguments and the Panel's corresponding findings.  
2.22  Paragraph 7.190  
2.46.   Japan requests the P anel to modify paragraph 7.190 to more accurately reflect its 
arguments. Korea does not support Japan's request. Korea argues that the paragraph in question 
contains the Panel's evaluations and findings and not the parties' arguments. Korea also asserts 
that Japan's proposed changes are unwarranted and incompatible with the Panel's findings.  
2.47.   We have decided not to grant Japan's request. The paragraph accurately expresses the 
Panel's understanding of Japan's arguments.  
2.23  Paragraph 7.191  
2.48.   Japan requests that the Panel modify paragraph 7.191. Japan argues that it has not 
acknowledged that an investigating authority is not always required to conduct a counterfactual 
analysis in order to evaluate the magnitude of the margins of dumping. Japan als o challenges the 
Panel's finding that Japan failed to demonstrate what specific factual circumstances would have 
made such an analysis obligatory in this case. Korea does not support Japan's request. In 
Korea's  view, Japan's proposed changes are unwarrante d. 
2.49.   We have decided not to grant Japan's request. The paragraph accurately expresses the 
Panel's understanding of Japan's arguments. We are also unpersuaded by Japan's request on the 
need to modify the Panel's finding in this regard. Japan has failed  to demonstrate any special 
circumstances that would have made the alleged counterfactual analysis obligatory. We fail to see 
how Japan's argument that, in view of the magnitude of the dumping margin, it is not possible 
simply to assume that dumping margin s had an impact on domestic prices, differentiates this case 
from any other, particularly in light of the Panel's findings.  WT/DS504/R/Add.1  
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2.24  Paragraph 7.196  
2.50.   Korea requests the Panel to modify paragraph 7.196. Korea considers that not all of 
Japan's  arguments l isted in the paragraph were developed in later submissions. In Korea's view, it 
would be inaccurate to list these arguments as if they were consistently raised and developed. 
Japan opposes Korea's request. Japan asserts that it raised some arguments in its  first submission 
which Korea did not respond to. In Japan's view, because Korea did not respond, Japan had 
nothing further to add in subsequent submissions.  
2.51.   We have decided not to grant Korea's request. The paragraph references relevant sections 
in Japan's first written submission. Whether certain arguments were further developed in later 
submissions is irrelevant.  
2.25  Paragraphs 7.199, 7.200 , and 7.201  
2.52.   Japan requests the Panel to modify paragraphs 7.199, 7.200 , and 7.201 to "completely 
reflect Japan's various arguments in the proceeding" with regard to non -attribution. Korea does 
not comment on this request.  
2.53.   In light of Japan's request and the lack of objection from Korea, we have modified 
paragraph 7.199 to better reflect Japan's ar guments. We have decided not to grant 
Japan's  request with respect to paragraphs 7.200 and 7.201. These two paragraphs accurately 
express the Panel's understanding of Japan's arguments.  
2.26  Paragraph 7.200  
2.54.   Korea requests the Panel to modify  paragr aph 7.200. Korea considers that not all of 
Japan's  arguments listed in the paragraph were developed in later submissions. In Korea's view, it 
would be inaccurate to list these arguments as if they were consistently raised and developed. 
Japan opposes Korea 's request. Japan asserts that it raised some arguments in its first submission 
which Korea did not respond to. In Japan's view, because Korea did not respond, Japan had 
nothing further to add in subsequent submissions.  
2.55.   We have decided not to grant Korea's request. The paragraph references relevant sections 
in Japan's first written submission. Whether certain arguments were further developed in later 
submissions is irrelevant.  
2.27  Paragraph 7.202  
2.56.   Korea requests the Panel to modify paragraph 7.202 to clarify that the non -attribution 
element concerns "the performance" of the domestic producers not part of the domestic industry 
definition . Japan does not comment on this request.  
2.57.   We have decided not to grant Korea's request. The paragraph accurately expresses the 
Panel's understanding of Japan's arguments.  
2.28  Paragraph 7.212  
2.58.   Korea requests the Panel to modify the third sentence of paragraph 7.212 in relation to the 
non-attribution analysis. Japan does not comment on this request.  
2.59.   We have decided not to grant Korea's request. The language used in the paragraph mirrors 
that used in Korea's first written submission, to which the statement is cited.  
2.29  Paragraph 7.214  
2.60.   Korea requests the Panel to modify paragraph 7.214 to more completely reflect its 
arguments. Japan does not comment on this request.  WT/DS504/R/Add.1  
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2.61.   In light of Korea's request and the lack of objection from Japan, we have modified 
paragraph 7.214 to more completely reflect Korea's arguments.  
2.30  Paragraph 7.227  
2.62.   Japan requests the Panel to delete paragraph 7.227. Japan disagrees with the 
Panel's  statement that "[it] made a variety of arguments in support of its claims under 
Articles  3.1, 3.2 and 3.4 but … only referred to a selected few of those arguments i n support of its 
independent causation claim". Japan also requests the Panel, in addressing Japan's Article 3.5 
claims, to make findings with respect to all arguments Japan made in the context of its Article s 3.2 
and 3.4 claims. Korea opposes Japan's reque sts. In Korea's view, Japan's proposed modifications 
confirm its argument that Japan has not made an independent causation claim but rather a 
consequential claim. In light of Japan's interim review claim, Korea requests the Panel to reverse 
its findings th at Japan has made an independent causation claim.  
2.63.   We have decided not to grant Japan's request s. Japan has acknowledged that it has only 
expressly referred to a selected few arguments in support of its independent causation claim. It is 
not appropri ate for the Panel to address arguments which Japan itself has not made in the course 
of the proceedings. We have also decided not to grant Korea's request. Korea has provided no 
justification for the Panel to revisit its finding that Japan made an independ ent causation claim.  
2.31  Paragraph 7.254  
2.64.   Japan requests the Panel to modify paragraph 7.254. Japan argues that the KTC did not rely 
on the "effects of the 78.9% increase in the dumped imports", but on the increase itself. Korea 
does not comment on  this request.  
2.65.   In light of Japan's request and the lack of objection from Korea, we have modified 
paragraph 7.254 to more completely reflect the KTC's findings.  
2.32  Paragraph 7.257  
2.66.   Japan requests the Panel to modify paragraph 7.257. Accordi ng to Japan, there is no 
evidence that the increase in the dumped imports resulted in an increase in the market share. 
Korea opposes Japan's request. In Korea's view, it is reasonable to conclude that the increase in 
the dumped imports' volume must have co ntributed to the increase in the dumped imports' market 
share.  
2.67.   In light of Japan's request, we have modified paragraph 7.257 to better reflect the facts that 
underlay the KTC's determination.  
2.33  Paragraph 7.267  
2.68.   Korea agrees with the introd uctory sentence in paragraph 7.267 and requests the Panel to 
add a clarification to this sentence. Korea also requests the Panel to split subparagraph (b) into 
two subparagraphs (b) and (c), and to modify the text of the first of those subparagraphs to 
indicate that, for the purpose of examining price effects and comparing prices for price suppression 
and depression analyses, the KTC comprehensively considered various price -related elements.  
Japan opposes Korea's suggested addition to the introductory sente nce. Japan also agrees with 
part of the text proposed by Korea for subparagraph  (b). 
2.69.   We have decided not to grant Korea's request for the introductory sentence in 
paragraph  7.267. In light of Korea's request and Japan's comments, we have modified 
subparagraph (b) and added a footnote for additional clarification.  
2.34  Paragraph 7.269  
2.70.   Japan requests the Panel to modify paragraph 7.269. According to Japan, the KTC's findings 
of price effects were at least partly based on the average -to-average price comparisons. Japan 
further requests the Panel to reconsider its finding in paragraph 7.269. Korea agrees with Japan 
that the average -to-average comparisons, especially the price development in 2013, formed an WT/DS504/R/Add.1  
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important (although not exclusive) basis for the KTC's price effect analysis, and thus for its injury 
determination. However, Korea disagrees with Japan that as a result of this correction, the Panel 
should reconsider its finding and address Japan's argument that the KTC failed to ensure price 
comparability when conducting the average -to-average comparisons.  
2.71.   Korea also requests the Panel to make certain amendments to the second sentence of 
paragraph  7.269 to more accurately reflect its position. Japan does not comment on this request.  
2.72.   Korea finally requests the Panel to amend the fourth and fifth sentences of paragraph 7.269 
to more accurately reflect the KTC's findings. Japan opposes Korea's suggested modifications . In 
Japan's view, the focus of review should be the KTC's Final Resol ution as it was written.  
2.73.   We have decided not to grant Japan's request to modify the paragraph and reconsider the 
Panel's finding. It is apparent from its reasoning that the KTC did not rely on the average  to 
average comparisons in its price suppress ion and depression analyses. The KTC stated that it 
made its findings of price suppression and depression "although the average sales price of the 
dumped products was higher than that of the like product".  
2.74.   With respect to the first part of paragraph  7.269, i n light of Korea's request and the lack of 
objection from Japan, we have made some modifications to more completely reflect the record in 
this regard.  
2.75.   Finally, we have decided not to grant Korea's request to modify the fourth and 
fifth sentences of paragraph 7.269.  
2.35  Paragraph 7.270  
2.76.   Korea requests the Panel to modify the first sentence of paragraph 7.270 to more 
completely reflect the KTC's findings. Korea also requests the Panel to reconsider its findings under 
Article 3.5. In ad dition, Korea proposes that the Panel merge its price comparability discussions in 
paragraphs 7.269 and 7.270 (first sentence) into a single section devoted to the general topic of 
"price comparability". Finally, Korea requests that the second sentence of paragraph 7.270 
(including Table 1) should be, along with the discussions in paragraphs 7.271  and 7.272, moved 
and merged into paragraphs 7.297 to 7.322 where the issues of "average price overselling" are 
discussed.  
2.77.   Japan opposes with Korea's sugges ted changes to the first sentence of paragraph 7.270. 
Japan also opposes Korea' s request  for the Panel to reconsider its findings under Article 3.5 . Japan 
does not comment on Korea's request to move and merge the second sentence of paragraph 
7.270 along wi th the discussions in paragraphs 7.271 and 7.272 to the section where issues of 
"average price overselling" are discussed.  
2.78.   We have decided not to grant Korea's request to modify paragraph 7.270 and to reconsider 
the Panel's findings under Article 3. 5. The use of the words " inter alia " indicates the Panel's 
understanding that the KTC's finding of price suppression and suppression had several bases, 
including the "transaction to average" comparisons. Other bases are not mentioned in this 
paragraph beca use they are not relevant for the purpose of addressing the issue of whether the 
Korean Investigating Authorities ensured price comparability. Also we have not found it either 
necessary or appropriate to grant Korea's request for the Panel to move or merge  paragraphs as 
suggested. The key issue before the Panel in this section is whether the KTC failed to consider the 
comparability of products it used to reach its conclusions of price depression and suppression, and 
equally failed to conduct an objective ex amination of the overall extent of price competition 
between subject imports and domestic products . 
2.36  Paragraphs 7.270 to 7.272  
2.79.   Japan requests the Panel to modify the language in paragraphs 7.270 to 7.272 when 
referring to models of the dumped i mports and the domestic like products. Korea opposes 
Japan's  request.  WT/DS504/R/Add.1  
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2.80.   With respect to the same paragraphs, Korea requests that the discussions contained therein 
relate to the OTI's average price overselling analysis, rather than to the price compara bility 
analysis, and should be reflected in the section corresponding to paragraphs 7.304 and 7.305. 
Japan opposes Korea's request. In Japan's view, there is no reason why the Panel 's discussions 
should be moved as suggested by Korea.  
2.81.   In light of Ja pan's request, we have modified the language in paragraphs 7.270 to 7.272 for 
consistency reasons with other parts of the Report.  
2.82.   We have decided not to grant Korea's request. The key issue in this section of the Report is 
price comparability, rathe r than price overselling.  
2.37  Paragraph 7.274  
2.83.   Korea requests that the Panel add, in a new subparagraph 7.274(e), another 
counter -argument raised by Korea to Japan's allegation that the prices of the dumped imports and 
the domestic like product div erged over the period of trend analysis. Japan does not comment on 
this request.  
2.84.   In light of Korea's request and the lack of objection from Japan, we have modified 
paragraph 7.274 to more completely reflect Korea's arguments.  
2.38  Footnote 382 to p aragraph 7.275  
2.85.   Japan requests the Panel to modify the text of footnote 382. Japan argues that it has never 
acknowledged that different models are like products. Korea opposes Japan's request. According to 
Korea, the Panel is merely explaining the te rm "models" it uses for the general observation at 
paragraph 7.275, which has nothing to do with whether Japan accepts the KTC's like product 
definition or not.  
2.86.   We have decided not to grant Japan's request. The sentence as originally drafted express es 
the Panel's intended meaning for the term "models" as used in paragraph 7.275 to which the 
footnote pertains.  
2.39  Paragraph 7.276  
2.87.   Japan requests the Panel to modify paragraph 7.276, which in its view does not correctly 
reflect its arguments . Korea opposes Japan's request. In Korea's view, the statement in question is 
taken directly from Japan's own arguments.  
2.88.   We have decided not to grant Japan's request. The text contains an accurate summary of 
Japan's arguments.  
2.40  Paragraph 7.277  
2.89.  Korea requests that the text in footnotes 373 and 374 of the Interim Report be moved into 
the body of paragraph  7.277. In Korea's view, those footnotes contain references to important 
analys es and findings made by the KTC on the basis of the price fluc tuation index. Japan does not 
comment on this request.  
2.90.   In light of Korea's request and the lack of objection from Japan, we have modified 
paragraph 7.277 to more completely describe the facts before the Korean Investigating 
Authorities . 
2.41  Paragr aph 7.278  
2.91.   Japan requests the Panel to modify paragraph 7.278. Japan suggests alternative language 
which in its view is more neutral and better reflects the evidence before the Panel. Korea opposes 
Japan's request. In Korea's view, Japan is rearguing  its case which is not in line with the scope of 
the interim review stage.  WT/DS504/R/Add.1  
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2.92.   We have decided not to grant Japan's request. T he paragraph  in question accurately reflects 
the Panel's understanding of the facts.  
2.42  Paragraph 7.280  
2.93.   Korea request s the Panel to delete a sentence from paragraph 7.280, which in its view is 
misleading because it limits the basis of the KTC's price suppression and depression findings to 
three specific price comparisons. Korea argues that the KTC's price effect analysis  was based on a 
comprehensive assessment of various considerations. Japan opposes Korea's request. Japan 
argues that Korea is essentially trying to rewrite the KTC's Final Resolution to include some 
unspecified elements and thereby  to improve the position it has already taken  in the proceedings.  
2.94.   We have decided not to grant Korea's request. The sentence in question merely states the 
fact, which Korea does not dispute, that the KTC  found "fierce competition" based on the three 
inquiries referred to, a nd relied on that "fierce competition " in finding price suppression and 
depression. It does not imply that the KTC's findings regarding price suppression or depression 
were based only on the three inquiries in question.  
2.43  New paragraph between paragrap hs 7.282 and 7.283  
2.95.   Japan requests the Panel to insert a new paragraph to add Japan's counter -arguments 
concerning the representative model analysis "to show that Korea's allegation is not an undisputed 
fact". Korea opposes Japan's request. In Korea' s view, nothing in the Report posits that "the KTC 
undisputedly considered trends in the prices of 'representative models' of the dumped imports and 
the domestic like products".  
2.96.   We have decided not to grant Japan's request. In our view, it is unnece ssary to insert a new 
paragraph "to show that Korea's allegation is not an undisputed fact". As noted by Korea, the 
Panel considered this issue and found that there is insufficient evidence to conclude that the 
Korean Investigating Authorities actually con sidered the price trends on the basis of representative 
models or resale price trends.  
2.44  Paragraph 7.284  
2.97.   Japan requests the Panel to modify paragraph 7.284. In Japan's view, neither the KTC nor 
the Panel found competition between the percentages  of dumped imports and domestic like 
product stated therein. Korea opposes Japan's request. Korea argues that the KTC's Final 
Resolution and the OTI's Final Report concluded, based on analyses of the representative model 
and the 28 series of dumped imports , that the dumped and domestic products are, as a whole, in 
a competitive relationship with each other.  
2.98.   We have decided not to grant Japan's request. T he paragraph  in question accurately reflects 
the Panel's understanding of the facts.  
2.45  New par agraph between paragraphs 7.292 and 7.293  
2.99.   Japan requests the Panel to insert a new paragraph to make it clear that it has contested 
the probative value of exhibits submitted by Korea. Korea opposes Japan's request. Korea argues 
that the evidentiary value of customer statements is not diminished simply because some of them 
are not accompanied by price offers for both the dumped imports and the domestic like products.  
2.100.   In light of Japan's request, we have modified paragraph 7.292 to more complet ely reflect 
Japan's arguments.  
2.46  Paragraphs 7.294 and 7.295(c)  
2.101.   Japan requests the Panel to modify paragraphs 7.294 and 7.295(c). In Japan's view, the 
KTC's Final Resolution does not connect its finding of fierce competition to any evidence. Jap an 
asks the Panel to reconsider its conclusion in this regard. Korea opposes Japan's request. In 
Korea's view, Japan's proposed changes are an attempt to deny the record evidence and a 
repetition of the same arguments contained in its submissions.  WT/DS504/R/Add.1  
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2.102.   We have decided not to grant Japan's request. T he paragraphs  in question accurately 
reflect the Panel's understanding of the facts.  
2.47  Paragraph 7.295 (d) 
2.103.   Korea requests the Panel to modify paragraph 7.295(d). Korea argues that, while the 
KTC's e xamination of the alleged price discrimination among different customers with respect to 
specific products or product ranges and the strengthened marketing activities of SMC Korea, were 
a part of the KTC's price effect analysis, there were other important considerations. Korea also 
requests that the term "alleged" be removed when referring to price discrimination, as there is no 
dispute as to the "existence" of price discrimination. Japan opposes Korea's request. In 
Japan's  view, the focus of review is the KTC's Final Resolution as it was written.  
2.104.   We have decided not to grant Korea's request. Paragraph 7.295 concerns the 
Panel's  conclusions on Japan's arguments with respect to the lack of parallelism in the price trends 
of the dumped imports and the domestic like product. There is no need to set out in this paragraph 
a detailed description of the findings underlying the Korea n Investigating Authorities' conclusion on 
price effects of the dumped imports.  
2.48  Paragraphs 7.297, 7.299, 7.301, 7.319, 7.3 20, and 7.321  
2.105.   Korea requests the Panel to modify paragraphs 7.297, 7.299, 7.301, 7.319, 7.320 , and 
7.321, which refer to price overselling in the context of the KTC's price effects analysis. Japan 
partially opposes Korea's request on paragraphs 7.2 97, 7.301, 7.319, 7.320 , and 7.321, and does 
not comment on paragraph 7.299 . 
2.106.   In light of Korea's request and Japan's comments, we have modified paragraphs 7.297, 
7.301, 7.319, 7.320 , and 7.321, to more completely reflect Japan's arguments and the 
Panel's  understanding of the facts . We have decided not to grant Korea's request with respect to 
paragraph 7.299, which accurately reflects the Panel's reasoning . 
2.49  Paragraph 7.300  
2.107.   Korea requests the Panel to modify the introductory section of p aragraph 7.300, to provide 
a more complete description of the KTC's price depression and suppression analyses concerning 
the use of a "reasonable sales price" . Japan opposes Korea's request and suggested edits. Japan 
adds that the Panel should address whet her the KTC 's reasonable sales price analysis supports its 
finding of price suppression . 
2.108.   In light of Korea's request and Japan's comments, we have modified paragraph 7.300 to 
more completely reflect the Panel's understanding of the facts . 
2.50  Paragraph 7.302  
2.109.   Japan requests the Panel to modify paragraph 7.302. In Japan's view, this paragraph 
contradicts paragraph 7.290 of the Report, which finds that neither  the KTC nor the OTI 
considered the trends in the dumped import resale prices . Korea  opposes Japan's request . 
According to Korea, Japan seeks to delete a section which is an accurate reflection of the record of 
the examinations conducted by the Korean authorities in the underlying investigation . 
2.110.   We have decided not to grant Japan' s request. T he paragraph  in question accurately 
reflects the Panel's understanding of the facts  and we do not consider there to be any contradiction 
between paragraph 7.302 and paragraph 7.290 . 
2.51  Paragraphs 7.302, 7.305 , and 7.310  
2.111.   Korea request s the Panel to modify paragraphs 7.302, 7.305 , and 7.310, and to note that, 
as the basis of the its price depression and price suppression findings, the KTC in addition to 
comparing the average prices of domestic like product to the individual resale price s of dumped 
imports, also compared those average prices to the "target" reasonable sales prices. Korea also 
notes that, when considering individual resale prices of dumped imports, the KTC considered WT/DS504/R/Add.1  
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individual prices for some models that were lower than a verage domestic prices for comparable 
models, but also considered individual prices that were lower than the "high -end prices" of the 
comparable domestic models. Japan opposes Korea's request. Japan notes that Korea has not 
requested the Panel to review its finding  that there was no reference in the KTC's  Final Resolution 
or in the OTI's Final Report to Exhibit KOR -57 and that Exhibit KOR -57 does not show whether and 
if so how the OTI examined the extent to which domestic like product prices were affected b y the 
individual instances of lower dumped import prices . 
2.112.   We have decided not to grant Korea's requests  concerning  the comparison with the 
"reasonable  sales prices" . The paragraphs  in question accurately reflect the Panel's understanding 
of the fac ts. However, we have modified these paragraphs to better reflect that fact that 
Exhibit  KOR-57 contains comparisons between the transaction prices of the dumped imports and 
not only the average prices of the domestic like product but also the high -end pric es. 
2.52  Paragraph 7.311  
2.113.   Japan requests the Panel to modify paragraph 7.311 to more accurately reflect the facts 
described in the OTI's Final Report. Korea opposes Japan's request, which is considers an attempt 
of Japan to relitigate this matter.  
2.114.   In light of Japan's request, we have modified paragraph 7.311 to more accurately reflect 
the facts as described in the OTI's Final Report.  
2.53  Paragraphs 7.317 and 7.318  
2.115.   Japan requests the Panel to modify paragraphs 7.317 and 7.318. In Ja pan's view, none of 
the customer statements referred to by Korea satisfies th e standard  in assessing the probative 
value expressed by the Panel in paragraph 7.315. Korea opposes Japan's request. In Korea's view, 
the Panel did not develop a standard in para graph 7.315 and never sought to measure the 
customer statements against this "standard". Korea contends that the Panel found that these 
customer statements reveal a competitive relationship and objects to Japan's attempt to use the 
interim review process a s an appeal process.  
2.116.   We have decided not to grant Japan's request. The Panel did not develop and adopt a 
standard for the evaluation of evidence of the existence of a competitive relationship in 
paragraph  7.315. Rather, the Panel was discussing how  evidence of price discrimination or the 
ability to price discriminate may be relevant and probative in considering the price effects of 
imports. Paragraphs 7.317 and 7.318 accurately reflect the Panel's understanding of the facts.  
2.54  Paragraph 7.320  
2.117.  Japan requests the Panel to modify paragraph 7.320. In Japan's view, this paragraph 
contradicts paragraphs 7.310 and 7.313 of the Report, which find that the Korean Investigating 
Authorities did not consider Exhibit KOR -57 in considering the price ef fects. Korea opposes 
Japan's  request. In Korea's view, the Panel's finding in paragraph 7.320 does not contradict its 
earlier findings in paragraph 7.310 and 7.313.  
2.118.   We have decided not to grant Japan's request. The Panel's findings in paragraphs 7. 310 
and 7.313 concern whether Exhibit KOR -57 supports Korea's allegation that the OTI conducted 
numerous simulations and analyses on the basis of certain resale price data  and 
Korea's  arguments. The Panel does not question the fact that the OTI requested a nd obtained the 
underlying resale price data. There is no inconsistency between the Panel's finding in 
paragraph  7.320 and its earlier findings in paragraphs 7.310 and 7.313.  
2.55  Paragraph 7.321  
2.119.   Japan requests the Panel to modify paragraph 7.321.  In Japan's view, there is no evidence 
which demonstrates that representative models compete with each other substantially or 
conspicuously. Korea opposes Japan's request. In Korea's view, Japan repeats, without any 
supporting evidence or argument, its ass ertion that the Korean authorities never explained how WT/DS504/R/Add.1  
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they determined what they call representative models or demonstrated that representative models 
compete with each other.  
2.120.   We have decided not to grant Japan's request. T he paragraph  in question accurately 
reflects the Panel's understanding of the facts.  
2.56  Paragraph 7.323  
2.121.   Korea requests the Panel to modify paragraph 7.323. Korea argues that the statement that 
it was undisputed that the prices of the dumped imports were higher than thos e of the domestic 
like product  in the comparison of both the average prices for the product as a whole, and the 
average prices of the representative models, is not entirely accurate. Japan opposes 
Korea's  request. Japan argues that it is undisputed that th e prices of the dumped imports were 
always higher than the domestic prices on the basis of the average prices for the  product as a 
whole and the average prices of the so-called "representative models ". 
2.122.   We have decided not to grant Korea's request. The paragraph  in question accurately 
reflects the Panel's understanding of the facts.  
2.57  Paragraph 7.335  
2.123.   Japan requests the Panel to modify paragraph 7.335 to clarify its arguments. Korea objects 
to the proposed modifications. According to Korea , the proposed modification does not clarify but 
reconstructs Japan's arguments made during the proceedings.  
2.124.   We have decided not to grant Japan's request. The paragraph accurately expresses the 
Panel's understanding of Japan's arguments.  
2.58  Paragraphs 7.336 and 7.337  
2.125.   Japan requests the Panel to modify paragraphs 7.336 and 7.337 and to reconsider its 
findings. In Japan's view, the Panel misunderstood the point of Japan's argument and failed to 
address Japan's real concern. Korea opposes Ja pan's request, which in its view is an attempt to 
reconstruct its arguments . 
2.126.   We have decided not to grant Japan's request. The paragraph s accurately express the 
Panel's understanding of Japan's arguments.  
2.59  Paragraph 7.375  
2.127.   Korea request s the Panel to modify paragraph 7.375. In Korea's view, the key issue is not 
a lack of correlation, but a clear confirmation that a decline in consumption was not a cause of 
injury in 2010 -2012 and that in 2013 consumption increased, making it an even less  likely cause 
of injury. Japan opposes Korea's request. In Japan's view,  Korea's comment is internally 
inconsistent and the proposed edit does little more than rephrase the absence of any correlation. 
Japan argues that Korea has not pointed to any analysis  in the KTC's Final Resolution that goes 
beyond mere correlation.  
2.128.   We have decided not to grant Korea's request. T he paragraph  in question accurately 
reflects the Panel's conclusions in light of its understanding of the facts . 
2.60  Paragraph 7.429  
2.129.   Korea requests the Panel to modify paragraph 7.429. Korea disagrees with the 
characterization that the facts in question were undisputed by the parties. Korea argues that 
parties were never asked to express their agreement on these facts and that s ome of these facts 
were "contextualized" by Korea. Japan opposes Korea's request. In Japan's view, Korea failed to 
submit any specific reasons why the Panel's factual findings are not undisputed.  
2.130.   We have decided not to grant Korea's request. Korea' s arguments do not challenge the 
accuracy of the facts as described. While the Panel did not ask the parties whether they agreed on WT/DS504/R/Add.1  
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these facts, neither party challenged their accuracy. The fact that Korea "contextualized" the facts 
does not establish that  there was any dispute as to the facts themselves.  
2.61  Paragraph 7.449  
2.131.   Korea requests the Panel to modify paragraph 7.449. Korea identifies sections of its 
submissions in which it argued that narrative summaries were included in the 
applicants'  submissions in question. Japan opposes Korea's request and considers that the 
statement contained in the paragraph in question is accurate . 
2.132.   We have decided not to grant Korea's request. T he paragraph  in question accurately 
reflects the Panel's under standing of the facts . 
2.62  Paragraph 7.453  
2.133.   Japan requests the Panel to modify paragraph 7.453 to clarify its arguments on the legal 
obligation under Article 6.9. Korea does not comment on this request.  
2.134.   In light of Japan's request and the lack of objection from Korea, we have modified 
paragraph 7.453 to more completely reflect Japan's arguments.  
2.63  New paragraph between paragraphs 7.453 and 7.45 5 
2.135.   Japan requests the Panel to insert a new paragraph reflecting Korea's  and 
Japan's  arguments on the authority of the KTC and the MOSF, concerning the meaning of "final 
determination" under Article 6.9 of the Anti -Dumping Agreement. Korea does not support 
Japan's  request. Korea requests that the Panel either reject Japan's request to insert  the new 
paragraph summarising  Japan's Article 6.9 arguments or strike a balance by also reflecting 
Korea's  Article  6.9 arguments raised in its second written submission.  
2.136.   In light of Japan's request and the lack of objection from Korea, we included  two new 
paragraphs to more completely reflect the parties' respective arguments concerning the meaning 
of "final determination" under Article 6.9.  
2.64  New paragraph between paragraphs 7.46 4 and 7.46 6 
2.137.   Japan requests the Panel to insert a new para graph summarizing certain provisions of 
Korean law concerning the MOSF's authority to determine anti -dumping measures. Korea does not 
support Japan's request. Korea argues that it does not oppose inclusion of a correct summary of 
the relevant statutes and a finding that accurately reflects the relevant statutes. In Korea's view, 
however, the modifications proposed by Japan mischaracterize the implication of the relevant 
statutes from the perspectives of an anti -dumping investigation in Korea.  
2.138.   In lig ht of Japan's request, we have included a new paragraph to describe the relevant 
provisions of Korean law.  
2.65  Paragraph 7.47 3 
2.139.   Japan requests the Panel to modify this paragraph to differentiate what was stated in the 
OTI's Preliminary Report, the  KTC's Preliminary Resolution, and the OTI's Interim Report, as well 
as in the OTI's Final Report and KTC's Final Resolution, with respect to the alleged aggressive 
marketing practices of the importing companies. Korea opposes Japan's request. In Korea's v iew, 
the text proposed by Japan is factually incorrect.  
2.140.   We have decided not to grant Japan's request. T he paragraph  in question accurately 
reflects the Panel's understanding of the facts . WT/DS504/R/Add.1  
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2.66  New paragraph between paragraphs 7.4 80 and 7.4 81 
2.141 .  Japan requests the Panel to insert a new paragraph to clarify that the OTI's Preliminary 
Report, the KTC's Preliminary Resolution, and the OTI's Interim Report did not refer to the concept 
of system sales. Korea does not comment on this request.  
2.142.   In light of Japan's request and the lack of objection from Korea, we have modified 
paragraph 7.4 80. 
2.67  Paragraphs 7.4 90 and 7.49 4 
2.143.   Japan requests the Panel to modify paragraph s 7.490 and 7.494 to clarify that nothing 
about the level of imports a nd about the actual capacity and production of the domestic industry 
was disclosed to the interested parties throughout the entire investigation process . Korea opposes 
Japan's requests and the emphasis on the entire investigation process . In Korea's view, Japan 
never raised this argument during the dispute.  
2.144.   We have decided not to grant Japan's requests. We do not consider it necessary for the 
Panel to make the proposed modifications. T he paragraphs  in question accurately reflect the 
Panel's understa nding of the facts . The emphasis proposed by Japan that nothing about the level 
of imports was disclosed to the interested parties throughout the entire investigation process  was 
not something that Japan argued during the proceedings.  
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- B-1 - 
 
ANNEX B 
ARGUMENTS OF JAPAN  
Contents  Page  
Annex B-1 First integrated executive summary of the arguments of Japan  B-2 
Annex  B-2 Second integrated executive summary of the arguments of Japan  B-10 
 
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ANNEX B -1 
FIRST INTEGRATED EXE CUTIVE SUMMARY  
OF THE ARGUMENT S OF JAPAN  
A. Introduction  
 
1. Through its first written submission, opening  and closing statements at the first panel 
meeting  as well as responses to the Panel 's questions thereafter, Japan has established that 
Korea 's anti -dumping measures  – particularly  those taken by  Korea 's investigating authority, the 
Korea Trade Commission ( "KTC") – violated a number of substantive and procedural obligations 
under the General Agreement on Tariffs and Trade 1994 ( "GATT 1994 ") and the Agreement on 
Implementation of Art icle VI of the General Agreement on Tariffs and Trade 1994 ( "Anti-Dumping 
Agreement "). 
 
2. Japan notes that in this panel proceeding thus far, Korea has adduced a considerable portion 
of evidence that was not included in the KTC 's Final Determination or di sclosed to the interested 
parties in any manner, and has developed  new arguments based on the undisclosed information. 
Such attempt s at post hoc  rationalization of the KTC 's flawed analyses should be rejected . In any 
case, none of the newly disclosed infor mation supports the WTO consistency of these anti -dumping 
measures.  
 
B. The Overarching Legal Framework for the Obligations under Articles 3.1, 3.2, 3.4, 
and 3.5 of the Anti -Dumping Agreement  
 
3. Article 3 of the Anti -Dumping Agreement requires an objecti ve examination based on 
positive evidence, and calls for a "logical progression " of inquiry. The overarching obligation of 
Article 3.1 and the more specific obligations of Articles 3.2, 3.4, and 3.5 are intertwined and 
inform each other. A proper finding r egarding each of the specific obligations set forth in each 
paragraph of Article 3 must therefore take into account the underlying facts and relevant factual 
conclusions about the other obligations.  
 
4. Article 3.1 outlines the focus of a proper injury and  causation investigation, which consists of 
"three essential components ": (i) the volume of dumped imports; (ii) the effect of such imports on 
the prices of like domestic products; and (iii) the consequent impact of such imports on the 
domestic producers o f the like products. These components "are closely interrelated for purposes 
of the injury determination ". 
 
5. Articles 3.2, 3.4 and 3.5 of the Anti -Dumping Agreement stipulate an investigating 
authority 's obligations when determining the injury to the dom estic industry caused by dumped 
imports. None of the obligations set out in those paragraphs can be read independently from the 
"overarching " obligation contained in Article 3.1.  
 
6. As explained by the Appellate Body  in China – GOES , the paragraphs of Art icle 3 
"contemplate a logical progression of inquiry  leading to an investigating authority 's ultimate 
injury and causation determination ". The Appellate Body in China  – HP-SSST (Japan)/ China  – HP-
SSST (EU)  emphasized that the analyses pursuant to the vari ous provisions of Article 3 are 
"closely interrelated ". The findings about significant price effects and  significant  volume increase 
must enable the investigating authority to provide a "meaningful basis " for its determination as to 
whether dumped imports,  through such significant effects on the price and/or changes in the 
volume of domestic like products, are in fact causing injury to the domestic industry. The findings 
under Article 3.2 are thus a key part of the subsequent findings under Article 3.4 rega rding the 
condition of the domestic industry and the findings under Article 3.5 regarding the relative role of 
dumped imports and different factors in explaining the condition of the domestic industry.  
 
7. In order for the volume and price effects analys es under Article 3.2 to provide a "meaningful  
basis", the investigating authority must consider how any such volume increase and/or any such 
effects on price would relate to the subsequent injury determination. If an investigating authority 
is to find injury  to the domestic industry based on the price effects of those imports and the WT/DS504/R/Add.1  
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volume of dumped imports (as the KTC did here), the authority must logically include in its 
analys es of price and volume an assessment of whether domestic prices are actually low ered or 
prevented from rising to reflect cost increases  as a result of the dumped imports , and/or whether 
domestic sales volume is actually reduced as a result of the volumes of dumped imports. This 
concept of "logical progression " informs the interpretati on of specific requirements of each 
paragraph in Article 3.  
 
C. The KTC 's Price Effects Analysis Was Inconsistent with Articles 3.1 and 3.2 of the 
Anti-Dumping Agreement  
 
8. Under Articles 3.1 and 3.2 of the Anti -Dumping Agreement  as interpreted in the con text of 
the logical progression of inquiry discussed, an investigating authority must, in addition to its 
assessment and definition of the "like product " under Article 2.6 of the Anti -Dumping Agreement, 
objectively examine any positive evidence pertaining to the interaction in the market between the 
prices of the dumped imports and the like domestic products. This interaction can be examined 
based upon the consideration of the degree of competitive relationship  between the dumped 
imports and the like domest ic products in conjunction with the dumping margin of dumped 
imports. The Appellate Body in China – GOES  said that the necessary explanatory force does not 
exist if dumped import s and domestic prices were not comparable. Thus, the failure to ensure price 
comparability is inconsistent with the requirement under Articles 3.1 and 3.2.  Moreover, the text of 
Article 3.2 explicitly provides that an investigating authority must consider whether the effect of 
dumped imports is to depress or suppress the domestic pr ice "to a significant degree ". 
 
1. The KTC 's Analysis of Price Depression Was Analytically and Factually Flawed  
 
9. In light of the  relevant  legal standard discussed above , the KTC 's discussion of alleged price 
depression was flawed because it did not adeq uately address the overwhelming  evidence before it 
that suggested the lack of  any interaction in the market , i.e., the lack of any price effects. In 
particular, the KTC 's price effects analysis was deficient in the following key respects.  
 
10. The KTC did not address the diverging price trends of the dumped imports and the 
domestic like products . The simple average price trends of dumped imports and domestic like 
products diverged sharply over the period of investigation. This disconnect increased over time . 
 
11. The KTC also considered the price trends based on  what is called  the "price fluctuation 
index ". The price fluctuation index method similarly showed divergent price trends. The price 
fluctuation index method – like the simple average method – showed that dumped imports and 
domestic products were in different and distinct market segments, reacting to changing market 
conditions very differently. Yet the KTC never seriously addressed these divergent trends in prices.  
 
12. The KTC did not provide the nece ssary dynamic assessment of the relationship between the 
dumped import prices and those of domestic like products over the full period of investigation, and 
it failed to assess whether the dumped imports had any explanatory force for any depression of 
the domestic prices.  
 
13. Moreover, another  crucial fact largely overlooked by the KTC in its analysis of price 
depression was the existence and magnitude of overselling – dumped import prices were much 
higher than domestic prices. This overselling exists base d on both all products, but also for the 
representative products identified by the KTC. The overselling exists even for most of the 
comparisons of specific product identified by the Korean authorities.  
 
14. The consistent and significant overselling shown  by the data before the KTC fundamentally 
undermined the KTC findings. The panel  in China – Autos (US)  noted that overselling generally 
"undermines " any findings of price depression and suppression under Article 3.2. The domestic 
products and dumped import s were not interacting in the market to any meaningful degree – the 
overall price differences were simply too great.  
 
15. The persistent overselling – that is, the complete absence of price undercutting – seriously 
undermined the KTC 's finding of price dep ression. The absence of price undercutting means that 
KTC would have to have a particularly convincing explanation as to how the dumped imports could 
have depressed or suppressed domestic prices. Yet the KTC provided no such convincing 
explanation.  WT/DS504/R/Add.1  
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- B-4 - 
 
2. The KTC's Analysis of Price Suppression Was Analytically and Factually 
Flawed  
 
16. The KTC similarly overlooked the consistent and significant overselling by dumped imports in 
its finding  of price suppression. The KTC failed to explain how dumped imports that were sold at 
much higher prices than domestic products could have had any explanatory power for the alleged 
suppression of the domestic prices.  The KTC also overlooked the diverging price trends that 
undermined any conclusion about price suppression from d umped imports . 
 
17. These analytical defects could not be fixed by the KTC addressing a few models in isolation. 
The authority must consider the price effects of dumped imports on the domestic like products as  
a whole, to measure how much of the domestic p roduct has experienced any "effect of " dumped 
imports. The KTC purported to find price effects for the domestic like product as a whole, but only 
did so for a tiny portion of the like products. Without explaining how the isolated examples can 
represent the  entirety of domestic products, the KTC 's explanation cannot provide positive 
evidence for its finding of the price effect on the domestic products as a whole.  
 
18. Although the references were brief and cryptic  in the public version of the final 
determina tion report , the KTC appears to have adopted the analysis of  what is called  the 
"reasonable selling price " as the basis of its finding of price suppression. However, t he KTC failed 
to explain how this reasonable selling price was calculated. More fundament ally, it never examined 
whether the domestic price would have increased if the dumped imports had been priced at normal 
value. Thus, the KTC never tried to find a link between the dumped imports and the alleged price 
suppression of the domestic price.  
 
3. The KTC Failed to  Ensure Price Comparability  
 
19. The KTC made no attempt to ensure price comparability between specific products or 
product segments within the broad overall baskets of dumped imports and domestic products for 
pneumatic valves as a whole. Instead, by relying primarily on the likeness determination that it 
(and the OTI in its findings) had made between the broad groups of dumped imports and domestic 
products, the KTC asserted that both products were somehow in a competitive relationship.  This 
approach failed  to ensure price comparability before finding advers e prices effects under 
Articles  3.1 and 3.2.  
 
20. The KTC also did not objectively examine the physical characteristics of the dumped imports 
and the domestic products. Japanese responde nts submitted explanations that most of their 
exports were of high quality products designed for very specific applications. These physical and 
quality differences explained the significant price overselling – with the Japanese products selling 
at much hig her prices than the domestic alternatives. Yet the KTC and OTI simply ignored those 
differences.  
 
21. The KTC 's assessment of the consumer evaluations was also severely biased. Although a 
significant number of end -users of pneumatic valves submitted statem ents to the KTC that the 
imported valves and domestic valves are not substitutable due to their significant difference in 
physical characteristics, quality and other respects, the KTC selectively relied on six interested 
parties who testified otherwise. Su ch isolate examples cannot explain away the other evidence of 
significant differences.  
 
22. The KTC also did not properly evaluate the differences in the end -uses of the imported and 
domestic products. The KTC failed to meaningfully address the particular nature of the products 
and their market situation, and simply assumed without any basis that both products could be 
used interchangeably if they were supplied to the same sector. This approach does not represent 
an objective assessment based on positive ev idence.  
 
D. The KTC 's Volume Analysis Was Inconsistent with Articles 3.1 and 3.2 of the Anti -
Dumping Agreement  
 
23. The Final Determination also provided a limited and inadequate discussion of any volume 
increase by dumped imports. The KTC did not consider  whether there was a "significant increase " 
as required by Article 3.2. The KTC did not examine (i) interactions  in the market between the 
volume of the dumped imports and that of the like domestic products, or (ii) any additional WT/DS504/R/Add.1  
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- B-5 - 
 
positive evidence pertain ing to the degree of the competitive relationship between the dumped 
imports and the domestic like products.  
 
24. The KTC 's limited and flawed volume determination did not constitute an objective 
examination of positive evidence as required by Articles 3.1  and 3.2 of the Anti -Dumping 
Agreement. More specifically, the Final Determination made the following fundamental errors: (i) it 
improperly found a "significant increase " in dumped imports even though dumped imports actually 
fell in two out of three of the  comparison periods, and ended the overall period up only slightly on 
an absolute basis and down on a relative basis; (ii) it improperly assumed a competitive 
relationship between domestic products and dumped imports that simply did not exist; (iii) it nev er 
considered whether any apparent increase in dumped imports was significant in conjunction with 
the margin of dumping; (iv) it improperly considered the effect of dumped imports that were still 
in inventory, and were not competing at all with the domesti c producers; and (v) it improperly 
found displacement by dumped imports, even though domestic shipments were actually 
increasing.  
 
25. Article 3.2 explicitly requires an investigating authority to consider whether there has been 
not just any increase, but a "significant " increase. The Appellate Body has said , in the context of 
Article 2.4.2 of the Anti -Dumping Agreement,  that the term "significant " incorporates both 
quantitative and qualitative dimensions, and circumstances pertaining to the nature of the p roduct 
or the markets may be relevant for the assessment of whether differences are "significant " in the 
circumstances of a particular case.  
 
26. Accordingly, the investigating authority 's examination of whether there has been a 
"significant increase " must also include a qualitative assessment of circumstances pertaining to the 
nature of the products and the market at issue. A mere finding of a numerical increase in the 
dumped imports, without finding that users chose dumped imports in place of domestic lik e 
products, would not provide a "meaningful basis " to find injury and causation. The qualitative 
assessment  of increasing dumped imports is crucial, especially  when  the domestic like products 
are also increasing.  
 
27. Further, the Appellate Body has explai ned, in the context of "significant price undercutting " 
under Article 3.2,  that what is "significant " depends on the circumstances of each case and must 
involve a dynamic assessment of the relationship between the prices of the dumped imports and 
those of the like domestic products. This same interpretation of "significant " applies when 
considering volume under Article 3.2.  
 
28. On an absolute basis, dumped imports increased for the period of investigation as a whole. 
But the KTC never stated how much dumpe d imports increased over the full period, or explained 
why that level of increase should be considered a "significant increase ", when the increase in 
absolute terms over the entire period was in fact quite modest.  
 
29. On a relative basis, the KTC never e xplained why it found a "significant increase " in dumped 
imports relative to consumption or production. The KTC seems to have found the increase in 
market share in 2013 alone to be "significant ", yet the market share of dumped imports actually 
decreased ov er the period of investigation and in 2013 the shipments of the domestic like product 
increased.  
 
30. The KTC improperly found a competitive relationship between domestic products and 
dumped imports. Yet the consistent and significant overselling, the dive rging price trends, the 
differing magnitudes of price changes were all inconsistent with any meaningful competitive 
relationship, as were the diverging volume and market share trends. The KTC never examined the 
extent to which dumped imports would have rep laced any volume of the domestic like product had 
the imports been priced at or above normal value.  
 
31. Given that dumped imports were actually decreasing for most of the period, the KTC relied 
entirely on the increase in 2013 to find a significant volume  increase. Yet the Japanese 
respondents had explained that this increase in 2013 occurred only because of a change in 
inventory policy, such that most of the volume in fact was still in inventory and had not been 
competing with domestic producers. The KTC never examined the extent to which imports held in 
inventory could have had any impact in displacing domestic sales. This failure made it impossible 
for the KTC to assess whether the increase in import volume in 2013 was "significant ". WT/DS504/R/Add.1  
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32. Finally, the KTC  tried to turn the dumped import market share change into something 
"significant " by pointing to the decline in domestic industry market share in 2013. The KTC noted 
that the domestic market share increased in 2011 and 2012, but "decreased " in 2013 to a le vel 
"which is near the figure for 2010 ". While the loss of market share in one year might be significant 
in some cases, the KTC never explained how the loss of market share in one year alone could be 
significant in light of the overall market shares remain ing virtually the same over the period as a 
whole.  
 
E. The KTC 's Examination of the Adverse Impact of Dumped Imports on the Domestic 
Industry Was Inconsistent with Articles 3.1 and 3.4 of the Anti -Dumping 
Agreement  
 
33. The KTC 's Final Determination provid ed a superficial and inadequate discussion of adverse 
impact. The KTC did not provide the meaningful "evaluation of all relevant economic factors " 
required by Article 3.4.  
 
34. The Appellate Body  in China  – HP-SSST (Japan)/ China  – HP-SSST (EU)  stated that  the 
volume, price effects, and impact inquiries are "closely interrelated "; and that the various 
paragraphs of Article 3 "contemplate a logical progression of inquiry ". The logical progression that 
begins with Article 3.2 continues with Article 3.4, and t he authority must show "the explanatory 
force of dumped imports for the state of the domestic industry ". The impact analysis under 
Article  3.4 must then provide a meaningful basis for the ultimate injury determination.  
 
35. The KTC disregarded  the "closel y interrelated " nature of the inquiries. The KTC failed to 
consider the "explanatory force " of dumped imports when it failed to consider the impact of the 
volume of dumped imports on the domestic industry. A proper impact analysis must show that the 
sales amount of domestic like products would have increased if the dumped imports had been 
imported at their normal value, but the KTC did not even examine whether end -users replaced 
domestic like products with the dumped imports because of the dumping. Similarl y, the KTC failed 
to address the role that imports from other countries may have had on the condition of the 
domestic industry, with such non -dumped imports also gaining significant market share over the 
full period of investigation . It further ignored the  evidence showing that the declines in domestic 
production and sales were overwhelmingly linked to declining consumption in the market, and not 
to dumped imports.  
 
36. The KTC also failed to consider the explanatory force of dumped imports when it complete ly 
ignored the fact that the prices of dumped imports were consistently higher than the prices of 
domestic products, and hence, no price effect analysis was properly conducted. Although Korea 
has adduced a few isolated examples of alleged underselling, the logical progression of inquiry 
would not stand, if the price effects are found only within a small fraction of the domestic products 
while the impact finding is linked to the entire domestic products.  
 
37. The KTC also failed to consider at all two speci fically enumerated factors: ( i) the ability to 
raise capital, and ( ii) the magnitude of the margin of dumping. Of particular importance to 
Article  3.4 is whether and to what extent the economic indicators would have changed if the 
dumped imports had been p riced at their normal value, in order to identify the impact of the 
dumped imports on the domestic industry. It is f or this purpose that the consideration of the 
magnitude of the margin of dumping is required for the analysis under Article 3.4. Yet the KTC  did 
not do so.  
 
F. The KTC 's Examination of the Causal Relationship between Dumped Imports  and 
the Injury to the Domestic Industry  Was Inconsistent with Articles 3.1 and 3.5 of 
the Anti -Dumping Agreement  
 
38. The Final Determination provided a limited and  inadequate discussion of causation. The KTC 
did not provide any explicit "demonstration of a causal relationship " as required by Article 3.5. 
Moreover, the KTC ignored other known factors that it should have addressed.  
 
39. The Appellate Body has confirme d that the inquiries into any causal link under Article 3.5 
depend on the results of the prior analys es of price and volume under Article 3.2 and impact under 
Article 3.4. The logical progression , which  begins with Article 3.2 and continues with Article 3. 4, WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- B-7 - 
 
must then continue further under Article 3.5. The outcomes of the earlier stages "form the basis 
for the overall causation analysis " under Article 3.5.  
 
40. The KTC never provided any actual "demonstration " of the causal relationship as required by 
the first and second sentences of Article 3.5. The KTC apparently did not even try to 
"demonstrate " the necessary causal relationship because it could not do so. The underlying facts in 
this proceeding showed the absence of a sufficient causal relationship. Th e KTC may have thought 
its discussion of price effects and volume were enough, but as discussed earlier these findings 
were flawed and did not even establish any explanatory force from the dumped imports, let alone 
establish the causal relationship as requ ired by Article 3.5.  
 
41. Article 3.5 also requires the authority to "examine any known factors other than the dumped 
imports " that might also be affecting the domestic industry, and any injuries from these other 
factors "must not be attributed to dumped i mports ". The KTC considered some factors but ignored 
others. For those factors considered, the KTC simply dismissed them rather than make any serious 
effort to examine them objectively and then to separate and distinguish the effects of subject 
imports fro m the effects of these other factors. The KTC inadequately considered the ( i) the effect 
of imports from countries other than Japan, ( ii) the effect of changing levels of consumption, 
and (iii) the effect of changing exports by the Korean industry.  
 
42. For those factors not considered, the KTC even more egregiously ignored its obligation under 
Article 3.5 not to blame subject imports for the problems caused wholly or partially by other 
factors. The KTC ignored ( i) the extent to which other Korean producers  were gaining shipments 
and market share from the two applicants, ( ii) the extent to which other Korean producers were 
affecting domestic prices, and ( iii) the possible competition between the two applicants 
themselves.  
 
43. The KTC considered some of the se factors, but considered them only in isolation; the KTC 
should have considered all of these factors both individually and then collectively. The "objective 
examination " required by Article 3.1 and the need to consider "all relevant evidence " required by  
Article 3.5 require that the authority understand the complete picture, and consider the possible 
interaction of different factors.  
 
44. If the Panel finds that the impact analysis of either the volume or the price effects of subject 
imports is flawed, th en this flaw would automatically lead to a finding that the KTC failed to 
demonstrate that the dumped imports are causing injury through the effects of dumping, as 
required by Article 3.5. However, even if the KTC 's analysis of volume and price effects wer e 
deemed to be not inconsistent with Article 3.2, a causal relationship would not exist whenever the 
volume or price effects affected only a small portion of domestic products.  
 
45. In addition, the KTC 's analysis of a causal relationship under Article 3. 5 is deficient to the 
extent it did not consider all other "known " factors and evaluate the extent to which those other 
factors might be contributing to injury. The phrase "any known factors " refers to any factor that is 
within the agency 's knowledge (on t he record), and is not limited to factors specifically raised by 
the parties.  
 
G. The KTC 's Definition of Domestic Industry Was Inc onsistent with Articles 3.1 
and 4.1 of the Anti -Dumping Agreement  
 
46. The KTC failed to ensure that the definition of  the do mestic industry did not give rise to a 
material risk of distortion.  The term "major proportion " in Article 4.1 requires both quantitative 
and qualitative assessment. Thus, i t is not sufficient for the investigating authority merely to 
include domestic  producers of the like products accounting for a quantitatively large proportion of 
the total domestic production in the definition of the domestic industry. In order for the 
investigation authority to ensure that the producers  also qualitatively represent the total domestic 
production,  the authority must do more than just measure the percentage of the total domestic 
production covered. When those  domestic producers that voluntarily come forward to the authority 
are not sufficient qualitatively  – when they are d ifferent than the rest of the industry – the 
authority must include  other  producers in the domestic industry definition.  
 WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- B-8 - 
 
47. The KTC defined the "domestic industry " for its analysis as consisting of just the two 
petitioning firms representing only half of  the total domestic production . Without any explanation 
as to how the two petitioning  firms may represent the total domestic production, t he KTC did not 
include the other seven producers that made up the other half of the Korean production  as a 
whole. It d id not even include two domestic producers that provided sales and production 
quantities.  
 
48. The KTC did not acknowledge the additional risk of distortion inherent in limiting the 
domestic industry only to those firms applying for the anti -dumping dutie s. The KTC also ignored 
the fact that the OTI Final Report noted ways in which one of the petitioning firms was different 
than the remainder of the domestic industry. In this case, there was a material risk of distortion 
since the domestic industry had bee n defined to include only the applicants that sought the anti -
dumping duties.  
 
H. The KTC 's Treatment of Confidential Information Was Inconsistent with  
Articles  6.5 and 6.5.1 of the Anti -Dumping Agreement  
 
49. The KTC 's treatment of confidential informati on submitted by t he applicants violated 
Articles  6.5 and 6.5.1 of the Anti -Dumping Agreement in several key respects. The KTC did not 
require any specific justification for confidential treatment. Moreover, the KTC did not require a 
proper non -confidential  summary of the application and many other submissions by the applicants. 
Key information was simply deleted and left blank, without adequate public summaries and 
without any explanation why such summaries could not be provided.  
 
50. This lack of appropri ate non -confidential summaries adversely affected the ability of the 
Japanese respondents to fully defend their interests.  The existence of good cause for confidential 
treatment must be "shown " by the submitting parties. The authority may not simply presum e the 
existence of good cause on the basis of a municipal law that classifies broad categories of 
information as confidential. Furthermore, the investigating authority "must objectively assess the 
'good cause ' alleged for confidential treatment, and scruti nize the party 's showing in order to 
determine whether the submitting party has sufficiently substantiated its request ".  
 
51. When interested parties submit confidential information, due to transparency and due 
process concerns, Article 6.5.1 requires int erested parties to submit sufficient non -confidential 
summaries of the information. In "exceptional circumstances ", if the information at issue is not 
"susceptible to summary ", the party submitting the information may indicate it is unable to provide 
a non -confidential summary. In such circumstances, however, the party must provide "a 
statement of the reasons why summarization is not possible ".  
 
52. Finally, "the investigating authority must scrutinize such statements to determine whether 
they establish ex ceptional circumstances, and whether the reasons given appropriately explain 
why, under the circumstances, no summary that permits a reasonable understanding of the 
information 's substance is possible ".  
 
53. In the present case, applicants did not show "good cause " for confidential treatment. 
Applicants did not provide sufficient non -confidential summaries or any statements as to why such 
summaries were not possible, and KTC 's failure to require such summaries or statements violated 
Article 6.5.1 of the An ti-Dumping Agreement.  
 
I. The KTC Violated Article 6.9 of the Anti -Dumping Agreement by Failing to Disclose 
Essential Facts before its Final Determination.  
 
54. The KTC breached Article 6.9 of the Anti -Dumping Agreement by failing to disclose the 
"essentia l facts " that formed the basis of its injury determination before making the final 
determination. The "final determination " within the meaning of Article 6.9 was the KTC Final 
Determination dated  20 January 2015 , which  was circulated to  the Japanese respon dents only on 
17 March 2015.  
 WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- B-9 - 
 
55. Since the disclosure had to take place before the KTC Final Determination, there were only 
three documents issued by the Korean authorities which could possibly constitute disclosure of 
"essential facts " within the meaning  of Article 6.9: ( i) the OTI Preliminary Investigation Report, 
released on 26 June 2014 ; (ii) the KTC Preliminary Determination, released on 26 June 2014 ; 
and (iii) the OTI Interim Investigation Report, released on 23 October 2014.  
 
56. The KTC violated Ar ticle 6.9 because of the inadequate manner in which it disclosed certain 
information to the Japanese respondents. In particular, the KTC never adequately disclosed the 
following essential facts regarding: (i) price effects under Article 3.2, including fact s about alleged 
aggressive marketing; (ii) the so -called "reasonable selling price ", system sales, and 
interchangeability; (iii) volume of dumped imports under Article 3.2, including the actual level of 
dumped imports and market shares; (iv) the impact on the domestic industry under Article 3.4, 
including capacity utilization, market shares, and domestic industry profitability; and (v) causation 
under Article 3.5, including facts relating to any "causal relationship ", and facts relating to 
alternative cause s. 
 
57. These failures to disclose "essential facts " permeated the KTC 's injury analysis, with defects 
in all of the key issues under Article 3 of the Anti -Dumping Agreement.  
 
J. The KTC Violated Articles 12.2 and 12.2.2 of the Anti -Dumping Agreement  
 
58. The KTC failed to meet the requirements under Articles 12.2 and 12.2.2 of the Anti -Dumping 
Agreement. The date of "public notice " under Article 12.2 and 12.2.2 is "19 August 2015, " the date 
on which the official gazette to impose the definitive measures wa s published.  The KTC did not 
provide a report stating "all relevant information " supporting the imposition of definitive anti -
dumping duties against dumped imports. In particular, the KTC did not explain and provide all 
relevant information for its finding s: (i) that dumped imports and domestic producers were 
interchangeable, failing both to explain adequately its rationale and to address the contrary 
evidence; (ii) that price depression and suppression occurred because of dumped imports, failing 
to explain  adequately its rationale and to address the contrary evidence; (iii) that imports from 
countries other than Japan were having no negative influence; (iv) that total consumption was 
having no effect on the domestic industry; (v) that changing domestic expo rts were having no 
effect on the domestic industry; (vi) that expanded domestic industry capacity and intra -industry 
competition were having no effect on the domestic industry; and (vii)  that even the collective 
effect of these other factors could be ignor ed in the causation analysis.  
 
59. The KTC findings of price depression and suppression: (i) omitted the key facts relating to 
price comparability between dumped imports and domestic like products, and (ii) did not provide 
the factual information that the effect of dumped imports is otherwise to depress "to a significant 
degree " or prevent price increases, which would otherwise have occurred to "a significant degree ". 
 
60. Confidentiality concerns cannot excuse the KTC from its obligation to have provided a  report 
containing "all relevant information " material to its injury determination. For these reasons, the 
KTC failed to satisfy its obligations under Articles 12.2 and 12.2.2 of the Anti -Dumping Agreement.  
 
K. Korea 's Anti -Dumping Measures on Valves for P neumatic Transmissions From 
Japan Are Inconsistent with Article 1 of the Anti -Dumping Agreement and Article VI of 
the GATT 1994  
 
61. As a consequence of the inconsistencies with the Anti -Dumping Agreement described above, 
Korea 's anti -dumping measures on v alves for pneumatic transmission from Japan are also 
inconsistent with Article 1 of the Anti -Dumping Agreement and Article VI of the GATT 1994. No 
specific part of Article VI of the GATT 1994 will be violated, but Article VI as a whole will be 
violated.  WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- B-10 - 
 
ANNEX B -2 
SECOND INTEGRATED EX ECUTIVE SUMMARY  
OF THE ARGUMENTS OF JAPAN   
I. STANDARD OF REVIEW AND POST HOC JUSTIFICATIONS  
 
1. Korea has incorrectly accused Japan of seeking de novo  review. As clearly shown in each of 
Japan 's arguments, Japan is pointing out  "logical inconsistencies " or failures to provide 
"explanations of the data " in the Korean authorities ' examination that were not "objective " or 
"reasonable ", lacked "reasoned explanation ", and were not based upon "positive evidence ". Japan 
is pointing to alternative explanations that the authorities either ignored, or did not address 
objectively. None of this seeks de novo  review by the Panel, only that the Panel engage in the 
searching review that Article 11 of the DSU requires.  
 
2. Korea must justify the  KTC Final Determination based on findings, reasoning, and 
conclusions contained in that determination. Korea cannot now present post hoc  rationales to 
defend the WTO consistency of the KTC Final Determination. Under Article 11 of the DSU, panels 
are to re view only what the authority found, not what the authority might have found. As the 
Appellate Body in China – HP-SSST(Japan)/China – HP-SSST(EU)  noted, a panel is not to "develop 
an explanation of the basis for the investigating authority 's conclusions " and must instead focus on 
what the authority itself explained.  
 
II. LEGAL ARGUMENTS  
 
A. The KTC 's Price Effects Analysis Was Inconsistent with Articles 3.1 and 3.2 of the 
Anti-Dumping Agreement  
 
1. The KTC had an Obligation to Objectively Examine Both Signif icant Price 
Depression and Suppression  
 
3. Korea 's argument that the Panel should consider price depression and price suppression 
together fails because that is not what the KTC did in its Final Determination. The Panel must 
review the KTC determination as  written, and review whether the KTC objectively examined 
significant price depression and significant price suppression and based each conclusion about 
these separate and distinct price effects on positive evidence. To do otherwise would be to rewrite 
the KTC determination.  
 
2. The KTC Failed to Address the Necessary Counterfactual Question for its Price 
Depression and Price Suppression Findings  
 
4. The core of the obligation under Article 3.2 is to address the counterfactual question of 
whether domestic p rices would have been higher if the dumped imports had been sold at their 
normal value. The Appellate Body in China – GOES , US – Upland Cotton (21.5 – Brazil)  and EC and 
certain member States – Large Civil Aircraft  concluded that when seeking to show the e ffect of 
something, it is inevitable to address the counterfactual question of what would have been the 
situation but for that thing.  
 
5. Contrary to Korea 's argument, the obligation of the invest igating authority under 
Article  2.6 regarding like product i s fundamentally different from the obligation under Article 3.2. 
Korea continues to miss the key distinction: like product is about defining a broad category 
(usually a single broad category) that may include different products not even competing at all 
with each other, while price comparability and competitive overlap for Article 3.2 focuses on more 
direct competition (if any) between specific segments or product models of (1) the subject imports 
and (2) the domestic like products.  
 
6. The KTC did not addr ess any part of this core question to consider what would have 
happened to domestic prices in the absence of dumping, i.e., if the dumped imports had been sold 
at their normal value.  WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- B-11 - 
 
7. Korea refers to the circumstantial evidence of "fierce competition " and "increase in the 
manufacturing cost of the like product " to explain the price depression in 2012 and 2013. But the 
KTC did not adequately link these statements to the actual facts about the subject imports.  
 
8. The KTC did not provide any discussion eve n addressing – let alone showing – whether and 
to what extent the domestic like products would not have declined (or would have been higher) if 
the subject imports had been imported at a normal value in relation to this price/cost analysis. 
Rather, the KTC  referred to the "strengthened marketing activities of SMC Korea ". The KTC did not 
examine the competitive relationship, if any, between the subject imports and domestic like 
products, in conjunction  with the dumping margins at issue; it rather referred on ly to other factors 
such as "the expansion of sales organizations ". 
 
9. The only additional reasoning provided solely for price suppression was what the KTC/OTI 
called "reasonable sales price " analysis. However, the KTC Final Determination and the OTI Fina l 
Report provide no explanation of how this analysis was conducted. The analysis used a certain 
profit ratio (designated as BCI by Korea)  as a benchmark, a decision left unexplained in the 
determination, with no effort to provide any justification for why this ratio of operating profits was 
in fact "reasonable " in this context.  
 
3. The KTC Did Not Ensure the Price Comparability  
 
10. Contrary to Korea 's argument, ensuring price comparability is required for price effects 
analysis under Article 3.2. The key q uestion when analyzing price depression and suppression is to 
address the question of whether and to what extent in product scope the domestic prices would 
have been higher or would not have been lower if the subject imports had been imported at their 
norm al value. This analysis necessarily involves the comparison of the prices of the dumped 
imports and the domestic products to understand their relationship. Price comparability is key to 
all aspects of price effects under Article 3.2.  
 
11. Here, even the "series-to-series " comparisons and the "model -to-model " comparisons, 
allegedly conducted by the KTC/OTI, do not ensure, but rather disprove, the price comparability 
between the two broad baskets of subject imports as a whole and domestic products as a whole.  
 
4. Korea 's Additional Arguments Should be Rejected  
 
12. Korea now presents arguments about "representative models " and resale prices, and 
selected examples of lower prices. All of these arguments are post hoc  explanations that should be 
disregarded. More over, these facts and arguments just underscore the inadequacy of the KTC Final 
Determination discussion of price effects.  
 
13. The so -called "representative models " represented only a small part of the overall domestic 
industry and subject imports being c onsidered, and there is no explanation about why the 
"representative models " represent the domestic like products as a whole. According to the 
confidential parts – which had been completely redacted in the published version – of the OTI Final 
Report that K orea refers to, the "representative models " allegedly used for the price effects 
analysis are only a comparison between some of the products of SMC and TPC. TPC alone, 
however, represented only a certain percentage (designated as BCI by Korea)  of the produ ction by 
the domestic industry as a whole. Moreover, the "representative products " discussed in the price 
effects analysis were less than a certain percentage (designated as BCI by Korea)  of TPC total 
shipments. Nor is there any explanation that the examin ation of this limited portion of domestic 
like products is representative of the entire domestic industry. Thus, when using the 
"representative model " analysis, the KTC necessarily ignored the remaining part of the "domestic 
industry ", and therefore distor ted the analysis of price effects. This analysis was therefore biased 
and not based on positive evidence.  
 
14. Korea has tried to create the impression that the Korean authorities engaged in a careful 
comparison of subject import pneumatic valves and subst itutable domestic products, but this 
impression is wrong. This discussion of how the Korean authorities defined the like product (and 
decided what product exclusions to grant) cannot replace the analysis of price effects, because it 
does not examine market  interactions between the subject imports and domestic like products by 
examining their competitive relationship in conjunction with the dumping margin at issue.  
 WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- B-12 - 
 
15. Another of Japan 's main arguments was that the consistent and substantial margins of 
price overselling demonstrated the lack of any significant price effects. Korea 's response does not 
address the fundamental inconsistency between the alleged price effects and the substantial 
margins of overselling. Korea now tries to significantly rewrite the  KTC Final Determination. The 
KTC stated only that the subject import prices were "much lower " for "certain products and 
customers ". There is no elaboration in the KTC Final Determination. The OTI Final Report provides 
some limited data, but this data actu ally contradicts the assertion by the KTC.  
 
16. Korea goes even further, citing data not even discussed in the OTI Final Report. Korea 
refers to verification documents that were not discussed by KTC or OTI, but this data actually 
shows more overselling tha n underselling. Korea cites isolated statements by some customer, but 
this testimony, not accompanied by verifiable evidentiary documents, represents a tiny portion of 
the overall domestic market being examined at best.  
 
17. Ironically, Korea 's efforts to undermine the probative weight of the price overselling data 
actually highlight that the overall overselling was in fact typical of the vast majority of product and 
transactions. The KTC tried to dismiss the overselling data with a passing reference to "certain 
products and customers ", but that brief, vague, and largely incorrect statement does not justify 
disregarding the price overselling.  
 
B. The KTC 's Volume Analysis Was Inconsistent with Articles 3.1 and 3.2 of the Anti -
Dumping Agreement  
 
1. Legal Obli gation under Articles 3.1 and 3.2 Concerning Volume Analysis  
 
18. The Appellate Body has made clear that there is a "logical progression" between the 
obligations in Articles 3.2, 3.4 and 3.5. In order for an authority's finding under Article 3.2 to have 
"explanatory force", therefore, the authority must show that an increase in import volume is 
"significant" in light of both the "impact" on the domestic industry, as specified in Article 3.4, and 
the "causal link" between dumped imports and injury to the dom estic industry, as specified in 
Article 3.5. Korea appears to agree with this conclusion.  
 
19. Korea has also admitted that whether a volume increase is "significant " requires a 
"contextual consideration " of the volume increase. That is, Korea itself recog nizes that determining 
whether an increase is significant must be more than a "quantitative exercise ", and must consider 
"the relevant facts and circumstances of the case to come to a conclusion whether the magnitude 
or degree of increased dumped imports c an be considered significant ". 
 
20. Contrary to Korea 's argument, Japan is not asking for a full -fledged causation analysis. 
Japan is merely asking whether the KTC made an objective examination of whether subject 
imports replaced domestic like products, so  as to support its finding that the increase in import 
volume could objectively be described as "significant ". The impact analysis required under 
Article  3.4 depends upon an affirmative finding of a "significant " volume increase, and the injury 
determinati on required under Article 3.5 rests on the results of the impact analysis that depends 
upon the volume analysis. Therefore, Article 3.5 will not at all be rendered inutile . 
 
2. The KTC 's Examination of the Volume Increase of Subject Imports Was 
Deficient i n Several Respects  
 
a. Korea Has Failed to Show that the KTC Made Any Finding of 
Displacement of Domestic Sales by Subject Imports  
 
21. The KTC 's analysis of the "significance " of volume increases in dumped imports is flawed 
for many of the same reasons pl aguing its analysis of price effects. The KTC never examined the 
issue of whether there was any displacement of domestic sales by subject imports. Its examination 
of subject imports ' and domestic products ' market shares included no consideration of the ext ent 
to which imports and domestic products interacted with each other. It failed, for example, to 
examine the extent to which those subject imports that went into inventory could have had any 
interaction with domestic products in the market. In light of al l these  flaws, it is apparent that 
the KTC did not undertake an objective examination of the evidence before it.  
 WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- B-13 - 
 
22. While simultaneously denying that any examination of displacement is required, Korea 
maintains that "OTI actually made findings on the dis placement of the domestic like product by the 
dumped imports ". But the "findings " OTI made on the issue of displacement are vague, elliptical, 
and anecdotal. These findings also merely compared the price levels of the subject imports and 
domestic like prod ucts, without taking into consideration the margins of dumping at issue viewed 
in light of the competitive relationship (or lack thereof) between subject imports and domestic 
products. Korea quotes OTI as saying that "SMC Korea supplied products  at prices as low as those 
of the like products to customers  in competition, such as new projects or large customers etc., and 
thereby encroached on the market of domestic companies  …". This statement is stunning in its 
vagueness. What does it mean to sell at a price  "as low as " domestic products – does it mean at 
almost the same price, or at exactly the same price; how close are the prices, and which product, 
domestic or imported, is priced lower? What are the "products " that SMC is supposed to have sold, 
and what do mestic products are they being compared to? What are "customers in competition "? 
Are they the same customers or are they merely customers in the same general category? OTI 's 
report provides no concrete information, even in non -confidential form, that would  answer any of 
these questions.  
 
23. The mere fact that some imports were sold at prices "as low as " those of the domestic 
products, even if true, does not mean that subject imports took any sales away from domestic 
producers due to the dumping. Without an y evidence that the low prices caused by the dumping of 
subject imports actually resulted in significant sales lost by domestic producers, in other words, 
that domestic like products would have been sold in greater quantities if the subject imports had 
been sold at their normal value, OTI 's allegations of market "encroachment " are mere supposition.  
 
b. The KTC 's Examination of Market Shares Failed to Show Any Market 
Interaction Between Imports and the Domestic Products.  
 
24. Korea also contends that it has  conducted a market share analysis of the dumped imports 
and the domestic products. The Korean authorities, however, presented only a numerical 
comparison of the volume, without examining market interactions by considering the competitive 
relationship betw een the dumped imports and domestic like products in conjunction with the 
margins of dumping.  
 
C. The KTC 's Analysis of Adverse Impact Was Inconsistent with Articles 3.1 and 3.4 of 
the Anti -Dumping Agreement.  
 
1. The KTC 's Legal Obligation under Articles 3 .1 and 3.4 is to Address the 
Counterfactual Question by Examining All Indices  
 
25. Article 3.4 requires the authority to examine "the impact of dumped imports " on the 
domestic industry, and includes a specific list of those factors through which that "impact" is to be 
evaluated. Like other subsections of Article 3, this provision requires an investigating authority to 
address the counterfactual question of how these factors would have reacted if there had been no 
dumping.  
 
2. The KTC 's Impact Analysis Did N ot Follow Logically from its Analysis of 
Volume and Price Effects under Article 3.2  
 
26. As explained above and as confirmed by the Appellate Body, there is a logical progression 
between Articles 3.2 and 3.4. The authority 's findings about prices and volum e of subject imports 
must have explanatory force in determining the "impact of the dumped imports " under Article 3.4.  
 
27. It is noteworthy that Article 3.4 requires an examination of the impact of the dumped 
imports on the "domestic industry " as a whole. Consequently, if the authority found price 
depression or suppression, or volume replacement by subject imports with respect to only a 
limited fragment of domestic like products, it should proceed with the analysis under Article 3.4 on 
the premise that the remaining portion of the domestic industry had not experienced any impact 
from the dumping. The KTC 's analysis of volume and price effects, if it were correct for a small 
portion of the dumped imports, must be used accordingly as the basis for the analysis  of the 
impact of the subject imports on the domestic industry as a whole. Since the KTC 's impact analysis 
did actually examine the impact of the dumped products on the domestic industry as a whole, WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- B-14 - 
 
without regard to the fact that the KTC cannot find the p rice effect of the subject imports on the 
domestic like products as a whole, it is necessarily inconsistent with Article 3.4.  
 
3. The KTC Failed to Examine Whether the Subject Imports Provided 
Explanatory Force Regarding the Condition of the Domestic Indus try 
 
28. The increase in subject imports ' market share in 2013 could not have come at the expense 
of the domestic industry and the KTC never explains how they could. Subject imports were priced 
higher than domestic products in both 2012 and 2013, which mak es it highly unlikely that subject 
imports took any sales away from domestic products in 2013 based on price (with or without the 
margin of dumping added to subject import prices). Moreover, the evidence before the KTC 
showed that subject imports sold in d ifferent market segments from those served by domestic 
products, and there was no evidentiary basis for concluding that subject imports displaced 
domestic products to any significant degree.  
 
29. The significant growth in the size of domestic consumption i n 2013 largely represented 
domestic consumption 's return to levels that existed at the outset of the period of investigation. 
While domestic consumption increased by 52.8 percent in 2013 as compared to 2012, it increased 
by only 14 percent when compared to  2010. The KTC focus on 2013 in isolation, without 
considering the trends in consumption over the entire period, did not constitute an objective 
analysis, and did not considering alternative explanations for the data.  
 
30. The effects of subject import pri ces and the increase in import volume, as properly 
considered pursuant to Article 3.2, must have explanatory force for the determination of the 
impact of dumped products under Article 3.4. The KTC 's impact examination under Article 3.4, 
however, did not co nsider the extent to which either price or volume competition had explanatory 
force. The KTC merely examined the relative changes in market share in one year (2013), without 
considering any of the other evidence that vitiated the explanatory force of the i nteraction of 
subject import and domestic products in the market, either in terms of price or volume.  
 
4. The KTC Failed to Examine Two of the Specifically Required Factors Listed in 
Article 3.4  
 
31. Article 3.4 includes a list of several specific "economi c factors and indices " that must be 
"evaluated " as part of the authority 's "examination " of the impact of dumped imports. Although 
Article 3.4 states that the list of such factors is "not exhaustive, " there is no doubt that the 
authority must undertake the  evaluation of every one of the listed factors. The text is quite specific 
that the authority 's examination "shall include " an evaluation of all l isted factors. Although 
Article  3.4 does not specify how the authority is to undertake that evaluation, an exa mination that 
does not include an evaluation of any one or more of the listed factors does not conform to the 
requirements of Article 3.4.  
 
32. Japan submits that there are two factors among those listed in Article 3.4 that the KTC did 
not examine at all i n this case  – namely , the "magnitude of the margin of dumping ", and the 
"actual and potential negative effects on  … ability to raise capital or investments ". 
 
D. The KTC 's Causation Analysis was Inconsistent with Articles 3.1 and 3.5 of the 
Anti-Dumping Ag reement  
 
1. Legal Obligations under Articles 3.1 and 3.5  
 
33. In order to show the requisite logical progression from Article 3.5, an authority 's findings 
with respect to Articles 3.2 and 3.4 must also qualify as being based on positive evidence and an 
objective examination of that evidence. Flaws or failures in the preceding two Articles would 
necessarily affect the determination of a causal relationship under Article 3.5. Even Korea appears 
to accept this proposition. In this case, the flaws in the KTC 's analysis of volume and price effects 
under Article 3.2 and its impact analysis under Article 3.4 are so substantial as necessarily to 
render its determination of a causal relationship under Article 3.5 completely unsustainable.  
 
34. The determination of ca usal relationship under Article 3.5, however, encompasses more 
than the underlying findings under Article 3.2 and Article 3.4. First, the authority must consider 
whether the changes in the economic indicators of the domestic industry due to the dumping, WT/DS504/R/Add.1  
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- B-15 - 
 
which it identifies under Article 3.4, comprehensively amount to "material injury " to the domestic 
industry. Second, the authority must still consider "all relevant evidence " that establishes or 
negates a causal relationship, over and above the information o n price effects, volume and impact. 
Moreover, Article 3.5 requires the authority to "examine any known factors other than the dumped 
imports ". 
 
2. The KTC 's Causation Determination Lacked a Proper Foundation in a WTO -
consistent Analysis of Volume, Price Ef fects, and Impact of Subject Imports  
 
35. In its First Written Submission,  Korea accepts Japan 's argument that a determination of 
causal relationship under Article 3.5 depends upon the underlying findings under Articles  3.2 
and 3.4. Korea 's reliance on mar ket share and domestic prices depends upon determinations that 
the KTC made under both Articles 3.2 and 3.4, and the reliance on the condition of the domestic 
industry depends upon findings the KTC made under Article 3.4.  
 
36. An examination of the flawed analyses the KTC made under Articles 3.2 and 3.4 makes 
clear, however, that the determination of causation made by the KTC under Article 3.5 was itself 
fatally flawed as a result of the flaws in the preceding analyses.  
 
3. The KTC Failed to Establish the R equisite Causal Relationship between the 
Subject Imports and the Condition of the Domestic Industry  
 
37. Korea has not even attempted to rebut  Japan 's claims, saying only that "Japan basically 
repeats the same arguments it raised under Article 3.2 ". That i s not a rebuttal. Although the facts 
examined under Article 3.2 may be the same as they are under Article 3.5, the "consideration " 
required of the authority by Article 3.2 is different from the "demonstration " of a causal 
relationship required by Article 3 .5. The facts on pricing examined by the KTC fail to demonstrate 
the causal relationship required by Article 3.5. Korea 's failure to rebut Japan 's analysis of pricing 
trends in the context of Article 3.5 may be taken as a virtual concession of that conclus ion. 
 
38. The trends in subject import volume and import prices, when compared to the trends in 
domestic industry volume, prices and profitability, all show no relationship between subject 
imports and the condition of the domestic industry. Under the circu mstances, the KTC 's finding of 
a causal relationship between subject imports and injury was not based on an objective 
examination of the evidence before it.  
 
4. The KTC Failed to Separate and Distinguish Injurious Effects of Other Known 
Factors from Injuri ous Effects of Subject Imports  
 
39. Korea 's defense of the KTC 's causation determination relies "primarily " on findings the KTC 
made under Article 3.2 and 3.4. Its response to Japan 's argument that the KTC failed to separate 
and distinguish other known fac tors is sparse. Korea notes that the KTC examined non -subject 
imports, domestic consumption, export volume and the cost of raw materials. Korea fails to show, 
however, how the KTC separated and distinguished these factors from the injurious effects of 
subject imports. Equally significant, Korea fails to rebut Japan 's arguments about other factors 
that the KTC appears not to have considered at all.  
 
E. The KTC 's Definition of Domestic Industry Was Inc onsistent with Articles 3.1 
and 4.1 of the Anti -Dumping Ag reement  
 
1. Legal Obligation Under Articles 3.1 and 4.1  
 
40. The Appellate Body has confirmed that the term "major proportion " in Article 4.1 requires 
both quantitative and qualitative assessments. Thus, it is not sufficient for the investigating 
authority  merely to include domestic producers of the like products accounting for a quantitatively  
large proportion of the total domestic production in the definition of the domestic industry. When 
those domestic producers that voluntarily come forward to the auth ority are not qualitatively  
sufficient – when they are different from the rest of the industry – the authority must include other 
producers in the domestic industry definition.  
 
41. What is required to satisfy the qualitative aspect of the "major proportio n" definition should 
be analysed on a case -by-case basis, depending on the industry situation in each case. In an WT/DS504/R/Add.1  
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- B-16 - 
 
industry where the number of domestic producers of like products is limited and the businesses of 
the domestic producers are not homogenous, a  domestic industry definition that includes only a 
small number of companies is more susceptible to a material risk of distortion. Thus, the 
investigating authority would have to provide a particularly convincing explanation as to why the 
subset of the tot al domestic production could be considered to substantially reflect the total 
domestic production as a whole.  
 
42. Korea argues that "facts available " are not appropriate for the injury analysis. In contrast 
to this position before the Panel, Japan notes t hat Korea itself mentioned in its notice for the 
initiation of the investigation that "facts available " may be used for the injury analysis.  There is 
nothing "unrealistic " about the use of "facts available ". The point is simply that when faced with a 
gap i n the record, the authorities can try to fill that gap as best they can with the available 
information. Ignoring the gap, and pretending it does not exist, is not preferable and in fact 
creates the situation of distorted results when the gap reflects a dis tinct domestic industry from 
the one that has voluntarily responded.  
 
2. Korea Has Failed to Rebut Japan 's Argument That the KTC 's Definition of the 
Domestic Industry Did Not "Substantially Reflect the Total Domestic 
Production " 
 
43. The KTC 's approach to the domestic industry definition predominantly focused on the 
numerical threshold, i.e., the quantitative  aspect, and made no effort whatsoever to ensure the 
qualitative  aspect of the "major proportion " requirement. It appears that once the Korean 
authorit ies secured participation of domestic producers that account for over 50 %, they did not 
think it necessary to do anything else.  
 
44. Regarding the quantitative aspect, the KTC did not consider the available evidence 
objectively. The OTI never confirmed and  updated, or verified, this information with subsequently 
submitted information for the two partially cooperative firms, Yonwoo and Shin Yeong. Also, the 
evidence before the Korean authorities presented inconsistent information about the levels of 
producti on for the next largest of the domestic producers.  
 
F. The KTC Violated Articles 6.5 and 6.5.1 of the Anti -Dumping Agreement by Failing 
to Require Providers of Information to Show "Good Cause " or to Provide Adequate 
Non-Confidential Summaries  
 
1. The KTC Failed to Establish that "Good Cause " Was Shown as Required by 
Article 6.5  
 
45. Contrary to Korea 's allegation, the petitioners ' "implicit assertion " of good cause by 
deleting allegedly confidential information in the public version of their submissions in the 
underlying investigation does not satisfy the requirements of Article 6.5. As confirmed by the panel 
in Korea – Certain Paper,  good cause must be shown for all categories of information, and cannot 
be assumed regardless of the nature of the information  at issue. Moreover, absent some showing  
of "good cause ", a panel has no way to review what the authority has done and whether that 
action complies with Article 6.5. Also, information that is truly confidential in one case may not be 
confidential in anothe r case. That is why a generic approach set forth in a law is not enough.  
 
2. The KTC Failed to Require Non-Confidential Summaries in "Sufficient Detail" 
to Convey the "Substance " of the Information as Required by Article 6.5.1  
 
46. Article 6.5.1 allows for  non-confidential summaries of confidential information, but those 
summaries must be in "sufficient detail to permit a reasonable understanding of the substance of 
the information ". Simply redacting numerical information, while leaving some general narrati ve, 
does not comply with Article 6.5.1. To redact numerical information from tables and replace it with 
nothing at all cannot permit a "reasonable understanding " of the "substance " of the information, 
even if the parties still can discern the category of i nformation being withheld.  
 
47. Korea argues that the "substance " means the "essence " of the information, but reads this 
concept too narrowly. The "substance " of the information will vary case -by-case, but depends on 
how the information will be used. Since  the point is to allow parties to understand enough to WT/DS504/R/Add.1  
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- B-17 - 
 
defend their interests, the focus should be on how the authorities will use that information being 
summarized.  
 
48. Article 6.5.1 contemplates exceptional situations when no summary can be provided, bu t 
Korea has not invoked this provision, and the KTC never made any efforts to qualify for this 
exception. Korea notes this theoretical possibility, but does not link this possibility to the facts of 
this particular dispute.  
 
49. Korea notes that the KTC so metimes provided its own non -confidential summaries, and 
argues Japan 's claim is a "purely formalistic argument of harmless error ". However, the text of 
Article 6.5.1 requires the party to submit the non -confidential summary, and does not provide for 
an ex ception if the authority later provides its own summary .  
 
G. The KTC Violated Article 6.9 of the Anti -Dumping Agreement by Failing to Disclose 
the "Essential Facts " Before its "Final Determination " 
 
50. Essentially admitting the inadequacy of the disclosu re prior to the KTC Final Determination 
(and the OTI Final Report on which the KTC based its final determination), Korea shifts the time 
line to the Minister of Strategy and Finance 's ("MOSF ") decision to impose duties. But, this 
argument fails both legall y and factually.  
 
1. The MOSF Decision Was Not a "Final Determination " For P urposes of 
Article  6.9 
 
51. Korea argues that "a final determination " means a decision to impose duties, but this 
interpretation of Article 6.9 is wrong. The text of Article 6.9 ex pressly distinguishes between "a 
final determination " and "the decision " to impose definitive measures. The remainder of Article 6 
supports this distinction between "final determination " on various issues and the "decision " to 
impose duties. Also, an anti -dumping "duty is imposed " under Article 9.2 only if the imports have 
been "found to be dumped and causing injury ", a clear reference back to Articles 2 and 3 albeit 
without the specific word "determination ". Thus, the Anti -Dumping Agreement as a whole refl ects 
this distinction between "determinations " and the "decision " set forth in Article 6.9.  
 
52. In the communication of 12 December 2014 sent from the KTC to the legal counsel of the 
interested parties, the KTC made a notification of the second meeting of  the interested parties, 
where the KTC would "explain essential facts under consideration which form the basis of 
determining the final dumping margin ". This communication expressly refers to Article 6.9 of the 
Anti-Dumping Agreement (as well as the releva nt provision in the municipal law), and states that 
the meeting would be held in accordance with this provision. It is thus evident that the KTC itself 
was aware that its "Resolution of Final Determination " does constitute "a final determination " 
within th e meaning of Article 6.9, and accordingly, the disclosure of essential facts needed to be 
done before the issuance of the KTC 's "Resolution of Final Determination ". 
 
2. The Korean Authorities Did Not Disclose the "Essential Facts " as Required by 
Article 6. 9 to Allow the Japanese Respondents to Defend Their Interests  
 
53. Japan 's claim under Article 6.9 does not call for the disclosure of "raw data " but rather for 
the disclosure of the compilation of the raw data into the "essential facts ". Korea repeatedly refers 
to Japan demanding the "raw data ", but these statements are simply wrong.  
 
54. Korea refers to Japan demanding the "minor, intermediate " findings, but this argument 
misunderstands the structure and nature of a final determination of injury under Art icle 3. 
Japan 's 14 specific items were grouped into four categories, each one related to one of the key 
issues the authority must consider under Articles 3.1, 3.2, 3.4, and 3.5 in order for the authority 
to make the final determination of injury. These fou r categories may be "intermediate " findings in 
the sense that they all build up to an overall finding of injury, but they are in no way "minor " 
findings.  
 
55. Korea invokes Article 6.5 and the need to protect confidentiality, but the need to protect 
confid entiality does not excuse an authority 's failure to disclose the "essential facts " in some way 
that still protects the confidentiality.  
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- B-18 - 
 
56. Japan has presented arguments about 14 specific items, and Korea has not responded to 
each of those specific items.  The Korean arguments do not turn these "essential facts " into 
something that need not have been disclosed, and do not establish that the Korean authorities 
provided the necessary disclosure.  
 
57. For all of these reasons, Korea has failed to rebut Japan 's showing that the KTC acted 
inconsistently with Article 6.9 by not disclosing the "essential facts " regarding these 14 specific 
issues that were such an important part of the injury determination in this case.  
 
H. The KTC Violated Articles 12.2 and 12.2.2 of the Anti -Dumping Agreement by Not 
Providing Adequate Disclosure in a Public Notice  
 
58. Korea erroneously believes that because the KTC and OTI documents were "lengthy and 
detailed " and the investigation was "extensive and in -depth ", the Korean authorit ies must have 
complied with their obligations. But Korea admits that "not every detailed aspect of the factual 
discussion and intermediate findings " was included. That is the crux of the dispute. Japan does not 
believe the seven issues can be dismissed as mere "detailed aspects " and "intermediate findings ". 
Rather, Japan believes that these issues are "material " within the meaning of Article 12.2 and "led 
to the imposition of final measures " within the meaning of Article 12.2.2.  
 
59. Korea has engaged in  post hoc explanations to explain its injury analysis under Article 3. 
Japan is of the view that those explanations were not actually considered by the KTC, and thus 
cannot save the defective determination. However, even if the Panel were to conclude that the  KTC 
considered those facts, and found those facts to qualify as "material " such that they "led to the 
imposition of final measures " within the meaning of Article 12.2, they are not reviewable in the 
published document. The Appellate Body has noted this ob ligation to explain the basis for decisions 
under Article 12, and stressed that the reviewing panel must examine the rationale or explanation 
provided by the investigating authority in its determinations. Thus, in any case, the KTC 's post hoc  
explanations are inconsistent with Articles 12.2 and 12.2.2.  
 
I. Korea Failed to Rebut the Consequential Claim  
 
60. Korea has not presented any argument against Japan 's consequential claims, other than 
the substantive arguments presented above that have already been ad dressed by Japan. The 
consequential claims thus stand.  
 
_______________  
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- C-1 - 
 
ANNEX C  
ARGUMENTS OF KOREA  
Contents  Page  
Annex C-1 First integrated executive summary of the arguments of Korea  C-2 
Annex  C-2 Second integrated executive summary of the arguments o f Korea  C-12 
 
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- C-2 - 
 
ANNEX C -1 
FIRST INTEGRATED EXE CUTIVE SUMMARY OF TH E ARGUMENTS OF KOREA  
I. INTRODUCTION  
 
1. This dispute concerns Korea's imposition of definitive anti -dumping duties on pneumatic 
valves from Japan  (the "dumped imports") , as implemented by t he "Decision to Apply Anti -
Dumping Duties on the Pneumatic Transmission Valves from Japan" and the "Rules on Imposition 
of Anti -Dumping Duties on Pneumatic Valves from Japan" of the Ministry of Strategy and Finance 
("MOSF"). These measures were based on th e dumping and injury determinations made by the 
Korea Trade Commission ("KTC") , as set forth in the "Resolution of Final Determination on 
Dumping and Injury to Domestic Industry of Valves for Pneumatic Transmissions from Japan " 
dated  20 January 2015. The r elevant factual findings and recommendations  made by KTC in its 
Final Resolution were, in turn, substantially based on the F inal Investigat ion Report  of the Office of 
Trade Investigation ("OTI").  
 
2. Japan brings nine claims relating to Korea's anti -dumpin g measure on pneumatic valves. 
These claims can be grouped into five substantive claims, three procedural claims and one 
consequential claim under Article 1 of the Anti -Dumping Agreement and Article VI of the General 
Agreement on Tariffs and Trade of 1994.  
 
3. The relevant question before the Panel is not whether it would have reached the same 
conclusions as the Korean authorities did, but rather whether the facts were properly established, 
whether these facts were objectively examined, and whether a reason able and reasoned 
explanation was provided as to how these facts supported the findings made. The Korean 
authorities' examination was critical and searching, and they reflected on all of the counter -
arguments and alternative readings of the facts presented  by the Japanese exporters, the large 
majority of which are simply repeated by Japan in the current dispute.  
 
II. FACTUAL BACKGROUND  
 
4. The underlying investigation involved an extensive discovery and examination of the facts 
collected by the Korean inves tigating authorities over many months and through a constant 
dialogue with the interested parties. Under Korean law, OTI is a subdivision of KTC specialized in 
anti-dumping investigations. OTI carries out the anti -dumping investigation and reports to KTC 
(i.e. nine commissioners: one standing and eight non -standing members) that adopts a resolution 
based on OTI's findings. KTC is only vested with the authority to conduct anti -dumping 
investigations. KTC's resolution is then communicated to MOSF , which  has the authority to hear 
the parties, conduct additional investigative steps, and make the final determination , including the 
decision whether or not to impose anti -dumping measures.  
 
A. HISTORY OF THE KOREAN PNEUMATIC VALVE MARKET & JAPANESE EXPORTERS ' MARKET  SHARE 
EXPANSION POLICY  
 
5. Japan has historically been the main supplier  of pneumatic valves to the Korean market,  and 
SMC Corporation, a respondent in the underlying investigation  has been  the largest producer of 
pneumatic valves in the world for decades . TPC, one of the applicants in the underlying 
investigation, was SMC's distribution agent in Korea until 1997. In 1995, however, 
SMC established its Korean subsidiary, SMC Korea, and started to sell its pneumatic products in 
the Korean market directly thr ough SMC Korea. TPC naturally had to switch from a distributor to a 
producer, and began producing its own pneumatic products in 1997. Therefore, it was not 
until 1997 that Japanese exporters faced competition from domestic producers in Korea. To date, 
SMC maintains a dominant position in the Korean market and is by far the largest exporter from 
Japan. In 2013, the year of the dumping, SMC supplied [[ ***]]% of the total dumped imports 
from Japan. Its market share in Korea was in the range of [[ ***]]% to [[ ***]]%, which 
represented a rapid increase . There are nine domestic producers of the like product in Korea, but 
they are all relatively small companies.  WT/DS504/R/Add.1  
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- C-3 - 
 
6. Throughout the underlying investigation, the applicants repeatedly asserted that [[ ***]] 
was engaging in low -pricing and aggressive marketing strategies with a view to expanding its 
market share in Korea. KTC verified such complaints, and included the results of its verification in 
the Final Resolution and the Final Report. The facts made clear that the Ja panese exporters had a 
genuine motivation to implement an injurious dumping campaign that transpired in the form of the 
alleged "aggressive marketing" or "strategic low pricing" in the Korean valves market. For 
example, SMC set a target to expand its globa l market share from 32% in 2012 to 50%. It is 
telling that the Japanese respondents' dumping, accompanied by aggressive marketing  or strategic 
low pricing , took place in Korea during the period of 2012 -2013, and that their  market share, 
which had been decl ining in 2012 to [[ ***]]%, picked up dramatically to [[ ***]]% in 2013.  
 
B. COMPARABILITY AND COMPETITION BETWEEN T HE DUMPED IMPORTS AND THE LIKE DOMESTIC 
PRODUCTS  
 
7. The product subject to the underlying investigation is characterized by a limited number of 
key features and functions. It is not a complex product that consists of thousands of completely 
different types that cannot be compared and that are not in competition with one another, as 
Japan suggests. Pneumatic valves are one of the three key compo nents of the larger "pneumatic 
system ". The other two key components are air units and cylinders (i.e. the actuators). Pneumatic 
systems constitute an essential component of production lines and other forms of automated 
manufacturing facilities in a wide -range of industries. It is the pneumatic valve that controls and 
directs the flow of compressed air in order to operate cylinders. A wide variety of different 
pneumatic valve  models  can be used interchangeably within a pneumatic system so long as they 
can a ctuate the required cylinder.  
 
8. Pneumatic valves are all classified under HS heading 8481.20. In the underlying 
investigation, the product scope was limited to those pneumatic valves that control the flow of the 
compressed air with less than 10 bar press ure to operate the cylinders with an inside diameter of 
not more than 320mm.  
 
9. Both the dumped imports and the like domestic products covered a variety of product 
"models". During the period 2010 to 2013, [[ ***]] product models of the Japanese dumped 
imports were imported into Korea, while [[ ***]] product models of the like domestic products 
were sold in the Korean market. In 2013, the year of the dumping, the Japanese respondents 
sold [[***]] product models while the domestic industry sold [[ ***]] produc t models.  
 
10. Despite such apparent diversity, KTC found that the constituent product models of the 
dumped imports shared the same or similar physical characteristics, end -uses, manufacturing 
processes, and distribution channels. KTC also found that the l ike domestic products, as a whole, 
presented the same or similar physical characteristics, constituent parts, end -uses, manufacturing 
processes, distribution channels, quality, and consumer preferences as the dumped imports. In 
examining the comparability,  OTI did not simply rely upon its "like product" definition, as Japan 
asserts. Instead, it examined the comparability between specific product models or between 
specific product segments within the broad baskets of the dumped imports and the like domestic 
products.  
 
11. First, based on the products sold in 2013, OTI specifically identified corresponding 
"representative models" of the dumped imports and the like domestic products which shared the 
same basic physical characteristics and which were sold in lar ge volumes. The representative 
models shared six key physical characteristics based on (i) operating method; (ii) number of ports; 
(iii) valve size; (iv) switching method; (v) voltage; and (vi) wiring method. Thus, the 
representative models from one produc t group were deemed directly substitutable and competitive 
with the corresponding representative models from the other product group. OTI found that there 
were [[ ***]] representative models of the dumped imports which had the same physical 
characteristics as [[***]] representative models of the like domestic products.  
 
12. Next, OTI calculated the proportion of these representative models in relation to the total 
amount of valve sales. OTI found that, as of 2013, the [[ ***]] representative models of the 
dumped imports accounted for [[ ***]] of the total sales of the dumped imports in Korea, while the 
[[***]] representative models of the like products accounted for [[ ***]] of their total sales.  
 WT/DS504/R/ Add.1  
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- C-4 - 
 
13. OTI then expanded its analysis by comparing the valve sales o n the basis of the "series" of 
products. A series of products, in OTI's analysis, is a group of the product models which share the 
same or similar physical characteristics. Thus, the dumped imports and the like domestic products 
that fell within the same s eries were deemed substitutable with each other and therefore in 
competition. OTI found that there were [[ ***]] corresponding series in which the representative 
models and their variations of the dumped and domestic products were included and that 
these  [[***]] corresponding series accounted for [[ ***]]% of total sales of the dumped imports 
and [[ ***]]% of total sales of the like domestic products in 2013.  
 
14. This does not mean that the products not belonging to the above [[ ***]] corresponding 
series were  not substitutable or competitive with each other. As observed by OTI, the models that 
fell outside the scope of the [[ ***]] corresponding series (less than [[ ***]]% of the total sales) 
were those models which were simply customized to particular specifica tions required by specific 
customers. As such, these models were still substitutable with the products in the other product 
group, depending on the preference of the specific customer, or could be developed by the 
domestic industry once demand for such pro ducts arose . 
 
15. In addition to objectively verifying the comparability based on product characteristics, KTC 
examined how the dumped and domestic products actually  competed with each other in the 
market based on other positive evidence, such as customer evaluations and the result of on -site 
verifications by OTI. Customers confirmed that they were using, or could use, the dumped and the 
like domestic products interchangeably and  that they were competing fiercely in the market. 
Moreover, the competition bet ween the dumped and the like domestic products was demonstrated 
by the respective development of market shares over the course of the POI. Tellingly, when the 
market share of the dumped imports decreased in 2011 and 2012, the market share of the like 
domes tic products increased. In 2013, when the market share of the dumped imports sharply 
increased, the market share of the like domestic products fell by more than [[ ***]]%. This market 
share development demonstrated the existence of close market interaction and competition 
between the dumped and the like domestic products.  
 
16. Thus, on the basis of the above -described analysis of objective characteristics and market 
interaction, KTC concluded there was competition between these products that supported the 
explanatory force of the dumping for purposes of examining its effects on prices and the impact on 
the domestic producers . 
 
III. JAPAN'S SUBSTANTIVE CLAIMS ARE FLAWED  
 
17. Korea considers Japan's legal claims to be without merit. Japan's legal claims under A rticle 3 
of the Anti -Dumping Agreement are mainly premised on the groundless argument that there was 
no competition between the products, and that the investigating authorities thus erred in their 
analyses of the explanatory force of the dumped imports for  purposes of objectively examining the 
volume, price, and other injury factors. In addition to lack ing a  factual or legal basis for these 
assertions, Japan fails to demonstrate that KTC's analyses under Article 3 were not objective or 
not based on positive  evidence.  
 
18. Specifically, MOSF's  decision to impose anti -dumping duties on imports of pneumatic valves 
from Japan was the result of KTC's objective examination based on positive evidence of dumping, 
injury and causation. KTC considered the required ele ments that together, in a logical progression, 
formed the injury and causation determination, and it conducted a critical and searching 
examination of the record evidence in conformity with the basic principles of good faith and 
fundamental fairness. It co nducted the examination in an unbiased manner, without favoring any 
interested party or group of interested parties. In a reasoned and reasonable manner, KTC made a 
number of intermediate factual findings that supported its determination of material injury  to the 
domestic industry in Korea as a result of the dumped imports.  
 
19. Japan disagrees with the findings of KTC but fails to point to any legal errors. Japan's 
submission is an attempt at re -litigating before the Panel the issues that were raised befor e the 
investigating authorities, hoping that the Panel will conduct a de novo  review and reach different 
conclusions on the facts. That, however, is not the task of the Panel, which is not the trier of fact 
in the context of WTO disputes involving anti -dumping measures. The Panel should be mindful of 
the standard of review as articulated in Article 17.6 of the Anti -Dumping Agreement and Article 11 
of the DSU. Under the applicable standard of review, the question is not whether the Panel would WT/DS504/R/Add.1  
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- C-5 - 
 
have reached t he same conclusion as the investigating authority did. The task of the Panel is to 
determine whether the investigating authority was biased in its examination of the evidence or 
failed to properly establish the facts. Japan fails to present a prima facie  case of such lack of an 
objective examination or failure to properly establish the facts by KTC.  
 
A. JAPAN'S CLAIMS RELATING TO TH E PRICE EFFECTS OF THE DUMPED IMPORTS UNDER ARTICLES 3.1 
AND 3.2 OF THE ANTI-DUMPING AGREEMENT ARE FLAWED  
 
20. In relation to t he price effect findings under Article 3.2, KTC properly considered this 
element by dynamically analyzing the relevant price trends, based on import prices as well as on 
so-called "actual" sales prices, that is, the price at which the products were re -sold to the first 
independent buyer in the Korean market . The price developments and trends were examined over 
the entire POI, as well as making an end -point to end -point comparison. KTC made several 
observations, all supporting its finding that the prices of the dumped imports had explanatory 
force for the price suppression and depression  of domestic prices at the end of the POI:  
 
"[The] suppression of the price increase as well as the decrease in the price appears 
to have been caused by the fierce competition  with the dumped products that had 
strong dominance in the domestic market. In particular, in 2013, the drastic  decrease 
in the price of the dumped products apparently  depressed the price of the like product 
despite strong factors warranting  an increase of  sales price, such as the increase in 
the manufacturing cost of the like product.  As such, the dumped products suppressed 
the increase in the price of the like product throughout the entire period of 
investigation, and caused the price decrease of the like  product in 2013 during which 
the prices of dumped imports drastically decreased.  
… 
[KTC] finds that the dumped products suppressed price increases of the like product 
and caused decreases thereof, although the average sales price of the dumped 
products wa s higher than that of the like product.  
The average sales price of the dumped products was higher due to their price 
differential in accordance with models, option details or customers, but it was found 
that the sales price of the dumped products was much lower than the average sales 
price in the case of certain products or customers for which the degree of competition 
with the domestic industry was fierce, which had the effect of suppressing increases in 
the price of the like product or causing decreases t hereof. It was investigated that 
[[***]] caused the domestic industry to decrease the sales price or refrain from 
increasing it in order to respond to strengthened marketing activity of [[ ***]], which 
consistently expanded its sales organizations and used its dominant position to attract 
distribution agents or discourage defections of its distribution agents, and thus the 
domestic industry had to respond to such strengthened marketing activities of [[ ***]] 
and became forced to decrease the sales price or re frain from increasing prices".  
21. KTC observed that, overall, prices of the dumped products and the like domestic products 
moved in the same downward direction throughout the entire POI. In particular, it noted that 
prices of the dumped imports decreased significantly in 2013, when dumping took place in Korea. 
During the same period, prices of the like domestic products also decreased, although costs 
increased and demand surged, and prices were thus expected to rise. In addition, KTC observed 
that, despite  the fact that the average import price of the dumped imports were higher than prices 
of the like domestic products, the Japanese respondents resold the dumped imports in the Korean 
market at prices similar to or even below the sales prices of the like dom estic products when there 
was direct competition with the like domestic products.  
 
22. Based on these observations, KTC concluded that the dumped imports had the effect of 
depressing and suppressing the prices in the domestic market.  
 
23. Japan's argument of alleged divergence in price trends between domestic and dumped 
products  is without merit . KTC found that the slight increase in the "average" import price of the 
dumped products in 2012 was not a significant factor that undermined the effect of the dump ed 
imports on prices of the like domestic product as the prices moved overall in the same downward WT/DS504/R/ Add.1  
BCI deleted, as indicated [[***]]  
- C-6 - 
 
direction throughout the entire POI. Further, KTC's finding was supported by a dynamic 
assessment of the import price trends of the competitive "representati ve models" and the trends 
of the actual sales prices in the Korean market, which all showed a downward trend even in 2012. 
Also, although Japan alleges that there was a divergence in prices in 2013 because prices of the 
like domestic products fell modestly  while the price of the dumped imports fell drastically, KTC 
objectively confirmed that prices of the like domestic products fell slightly because they were 
already too low to fall to the same extent as the dumped imports. In any case, despite any of 
these  alleged divergent trends, KTC confirmed a consistent and prevalent practice of Japanese 
exporters selling the dumped products at low prices to compete with domestic products, and such 
finding negated any allegation of lack of interaction or competition. T he strategic low pricing of the 
dumped imports did not take place only with respect to a limited number of products but it was 
consistently implemented in respect of a broad range of the products and customers – thereby 
depressing the prices or preventing the prices of the domestic like product from increasing.  
 
24. Next, KTC found that, although there was overselling when based on the "average" of import 
prices, its significance was disproved by the fact that the Japanese respondents implemented low 
pricin g strategy specifically targeting the customer bases of the domestic producers in the Korean 
market and were selling dumped products at prices similar to or even lower than the domestic 
prices. KTC considered sufficient evidences that the Japanese responde nts were engaged in 
targeted aggressive market activities and the strategically low pricing , which confirmed that the 
dumped products had explanatory force for the price suppression during the POI and price 
depression at the end of the POI.  
 
25. In additio n, KTC corroborated its observation that prices did not increase and even 
decreased as a result of the dumped imports by confirming that the prices of the domestic like 
products stayed significantly below the "reasonable sales price", a reasonably construc ted price 
that would allow the domestic industry to realize a reasonable level of profit. The comparison with 
the reasonable "target" price showed that the lack of increase in domestic prices to the level of the 
target price was an effect of the dumped imp orts. 
 
26. Based on this objective assessment of positive evidence, KTC observed that the dumped 
imports were suppressing the price of the like domestic products throughout the entire POI and 
were also found to be depressing prices in 2013 in particular.  
 
B. JAPAN'S CLAIMS RELATING TO DUMPED IMPORTS ' VOLUME DEVELOPMENT UNDER ARTICLES 3.1 
AND 3.2 OF THE ANTI-DUMPING AGREEMENT ARE FLAWED  
 
27. KTC found that the volume of dumped imports  had significantly increased both in absolute 
and relative terms over the P OI. Dumped imports increased from [[ ***]] units in 2012 to [[***]] 
units in 2013, an increase of 78.9% compared to the previous year, and this import volume 
represented an increase of [[ ***]]% from that of 2010. This finding was corroborated by the fact 
that the dumped imports significantly increased their market share in the Korean market from 
[[***]]% in 2012 to [[ ***]]% in 2013, at the expense of the domestic industry whose market 
share dropped from [[ ***]]% to [[ ***]]% in the same period.  
 
28. So, after  two years of increasing market share for the like domestic products, the situation 
completely reversed in 2013, the year that greatly overlaps with the  dumping POI. In particular, 
in 2013, the market share of the dumped products increased by [[ ***]]% from  the previous year, 
while the market share of the like domestic products decreased by [[ ***]]% from the previous 
year due to a dramatic increase in the import volume of the dumped imports. In relation to this 
analysis, KTC noted that the dumped imports' dr astic price reduction and market share increase 
took place between 2012 and 2013 when the dominant Japanese exporter, SMC,  was 
implement ing its aggressive policy to expand its global market share from 32% to 50%.  
 
29. All of these findings disprove Japan's  allegation that there was no market interaction or 
competition between the dumped imports and the domestic like products. Also, there is no legal or 
factual basis for Japan's assertion that certain dumped imports should have been excluded from 
the total v olume of dumped imports for purposes of this analysis, simply because they were 
allegedly destined for increasing inventory. In any event, the inventory increase reported by SMC 
was simply reflective of increased sales in a growing Korean market.  
 WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- C-7 - 
 
30. Thus, KTC carried out its examination of the volume of dumped imports in an objective 
manner and found  that, on the basis of uncontested positive evidence, the volume of imports 
increased sharply during the POI, both in absolute and relative terms. Japan has f ailed to 
demonstrate otherwise.  
 
31. Japan is wrong to require the authorities to examine the effects of the increase in the 
volume of imports. Article 3.2 does not require a "displacement" analysis similar to what is 
required for example under Article 6.3  of the SCM Agreement. Article 3.2 only requires the 
authorities to consider whether the volume of dumped imports increased in absolute or relative 
terms. Japan fails to point to any bias in the authorities' examination of the volume developments.  
 
C. KTC' S EXAMINATION OF THE IMPACT OF THE DUMPED IMPORTS ON THE DOMESTIC INDUSTRY WAS 
OBJECTIVE AND BASED O N POSITIVE EVIDENCE AS REQUIRED BY ARTICLES 3.1 AND 3.4 OF THE 
ANTI-DUMPING AGREEMENT  
 
32. In relation to the examination of the impact on the domestic indu stry, KTC examined and 
adequately explained the relationship between the dumped imports and the state of the domestic 
industry. KTC examined in a dynamic manner all of the required injury factors in Article 3.4 and 
found a negative development in at least twelve factors, namely (i) reduced production volume, 
(ii) reduced capacity utilization, (iii) increased inventory, (iv) reduced sales volume, (v) reduced 
market share, (vi) price reduction, (vii) reduced profits, (viii) redu ced return on investments, 
(ix) reduced employment, (x) reduced wages, (xi) difficulty in raising capital, and (xii) reduced 
investments.  
 
33. The correlation that was found to exist between the period of time in which the dumping 
occurred and the negative development of a significant n umber of injury factors formed an 
appropriate basis for KTC's intermediate finding of an injurious impact of the dumped imports on 
the state of the domestic industry. Japan's argument is merely that KTC allegedly failed to 
evaluate two injury factors liste d in Article 3.4, relating to the ability of the industry to raise capital 
and the magnitude of dumping. However, the facts on the record disprove Japan's allegation as 
they clearly show that KTC appropriately examined and explained the results of these fa ctors as 
well. 
 
34. Thus, KTC objectively examined all injury factors and reached the reasonable and reasoned 
conclusions about the impact of the dumped imports on the overall state of the industry. While 
Japan may disagree with these conclusions and with the way in which KTC weighed the different 
factors and developments, it fails to present a prima facie violation of the requirements of 
Articles  3.1 and 3.4 of the Anti -Dumping Agreement.  
 
35. Japan is wrong to require that the authorities establish  that t he injurious impact is caused by 
the price effects and volume developments of the dumped imports. The Article 3.4 injury 
examination requires authorities to take a snapshot of the state of the domestic industry and to 
examine all relevant factors in a dyna mic and objective manner in order to determine if the 
dumped imports had explanatory force for the developments in the injury factors. Whereas 
Article  3.5 requires the examination of the effects of dumping, as set forth in both 3.2 and 3.4, no 
separate lin k needs to be established between the volume and price effects and each of the injury 
factors of Article 3.4 . Certain considerations that are relevant for examining the explanatory force 
of the volume and price developments may therefore also need to be ex amined in the context of 
the Article 3.4 analysis, but this does not mean that investigating authorities are required to 
establish a link or demonstrate that the injury factor developments of Article 3.4 were caused by 
the effect of the volume and price de velopments . No fully -fledged causation and non -attribution 
analysis is required under Article 3.4.  
 
36. Japan is also wrong to seek to isolate certain injury factors or certain years during the POI. 
The authorities' analysis of the relevant factors was dyn amic in nature and examined all such 
factors over the entire POI, both by looking at the trends and by comparing the evolution from the 
beginning to the end of the POI, thus placing these factors in the context of the dumping found to 
exist. In so doing, t he authorities confirmed that the dumped imports had explanatory force for the 
developments in these factors.  
 WT/DS504/R/ Add.1  
BCI deleted, as indicated [[***]]  
- C-8 - 
 
D. KTC  CONDUCTED AN OBJECTIVE EXAMINATION OF THE CAUSAL RELATIONSHIP AND APPROPRIATELY 
SEPARATED AND DISTINGUISHED THE INJURY CAUSED BY OTHER KNOWN FACTORS AS REQUIRED BY 
ARTICLES 3.1 AND 3.5 OF THE ANTI-DUMPING AGREEMENT  
 
37. KTC's causation and non -attribution determination under Article 3.5 followed the customary 
practice, as upheld by the Appellate Body, of examining in a dynamic way the trends  in the injury 
factors and their coincidence in time with the dumping found to exist so as to find that there 
existed a causal link between the two. Thus, a  causal link was found to exist between the dumped 
imports and the injury to the domestic industry. Specifically, KTC identified at least fourteen 
factors supporting its injury and causation determination. Japan's argument that KTC's 
determination violated Articles 3.1 and 3.5 is entirely without merit. KTC demonstrated the causal 
relationship not only o n the basis of each relevant injury factor, but also on the basis of a holistic 
evaluation of all injury factors.  
 
38. Following this integrated analysis that dumped imports were causing injury, through the 
effects of dumping as set forth in Articles 3.2 a nd 3.4, KTC examined whether that link was 
severed by other factors that were known to be causing injury to the domestic industry at the 
same time as the dumped imports. This analysis consisted of a careful and in -depth scrutiny of 
other known factors such  as imports from countries other than Japan, the evolution of domestic 
consumption, the domestic industry's export performance and the cost of raw materials. For 
example, KTC distinguished the volume effect of third -country imports from the volume effect o f 
the dumped imports. It was found that the third country volumes were very small and their 
market share equally small at about [[ ***]]%. KTC also distinguished the price effect of such 
third-country imports by finding that prices of the third -country impo rts were much higher than 
the prices of both the dumped imports and the like domestic products. Therefore, these third -
country imports, which were minimal in terms of volume, were found to have had, at most, a 
minimal impact on the domestic industry. On th e basis of this examination, it was established that 
there existed a causal link between the injury suffered by the domestic industry and the Japanese 
dumped imports.  
 
39. Japan makes a number of flawed arguments, often repeating its previously addressed p oints 
about diverging price trends or developments in certain injury factors in isolation. For example, 
Japan complains that KTC's causation analysis was based on the events that occurred in 2013, in 
isolation, without due regard of the same indices in the  context of the entire POI. However, the 
coincidence in trends is between the dumping and the injury found to exist, and does not 
necessarily concern a continued trend within each of the injury factors over the POI. The question 
that was answered affirmati vely by KTC was whether there existed a causal link between the 
dumping in 2012 -2013 and the injury found to exist. That is the correlation in trends which is most 
relevant.  
 
40. In sum, and based on a logical progression and a holistic approach to the inj ury and 
causation determination, KTC reached a reasonable and reasoned conclusion in light of the facts 
and arguments before the authorities that the dumped imports caused injury to the domestic 
industry.  
 
41. Japan's argument that certain "other factors" should have been examined because they 
could have been known to the authorities is legally flawed. It is well established that authorities 
will be required to examine "other factors known to be causing injury"  only when  these  other 
factors are clearly rais ed and when it is substantiated by evidence that these factors are causing 
injury. Japan fails to establish that the other factors it argues should have been examined were 
even raised by the interested parties, let alone substantiated with evidence. In add ition, Japan 
fails to establish any bias in the authorities' examination of the other factors that were examined.  
 
E. KTC' S DEFINITION OF THE DOMESTIC INDUSTRY WAS PROPER AND INTRODUCED NO RISK OF 
MATERIAL DISTORTION AS REQUIRED BY ARTICLES 3.1 AND 4.1 OF THE ANTI-DUMPING AGREEMENT  
 
42. KTC's definition of the domestic industry under Article 4.1 was based on an objective 
examination of questionnaire responses received from domestic producers representing [[ ***]]% 
of total domestic production. Quantitatively , these producers constituted not simply "a" major 
proportion of total domestic production but even "the" major proportion of the domestic 
production . In addition, qualitatively, KTC's definition was based on an objective process that did 
not involve any r isk of material distortion.  WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- C-9 - 
 
43. In the underlying investigation, KTC sent questionnaires to all eleven producers of the 
pneumatic valves, to which only two producers, TPC and KCC, submitted responses. Both were 
included in the definition of the domestic in dustry. Two other domestic producers, Shin Yeong and 
Yonwoo, responded that they were unable to respond to the questionnaire because of insufficient 
resources. It was also examined and concluded that there was no other credible source to obtain 
industry -wide data or data on the domestic producers not participating in the investigation. On 
that basis, KTC defined the domestic industry based on TPC and KCC, i.e. the two producers that 
came forward and provided the requested information. At the public hearing,  the respondents 
insisted that other domestic producers should also be examined because they were allegedly 
performing well. In response, additional effort was undertaken by KTC to obtain data from the 
other domestic producers. In the end, Yonwoo and Shin Yeong were persuaded and submitted 
some limited and incomplete information on sales volume and operating profit, which were 
reviewed in order to respond to such arguments by the respondents. Ultimately, this limited and 
incomplete data confirmed that these  two producers were similarly suffering injury and thereby 
corroborating KTC's findings.  
 
44. Japan's speculative assertions about the reasons why certain producers did not come 
forward or did not respond to the questionnaire do not establish a prima facie  case of an improper 
definition of the domestic industry and are in any case contradicted by the facts on the record 
which show that even the producers that did not participate for resource -related reasons claimed 
to be injured by the dumped imports. Nothi ng in the process of defining the domestic industry was 
capable of skewing the definition . 
 
45. Japan fails to explain what more the authorities should have done to seek greater 
participation of producers and is incapable of pointing to any legal obligatio n to do so.  
 
IV. JAPAN'S PROCEDURAL C LAIMS ARE MISGUIDED  
 
46. Japan's procedural claims under Articles 6.5, 6.5.1, 6.9, 12.2 and 12.2.2 are undeveloped, 
unsubstantiated and without merit. Japan has failed to satisfy its obligation to make a prima facie 
case of violation.  
 
A. JAPAN'S CLAIM THAT KTC' S TREATMENT OF CONFIDENTIAL INFORMATION WAS INCONSISTENT WITH 
ARTICLES 6.5 AND 6.5.1  OF THE ANTI-DUMPING AGREEMENT IS WITHOUT MERIT 
 
47. In relation to the obligations under Articles  6.5 and 6.5.1, Japan merely li sts a number of 
items from the domestic producers' submissions that were kept confidential and simply asserts 
that confidentiality was granted without "good cause" and that no non -confidential summaries 
were provided "at all". These are mere assertions whi ch are demonstrably inaccurate. In Korea, 
every interested party in anti -dumping investigations submits non -confidential summaries by 
designating what information is to be treated confidential. It does this by deleting the relevant 
information. By doing so , the provider of the information asserts that such deleted information falls 
within the categories of "confidential information" specifically set forth in the relevant laws in 
Korea (in particular, the Enforcement Decree and Enforcement Rule of the Custom s Act of Korea). 
It goes without saying that every participant in the underlying investigation, including KTC, the 
applicants, the respondents, and the other interested parties, were all well aware of this common 
practice in Korea.  
 
48. KTC proceeded to ob jectively assess whether there was "good cause", i.e. whether the 
deleted information indeed fell within a category of confidential information enumerated in the 
relevant Korean laws. In applying the relevant provisions of Korean law on confidential treatm ent 
of information, KTC also considered that the requested confidential information was by its nature 
"commercially -sensitive information (such as profit or cost data or proprietary customer 
information) that is not typically disclosed in the normal course  of business and which would likely 
be regularly treated as confidential in anti -dumping investigations". There was therefore a "good 
cause" assessment based on a presumption of good cause reflected in Korean law. KTC did not 
require the applicants to link  each piece of information that was redacted to one of the categories 
of confidential information set out in Article 15 of the Enforcement Rule of the Customs Act , 
because the nature of the redacted information obviously pointed to the relevant category of  
confidential information under the law.  
 WT/DS504/R/ Add.1  
BCI deleted, as indicated [[***]]  
- C-10 - 
 
49. Moreover , it is the established practice in Korea that all interested parties to anti -dumping 
investigations provide the "non -confidential summary" of their confidential information by way of 
providing a public  version of the document that contains the confidential information. In the 
underlying investigation, the applicants provided non -confidential summaries for all confidential 
information that they submitted . Such non -confidential summaries were in sufficien t detail to 
permit reasonable understanding of the substance of the confidential information.  
 
50. In fact, many comments were made by the Japanese interested parties in defense of their 
interests throughout the underlying investigation. Interestingly, Jap an has not included a claim 
under Articles 6.2 or 6.4 of the Ant i-Dumping Agreement, thus confirming that its claim under 
Article 6.5.1 is purely formalistic.  
 
B. JAPAN'S CLAIM THAT KTC  VIOLATED ARTICLE 6.9 OF THE ANTI-DUMPING AGREEMENT BY FAILING 
TO DISCL OSE ESSENTIAL FACTS BEFORE THE FINAL RESOLUTION IS WITHOUT MERIT 
 
51. In relation to its claims under Article 6.9, Japan fails to understand that the disclosure of 
"essential facts" was made in KTC's Final Resolution and OTI's Final Report, which constitut e valid 
disclosure documents  within the meaning of Article 6.9 . Instead, Japan improperly proffers that 
the disclosure of "essential facts" was made only in KTC's investigation documents that preceded 
the issuance of the Final Resolution and the Final Repo rt. However, these documents undoubtedly 
disclosed all essential facts that formed the basis for MOSF's final determination which included the 
decision  to apply definitive measures. These documents properly disclosed the essential facts while 
respecting the confidentiality of certain information.  
 
52. The Japanese respondents had full opportunities to review these disclosure documents and 
defend their interests, as it took seven months from the date of KTC's Final Resolution for MOSF to 
officially render it s Final Decision. Alternatively, even the preliminary reports and resolutions of 
KTC and OTI provided relevant information on essential facts and provided an opportunity for 
interested parties to defend their interests.  
 
53. Furthermore, Japan fails to ide ntify the "essential" facts that allegedly were not disclosed. 
Instead, it focuses on relatively minor intermediate findings. In addition, rather than suggesting 
that the essential facts should have been disclosed, it is arguing that the raw data and evide nce 
supporting each of these factual findings should have been disclosed. That is not what is required 
under Article 6.9. The disclosure obligation under Article 6.9 is to give the interested parties a 
proper indication which of the many, and often contrad ictory, facts and arguments have been 
retained by the investigating authorities on their path to the final determination and decision of 
whether to apply definitive measures. For example, i n the context of an injury determination, it is 
important to allow interested parties to understand whether price effects were found, which price 
effects were considered and on the basis of which facts and considerations such price effects were 
found to exist. That is what KTC did and Japan has failed to even attempt to a rgue otherwise. 
Japan's decision not to include claims under Article 6.2 and 6.4 confirm s that it does not consider 
that the rights of interested parties to defend their interests and to see all relevant information 
were violated in this investigation.  
 
C. JAPAN'S CLAIM THAT KTC  VIOLATED ARTICLES 12.2  AND 12.2.2  OF THE ANTI-DUMPING 
AGREEMENT IS WITHOUT MERIT 
 
54. In respect of the obligations under Article s 12.2 and 12.2.2 , the public notice by the MOSF 
provided in a separate report the lengthy and detailed  KTC Final Resolution and OTI Final Report 
which set forth in sufficient detail the findings and conclusions reached on all issues of fact and law 
considered material by KTC. These documents contain all relevant information on the matters of 
fact and law t hat led to the imposition of final measures. Japan fails to establish a prima facie  case 
that a public notice of these KTC determinations and reports would not suffice in light of the 
requirements under Articles 12.2 and 12.2.2. Instead, Japan simply repea ts the flawed arguments 
it has developed  in the context of its claims under Articles 3 and 6.9 of the Anti -Dumping 
Agreement.  
 WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- C-11 - 
 
V. JAPAN'S CLAIM UNDER ARTICLE 1 OF THE ANT I-DUMPING AGREEMENT AN D 
ARTICLE VI OF GATT 1 994 IS ENTIRELY CONS EQUENTIAL AND MUST F AIL 
 
55. Japan includes a claim under Article 1 of the Anti -Dumping Agreement and Article VI of 
GATT 1994 which is entirely consequential of its substantive and p rocedural claims under 
Articles  3.1, 3.2, 3.4, 3.5, 4.1, 6.5, 6.5.1, 6.9, 12.2 and 12.2.2 of the  Anti-Dumping Agreement. 
Korea has addressed and rebutted each of these claims in this submission. As a result, Japan's 
consequential claim must necessarily fail.  
 
VI. CONCLUSION  
 
56. Japan's dispute with Korea is not a legal dispute and it does not raise any questions of law. 
Rather, it is a mere factual disagreement over the weight to be ascribed to certain facts. Japan 
fails to point to any bias in the analysis of the investigating authorities and simply invites the Panel 
to examine the facts and reach c onclusions different from  those that were reasonably reached by 
the Korean investigating authorities. The Panel is not, however, the trier of fact in the context of 
trade remedy -related disputes and is not to conduct a de novo  review. Japan's claims must 
therefore be rejected.  
 
57. In sum, and for the reasons stated in its submissions, Korea respectfully requests the Panel 
to reject all aspects of Japan's claim that Korea's anti -dumping measure on pneumatic valves from 
Japan is inconsistent with the Anti -Dumping Agreement.  
 
 
 WT/DS504/R/ Add.1  
BCI deleted, as indicated [[***]]  
- C-12 - 
 
ANNEX C -2 
SECOND INTEGRATED EX ECUTIVE SUMMARY  
OF THE ARGUMENTS OF KOREA  
I. INTRODUCTION  
 
1. As an initial matter, Korea refutes Japan 's groundless argument that the Panel can only 
examine information that was disclosed to the parties in  the underlying investigation and that any 
other evidence, even if contemporaneous and genuine, c annot be relied on by Korea in the present 
dispute . Japan 's argument is contradicted by the relevant WTO jurisprudence which has clearly 
established that the p anel may and in fact must rely on the record evidence, including evidence 
not previously disclosed to the interested parties . Furthermore, there is nothing "post hoc " about 
presenting data that was collected by the investigating authorities during the inve stigation and 
presenting an alysis that was conducted by the authorities in the underlying investigation . These 
data and analyses are undoubtedly part of the contemporaneous record evidence that the Panel is 
to base its review on . There is no basis for Japa n's argument that these data and analyses are 
"post hoc " simply because they were not disclosed to the interested parties.  
 
2. Korea also refutes Japan 's repeated assertions that the authorities should have conducted a 
so-called "counterfactual analysis " as a required eleme nt of an inj ury determinati on. Japan alleges 
that such a counterfactual analysis is required as part of the "logical progression of enquiry " into 
injury and causation, but again fails to point to WTO jurisprudence that would support its 
argument . As clarified by the Appellate Body, the  meaning of "logical progression " is simply that 
the inquiries under Articles 3.2 and 3.4 must be meaningful in advancing towards a causation 
determination under Article 3.5 and may be connected in a way that  leads to the conclusion of 
injury caused by dumped imports . For Japan, it seems that the concept of "logical progression " 
requires a counterfactual analysis under each part of the analysis  under Articles 3.2, 3.4 , and 3.5, 
requiring authorities to examine  among others what the price levels would have been but for the 
dumping . However, that is not what the AD Agreement requires investigating authorities to do . 
Importantly, relevant WTO jurisprudence confirms that a counterfactual determination comparing 
the situation with a hypothetical situation of products sold at normal value is not required in o rder 
to determine if the price effects, and other injury developments, were the effect "of the dumping ". 
It suffices to establish a genuine cause and effect betwe en the dumped imports and the injury 
found to exist, without in addition having to examine the effects of the dumping through some 
counterfactual analysis.  
 
II. JAPAN 'S SUBSTANTIVE CLAIMS  ARE FLAWED  
 
3. Japan 's legal claims are all groundless and thus wit hout legal merit . Japan disagrees with 
certain findings of KTC but fails to point to any legal errors . Japan 's arguments are merely an 
attempt to re -litigate certain issues of the underlying investigation, hoping that the Panel will 
conduct a de novo  review and reach different conclusions than the Korean investigating 
authorities . That, however, is not the t ask of the Panel in WTO disputes concerning anti -dumping 
measures . Japan fails to present a prima facie  case that KTC failed to conduct such an objectiv e 
examination or to properly establish the facts.  
 
A. JAPAN'S CLAIMS RELATING TO TH E PRICE EFFECTS OF THE DUMPED IMPORTS UNDER ARTICLES 3.1 
AND 3.2 OF THE AD AGREEMENT ARE FLAWED  
 
4. In relation to the price effects of the dumped imports under Article 3.2,  KTC properly 
considered price suppression and depression as well as the explanatory force of the dumped 
imports in respect of these effects by dynamically analyzing the relevant price trends based on 
import and re -sale prices (i.e. the price of the dumped  imports  to the first independent buyer in 
Korea) . These prices were examined over the entire POI and through an end -point to end -point 
comparison . KTC made several observations, all supporting its finding that the prices of the 
dumped imports had explanat ory force for the price suppression and depression  of domestic prices 
at the end of the POI.  
 WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- C-13 - 
 
5. KTC observed that, overall, prices of the dumped products and the like domestic products 
moved in the same downward direction throughout the entire POI . In pa rticular, it noted that 
prices of the dumped imports decreased significantly in 2013, when dumping took place in Korea . 
During the same period, prices of the like domestic products also decreased, although costs 
increased and demand surged, and prices were  thus expected to rise . In addition, KTC observed 
that, despite the fact that the average import price of the dumped imports were higher than prices 
of the like domestic products, the Japanese respondents re -sold the dumped imports in the Korean 
market at prices similar to or even below the sales prices of the like domestic products when there 
was direct competition with the like domestic products.  
 
6. Contrary to Japan 's naked assertion, KTC did not ignore the fact that the average price of 
the dumped impo rts was generally higher than the average domestic price . KTC explained, in a 
reasonable and reasoned manner, that the dumped imports imposed competitive price pressure on 
the prices of the domestic like products so as to depress and suppress prices even t hough their 
average price was higher .  
 
i. Prices moved in the same direction over the entire POI, especially in 2013 
 
7. Japan 's argument of "diverging price trends " is based on very limited price developments in 
2012 only . However, it is difficult to con sider that a slight increase of the dumped products ' import 
prices in 2012 constituted a widely diverging trend from the even slighter decrease of the like 
products ' domestic prices in 2012 . In fact, both sets of prices appear to have stagnated in 2012 . 
As such, there was no significant difference in price trends in 2012 that would strongly suggest the 
lack of competition and thus comparability between the two sets of products.  
 
8. Nevertheless, when KTC compared average resale prices of the dumped imports with the 
prices of the domestic like product, there was no "divergence " to speak of even in 2012 . Likewise, 
when KTC compared average import prices of the "representative models " of the dumped imports 
with the corresponding "representative models " of the d omestic like product, no such "divergence " 
could be found . Furthermore, the average import prices of the five flagship series of dumped 
imports and the prices of the corresponding series of domestic products moved in exactly the 
same direction . Therefore, Japan 's "diverging price trends " argument is factually incorrect and 
legally irrelevant.  
 
ii. The higher average import price does not undermine the explanatory force of the 
dumped imports  
 
9. KTC explained in a reasonable and reasoned manner that, althoug h the average import price 
of the dumped imports was higher than the average domestic price, the dumped imports exhorted 
competitive price pressure on the domestic like products . In particular, KTC found that, for those 
products or customers for which the competition with the domestic industry was particularly fierce, 
the prices of the dumped products were much lower and thus much closer to or sometimes even 
below the domestic prices of the like product, which further supported its conclusion of price 
suppr ession . KTC confirmed that Japanese respondents ' strategic low pricing was a prevalent 
practice  in the Korean market . This strategic low pricing did not take place only occasionally but 
was in fact implemented consistently in respect of a broad range of pr oducts and customers . As a 
result, domestic producers were forced to react to the competition by lowering their prices to 
match such underselling.  
 
10. The evidence demonstrating the strategic low pricing was extensive, probative and reliable . 
In the cours e of the underlying investigation, domestic producers, distributors, and end users 
constantly testified to such strategic low pricing of the Japanese respondents . However, KTC did 
not simply rely on such statements . KTC requested for actual transaction doc uments evidencing 
the Japanese respondents ' aggressive marketing and strategic low pricing from the customers who 
testified to the Japanese respondents ' aggressive marketing and strategic low pricing . Despite the 
extremely sensitive nature of such transact ion documents, [[ ***]] transaction documents vividly 
demonstrating the aggressive marketing and strategic low pricing of the Japanese respondents 
were procured and submitted . The customers who provided such [[ ***]] transaction documents as 
evidence of the strategic low pricing collectively purchased approximately [[ ***]]% of TPC 's total 
domestic sales in 2013 and [[ ***]]% of the total domestic shipment in 2013.  
 WT/DS504/R/ Add.1  
BCI deleted, as indicated [[***]]  
- C-14 - 
 
11. KTC also confirmed, through its comprehensive analysis of the Japanese respondents ' sales 
data, that (i) the dumped imports were frequently being sold at prices much lower than its 
average prices, across all 28 "series " of the dumped imports, and the price differential of the 
identical product models varied by up to [[ ***]]%, (ii) the dumped imp orts' "representative 
models " sold in 2013 undercut the average sales prices of [[ ***]]% of the corresponding 
"representative models " of the domestic like products, (iii) the dumped imports ' "representative 
models " sold in 2013 undercut the high -end sales prices of [[ ***]]% of the corresponding 
"representative models " of the domestic like products, and (iv) the dumped imports ' price 
undercutting when compared to the average price of the corresponding domestic models took 
place with respect to [[ ***]] out of  [[***]] (i.e., [[ ***]]%) corresponding representative models 
of the domestic products sold in 2013.  
 
12. Moreover, KTC objectively confirmed the strategic low pricing behavior by comparing prices 
of the "main" or "flagship series " of the dumped imports wi th selling prices of corresponding 
domestic "main" or "flagship series ". Through this exercise, KTC again observed that the Japanese 
respondents substantially lowered their re -sale prices to the domestic producers ' customers, 
thereby exhorting competitive pressure on domestic prices . KTC further verified the nature and 
degree of the strategic low pricing by comparing "user-to-user" sales prices to the two largest 
common customers for the Japanese respondents and domestic industry . This comparison also 
revea led that the average resale price of the dumped imports was similar or even lower than the 
prices of the competing domestic products.  
 
iii. Japan fails to rebut KTC 's reasonable and reasoned finding of price comparability and 
competition between the dumped  imports and domestic like products  
 
13. Korea has explained at length the basis for KTC 's finding that the dumped imports and the 
domestic products were in a competitive relationship, and how the dumped imports could provide 
explanatory force for the pric e effects on the domestic products . Japan 's argument that no 
competition existed between the dumped and domestic products squarely run counter to the 
historical and transactional competitive relationship between the dumped and domestic products in 
the Kore an market .  
 
14. Also, the underlying investigation did not present a situation in which the dumped imports 
and the domestic like products consisted of very different product types without overlap . Quite the 
contrary is true given that there was a great de gree of overlap between the dumped imports and 
the domestic products, and domestic prices decreased when demand surged and costs increased, 
right at the time when the dumped imports drastically increased in volume and their prices sharply 
decrease . In such  a situation, and when the likeness of the two products is not at issue, there is no 
need to conduct an additional and rather unspecified "competitive relationship " analysis in finding 
that the dumped imports had explanatory force for the price effects in accordance with the 
requirement of Article 3.2 .  
 
15. In any event, KTC objectively examined and confirmed the competitive relationship between 
the dumped and domestic products by analyzing the detailed extent of the substitutability between 
the two produc ts and how the two products actually competed with each other in the 
Korean  market, based on its "model -to-model " and "segment -to-segment " comparisons.  
 
iv. A comparison of the "reasonable sales  price" with the actual domestic prices provides 
a reasonable basis for considering significant price suppression  
 
16. KTC compar ed developments in domestic prices to a "reasonable sales price ", which is an  
expected sales price reflecting the actual cost of production and sales, and a reasonable operating 
profit . WTO jurisprudence confirms the reasonable and objective basis of using a "reasonable sales 
price" as the "target price " when considering price suppression under  Article 3.2 . In complete 
denial of this jurisprudence, however, Japan asserts that more is require d to consider whether 
there is price suppression . The relevant WTO jurisprudence confirms that Japan 's argument is 
misguided .  
 
17. In any event, KTC did not only rely on the "target price " analysis when reaching its 
conclusion on price suppression . The fa ct that prices did not increase during the POI , and even 
decreased in 2013, while costs increased and demand surged formed the equally reasonable basis 
for KTC's consideration of significant  price suppression.  WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- C-15 - 
 
v. Japan fails to rebut KTC 's price depression  analysis  
 
18. Other than by proffering its misplaced argument on the so -called "divergence " in price 
trends and "overselling ", Japan completely fails to point to any flaw in KTC 's price depression 
consideration . KTC observed that the price of the like pro duct decreased in both 2012 and 2013  
due to "the fierce competition with the dumped products ". The price depression effect of the 
dumped imports became more conspicuous in 2013, notably because in 2013, the average price 
difference between the dumped impor ts and the domestic like product, which was approximately 
KRW [[ ***]] in 2012, rapidly narrowed to the level of KRW [[ ***]]. At the same time, the 
manufacturing cost of the like product increased by [[ ***]]%. In addition, KTC considered that the 
sharp incr ease in the import volume of the dumped imports, which took place in 2013, was 
another contributing factor for the price depression .  
 
19. On a related topic, Korea notes that Articles 3.1 and 3.2 of the AD Agreement do not require 
separate findings or eve n considerations of each possible price effect, and as such, there is no 
requirement for the Panel to consider each possible price effect separately either . That said, 
however, even if the Panel is to examine KTC 's analyses of the price depression and pric e 
suppression separately and finds that either one of such analyses was improper, pursuant to the 
plain language of Article 3.2, KTC 's price effect consideration as a whole should still be deemed 
proper as long as the remaining analysis was proper.  
 
B. JAPAN'S CLAIMS RELATING TO DUMPED IMPORTS ' VOLUME DEVELOPMENT UNDER ARTICLES 3.1 
AND 3.2 OF THE AD AGREEMENT ARE FLAWED  
 
20. In relation to the impact of the volume of dumped imports under Article 3.2, KTC properly 
considered this element by relying on positi ve evidence showing absolute and relative increases in 
dumped imports .  
 
21. Specifically, the volume of dumped imports increased in absolute terms by 78.9% in 2013 
compared to 2012 and over the entire POI by a significant percentage as well . This finding was 
corroborated by the fact that the dumped imports significantly increas ed their market share  in the 
Korean market between 2012 and 2013 at the expense of the domestic industry which lost almost 
identical market share in the same period . KTC also noted t hat the dumped imports ' drastic price 
reduction and market share increase took place between 2012 and 2013 when the dominant 
Japanese exporter implemented an aggressive policy to expand its global market share from 32% 
to 50% .  
 
22. Importantly, establishe d WTO jurisprudence confirms that the consideration of the 
"significance " of an increase in imports calls for an assessment of whether the increase is 
"important, notable or consequential " which "may be assessed on the basis of the magnitude of 
the increas e". Thus, Japan is incorrect to read a lot into the term "significant " as if that word opens 
the door to a whole host of additional requirements and considerations, when it simply refers to 
the magnitude of the increase in absolute terms or relative to pro duction or consumption in the 
context of the market in question . In the context of the present dispute, a volume increase of 78% 
in absolute terms, of more than [[ ***]]% relative to consumption (i.e., market share), and of 
more than [[ ***]]% relative to pr oduction is "significant " under any understanding of this term .  
 
23. Moreover, Japan is mistaken to argue that Article 3.2 requires investigating authorities to 
carry out a displacement analysis in the sense that any increase in imports must be "as a resu lt" of 
domestic users "switching " from domestic products to dumped imports . This is not supported by 
the text of the AD Agreement and the Appellate Body has already rejected such a notion . In any 
case, KTC examined the loss of market share of the domestic like product and thus, in fact, 
established that during the dumping POI, domestic products lost to the dumped imports the 
market share they had previously gained.   
 
24. Lastly, there is no legal or factual basis for Japan 's assertion that KTC should have e xcluded 
from the total volume of dumped imports certain imports supposedly destined for increasing 
inventory . There is no legal obligation in the AD Agreement that would require an investigating 
authority to exclude from its import volume analysis dumped i mports that went into inventory 
before being sold . The term "dumped imports " referred to in Article 3.2 of the AD Agreement is 
interpreted as including all of the products which have been "imported ' whether sold or in 
inventory . Indeed, Article 3.4 of the AD Agreement calls for the examination of both the actual and WT/DS504/R/ Add.1  
BCI deleted, as indicated [[***]]  
- C-16 - 
 
potential impacts of the dumped imports on various injury indices, such as potential decline in 
sales of the domestic industry, which has a close bearing on the post -importation inventory 
volume  of the dumped imports . In this light, investigating authorities, if anything, should  include 
dumped imports held in inventory in considering the volume of the dumped imports.  
 
25. In sum, the investigating authorities carried out their examination of the volume of dumped 
imports in an objective manner and found on the basis of uncontested positive  evidence that the 
volume of imports increased sharply during the POI, both in absolute and relative terms . Japan 
has failed to demonstrate otherwise .  
 
C. KTC'S EXAMINATION OF THE IMPACT OF THE DUMPED IMPORTS ON THE DOMESTIC INDUSTRY WAS 
OBJECTIVE AND BASED O N POSITIVE EVIDENCE AS REQUIRED BY ARTICLES 3.1 AND 3.4 OF THE 
AD AGREEMENT  
 
26. In relation to the examination of the impact on the domestic industry, KTC du ly examined 
and adequately explained the explanatory force of the dumped imports when analyzing the state 
of the domestic industry . KTC examined in a dynamic manner all of the required injury factors in 
Article 3.4 and found a negative development in a sig nificant number of injury factors, including (i) 
reduced production volume; (ii) reduced capacity utilization; (iii) increased inventory; (iv) reduced 
sales volume; (v) reduced market share; (vi) price reduction; (vii) reduced profits; (viii) reduced 
return on investments; (ix) reduced employment; (x) reduced wages; (xi) difficulty in raising 
capital; and (xii) reduced investments . This formed an appropriate basis for KTC 's intermediate 
finding of an injurious impact on the state of the domestic industry.  
 
27. Japan 's claim focuses almost entirely on a consequential argument that Article 3.4 must 
necessarily have been violated because KTC 's consideration of price effects under Article 3.2 was 
faulty, that KTC allegedly failed to consider the magnitude of the  margin, and that KTC allegedly 
failed to consider the ability to raise capital or investment . First, Korea explained that whereas 
Article 3.5 requires the examination of the effects of dumping, as set forth in Articles 3.2 and 3.4, 
no separate causal link  needs to be established between the volume and price effects and each of 
the injury factors of Article 3.4 . There is simply no legal basis for Japan 's alleged "necessary " 
causal link between Articles 3.2 and 3.4 given that Article 3.4 requires the "examin ation of the 
impact of the dumped imports " and not the impact of the "price effects " or "volume developments " 
of Article 3.2 on the domestic industry.  
 
28. Second, in relation to the factor "margin of dumping ", the record clearly shows that KTC 
examined th is factor and explained the basis for finding that the magnitude of the dumping 
detrimentally affected the domestic industry . While there is no methodological guidance on how 
the magnitude of dumping shall be assessed or how the examination shall be presen ted by 
investigating authorities in Articles 3.1 and 3.4, relevant WTO jurisprudence explains that what is 
required is to evaluate the magnitude of the margin of dumping on the domestic industry as one of 
the factors that gives an indication of the state o f the domestic industry . In light of the dumping 
margins ranging between 11.66% and 31.61%, KTC found that "the size of dumping margin [was] 
not insignificant " and that "such dumping appears to have had significant impact on the sales 
price" of the domesti c products . In so doing, it complied with the requirement to evaluate this 
factor under Article 3.4.  
 
29. Third, in relation to the factor "ability to raise capital or investment ", the record also clearly 
shows that KTC examined this factor and explained t hat the domestic industry 's ability to raise 
capital or investment was detrimentally affected by the continued operating loss, which was 
attributed to the effect of the dumped imports.  
 
30. Moreover, Japan argues that Article 3.4 requires a finding that th e impact on the domestic 
industry "was caused " by the dumped imports . However, as explained by Korea, Article 3.4 
requires an examination of the impact of the dumped imports on the domestic industry . Thus, the 
focus of the inquiry is on the state of the do mestic industry, not whether the dumped imports are 
causing injury to the domestic industry, which is an analysis specifically mandated by Article 3.5.  
 
31. In sum, KTC concluded that the domestic industry lost most of the market share it had 
gained up to  2012 and also suffered material injury across the overall business indicators as a 
result of the sharp increase in volume of dumped products and large drop in their prices, and the 
aggressive marketing by the importers of the dumped products . The outcome of this Article 3.4 WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- C-17 - 
 
inquiry formed the basis for the overall causation analysis contemplated in Article 3.5 . Japan 's 
claim of violation of Articles 3.1 and 3.4 must therefore fail . 
 
D. KTC  CONDUCTED AN OBJECTIVE EXAMINATION OF THE CAUSAL RELATIONSHIP AND APPROPRIATELY 
SEPARATED AND DISTINGUISHED THE INJURY CAUSED BY OTHER KNOWN FACTORS IN ACCORDANCE 
WITH ARTICLES 3.1 AND 3.5 OF THE AD AGREEMENT  
 
32. In respect of the causation and non -attribution determination under Article 3.5, KTC 
followed WTO customary p ractice by examining "all relevant evidence " before it in finding the 
existence of a causal link between the dumped imports and the injury to the domestic industry .  
 
33. In the "Overall Evaluation " section of its Final Resolution, KTC summarized the outco me of 
its inquiries under Articles 3.2 and 3.4 finding, based on a holistic and comprehensive review of 
these elements, that the domestic industry had suffered material injury due to the dumped 
imports . Following the affirmative causation analysis, KTC exa mined whether the causal link was 
severed by other factors known to be causing injury to the domestic industry at the same time as 
the dumped imports . It was established that these factors did not contribute to the injury, or that 
the injury caused by thes e factors was negligible – both individually and in combination . Thus, 
based on a logical progression and holistic approach to the causation determination, KTC reached 
the reasonable and reasoned conclusion that the dumped imports caused injury to the dome stic 
industry.  
 
i. KTC properly established a causal relationship between the dumped imports and the 
injury to the domestic industry  
 
34. Japan makes a fundamental mistake in its reasoning that KTC violated Article 3.5 because it 
allegedly found a causal l ink based on 2013 alone when it must be based on the POI in its entirety . 
In addition to the fact that it is incorrect to state that KTC focused exclusively on 2013 for its 
injury and causation finding, the coincidence in trends that is required under Arti cle 3.5 is between 
the effects of the dumped imports and the injury suffered by the domestic industry . It does not 
concern a continued trend within each of the injury factors over the entire POI . Given that the 
"dumping " was examined in the period April 20 12 - March 2013, 2013 was also one of the most 
relevant periods for assessing the causal link . Accordingly, KTC examined the trends in prices, 
volumes and other relevant factors and concluded that the trends turned negative in 2012 and 
were aggravated in 2 013 in particular.  
 
ii. KTC properly separated and distinguished other known factors  
 
35. KTC examined whether the causal link found to exist was severed by other factors known to 
be causing injury to the domestic industry at the same time . Carefully scrut inizing such factors, 
including imports from countries other than Japan, the evolution of domestic consumption, the 
domestic industry 's export performance and the cost of raw materials, KTC established that no 
"other factor " severed the link with the dumpe d imports.  
 
36. For example, KTC explicitly distinguished the volume effects of third -country imports and the 
dumped imports . It was found that the volume of third country imports was very small and their 
market share equally de minimis.  This was compared to the dumped imports, which had very 
significant share of the Korean market in 2013.  
 
37. Japan argues that KTC ignored the significant increase in third -country imports because the 
volume increase in percentage points was very high when subject imports i ncreased by much less 
in percentage point over the same period . This argument is telling of the weakness of Japan 's 
claim . The virtually non -existent level of third -country imports at the start of the POI makes such a 
percentage presentation of the increas e negligible . Even after this increase, the volume of third -
country imports was still very low and completely insignificant when compared with the level of 
sales of dumped imports and domestic sales.  
 
38. Moreover, KTC distinguished the price effects of t hird-country imports by finding that these 
prices were higher than the prices of both the dumped imports and the domestic like product . 
Japan seeks to misconstrue the facts by arguing that the price gap of the third -country imports 
was "analogous " to the p rice gap between the dumped and the domestic products . That is, 
however, a misrepresentation of the record evidence . Third-country import prices were more WT/DS504/R/ Add.1  
BCI deleted, as indicated [[***]]  
- C-18 - 
 
than 44% higher than those of the dumped imports . Furthermore, there was no allegation or 
evidence th at importers of such third -country products were exploiting a low pricing strategy 
aimed at undercutting the prices of domestic products.  
 
39. Finally, Japan argues that KTC was under an obligation to examine certain factors allegedly 
"known " to it, irresp ective of whether they were raised by any interested party in the underlying 
investigation . However, this argument clearly has no legal basis in Article 3.5 or relevant WTO 
jurisprudence which confirms that only factors that are "clearly raised " before an investigating 
authority and that are properly substantiated with evidence of their injury to the domestic industry 
must be examined by investigating authorities as part of the non -attribution analysis . As the 
factors highlighted by Japan were not raised, l et alone substantiated, by the respondents in the 
underlying investigation, they were not "clearly raised " and thus not "known " to be causing injury . 
KTC was therefore not under an obligation to separate and distinguish, or otherwise examine, their 
potenti al injurious effect on the domestic industry.  
 
40. For all of the above reasons, Japan 's claim of violation of Articles 3.1 and 3.5 of the 
AD Agreement must fail.  
 
E. KTC'S DEFINITION OF THE DOMESTIC INDUSTRY WAS PROPER AND INTRODUCED NO RISK OF 
MATERIAL DISTORTION IN ACCORDANCE WITH ARTICLES 3.1 AND 4.1 OF THE AD AGREEMENT  
 
41. In respect of the definition of the domestic industry, KTC included all domestic producers 
coming forward following the neutral invitation by the authorities to do so. Together thes e 
producers represented 55.4% of total domestic production . No producers were excluded and no 
conditions were attached to their inclusion in the domestic industry definition . These producers 
therefore satisfied the "major proportion " requirement both by qu antitatively covering the majority 
of producers and by qualitatively being defined on the basis of an objective process that did not 
involve any risk of material distortion . Japan fails to point to any aspect of the process of soliciting 
the participation of domestic producers that would have skewed the definition and could have 
created a material risk of distortion.  
 
42. First, the Appellate Body has explained that the qualitative assessment under Article 4.1 
relates to the process  by which the domestic in dustry is defined and that it must not introduce a 
material risk of distortion . The factual record shows that no material risk of distortion arose in the 
neutral way in which KTC defined the domestic industry . All domestic producers were invited to 
partici pate and they received questionnaires, and no producer was excluded as the process was 
open to all . Japan has failed to point to anything in the process that was capable of skewing the 
industry definition.  
 
43. Second, Japan 's argument that OTI was "too pa ssive" is irrelevant and lacks any legal basis . 
WTO jurisprudence confirms that the two methods for defining the domestic industry in Article 4.1 
are equally valid, and that there is no obligation on investigating authorities to actively seek to 
gather as many domestic producers as reasonably possible . Japan 's late suggestion that the 
authorities could have applied the use of facts available to obtain additional information is not 
helpful . There is no requirement to actively seek out additional information if the producers already 
constitute a major proportion of domestic production . In addition, this approach makes sense in a 
dumping context to force cooperation but it does not make sense in the context of defining the 
domestic industry since the effects wo uld be unduly felt by the participating domestic producers 
and not by the uncooperative domestic producer . In any case, it would not lead to a more 
comprehensive basis for making an injury determination.  
 
44. Third, Japan 's argument that KTC 's definition was defective because it was not genuinely 
representative of other smaller producers is without merit and lacks support in Article 4.1 or 
relevant WTO jurisprudence . The "major proportion " requirement is not a sampling situation but 
rather concerns, quanti tatively, whether the producers included produce a significant, notable, 
important proportion of total production, and qualitatively whether the process by which the 
industry was defined was objective and not biased . There is no basis to argue that a domes tic 
industry definition is consistent with Article 4.1 only when the producers constituting the "major 
proportion " are qualitatively similar to the other producers which are not part of the definition . In 
other words, the fact that smaller producers, not p art of the definition, may not be selling the 
complete range  of products is irrelevant .  
 WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- C-19 - 
 
45. Nonetheless, even if Article 4.1 would require that the domestic industry qualitatively reflect 
all domestic producers as a whole ( quod non ), it is clear that KTC 's domestic industry definition 
represented the industry as a whole as it (i) produced a wide range of the models included in the 
product definition; (ii) sold valves both individually and as a part  of the pneumatic system; 
(iii) sold pneumatic valves for equipment in the diverse range of major industries identified; and 
(iv) sold in the domestic Korean market through the main distributing channels . Again, Japan has 
failed to point to any contrary facts on the record.  
 
46. Finally, in a belated attempt to c ast doubt on the quantitative significance of the proportion 
of domestic production represented by the included domestic producers, Japan attempts to allege 
that the quantities of production of certain domestic producers were not correctly calculated or 
verified. This argument is entirely groundless and based on a misrepresentation of the available 
information on the record.  
 
47. In sum, KTC 's definition of the domestic industry, as consisting of those producers 
accounting for more than 55% of total domesti c production, satisfied the "major proportion " 
requirement by both covering a relatively high proportion, substantially reflecting the totality of 
domestic production and by being defined on the basis of an objective process that did not involve 
any risk o f material distortion . Japan has failed to point to any act by KTC capable of skewing the 
industry definition, and its speculation about the impact of dumped imports on other producers is 
factually baseless . Accordingly, Japan 's claim of violation of Artic les 3.1 and 4.1 of the 
AD Agreement must fail.  
 
III. JAPAN 'S PROCEDURAL CLAIMS ARE GROUNDLESS  
 
A. JAPAN'S CLAIM THAT KTC'S TREATMENT OF CONFIDENTIAL INFORMATION WAS INCONSISTENT WITH 
ARTICLES 6.5 AND 6.5.1  OF THE AD AGREEMENT IS WITHOUT MERIT 
 
48. In relat ion to the obligations under Articles 6.5 and 6.5.1, KTC specifically examined whether 
there was "good cause " for treating the redacted information as confidential, by reviewing whether 
the information, if disclosed, would infringe the interests of interes ted parties, given the type and 
nature of the information for which the applicants requested a confidential treatment.  
 
49. Article 6.5 of the AD Agreement requires that "good cause " be shown but it does not specify 
how and by whom the good cause must be s hown . In fact, nothing in the AD Agreement provides 
that a good cause can be shown only by the submitting party . Therefore, the "good cause " 
requirement is satisfied as long as an investigating authority properly satisf ies itself that there is a 
good cause  for treating the information in question as confidential .  
 
50. In the present case, KTC followed established practice in Korea where every interested party 
in anti -dumping investigations submits non -confidential summaries by designating what 
information is to be treated as confidential . By doing so, the provider of the information asserts 
that such deleted information falls within the categories of "confidential information " specifically 
set forth in the relevant laws in Korea . In turn, KTC objectively as sesses whether there is "good 
cause " for such deleted information . KTC does not require interested parties to link each piece of 
redacted information to one of the categories of confidential information in Article 15 of the 
Enforcement Rule of the Customs Act, because the nature of the redacted information obviously 
pointed to the relevant category of confidential information under the law.  
 
51. Moreover , it is the established practice in Korea that all interested parties to anti -dumping 
investigations prov ide the "non-confidential summary " of their confidential information by way of 
providing a public version of the document that contains the confidential information . In the 
underlying investigation, the applicants provided non -confidential summaries for al l confidential 
information that they submitted . Such non -confidential summaries were in sufficient detail to 
permit reasonable understanding of the substance of the confidential information . Japan 's 
argument relating to the alleged lack of sufficiency of t he non -confidential summaries is 
undeveloped and in error . The "substance " of the information submitted in confidence refers to the 
"essence " of the information for purposes of the anti -dumping investigation . So, if sales prices of 
the domestic producer ar e treated as confidential, a summary that permits a reasonable 
understanding of the essence of the information does not need to provide ranges but can consist 
of a summary of the upward or downward development of such prices . That is the "essence " or 
"substance " of the information in the context of an injury analysis, for example . Japan reveals a WT/DS504/R/ Add.1  
BCI deleted, as indicated [[***]]  
- C-20 - 
 
fundamental misunderstanding of the meaning of the term "substance " in the context of 
Article  6.5.1 as it states that "[t]he summary must reflect the "substance " of the information – in 
other words, the "substance " of how the information will be used by the authority ". Yet, given that 
this summary is to be provided by the interested parties, they do not know "how the information 
will be used " and Japan thus seeks to  impose an impossible burden on interested parties . All that 
they need to do is to make available a public version or non -confidential summary that through its 
narrative or other type of summarization provides information on the essence of the information 
that is submitted . Japan has failed to present a prima facie  case that the non -confidential versions 
of the submissions failed to inform interested parties of the essence of the information submitted.  
 
52. Korea also notes that Japan has not included a cl aim under Articles 6.2 or 6.4 of the 
AD Agreement, thus confirming that its claim under Article 6.5.1 is purely formalistic.  
 
B. JAPAN'S CLAIM THAT KTC  VIOLATED ARTICLE 6.9 OF THE AD AGREEMENT BY FAILING TO DISCLOSE 
ESSENTIAL FACTS BEFORE THE FINAL RESOLUT ION IS WITHOUT MERIT 
 
53. In relation to the disclosure of essential facts, KTC satisfied this requirement by releasing 
KTC's Final Resolution and OTI 's Final Report to interested parties, which constitute the valid 
disclosure documents within the meaning of Article 6.9.  
 
54. An anti -dumping investigation in Korea is only concluded when the Ministry of Strategy and 
Finance ( "MOSF ") makes its final determination, deciding whether to impose definitive measures . 
MOSF has the power to conduct its own investigat ion by requiring interested parties and KTC to 
provide comments and make submissions to MOSF with respect to the findings of OTI and KTC, 
and by holding a hearing at which interested parties can state their opinions . Once a final 
resolution is issued by KT C, interested parties to the relevant investigation have the statutory right 
to provide comments to MOSF on the final resolution, and MOSF has the statutory obligation to 
consider such comments . Following these procedures, MOSF takes the decision not only on 
whether to apply definitive measures, but also on whether to endorse or revise the findings and 
determinations made by KTC, and the investigation remains active until it does so, meaning that 
no final determination is made before MOSF renders such decis ion. This confirms that the reports 
released by the KTC before MOSF made its final determination whether to impose duties 
constituted the relevant disclosure of essential facts in accordance with Article 6.9.  
 
55. KTC acted consistently with Article 6.9 b y disclosing the "essential facts " in the underlying 
investigation, i.e. information that is "absolutely necessary, extremely important ", while ensuring 
the adequate protection of confidential information . Japan fails to identify the "essential " facts that  
allegedly were not disclosed . Instead, it focuses on relatively minor intermediate findings . In 
addition, rather than suggesting that the essential facts should have been disclosed, it in fact 
argues that the raw data and evidence supporting each of these  factual findings should have been 
disclosed . That is not, however, what is required under Article 6.9 .   
 
56. Again, Japan 's decision not to include claims under Article 6.2 and 6.4 confirm s that it does 
not consider that the rights of interested parties to defend their interests and to see all relevant 
information were violated in this investigation.  
 
C. JAPAN'S CLAIM THAT KTC  VIOLATED ARTICLES 12.2  AND 12.2.2  OF THE AD AGREEMENT IS 
WITHOUT MERIT 
 
57. In respect of the obligations under Article s 12.2 and 12.2.2 , the public notice by MOSF 
provided, in a separate report, the lengthy and detailed KTC Final Resolution and OTI Final Report 
setting forth in sufficient detail the findings and conclusions reached on all issues of fact and law 
considered material b y KTC . These documents contain all relevant information on the matters of 
fact and law that led to the imposition of final measures.  
 
58. Japan 's claims focus on detailed facts and arguments and seek to require disclosure of any 
information and all of the  underlying data that was considered . It fails to distinguish between the 
more nuanced transparency obligation of Article 12.2 and the due process obligations of Article 6 
or the substantive obligation of Article 3 . Articles 12.2 and 12.2.2 require KTC to provide sufficient 
information to allow the public to understand the findings and conclusions reached on all issues of 
fact and law considered material . KTC clearly satisfied this obligation by providing reports that set 
forth its findings and elaborated o n the determinations and findings made . The public notice WT/DS504/R/Add.1  
BCI deleted, as indicated [[***]]  
- C-21 - 
 
requirement does not require the authorities to disclose all factual information raised by interested 
parties in the underlying investigation . The purpose of Article 12.2 is for the public to unders tand 
the reasoning of KTC on the relevant and material parts of the determination, not to test the 
accuracy of each and every intermediate finding . Japan has not presented any arguments that 
would establish a prima facie  case that these lengthy and elabora te reports of KTC and OTI were 
insufficient to inform the public of the essential determinations of fact and law made by MOSF .  
 
59. Japan fails to establish a prima facie  case that a public notice of these KTC determinations 
and reports would not suffice in light of the requirements under Articles 12.2 and 12.2.2 . Instead, 
Japan simply repeats the flawed arguments it has developed  in the context of its claims under 
Articles 3 and 6.9 of the AD Agreement.  
 
IV. CONCLUSION  
 
60. Japan 's dispute with Korea is n ot a legal dispute and it does not raise any questions of law . 
Instead, it is a mere factual disagreement over the weight to be ascribed to certain evidence . 
Japan fails to point to any bias in the Korean authorities ' analyses and assessment of the facts o n 
the record . It simply invites the Panel to examine the facts and reach different conclusions than 
those reasonably reached by the Korean authorities . Since the Panel is not the trier of fact in this 
trade remedy -related dispute, it is not to conduct a de novo review of the record evidence . Japan 's 
claims must therefore fail.  
 
61. For the reasons stated, Korea respectfully requests the Panel to reject all aspects of Japan 's 
claim that Korea 's anti -dumping measure on pneumatic valves from Japan is inconsist ent with the 
AD Agreement.  
 
_______________  
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ANNEX D  
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex D -1 Integrated executive summary of the arguments of Brazil  D-2 
Annex D -2 Integrated executive summary of the arguments of Canada  D-4 
Annex D -3 Integrated executive summary of the arguments of Ecuador  D-7 
Annex D -4 Integrated executive summary of the arguments of the European Union  D-9 
Annex D -5 Integrated executive summary of the arguments of the United States  D-12 
 
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ANNEX D -1 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGUM ENTS OF  BRAZIL  
(I) Price effect analysis (Arts. 3.1 and 3.2 ADA)  
 
1. Firstly, Brazil understands that price depression or suppression inquiries must provide the 
authority with a meaningful understanding of whether subject imports have "explanatory force ". 
To this end, an authority is required to examine domestic prices in conjunction with subject 
imports. The explanatory force stems from the relevant aspects of such imports, including price 
and/or volume, vis -à-vis domestic production. Therefore, it is not sufficient under Article 3.2 to 
consider the existence of price depression or suppression per se . This analysis is a preceding step 
before the comprehensive causation analysis regarding injury contemplated in Article 3.5.  
 
2. Furthermo re, in the occurrence of price overselling and the consequential effects of subject 
imports on domestic prices, Brazil understands that in cases where there is no finding of price 
undercutting the investigating authority should present a thorough analysis,  with a compelling 
reason to explain how the prices of the dumped products could have affected the prices of the 
domestic like product. Otherwise, it would be difficult to understand how a conclusion of price 
depression was reached in a situation where pri ces of imports were, for most parts, higher than 
those of the domestic like product whose prices were purportedly being depressed.  
 
3. Moreover, in Brazil 's view, whether two products compete is not determined simply by 
assessing whether they share partic ular physical characteristics or have the same general uses. It 
is also relevant to consider other factors, such as consumer preferences. The objective of this 
analysis is to determine whether products form part of the same  market. In this respect, it is 
important to notice, inter alia , if products are in actual or potential competition with each other 
and if the relevant products are substitutable.  
 
4. In conclusion, under the incidence of constant price overselling and the existence of 
heterogeneity of pr oducts, investigating authorities should delve deeply into the analysis of price 
calculation and any differences among products, since those particular features would point to a 
higher standard for the determination of material injury .  
 
(II) State of the industry analysis (Art. 3.4 ADA)  
 
5. Regarding the examination of the state of the industry and the evaluation of the relevant 
economic factors therein required by Article 3.4 of the ADA, Brazil is of the view that each of the 
factors listed in the cited A rticle must be considered during the investigation of the impact of 
dumped imports. It is also clear from the plain reading of Article 3.4 that those factors are not 
exhaustive and still would not necessarily give decisive guidance.  
 
6. While the authoriti es may determine that some factors are not relevant or do not weigh 
significantly in the decision, they may not simply disregard such factors, even though this 
consideration may lead the investigating authority to conclude that a particular factor is not 
probative in the circumstances. Rather, the analysis and conclusions must consider each factor, 
determine its relevance for the investigation, or lack thereof and consider the relevant factors 
together, in the context of the particular industry.  
 
(III)  Definition of "domestic industry" (Art. 4.1 ADA)  
 
7. Brazil understands that in defining the domestic industry the investigating authority does not 
make an "exclusion " of domestic producers if it does not considers data it was unable to collect. 
Brazil unders tands that all known producers should be consulted in order that the data coverage is 
as broad as possible, as not to give rise to a material risk of distortion. However, the investigating 
authority does not exert control on the willingness of producers to  respond to questionnaires and 
actively participate in investigations.  
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8. Furthermore, the investigating authority should always consider data it collects from 
domestic producers for the purpose of the investigation, but not necessarily must it include t hose 
producers in the definition of domestic industry. Such decision will depend on the existence of a 
major proportion of domestic producers on the records and the particularities of the case. If the IA 
is convinced, after receiving data from other produc ers, that non -inclusion of this information for 
injury analysis will not create material distortion and thus will not invalidate its previous 
determination of major proportion, it is not obliged to do so.  
 
9. Moreover, Brazil does not contest that the larg er the number of producers included in the 
definition of domestic industry and the ampler the set of economic data available, the higher is the 
potential of an accurate injury analysis. However, considering the facts of the present case, the 
definition of domestic industry cannot be considered biased or distorted for the sole reason that 
investigating authorities have considered only data from the applicants, due to the fact that the 
other producers did not answer to the questionnaire sent to them.  
 
10. Finally, Brazil contends that the claimant of any alleged inconsistency should present 
evidence and bear the burden of proof to demonstrate that the domestic industry definition does 
not meet the standard of a major proportion set out by Article 4.1 of the A DA.  
 
(IV)  Treatment of confidential information (Arts. 6.5 and 6.5.1 ADA)  
 
11. Under Article 6.5 of the ADA, if confidential information is submitted by the interested party 
to the investigating authority with a justification, two situations may arise: ( i) the investigating 
authority rejects the justification (in this case, the provisions of Article 6.5.2 apply, including 
footnote 18); or (ii) the investigating authority understands that a "good cause " was shown 
(Article 6.5) and accepts the justification , in which case there is no specific guidance about how it 
should proceed.  
 
12. In respect of the investigating authority 's assessment of whether a "good cause " was 
effectively demonstrated by the interested party , Brazil does not consider that an explici t reference 
on the record regarding this analysis is mandatory for each request of confidential treatment, 
except when the authority rejects the justification. Otherwise, Brazil understands that a tacit 
acceptance of the "good cause " should suffice.  
 
13. In any event, according to Article 6.5.1 of the ADA, it is the investigating authority 
responsibility to require a non -confidential summary in sufficient detail to permit a reasonable 
understanding of the substance of the information submitted in confidence . It also falls upon the 
investigating authority to demonstrate that its obligation of requesting the non -confidential 
summary has been dully fulfilled.  
 
(V)  Non-attribution analysis (Article 3.5 ADA)  
 
14. In Brazil 's understanding, for the purpose of th e injury analysis under Article 3.5 of the ADA, 
a factor other than the dumped imports allegedly causing injury is "known " to the investigating 
authority when "clearly raised " by the interested party. In order for a factor to be "known ", the 
interested par ty shall substantiate assertions in this regard by presenting evidence before the 
investigating authority. Therefore, the investigating authority is only required to address the 
arguments and elements of evidence raised by the interested party which were c learly presented.  
 
15.  However, the investigating authority cannot choose to ignore evidence regarding known 
factors. It would also be preferable for an investigating authority to expressly mention the lack of 
evidence not presented by the interested part y in the records of the investigation, rather than not 
mentioning it at all.  
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ANNEX D -2 
INTEGRATED EXECUTIVE  SUMMARY OF  
THE ARGUMENTS OF CANADA  
1. Mr. Chairman, Members of the Panel, we thank you for this opportunity to present Canada 's 
views regarding t he proper interpretation of important provisions of the Anti-Dumping Agreement  
(ADA) . Our statement today will focus on the proper interpretation of  the first sentence of 
Article  3.2. 
 
2. In this case, Japan claims that the Korea Trade Commission 's examina tion of the increase in 
the volume of subject imports was inconsistent with Articles 3.1 and 3.2 . Japan contends that the 
Korea Trade Commission failed to properly examine the significance of the increase in subject 
imports either in absolute or relative t erms.1 In particular, Japan claims that it improperly found a 
"significant increase " in subject imports even though subject imports ended the period of 
investigation up only slightly on an absolute basis and down on a relative basis.2   
 
3. In response, Ko rea maintains that the Korea Trade Commission considered the absolute and 
relative volumes of the dumped imports . It found that there was a significant increase in the 
volume of dumped imports.3 
 
4. Canada does not take a position on the factual aspects of  this dispute . Rather, Canada would 
like to address the proper interpretation of the first sentence of Article 3.2 . This sentence requires 
an investigating authority to "consider whether there has been a significant increase in dumped 
imports, either in ab solute terms or relative to production or consumption in the importing 
Member ". In particular, Canada would like to first address the scope of the obligation to "consider " 
and second, to address the scope of the analysis required by the term "significant ". 
 
5. First, Article 3.2 requires an investigating authority to "consider " the increase in imports . 
The Appellate Body clarified in China – GOES  that the obligation to "consider " requires an 
investigating authority to take something into account in reaching  a decision but that it does not 
require a definitive determination.4 However, in that case, the Appellate Body was careful to 
remind investigating authorities that the lack of a requirement to make a definitive determination 
"does not diminish the rigour that is required of the inquiry under Article[ ] 3.2 " or "the scope of 
what the investigating authority is required to consider ".5 Furthermore, the Appellate Body 
specified that an investigating authority 's consideration "must be reflected in relevant 
documentation, such as the authorities ' final determination, so as to allow an interested party to 
verify whether the authority indeed considered  such factors ".6 
 
6. Thus, in Canada 's view, it is insufficient for a Member to simply assert that its investigatin g 
authority considered certain facts, evidence or legal analyses . Rather, a Member must 
demonstrate from the investigating authority 's record that the investigating authority considered 
those facts, evidence or legal analyses in the course of its investiga tion. 
 
7. Second, Article 3.2 requires an investigating authority to consider not only whether there is 
an increase in dumped imports, but also whether that increase is "significant ". 
 
8. In Canada 's view, consideration of whether an increase is "significa nt" requires an 
investigating authority to assess both the quantitative increase and the factual circumstances in 
which that increase occurred . It is insufficient for an investigating authority to simply consider the 
quantitative increase and, without furt her analysis, conclude that it is significant . Only by 
considering the quantitative increase and its context does an investigating authority have a basis 
on which to conclude that a particular increase is significant .  
                                                
1 Japan's first written submission, p. 43.  
2 Japan's first written submission, para. 117.  
3 Korea's first written submission, para. 175.  
4 Appellate Body Report, China – GOES , para. 1 30. 
5 Appellate Body Report, China – GOES , paras. 130 -131. 
6 Appellate Body Report, China – GOES , para. 131.  WT/DS504/R/Add.1  
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9. Take, for example, a case where an  investigating authority observes that the absolute 
volume of dumped imports increased by 10% over the period of investigation . Without considering 
the factual circumstances, on what objective basis will the investigating authority be able to 
conclude that  the 10% increase is significant? There is none . In this case, as in every case, the 
investigating authority will need to consider the factual circumstances in which that increase 
occurred . Relevant factors could include the nature of the product, the natu re of the market and 
changes in domestic demand . Specific inquiries that may be relevant include: is the product a 
commodity or a specialty product? Did demand for the product increase? Is the market for the 
product highly competitive? Did other segments o f the market also increase in volume? Only by 
assessing the significance of the 10% increase in the light of its context does an investigating 
authority have an objective basis on which to conclude that it is significant.  
 
10. Panels and the Appellate Body  have considered the term "significant " in the context of 
provisions other than the first sentence of Article 3.2 of the ADA . Despite these different contexts, 
these panels and the Appellate Body have interpreted the term "significant " in a consistent 
mann er. This interpretation confirms Canada 's view: the term "significant " requires an 
investigating authority to consider both the quantitative increase and the factual circumstances in 
which the increase occurred. Accordingly, this view should be adopted by the Panel in this case.  
 
11. Most recently, the Appellate Body in US – Washing Machines  considered the term 
"significantly " within the context of the requirement in Article 2.4.2 of the ADA to establish a 
pattern of significant price differences . The Appel late Body found that the term "significantly " 
requires an investigating authority to consider more than just quantitative dimensions . It also 
requires an investigating authority to consider qualitative dimensions.7 These include the nature of 
the product u nder consideration, the industry at issue, the market structure and the intensity of 
competition . The Appellate Body explained that the significance of price differences may be 
affected by these objective market factors . What may be significant in one inst ance may not be 
significant in another . However, the Appellate Body explained that "[u]nless the investigating 
authority considers such qualitative aspects, it will not know if and how these aspects are relevant 
to its assessment ".8 
 
12. The Appellate Body 's findings in US – Washing Machines confirm its earlier findings in 
China  – HP-SSST (Japan and EU) . In this earlier case, the Appellate Body considered the term 
"significant " in the context of a price undercutting analysis under Article 3.2 of the ADA . The 
Appellate Body explained that what amounts to significant price undercutting will necessarily 
depend on the factual circumstances of each case.9 This explanation is particularly relevant to the 
interpretation of "significant " in the volume analysis as it  relates to the interpretation of 
"significant " in the same provision and within the same injury analysis.  
 
13. These Appellate Body findings also accord with earlier panel findings in US – Upland Cotton . 
In this case, the panel considered the term "signif icant" in the context of a price suppression 
analysis under Article 6.3(c) of the SCM Agreement . The panel found that whether price 
suppression is significant "may vary from case to case, depending on the factual circumstances, 
and may not solely depend up on a given level of numeric significance ".10 
 
14. Moreover, the obligation under Article 3.1 of the ADA to make an injury determination on 
the basis of an "objective examination " further confirms Canada 's view . To conduct an "objective 
examination ", an inve stigating authority must consider all relevant evidence.11 It must also 
conduct an investigation in a manner that conforms to the principles of "good faith and 
fundamental fairness ".12 Accordingly, an investigating authority may not ignore relevant evidence 
regarding the factual circumstances in which an increase occurs . In particular, it may not ignore 
evidence tending to indicate that the increase is not significant . Rather, it must take this evidence 
into account in its analysis.  
 
                                                
7 Appellate Body Report, US – Washing Machines , para. 5.63.  
8 Appellate Body Report, US – Washing Machines , para. 5.63.  
9 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , para. 5.161.  
10 Panel Report, US – Upland Cotton , para. 7.1329. This approach was upheld in Appellate Body Report, 
US – Upland Cotton , para. 427.  
11 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , para. 5.161.  
12 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , paras. 5.138 and 5.161; 
China – GOES , para. 126; and US – Hot-Rolled Steel , para. 193.  WT/DS504/R/Add.1  
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15. Thus, in this case, t he Panel must determine whether the Korea Trade Commission 
adequately considered the factual circumstances in its analysis of whether there was a significant 
increase in the volume of dumped imports.  
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ANNEX D -3 
INTEGRATED EXECUTIVE  SUMMARY OF  
THE ARGUMEN TS OF ECUADOR  
1. Regarding the alleged violation by Japan of Article 3.1 of the Anti -Dumping Agreement. On 
this issue, the requirements for positive tests and the objective examination of the volume of 
imports and their Price effects constitute absolute ob ligations that "provide for no exceptions, and 
they include no qualifications so that they must be met by every investigating authority in every 
injury determination ".1  
 
2. About the alleged violation of Article 3.3 of the Anti -Dumping Agreement. It shoul d be 
mentioned that there is a margin of discretion conferred on the Investigating Authorities to 
determine what they will regard as a "significant " increase in imports.  
 
3. In concern to the alleged violation of Article 3.4 of the Agreement on Implementa tion of 
Article  VI of GATT 1994. On this paragraph, the elements mentioned on Article 3.4  should be 
taken  into account in any investigation conducted by the investigating authority. A ll these 
factors  should be assessed, although there may be additional one s to assist the 
investi gating  authorities in determining the impact of dumped imports on a given economy at a 
particular time.  
 
4. Ecuador would like to refer to the alleged violation of Article 3.5 of the Agreement on 
Implementation of Article VI of GATT 1994. Regarding the possibility of the authority also 
examining other factors, "Article 3.5 requires the authority to examine whether any other known 
factor is causing injury to the domestic industry or not as a prerequisite for separating and 
distinguishi ng the injurious effects of the dumped imports from the injurious effects of such other 
factor ".2  
 
5. Regarding the alleged violation of Article 6.5 and 6.5.1 of the Agreement on Implementation 
of Article VI of GATT 1994. In such examination, the relevant  national authority should consider 
what is provided for by Article 6.5, which states, by way of example, that  information which 
is disclosed  and which entails a significant advantage to a competitor or which could  
eventually  have an adverse effect on the person that provides the informatio n or to a 
third party from whom  it has been received, will be treated and qualified as confidential, upon 
justification.  
 
6. In concern to the alleged violation of Articles 12.2 and 12.2.2 of the Agreement on 
Implementat ion of Article VI of GATT 1994, the Group should examine Japan 's claims, verifying 
the guarantee of the principle of transparency with respect to public notice of determinations on 
the case, approved by the independent reports, as well as the allegations o f fact and law that gave 
rise to that determination.  
 
7. Finally, regarding to the alleged violation of Article 1 of the Anti -Dumping Agreement as well 
as Article VI of GATT 1994, it is indispensable for the Panel to examine whether or not there has 
been a  breach of other rules of the Agreement on Implementation of Article VI of GATT 1994, 
because the breach of the rules of this Agreement would result in a violation of both Article I and 
Article VI of the GATT.  
 
                                                
1 World Trade Organization. Appellate Body  Report , European Communities – Anti-dumping duties on 
imports of cotton -type bed linen from India  (WT/DS141/AB/RW) , para. 109. 
2 World Trade Or ganization. Report of the Panel,  European Communities — Anti-Dumping Measure on 
Farmed Salmon from Norway  (WT/DS337/R) , para. 5.94 . WT/DS504/R/Add.1  
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8. Ecuador believes that it is of the utmost importance that the review the Panel makes about 
the case in question, in the context of this analysis, which involves the intent to preserve the legal 
structure of the Agreement on Article VI of GATT 1994, the predictability in the investigations and 
that the rules on the determination of damage will be fully respected, without prejudice, in 
addition, to the fact that in any investigation of dumping, there are particular aspects, that is to 
say, dynamic variables, which are the ones that ultimately lead th e authorities to determine the 
existence or non -existence of injury. As a result, Ecuador restates its view that while it is 
mandatory to prove the damage and the causal relation, the valuation of such damage 
corresponds to the investigating authority to a ssess, in accordance with the conditions and 
circumstances of each case and in every situation under scrutiny.  
 
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ANNEX D -4 
INTEGRATED EXECUTIVE  SUMMARY OF  
THE ARGUMENTS OF THE EUROPEAN UNION  
I. ARTICLE 6.2 OF THE UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF 
DISPUTES  
 
1. Japan's request for establishment identifies the measure at i ssue in accordance with 
Article  6.2 DSU and Article 17.4 ADA. The issues before the Panel in this dispute is therefore 
whether Japan's request sets forth clai ms regarding that measure, and whether it does so with 
sufficient specificity to present the problem clearly.  
 
2. The Appellate Body has clarified that to satisfy the requirement to present the problem 
clearly, the panel request should explain succinctly h ow or why the measure at issue is violating 
the WTO obligation in question. A panel should examine whether a general reference to a treaty 
provision meets the requirement under Article 6.2 on a case -by-case basis, taking into account the 
extent to which su ch reference sheds light on the nature of the obligation at issue.  
 
A. Japan's claim under Articles 3.1 and 3.2 of the ADA  
 
3. As confirmed by the Appellate Body in EC- Bed Linen  (Article 21.5 DSU) Article 3.2 contains 
two distinct obligations: (i) to con duct a volume analysis and (ii) to conduct a price effects 
analysis. Contrary to what Korea alleges, the plain text of claims 1 and 2 of Japan's request makes 
it clear that the two obligations under Article 3.2 ADA, read in conjunction with 3.1 ADA, are th e 
subject matter of the request.  
 
B. Japan's claim under Articles 3.1 and 3.4 of the ADA  
 
4. The EU agrees with Japan that, Article 3.4 read in conjunction with Article 3.1, provides for a 
single obligation to examine "the impact of the dumped imports on t he domestic industry" based 
on "positive evidence" and "an objective examination". Japan's panel request plainly connects the 
measure at issue to said obligation.  
 
C. Japan's claim under Articles 3.1 and 3.5 of the ADA  
 
5. Article 3.5 requires a demonstra tion that the dumped imports are, through the effects of 
dumping, causing injury. The demonstration of this "causal relationship" must be based on an 
examination of "all relevant evidence". In addition; Article 3.5 provides an obligation for the 
authoritie s to examine any known factors other than the dumped imports which also cause injury 
to the domestic industry. Article 3.5 provides a non -exhaustive list of 5 "other factors" which may 
be relevant in the analysis.  
 
6. The EU notes that Japan's claim 4 conc erns on the one hand the obligation to demonstrate 
that dumped imports are, through the effects of dumping, causing injury, under the first sentence 
of Article 3.5 and, on the other hand, the general obligation to conduct an objective examination 
based on positive evidence under Article 3.1, as echoed and further qualified in the 
second  sentence of Article 3.5, which is also covered by Japan's claim 4.  
 
7. With its claim 5 Japan alleges that Korea violated its non -attribution obligation under 
Article  3.5, r ead in conjunction with Article 3.1. Japan does not specify in its claim with respect to 
which of the "known factors other than the dumped imports" the Korean authorities failed to 
comply with Article 3.5. The EU does not believe that the various factors l isted in the indicative list 
under Article 3.5 constitute separate and distinct obligations to the obligation to conduct a non -
attribution analysis. Similarly, to the list of factors under Article 3.4, they appear to constitute 
subordinate elements to the core obligation.  
 
8. In its claim 6 Japan alleges a violation of Articles 3.1 and 3.5, which exists irrespectively and 
independently of whether Korea's analysis would be found to be inconsistent with Articles 3.1 WT/DS504/R/Add.1  
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and 3.2 ADA and Articles 3.1 and 3.4 ADA. The EU agrees with Japan that both consequential 
claims, resulting from the breach of Articles 3.2 and 3.4 ADA, as well as independent claims of 
breach of Article 3.5 ADA can be raised in WTO proceedings.  
 
D. Japan's claim under Articles 3.1 and 4.1 of the  ADA 
 
9. Article 4.1 defines "domestic industry" for the purpose of the ADA. Although a definitional 
provision, Article 4.1 can be the basis of a finding of a violation under the ADA. As clarified through 
jurisprudence, Article 4.1 imposes an express oblig ation on Members to interpret the term 
"domestic industry" in a specified manner. In light of the fact that Ar ticle 4.1 contains one 
distinct  obligation, Japan's claim 7 in its panel request, which alleges a violat ion of Articles 3.1 
and 4.1 ADA, would app ear to meet the minimal requirements of Article 6.2 DSU.  
 
II. OBSERVATIONS ON THE I NJURY ANALYSIS UNDER  ARTICLE 3 OF THE AD AGREEMENT  
 
10. The ordinary meaning of the first sentence of Article 3.2 is not clear on whether an 
investigating authority is allow ed, as a matter of law, to progress to the next step of its analysis 
once it has considered whether there has been a significant increase in dumped imports either in 
absolute or relative terms or whether an investigating authority is expected to carry out both 
analyses before moving to the next step of "its logical progression of inquiry".  
 
11. The context provided by Article 3.1, the second sentence of Ar ticle 3.2, and Articles 3.4 
and 3.5 strongly suggest that both an absolute and a relative volume analy sis should be 
considered under the first sentence of Article 3.2. An investigating authority is expected to carry 
out an objective  analysis under Article 3.1, while the causation analysis under Article 3.5 and the 
volume analysis under Article 3.2, first s entence, should not be mixed up. Indeed, the causation 
analysis encompasses "all relevant evidence" before the authority, including the volume of subject 
imports and their price effects listed under Article 3.2, as well as all relevant economic factors 
concerning the state of the domestic industry listed in Article 3.4.  
 
12. If the investigating authority would e.g. begin to consider what a significant absolute 
increase in the volume of dumped imports means for the causation analysis under Article 3.5 
without having as a basis a consideration of how such an absolute increase relates to production or 
consumption, it would, at least in most cases, necessarily have to undertake such a relative 
analysis to properly understand e.g. the interaction between the in creased dumped imports and 
the relative market shares between dumped and non -dumped imports and the dumped imports 
and domestic consumption. Such information is often highly relevant to form the basis for the 
ultimate causation analysis. Allowing or requir ing such an analysis only under Article 3.5 would 
necessarily mix up the respective obligations under Articles 3.2 and 3.5 ADA.  
 
13. Consequently, the European Union is of the view that an investigating authority is, at least 
in most cases, required to co nsider whether there has been a significant increase in dumped 
imports by examining whether such increase is either absolute or relative to production or 
consumption or both. Before considering the relevance of both angles in a critical manner, the 
investi gating authority may not move to the next step in its objective analysis and logical 
progression of inquiry. This interpretation is also perfectly in line with the objective of Article 3, 
which is to ensure that the analysis and the conclusion drawn theref rom are robust .  
 
14. The results of the inquiries, pursuant to Article 3.2, relating to the volume of the dumped 
imports and the effects of the dumped imports on prices are relevant to the impact analysis 
required under Article 3.4, given that this provis ion requires the evaluation of all relevant 
economic factors and indices having a bearing on the state of the industry, including market share 
and factors affecting domestic prices.  
 
15. The examination under Article 3.5 in turn encompasses "all relevant e vidence" before the 
authority, including the volume of subject imports and their price effects listed under Articles 3.2, 
as well as all relevant economic factors concerning the state of the domestic industry listed in 
Article 3.4. The examination under Ar ticle 3.5, by definition, covers a broader scope than the 
scope of the elements considered in relation to price depression and suppression under Article 3.2.  
 
16. The Anti -Dumping Agreement does not expressly state how factors should become "known" 
to the investigating authority, or if and in what manner they must be raised by interested parties, WT/DS504/R/Add.1  
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in order to qualify as "known". In the view of the European Union an unbiased and objective 
decision maker may not disregard relevant known information regardless of whether it was raised 
by interested parties.  
 
III. DEFINITION OF THE DOMESTIC INDUSTRY  
 
17. Pursuant to Articles 3.1 and 4.1 of the AD Agreement, provisions which are inextricably 
linked, the "domestic industry" should be defined as referring to the dom estic producers as a 
whole of the like products. Some of those producers may be left out from the definition of 
"domestic industry" in view of the reasons provided for in subparagraphs (i) and (ii) of Article 4.1 
of the AD Agreement. Further, as an alterna tive, an investigating authority may reduce the 
universe of domestic producers to be caught under the definition of "domestic producers" if they 
amount to a "major proportion" of the total domestic production. However, this alternative is not 
unfettered. I n so doing, investigating authorities should proceed in an unbiased manner, without 
favouring the interests of any interested party in the investigation, and thus ensuring that the way 
in which the domestic industry is defined does not introduce a material  risk of skewing the 
economic data and, consequently, distorting its analysis of the state of the industry.  
 
18. The European Union is concerned with the uncontested fact that the domestic industry was 
defined to include only the two applicants out of a to tal of nine domestic producers. Although the 
collective domestic production of the two applicants consisted of about half of the total domestic 
production, the fact that all other seven domestic producers were excluded from the definition of 
the domestic i ndustry may give rise to a material risk of distortion. It is also clear that the 
domestic industry was not particularly fragmented; rather the contrary seems to be true.  
 
19. The investigating authority bears the obligation to ensure that the way in which  it defines 
the domestic industry does not introduce a material risk of skewing the economic data and, 
consequently, distorting its analysis of the state of the industry. In the light of the facts and 
evidence presented so far, the rest of the investigatio n must demonstrate in a particularly robust 
manner that despite the domestic industry consisting only of the two applicants to the exclusion of 
all other seven domestic producers there is no distortion in the analysis of the state of the 
industry.  WT/DS504/R/Add.1  
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ANNEX D -5 
INTEGRATED EXECUTIVE  SUMMARY OF  
THE ARGUMENTS OF THE UNITED STATES   
EXECUTIVE SUMMARY OF U.S.  THIRD PARTY WRITTEN SUBMISSION  
 
I. ARTICLES 3.1 AND 4.1 OF THE AD AGREEMENT  
 
1. Japan argues that the Korea Trade Commission's ("KTC") definition of the domes tic industry 
is inconsistent with Articles 3.1 and 4.1 of the AD Agreement .  
 
2. Article 3.1 informs the interpretation of Article 4.1 . Article 4.1 establishes that the "domestic 
industry" can be defined as either (1) the "domestic producers as a whole of the like products" , 
i.e., all domestic producers, or (2) a subset of domestic producers "whose collective output of the 
products constitutes a major proportion of the total domestic production" of the like products . 
Article 4.1 of the AD Agreement does not  require that all domestic producers be included in the 
domestic industry, nor does it articulate a minimum limit on the percentage of domestic production 
that must be included to constitute a "major proportion" of the total domestic production of those 
products .  
 
3. Although undefined in the AD Agreement, the term "major proportion" must be interpreted 
in the context of Article 3.1 of the AD Agreement . Article 3.1 of the AD Agreement sets forth two 
overarching obligations that apply to multiple aspects of  an authority's injury determination . The 
first overarching obligation is that the injury determination be based on "positive evidence" . The 
second obligation is that the injury determination involves an "objective examination" of the 
volume of the dumped imports, their price effects, and their impact on the domestic industry . How 
an authority chooses to define the domestic industry has repercussions throughout the course of 
the injury analysis and determination; thus, the overarching obligations of Article  3.1 necessarily 
extend to an authority's definition of the domestic industry .  
 
4. In this case, the Panel should consider whether the authority, consistent with Article 3.1, 
defined the domestic industry in a fair and unbiased manner . A flawed definition  of the domestic 
industry can distort an authority's material injury analysis . For a material injury determination to 
be based on "positive evidence and involve an objective examination" , the authority must rely 
upon a properly defined domestic industry to  perform the analysis . The Appellate Body has 
recognized that a proper definition of the domestic industry is critical to ensuring an accurate and 
unbiased injury analysis .  
 
5. In evaluating whether an authority's definition of the domestic industry intro duces a 
distortion to the analysis, a Panel should consider the existence of an inverse relationship between 
the proportion of producers included in the domestic industry and the absence of a risk of material 
distortion in the assessment of injury.  
 
II. ARTICLES 3.1 AND 3.2 OF THE AD AGREEMENT  
 
6. Japan contends that the KTC's analyses of the volume of subject imports and price effects 
were inconsistent with Articles 3.1 and 3.2 of the AD agreement.  
 
7. The obligations of Article 3.2 of the AD Agreement mus t be considered in conjunction with 
the overarching principles of Article 3.1 of that Agreement .  
 
8. With respect to volume, Article 3.2 of the AD Agreement states that an investigating 
authority shall "consider whether there has been a significant increa se in dumped imports" , either 
in absolute terms or relative to production or consumption of the importing country.  
 
9. Based upon the clear text of the AD Agreement, which uses the disjunctive terms "either" 
and "or" , analysis of the volume of subject impo rts should include consideration of the absolute 
volume of subject imports, as well as whether there was a significant increase in the volume of WT/DS504/R/Add.1  
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subject imports in absolute terms, a significant increase in the volume of subject imports relative 
to producti on in the importing Member, or a significant increase in the volume of subject imports 
relative to consumption in the importing Member . The last sentence of Article 3.2 specifies that "no 
one or several" of the Article 3.2 factors "can necessarily give dec isive guidance" . 
 
10. The United States recalls that the Appellate Body in China – GOES  found that Article 3.2 
does not require an authority "to make a definitive determination " on price effects, recognizing the 
distinction between use of the verb "conside r" in Article 3.2 of the AD Agreement and the verb 
"demonstrate" in Article 3.5 . However, the fact that no definitive determination is required "does 
not diminish the scope of what the investigating authority is required to consider" . 
 
11. The text contemp lates three inquiries with regard to the effects of dumped imports on 
prices: price undercutting, price depression and price suppression . As the Appellate Body in 
China  – GOES explained, the inquiries set out in Article 3.2 are separated by the words "or" and 
"otherwise" , indicating that the elements relevant to the consideration of significant price 
undercutting may differ from those relevant to the consideration of significant price depression and 
suppression . Thus, even if prices of subject imports do no t significantly undercut those of the like 
domestic products, subject imports could still have a price -depressing or price -suppressing effect 
on domestic prices.  
 
12. The Appellate Body has explained, however, that the investigating authority's inquiry mus t 
provide the authority with a "meaningful understanding of whether subject imports have 
explanatory force" for price depression or suppression, and, as required by Article 3.1, that 
understanding must be based on positive evidence and an objective examina tion.  
 
13. In assessing price depression or suppression, the authority may not confine its consideration 
to an isolated analysis of domestic prices . Rather, the plain text of Article 3.2 envisions an inquiry 
into the relationship between subject imports a nd domestic prices . Article 3.2 introduces the 
obligations on price effects by clarifying that the nature of the inquiry is to understand the "effect 
of the dumped imports on prices" . An authority's analysis of the three delineated price effects – 
price un dercutting, price depression, and price suppression – must necessarily be in reference to 
the subject imports . The Appellate Body has endorsed this interpretation that it is not enough for 
an authority to simply observe what is happening to domestic prices .  
 
14. The United States recalls that the Appellate Body in China – GOES  has explained that 
(1) Article 3.2 requires an investigating authority in its final determination to provide sufficient 
reasoning as to what explanatory force parallel pricing trends  have for the depression or 
suppression or domestic prices,  and (2) that although price depression and price suppression are 
not contingent on a finding of price undercutting, the investigating authority must conduct an 
objective examination of all the evi dence in making its determinations with respect to these 
effects .  
 
15. Regarding price comparability, when there is record evidence indicating that subject imports 
are not a homogenous product and/or that subject imports differ from the domestically -produ ced 
product, an investigating authority should evaluate those differences to determine whether they 
affected prices and take steps to explain the implications of such price comparability (or lack 
thereof) between subject imports and the domestic product.  
 
16. The AD Agreement does not prescribe a particular methodology to be used in an 
investigating authority's volume and price effects analysis.  
 
III. ARTICLES 3.1 AND 3.4 OF THE AD AGREEMENT  
 
17. Japan argues that the KTC's analysis of adverse impact is inc onsistent with Articles 3 .1 
and 3.4. 
 
18. All determinations or findings made in connection with Article 3.4 must be based on "positive 
evidence" and "involve an objective examination" , as required by Article 3.1 of the AD Agreement.  
 
19. Article 3.4 of th e AD Agreement sets out an authority's obligation to ascertain the impact of 
dumped imports on the domestic industry . The United States observes that Article 3.4 imposes an 
obligation on the authority to conduct an "examination" of the impact of the dumped  imports on WT/DS504/R/Add.1  
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the domestic industry . And the text of Article 3.4 expressly requires investigating authorities to 
examine the "impact" of subject imports on a domestic industry, and not just the state of the 
industry .  
 
20. As recognized by Articles 3.1 and 3 .2 of the AD Agreement, subject imports can influence a 
domestic industry's performance through volume and price effects . Thus, to examine the impact of 
subject imports on a domestic industry, an authority would need to consider the relationship 
between su bject imports – including subject import price undercutting, and the price depressing or 
suppressing effects of subject imports – and the domestic industry's performance during the 
period of investigation .  
 
21. Thus, in examining "the relationship between  subject imports and the state of the domestic 
industry" pursuant to Article 3.4 of the AD Agreement, an authority must consider whether 
changes in the state of the industry are the consequences of subject imports and whether subject 
imports have explanato ry force for the industry's performance trends . The "examination" 
contemplated by Article 3.4 must be based on a "thorough evaluation of the state of the industry" 
and it must "contain a persuasive explanation as to how the evaluation of relevant factors l ed to 
the determination of injury" . 
 
22. Article 3.4 does not dictate the methodology that should be employed by the authority, or 
the manner in which the results of this evaluation are to be set out . The United States observes 
that the Panel must be able to discern that the authority's examination of the impact on the 
domestic industry – an examination that necessarily includes an evaluation of relevant economic 
factors – is based on positive evidence and an objective examination .  
 
IV. ARTICLES 3.1 AND 3.5 OF THE AD AGREEMENT  
 
23. Japan claims that the KTC's causation analysis was inconsistent with Articles 3.1 and 3.5 of 
the AD Agreement.  
 
24. As with Articles 3.2, 3.4, and 4.1 of the AD Agreement, the Appellate Body has recognized 
that it is appropriate to read the obligations of Article 3.5 in conjunction with Ar ticle 3.1 of the 
AD Agreement.  
 
25. With respect to the interpretation of Articles 3.2 and 3.5, the United States agrees with 
Japan's argument that a deficient volume or price effects analysis c ould compromise a causation 
analysis where the findings on volume or price effects serve as a key element of the causation 
analysis . As the Appellate Body explained in China – GOES , the provisions in Article  3 
"contemplate a logical progression in an autho rity's examination leading to the ultimate injury and 
causation determination" . Fatal deficiencies in a volume or price effects analysis could compromise 
the objective nature of the causation analysis .  
 
26. The first sentence of Article 3.5 sets out the g eneral requirement for a demonstration that 
dumped imports are causing injury under the AD Agreement, and contains an explicit link back to 
Articles 3.2 (volume and price effects) and 3.4 (impact on domestic industries) . If the volume or 
price effects find ings are found to be inconsistent with Articles 3.1 and 3.2, or the impact findings 
are found to be inconsistent with Articles 3.1 and 3.4, an Article 3.5 causal link analysis relying on 
such findings would fail . That is, if an authority relies on a price effects finding to support its 
impact and injury determinations, its decision must be supported by positive evidence on these 
counts . In such circumstances, a failure to demonstrate price effects or significant impact would 
constitute a failure to demonstr ate that dumped imports are causing i njury, as required by the 
first sentence of Article 3.5 of the AD Agreement.  
 
27. The third sentence of Article 3.5 of the AD Agreement provides that, in addition to 
examining the effects of the dumped imports, an auth ority must examine other known factors 
which at the same time are injuring the domestic industry . Under Article 3.5, the premise of a 
non-attribution analysis is that there is at least one known factor other than the dumped imports 
that is at the same time  injuring the domestic industry . As the Appellate Body has found, if known 
factors other than dumped imports are simultaneously causing injury , the third sentence of 
Article  3.5 requires the authority to engage in a non -attribution analysis to ensure that the effects 
of those other factors are not attributed to the dumped imports . If there are no known factors WT/DS504/R/Add.1  
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other than the dumped imports that are injuring the domestic industry, Article 3.5 does not require 
an authority to conduct a non -attribution analysi s.  
 
28. The AD Agreement does not specify the particular methods and approaches an authority 
may use to conduct a causation analysis, including the non -attribution aspect of that analysis .  
 
V. ARTICLE 12 OF THE AD AGREEMENT  
 
29. Japan argues that Korea b reached Articles 12.2 and 12.2.2 of the AD Agreement by failing 
to issue a public notice or report disclosing all relevant information supporting its decision to 
impose anti -dumping duties against Japanese imports.  
 
30. Article 12.2 requires investigating authorities to provide public notice or a separate report of 
preliminary or final determinations . The notice or report must provide "in sufficient detail the 
findings and conclusions reached on all issues of fact and law considered material by the 
investig ating authorities" . 
 
31. Article 12.2.2 is triggered after an investigating authority makes a final determination to 
impose anti -dumping duties . According to the Appellate Body in China – GOES,  the notice 
requirement of Article 12.2.2 "capture[s] the princ iple that those parties whose interests are 
affected by the imposition of final anti -dumping  … duties are entitled to know, as a matter of 
fairness and due process, the facts, law and reasons that have led to the imposition of such 
duties" . If the relevant  information is confidential, the investigating authorities may provide non -
confidential summaries of that information.  
 
32. Article 12.2.2 does not require investigating authorities "to disclose all the factual 
information that is before them, but rather those ["matters of fact"] that allow an understanding of 
the factual basis that led to the imposition of final measures" .  
 
33. The Appellate Body also stated in China – GOES that public notice under 12.2.2 must include 
a discussion of the elements that es tablish injury under Article 3.  
 
34. Article 12.2.2 further requires that a public notice or report contain " reasons for the 
acceptance or rejection of relevant arguments or claims made by the exporters and importers" . 
Because the interests of exporters an d importers may be adversely affected by a final dumping 
determination, it is important that such parties are able to provide input on the evidence and 
methodology used by investigating authorities during the course of an investigation . If the public 
notice or report does not contain a detailed explanation as to why an argument was rejected, there 
is little way of knowing whether the investigating authority considered the comments of an 
interested party, or whether the final determination was consisten t with the provisions of the 
AD Agreement .   
 
VI. KOREA'S PRELIMINARY RULING REQUEST  
 
35. In its preliminary ruling request, Korea asserts that Japan's  panel request breaches 
Article  6.2 of the DSU by failing to "provide a brief summary of the legal basis of th e complaint 
sufficient to present the problem clearly" with respect to its claims under Articles 3.1, 3.2, 3.4, 
3.5, and 4.1 of the AD Agreement.  
 
36. Article 7.1 of the DSU establishes that a panel's terms of reference are to examine the "the 
matter refer red to the DSB" by the complaining party in the request for the establishment of a 
panel, in the light of relevant provisions of the covered agreement cited by the parties to the 
dispute.  
 
37. Article 6.2 of the DSU provides that the panel request shall "i dentify the specific measures at 
issue and provide a brief summary of the legal basis of the complaint sufficient to present the 
problem clearly" . These two distinct requirements – "(i) the identification of the specific measures 
at issue; and (ii) the pro vision of a brief summary of the legal basis of the complaint" – "constitute 
the 'matter referred to the DSB' , which forms the basis of a panel's terms of reference under 
Article 7.1 of the DSU" .   
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38. The Appellate Body has stated that the "legal basis o f the complaint ... [is] 'the specific 
provision of the covered agreement that contains the obligation alleged to be violated'" . The 
identification of the covered agreement provision claimed to have been breached is thus the 
"minimum prerequisite" for pres enting the legal basis of the complaint . Further, the requirement of 
a "brief summary" sufficient to "present the problem clearly" entails connecting the challenged 
measure with the provisions alleged to have been infringed . Consequently, "to the extent th at a 
provision contains not one single distinct obligation, but rather multiple obligations, a panel 
request might need to specify which of the obligations contained in th e provision is being 
challenged ".   
 
39. However, a panel request is required to stat e the claim at issue . It is not required to provide 
argumentation as to why and precisely how the measure breaches the relevant obligation . Thus, 
for Korea to demonstrate that a particular claim falls outside the Panel's terms of reference, it 
must show th at the panel request did not clearly identify the obligation or provision alleged to be 
breached by the challenged measure.  
 
EXECUTIVE SUMMARY OF U.S.  RESPONSES TO PANEL QUESTIONS TO THIRD PARTIES  
 
Response to Question 8  
 
40. Japan has requested the Panel to find the measures at issue to be inconsistent with 
Article  VI of the GATT 1994 "as a consequence of the inconsistencies with the Anti -Dumping 
Agreement" as described in its submission . Japan raised no new arguments spe cific to Article VI of 
the GATT  1994. The United States submits that the Panel need not make any f indings with respect 
to Article  VI of the GATT 1994 because such findings would not contribute to the resolution of the 
dispute between the parties.  
 
41. Article 3.4 and Article 3.7 of the DSU provide, respectively, that "[r]ecommendations or 
rulings of the DSB shall be aimed at achieving a satisfactory settlement of the matter" and that 
"the aim of the dispute settlement mechanism is to secure a positive solution to a dispute" . 
Pursuant to Arti cles 7.1 and 11 of the DSU, panels and the Appellate Body are charged with 
making those findings that may lead to such a recommendation . Given the findings requested by 
Japan under Article VI of the GATT 1994 are purely consequential, additional findings w ould not 
affect the DSB's recommendations and rulings, and the Panel therefore should exercise judicial 
economy with respect to those claims.  
 
 
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