RESTRICTED  
  
WT/DSB/M/374  
 
23 March 2016  
(16-1656)  Page: 1/5  
Dispute Settlement Body 
12 February 2016    
 
 MINUTES OF MEETING 
HELD IN THE CENTRE WILLIAM RAPPARD 
ON 12 FEBRUARY 2016 
Chairman: Mr. Harald Neple (Norway) 
1  EUROPEAN COMMUNITIES – DEFINITIVE  ANTI-DUMPING MEASURES ON CERTAIN 
IRON OR STEEL FASTENERS FROM CHINA: RECOURSE TO ARTICLE 21.5 OF THE DSU BY CHINA 
A.  Report of the Appellate Body (WT/DS397 /AB/RW and Add.1) and Report of the Panel 
(WT/DS397/RW and Add.1) 
1.1.  The Chairman drew attention to the comm unication from the Appellate Body contained in 
document WT/DS397/24 transmitting the Appellate Body Report in the dispute: "European 
Communities – Definitive Anti-Dumping Measures on  Certain Iron or Steel Fasteners from China: 
Recourse to Article 21.5 of the DSU by China", which had been circulated on 18 January 2016 in document WT/DS397/AB/RW and Add.1. He reminded delegations that the Appellate Body Report 
and the Panel Report pertaining to this dispute ha d been circulated as unrestricted documents. As 
Members were aware, Article 17.14 of the DSU requ ired that: "An Appellate Body report shall be 
adopted by the DSB and unconditionally accepted  by the parties to the dispute unless the DSB 
decides by consensus not to adopt the Appellate Body report within 30 days following its 
circulation to Members. This adoption procedure is without prejudice to the right of Members to 
express their views on an Appellate Body report". 
1.2.  The representative of China said that hi s country thanked the Appellate Body members, the 
compliance Panel and the respective Secretariats for their work in these proceedings. China highly 
appreciated the time and effort they had dedicated to resolving this dispute. China also thanked the EU and the third parties for their constructive participation throughout the compliance 
proceedings. This was an important moment for Ch ina. After nearly seven years of WTO litigation, 
this latest ruling of the Appellate Body left no doubt whatsoever that the EU's anti-dumping 
measures against Chinese imports of fasteners continued to violate the EU's WTO obligations. As Members would recall in 2009, China had challenged the original anti-dumping measures imposed 
by the EU. In 2011, the Appellate Body had found that those measures violated the GATT 1994 
and the Anti-Dumping Agreement. Yet, despite this clear ruling, the EU had failed to bring its 
measures into compliance. In its Report of 18 January 2016, the Appellate Body had confirmed 
that the EU had failed to comply with the DSB's recommendations and rulings and continued to 
violate its obligations under the Anti-Dumping Ag reement. China was pleased that the compliance 
Panel had found in favour of many of its claims, and that the Appellate Body had not only upheld 
all of these findings but that it had also agreed with China's cross-appeal and had reversed several 
of the Panel’s initial findings which were in favour of the EU position. 
1.3.  For China, the outcome of this dispute wa s of great significance not only because of its 
economic impact for the specific sector concerned but also because of its systemic implications. In 
particular, China welcomed the Appellate Body's findings concerning the transparency and due 
process obligations that must be observed by an investigating authority while carrying out anti-dumping investigations. In that regard, China noted that the Appellate Body had upheld the 
Panel's conclusion that the EU had acted incons istently with Article 6.5 of the Anti-Dumping 
Agreement by according confidential treatment to the information concerning the analogue country WT/DSB/M/374 
 
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  producer's products without making an objective assessment of the "good cause" allegedly 
justifying such treatment. The Appellate Body had found that it was not for the Panel to conduct a de novo  review of whether such information was confidential by nature or whether good cause had 
been shown by the analogue producer. The Appellate  Body had also agreed with the Panel that by 
withholding this information, the EU acted inconsistently with Articles 6.4 and 6.2 of the 
Anti-Dumping Agreement. Notably, with regard to  Article 6.4, the Appellate Body had confirmed 
that the information at issue was not to be treated as "confidential" because the EU accorded 
confidential treatment without following the requir ements of Article 6.5. The Appellate Body had 
also reaffirmed that the "relevance" of informatio n must be examined from the perspective of the 
interested party requesting to see that informatio n. The Appellate Body had finally clarified that 
the information was "used" by the investigating authority if it related to a "required step" in the 
investigation, such as the calculation of dumping margins. 
1.4.  Furthermore, China welcomed the Appellate Body's decision to reverse the Panel's findings 
under Article 6.1.2 of the Anti-Dumping Agreem ent. That provision required that evidence 
presented in writing by one interested party was made available promptly to other interested 
parties participating in an investigation. According to the Appellate Body, although there was no evidence that the EU had formally recognized the analogue country producer as an "interested 
party" within the meaning of Article 6.11, the re cord of the investigation demonstrated that it 
effectively treated that producer as an interested party in the review investigation. As a consequence, the Appellate Body had reversed th e Panel's finding and had concluded that the EU 
had acted inconsistently with Article 6.1.2 of the Anti-Dumping Agreement because it had failed to 
provide the Chinese producers with information concerning the products of the analogue country 
producer. Likewise, the Appellate Body had agreed with the Panel that the EU had acted inconsistently with its obligation under the last sentence of Article 2.4 of the Anti-Dumping 
Agreement because it had failed to provide Chinese producers with information regarding the 
characteristics of the analogue producer’s fasten ers that were used to determine normal values. 
The Appellate Body had considered that the Panel was correct in finding that the confidentiality of 
information did not annul the obligations under Article 2.4. In other words, even if the information 
was to be treated as confidential under Articl e 6.5 of the Anti-Dumping Agreement, the last 
sentence of Article 2.4 would still require the EU to make some disclosure in order to allow the interested parties to make informed decisions regarding possible adjustments. 
1.5.  China also welcomed the Appellate Body's decision to correct the Panel's findings under 
Article 2.4 of the Anti-Dumping Agreement concerning the obligation to make a fair comparison between export price and normal value, and to that end, to make adjustments for differences 
affecting price comparability. China had challenged the compliance Panel's findings because they 
were based on the assumption that the use of  the analogue country methodology waived the 
investigating authority's obligation to make adjustments for differences in taxation and certain 
costs differences. Following China's reasoning, the Appellate Body had considered that an 
investigating authority had to determine whether the adjustment was warranted because it reflected a genuine difference affecting price comparability or whether it would lead to reintroducing costs or prices that were found to be distorted. By rejecting the Chinese producers' 
requests for adjustments for differences in taxation and costs, the EU had failed to make such an 
adequate assessment and had therefore acted incons istently with Article 2.4 of the Anti-Dumping 
Agreement. That finding was of particular importance not only for this anti-dumping investigation, 
but for all investigations in which the analogue country methodology was used. Indeed, it 
confirmed that the use of the analogue country methodology could not, in itself, justify the refusal to account for comparative advantages existing in the exporting countries. 
1.6.  Finally, China welcomed the Appellate Body's confirmation of the Panel's findings under 
Article 2.4.2 and Articles 4.1 and 3.1 of the Anti-Dumping Agreement. With respect to Article 2.4.2, the Appellate Body had noted that the requirement to compare all comparable export 
transactions meant that such comparison should be made for the product under investigation as a 
whole, which in the present case included all expo rted models of fasteners. As a consequence, the 
Appellate Body had upheld the Panel's findings that the EU had acted inconsistently with Article 2.4.2 by excluding, in its dumping determ inations, those models of Chinese fasteners that 
did not match any of the models on the normal value side. The other important finding concerned 
the definition of "domestic industry". In this regard, the Appellate Body had rejected the EU's 
arguments raised on appeal and had upheld the Panel's findings that the EU had violated 
Articles 4.1 and 3.1 of the Anti-Dumping Agreemen t. The Appellate Body had considered that, by 
relying on the original Notice of Initiation, which stated that only those producers willing to be WT/DSB/M/374 
 
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  included in the injury sample would be considered as cooperating and thus part of the domestic 
industry, the Commission had introduced a material risk of distortion in the industry definition and in the injury determination. The Appellate Body had echoed the Panel's finding that injury determination, based on the data obtained from  a wrongly defined domestic industry, was also 
inconsistent with Article 3.1 of the Anti-Dumping Agreement. These findings of the compliance 
Panel and the Appellate Body had fully vindicated China's position and were a welcome reminder that, with the exception of the special rules governing the normal value determination that were 
due to expire on 11 December 2016, Chinese exporters should not be treated differently from 
exporters from other WTO Members in EU anti-dum ping investigations. Those findings therefore 
required that the EU modify the way it currently  carried out anti-dumping investigations against 
imports from China. China was therefore pleased to request that the DSB adopt the Reports of the 
Appellate Body and of the compliance Panel, as mo dified by the Appellate Body. China invited the 
EU to take all the necessary steps to ensure prompt and full compliance with the findings and recommendations of the Appellate Body. In Chin a's view, a necessary first step towards full 
compliance was for the EU to withdraw immediatel y its anti-dumping duties on fasteners from 
China. Given the significant lapse of time between the start of the original proceedings and the adoption of the final Appellate Body Report at the present meeting, China considered that any 
further delay by the EU in bringing its measures into conformity with its WTO obligations would be 
unacceptable. 
1.7.  The representative of the European Unio n said that the EU thanked the Appellate Body 
members, the Panelists and the Secretariat for their work on this dispute. The EU acknowledged 
the time and efforts dedicated to this dispute. The EU recalled that this dispute dated back 
to 2009, when China had requested consul tations with the EU with regard to, inter alia , 
anti-dumping measures on fasteners from China. In 2011, the DSB had adopted the 
recommendations and rulings in this dispute. The EU had taken a number of measures to 
implement the DSB's recommendations and rulings in good faith and within the reasonable period of time agreed with China. Only some of those measures were disputed through the compliance 
proceedings at issue. In particular, the EU had co nducted an extensive review of the anti-dumping 
measures on fasteners. In that review, several aspects of the measures had been re-assessed through, inter alia,  an extensive dialogue with the interested  parties, as required by the Appellate 
Body Report in the original proceedings. The in vestigating authority had disclosed additional 
information, it had made further distinctions regarding the product types and further adjustments, 
in order to ensure fair comparison; and it had re-assessed the definition of domestic industry. As a result of this review, all dumping margins that had been found in the original investigation were 
revised downwards significantly. This was accomplish ed before the expiry of the reasonable period 
of time. In the compliance Reports, the Panel and the Appellate Body had found that certain aspects of this review were inconsistent with the Anti-Dumping Agreement. The EU took note of 
those Reports and intended to ensure that the meas ures at issue fully complied with those findings 
as soon as possible. 
1.8.  Keeping that in mind, the EU wished to comment on some more systemic aspects of the 
Reports. The EU welcomed the confirmation by the Appellate Body that in case where the analogue 
country methodology was used, because the ex porters had not shown that market economy 
conditions prevailed in their industry, the investigating authority was not required, under Article 2.4 of the Anti-Dumping Agreement, to adjust for differences in costs between the 
non-market economy (NME) producer and the analog ue country producer where this would lead to 
adjusting back to the prices and costs in the NME industry that had been found to be distorted. 
The EU took note of the Appellate Body clarif ications of the terms "all comparable export 
transactions" under Article 2.4.2 of the Anti-Dumping Agreement. The EU, however, wished to 
reiterate that, in this case, through the contested methodology, the EU investigating authority had strived to perform a fair and accurate comparison on the basis of objective elements at its disposal. The EU recalled the practical difficulties that may arise more generally in this respect, in 
investigations concerning non-market economies. Likewise, the EU took note of the findings 
relating to the status of analogue country producers in the investigation and to the treatment and disclosure of information that those producers provided. This was also a systemic point arising 
more generally in investigations concerning non-market economies. The EU was convinced that a 
proper balance must be struck, and indeed could be struck, between those findings and the need 
to protect the confidential information provided by analogue country producers. In any event, as it 
had previously stated, it was the EU's clear intention to ensure that the measures at issue fully 
complied with the findings of the Panel and of th e Appellate Body so that this dispute could be 
resolved as soon as possible. WT/DSB/M/374 
 
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  1.9.  The representative of the United States said that his country had participated as a third-party 
in this dispute, and would like to offer the following observations on the Reports. This dispute 
involved a number of complex, fact-dependent issues involving a specific anti-dumping determination and related obligations under the Agr eement on Implementation of Article VI of the 
General Agreement on Tariffs and Trade 1994 (Anti- Dumping Agreement). Many of the findings by 
the Panel and the Appellate Body depended on the specific facts at issue, and those findings may 
not have systemic implications. Some findings, however, would appear to have systemic 
implications. The United States viewed some of  these findings as positive contributions to 
Members' understanding of the Anti-Dumping Agr eement, while other findings raised concerns. 
1.10.  First, the Panel and Appellate Body Reports supported that under Article 6.4 of the 
Anti-Dumping Agreement, interested parties must be provided access to information necessary to 
defend their interests. As explained in the US third-party submissions, for an interested party to 
fully defend its interests in the course of an anti-d umping investigation, it was especially critical for 
the interested party to have access to information related to an investigating authority's 
calculation of normal value and any price comparisons that were conducted. In that regard, the 
United States noted that the Appellate Body had confirmed that the issue of whether information 
was "relevant" for purposes of Article 6.4 was to be determined from the perspective of the 
interested parties that had requested to see the information, not the perspective of the 
investigating authority.
1 The United States also noted the Appe llate Body's finding that information 
"used" by the investigating authority, within the meaning of Article 6.4, was not necessarily limited to the narrow subset of data that the authority relied on in calculating the margin of dumping.
2 
1.11.  Second, the Reports confirmed that when an authority used a normal average-to-average 
methodology, the authority could not omit the consideration of certain export transactions on the basis that it would be inconvenient to determine a corresponding normal value. In that regard, the 
United States appreciated the Appellate Body's observation that the Anti-Dumping Agreement 
supplied methodologies that an investigating authority could employ to take account of non-matching model types.
3 For example, authorities could make use of constructed value under 
Article 2.2, and difference in merchandise adjustments under Article 2.4. 
1.12.  Third, the Reports, in line with a number of  prior reports, confirmed that for purposes of an 
injury determination, an authority may not select a biased sample of the domestic industry. In particular, the United States welcomed the Appellate Body's finding that an investigating authority 
acted inconsistently with Articles 3.1 and 4.1 where the authority defined the domestic industry on 
the basis of only those producers willing to be included in the injury sample.
4 Such an approach 
would tend to discourage healthier producers from responding to the authority's notice of 
initiation, thus making it more likely that weaker producers would be disproportionately 
represented among the producers that do respond. 
1.13.  Other findings in the Appellate Body Report raised concerns. First, the United States had 
concerns with the Appellate Body's interpretation and application of Article 2.4 of the 
Anti-Dumping Agreement. The United States re called that Article 2.4 of the Anti-Dumping 
Agreement, by its plain text, concerned the authority's comparisons "between the export price and the normal value". In this dispute, China had disagreed with the authority's determination of 
normal value. China had chosen to raise these issu es in the form of a claim under Article 2.4. The 
Panel had appropriately rejected China's claim. The Appellate Body, however, had reversed the Panel's finding. The United States had difficulty seeing how the Appellate Body's finding comported 
with the plain meaning of Article 2.4. Instead of applying Article 2.4 to issues of price 
comparability between the export price and normal value, the Appellate Body's analysis focused on, and ultimately found merit in, China's complaints regarding the normal value determined by 
the authority. Particularly given that the Anti-Dumping Agreement contained other provisions 
directly addressed to the methodology for determining normal value, the United States saw no basis in the text of the Anti-Dumping Agreement fo r a finding that Article 2.4 applied to the issues 
raised by China in this dispute. Second, the United States had concerns with the Appellate Body's 
interpretation of the term "interested party", as  specifically defined in Article 6.11 of the 
Anti-Dumping Agreement. In this dispute, the Appellate Body had found that the authority was 
                                               
1 See, "EC – Fasteners" (Article 21.5) (AB), paragraph 5.92. 
2 See, "EC – Fasteners" (Article 21.5) (AB), paragraph 5.117. 
3 See, "EC – Fasteners" (Article 21.5) (AB), paragraphs 5.271-5.272. 
4 See, "EC – Fasteners" (Article 21.5) (AB), paragraphs 5.325. WT/DSB/M/374 
 
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  required to treat an entity that provided cert ain information to the authority, but was not a 
producer of the product subject to investigation, as an "interested party". It was difficult to reconcile the Appellate Body's finding with the clear text of Article 6.11. As the United States had explained in its third-party submissions, an entity that simply provided information to an authority 
did not fall under any of the "interested party" cate gories listed in Article 6.11. In that regard, the 
United States considered that the Appellate Body's finding may best be understood as relating to the special facts of this dispute, in particular, the uniquely active role that the entity at issue had 
played in the investigation. The United States thanked the DSB for its consideration of these 
observations on the Reports in this dispute. 
1.14.  The DSB took note of the statements and adopted the Appellate Body Report contained in 
document WT/DS397/AB/RW and Add.1 and the Panel Report contained in document 
WT/DS397/RW and Add.1, as modified by the Appellate Body Report. 
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