WT/DS473/AB/R/Add.1  
 
6 October  2016 
(16-5337) Page: 1/42 
  Original: English  
 
  EUROPEAN UNION – ANTI -DUMPING MEASURES ON BIODIESEL  
FROM ARGENTINA  
AB-2016-4 
Report of the Appellate Body  
Addendum  
This Addendum contains Annexes A to D to the Report of the Appellate Body  circulated as  
document  WT/DS473/AB/R . 
 
The Notice s of Appeal and O ther Appeal  and the executive summaries of written submissions 
contained in this Addendum are attached as they were received from the participants and 
third participants. The content has not been revised or edited by the Appellate Body, except that 
paragra ph and footnote numbers that did not start at one in the original may have been 
re-numbered to do so, and the text may have been formatted in order to adhere to WTO style. The 
executive summaries do not serve as substitutes for the submissions of the parti cipants and 
third participants in the Appellate Body's examination of the appeal.  
 
 
_______________  
 
 WT/DS473/AB/R/Add.1  
 
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  LIST OF ANNEXES  
ANNEX  A 
NOTICE S OF APPEAL  AND OTHER APPEAL  
Contents  Page  
Annex  A-1 European Union 's Notice of Appeal  A-2 
Annex  A-2 Argentina 's Notice of  Other Appeal  A-3 
ANNEX B  
ARGUMENTS OF THE PAR TCIPANTS  
Contents  Page  
Annex  B-1 Executive summary of the European Union 's appellant's submission  B-2 
Annex  B-2 Executive summary of Argentina 's other appellant's submission  B-7 
Annex  B-3 Executive summar y of Argentina 's appellee's submission  B-13 
Annex  B-4 Executive summary of the European Union 's appellee's submission  B-16 
ANNEX  C 
ARGUMENTS OF THE THI RD PA RTICIPANTS  
Contents  Page  
Annex  C-1 Executive summary of Australia 's third participant's submissio n C-2 
Annex  C-2 Executive summary of China 's third participant's submission  C-3 
Annex  C-3 Executive summary of Colombia 's third participant's submission  C-6 
Annex  C-4 Executive summary of Indonesia's third participant's submission  C-7 
Annex  C-5 Executi ve summary of Mexico's third participant's submission  C-8 
Annex  C-6 Executive summary of Russia's third participant's submission  C-9 
Annex  C-7 Executive summary of Saudi Arabia's third  participant's submission  C-10 
Annex  C-8 Executive summary of the Uni ted States' third  participant's submission  C-11 
ANNEX  D 
PROCEDURAL RULING S 
Contents  Page  
Annex  D-1 Procedural Ruling of 9 July 2016  regarding timeline for filing additional 
memorandum and response  D-2 
Annex  D-2 Procedural Ruling of 11 July 2016  regardi ng the European Union's request for 
additional procedures  D-3 
 
 
 WT/DS473/AB/R/Add.1  
 
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  ANNEX  A 
NOTICE S OF APPEAL  AND OTHER APPEAL  
 
Contents  Page  
Annex  A-1 European Union's Notice of Appeal  A-2 
Annex  A-2 Argentina's Notice of Other Appeal  A-3 
 WT/DS473/AB/R/Add.1  
 
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  ANNEX  A-1 
EUROPEAN UNION'S  NOTICE OF APPEAL*  
Pursuant to Article 16.4 of the DSU the European Union hereby notifies to the Dispute Settlement 
Body its decision to appeal to the Appellate Body certain issues of law covered in the Panel Report 
and certain legal interpretations develope d by the Panel in the dispute European Union – 
Anti-Dumping Measures on Biodiesel from Argentina  (WT/DS473). Pursuant to Rule 20(1) of the 
Working Procedures for Appellate Review, the European Union simultaneously files this Notice of 
Appeal with the Appel late Body Secretariat.  
 
For the reasons to be further elaborated in its submissions to t he Appellate Body, the 
European  Union appeals, and requests the Appellate Body to reverse the findings, conclusions and 
recommendations of the Panel, with respect to th e following errors contained in the Panel Report:1 
 
a. the Panel erred when finding that the European Union ac ted inconsistently with 
Article  2.2.1.1 of the Anti -Dumping Agreement by "failing to calculate the cost of 
production of the product under investigat ion on the basis of the records kept by the 
producers ". As a result, the European Union requests the Appellate Body to reverse  the 
Panel's findings in paragraphs 7.247, 7.248, 7.249 and 8.1(c)(i) of its Report, which are 
based on its legally erroneous reas oning in paragraphs 7.220 -7.246;2 
b. the Panel erred when finding that the European Union v iolated Article 2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 by "using a "cost" that 
was not the cost prevailing "in the country of origin ", namely, Argentina, in the 
construction of the normal value ". As a result, the European Union requests the 
Appellate Body to reverse  the Panel's findings in paragraphs 7.260 and 8.1(c)(ii)  of its 
Report, which are based on its legally erroneous reasoning  in paragraphs 7.255 -7.259;  
c. the Panel erred when finding that the European Union ac ted inconsistently with 
Article  9.3 of the Anti -Dumping Agreement and Article VI:2 of the GATT 1994 by 
"imposing anti -dumping duties in excess of the margin of dumping that should have 
been established under Article 2 of the Anti -Dumping Agreement ". In view of those 
errors, the European Union requests the Appellate Body to reverse  the Panel's findings in 
paragraphs 7.367 and 8.1(c)(vii) of its Report, which are based on its l egally erroneous 
reasoning in paragraphs 7.357 -7.366.  
                                                
* This Notice , dated 20 May 2016 , was circulated to Members as document WT/DS 473/10 . 
1 Pursuant to Rule 20(2)(d)(iii) of the Working Procedures for Appellate Review this Notice of Appeal 
includes an indicative list of the paragraphs of the Panel Report containing the alleged errors, without prejudice 
to the ability of the European Union to refer to other paragraphs of the Panel Report in the context of its 
appeal.  
2 Only for the avoidance of doubt, we clarify that we in clude in the scope of our appeal the statement in 
the second sentence of paragraph 7.296 of the Panel Report, to the effect that,  supposedly, nothing in 
Article  2.4 provides guidance when it comes to considering how normal value and export price should be 
determined, including the question of whether or not a standard of reasonableness informs not just the term 
reflect but also the determination of the costs associated with production and sale. We provide this clarification 
without prejudice to our right to  refer to and disagree with other aspects of the Panel's reasoning in our 
submissions.  
 WT/DS473/AB/R/Add.1  
 
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  ANNEX A -2 
ARGENTINA'S  NOTICE OF OTHER APPE AL* 
1. Pursuant to Article 16.4 and Article 17 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes  ("DSU") and Rule 23 of the Workin g Procedures for 
Appellate Review (WT/AB/WP/6) ( "Working Procedures "), Argentina hereby notifies the Dispute 
Settlement Body ( "DSB") of its decision to appeal certain issues of law covered in the Panel Report 
in European Union – Anti-Dumping Measures on Bi odiesel from Argentina  (WT/DS473/R) 
("Panel  Report ") and certain legal interpretations developed by the Panel in that Report.  
2. Pursuant to Rules 23(1) and 23(3) of the Working Procedures , Argentina simultaneously files 
this Notice of Other Appeal and its Ot her Appellant Submission with the Appellate Body 
Secretariat. Argentina is providing as well an Executive Summary of the Other Appellant 
Submission, in accordance with the Guidelines in Respect of Executive Summaries of Written 
Submissions in Appellate Pro ceedings (WT/AB/23).  
3. Pursuant to Rule 23(2)(c)(ii) of the Working Procedures, this Notice of Other Appeal includes 
an indicative list of the paragraphs of the Panel Report containing the alleged errors, without 
prejudice of Argentina 's ability to refer to  other paragraphs of the Panel Report in the context of 
this appeal.  
4. Argentina requests the Appellate Body to reverse various findings and conclusions of the 
Panel as a result of the errors of law and of legal interpretation contained in the Panel Report a s 
identified below.  
1  REVIEW OF THE PANEL 'S FINDINGS WITH RESP ECT TO ARGENTINA 'S CLAIM UNDER 
ARTICLE 2.2.1.1 OF T HE ANTI -DUMPING AGREEMENT CO NCERNING ARTICLE 2(5 ) OF 
THE BASIC REGULATION  
5. Argentina seeks review by the Appellate Body of the Panel 's findings an d conclusions 
concerning Argentina 's claim that Article 2(5), second subpara graph, of Council Regulation 
No. 1225/2009 ( "the Basic Regulation ") is inconsistent as such w ith Article 2.2.1.1 of the 
Anti-Dumping Agreement. The Panel erred in its application o f Article 2.2.1.1 of the Anti -Dumping 
Agreement and failed to make an objective assessment, as required by Article 11 of the DSU, 
when it concluded that Article 2(5), second subparagraph, of the Basic Regulation is not 
inconsistent as such with Article 2.2 .1.1.1 In particular, Argentina has identified, inter alia , the 
following errors in the issues of law and legal interpretations developed by the Panel:  
- the Panel erred in the application of Article 2.2.1.1 of the Anti -Dumping Agreement 
when finding that Article 2(5), second subparagraph, of the Basic Regulation only 
deals with what has to be done after the EU authorities have determined that a 
producer 's records do not reasonably reflect the costs of production pursuant to the 
first subparagraph. Based on  its incorrect understanding of the scope, meaning and 
content of Article 2(5), second subparagraph, of the Basic Regulation, the Panel 
erroneously concluded that Article 2(5), second subparagraph, is not inconsistent "as 
such" with Article 2.2.1.1 of the Anti-Dumping Agreement;  
 
- the Panel erred in the application of Article 2.2.1.1 of the Anti -Dumping Agreement 
when finding that Article 2(5), second subparagraph, of the Basic Regulation does not 
require the European Union to determine that a producer 's records do not reasonably 
reflect the costs associated with the production and sale of the product under 
consideration when these records reflect prices that are considered to be artificially 
low or abnormally low as a result of a distortion. Based on its i ncorrect understanding 
of the scope, meaning and content of Article 2(5), se cond subparagraph, of the 
Basic Regulation, the Panel erroneously concluded that Article 2(5), 
                                                
* This Notice , dated 25 May 2016 , was circulated to Members as document WT/DS 473/11 . 
1 Panel Report, paras. 7.127 –7.154 and 8.1(b)(i).  WT/DS473/AB/R/Add.1  
 
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  secon d subparagraph, is not inconsistent "as such " with Article 2.2.1.1 of the 
Anti-Dumping Agreement;  
 
- the Panel failed to make an objective assessment of the matter before it when 
examining the scope, meaning and content of Article 2(5), second subparagraph, 
contrary to Article 11 of the DSU.  
 
6. Argentina requests the Appellate Body to r everse the Panel 's findings and conclusions and to 
complete the analysis by finding that Article 2(5), second subparagraph, of the Basic Regulation is 
inconsistent as such with Article 2.2.1.1 of the Anti -Dumping Agreement.  
7. Consequently, the Appellate Bod y should also reverse the Panel 's findings and conclusions 
that Article 2(5), second subparagraph, of the Basic Regulation i s not inconsistent with 
Article  XVI:4 of the WTO Agreement and Article 18.4 of the Anti -Dumping Agreement.2 
2  REVIEW OF THE PANEL 'S FINDINGS WITH RESPECT TO ARGENTINA 'S CLAIM UNDER 
ARTICLE 2.2 OF THE A NTI-DUMPING AGREEMENT AN D ARTICLE VI:1(B)(II ) OF THE 
GATT 1994 CONCERNING  ARTICLE 2(5) OF THE BASIC REGULATION  
8. Argentina seeks review by the Appellate Body of the Panel 's findings and concl usions 
concerning Argentina 's claim that Article 2(5), second subparagraph, of the Basic Regulation is 
inconsistent as such with Article 2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the 
GATT 1994. The Panel erred in its interpretation and a pplicatio n of Article 2.2 and of 
Article  VI:1(b)(ii) and acted inconsistently with Article 11 of the DSU  when it concluded that 
Article  2(5), second subparagraph, of the Basic Regulation is not inconsistent as such with these 
provisions.3 In that respect, Argentina has identified, inter alia , the following errors in the issues of 
law and legal interpretations developed by the Panel:  
- the Panel erred in its interpretation of Article 2.2 of the Anti -Dumping Agreement and 
of Article VI:1(b)(ii) of the GATT 1 994 when finding that these provisions "do not limit 
the sources of information that may be used in establishing the costs of production ", 
that they do not "prohibit an authority resorting to sources of information other than 
producers ' costs in the countr y of origin " but would "require that the costs of 
production established by the authorities reflect conditions prevailing in the country of 
origin "4; 
 
- the Panel erred in its application of Article 2.2 of the Anti -Dumping Agreement and 
Article VI:1(b)(ii)  of the GATT 1994 when fi nding that Article 2(5), 
second  subparagraph, "is formulated in permissive terms " and only lays out a series 
of options for the EU authorities in establishing the costs and when finding that this 
measure concerns "the sources of in formation " as opposed to the costs themselves. 
Based on its incorrect understanding of the scope,  meaning and content of 
Article  2(5), second subparagraph, of the Basic Regulation, the Panel erroneously 
concluded that the measure at issue is not inconsiste nt "as such " with Article 2.2 of 
the Anti -Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994;  
 
- the Panel failed to make an objective assessment of the matter before it when 
examining the scope, meaning and content of Article 2(5), second subparag raph, of 
the Basic Regulation, contrary to Article 11 of the DSU;  
 
- the Panel applied an erroneous legal standard for the establishment of the "as such " 
claim when it found that Argentina was required to demonstrate that Article 2(5), 
second subparagraph "cannot be applied in a WTO -consistent manner ".5 
 
9. Argentina requests the Appellate Body to reverse the Panel 's findings and conclusions and to 
find that Article 2(5), second subparagraph, of the Basic Regulation is, as such, inconsistent 
with Article 2.2 o f the Anti -Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994.  
                                                
2 Panel Report, paras. 7.175 and 8.1(b)(iii).  
3 Panel Report, paras. 7.155 –7.174 and 8.1(b)(ii).  
4 Panel Report, para. 7.171.  
5 Panel Report, para. 7.174.  WT/DS473/AB/R/Add.1  
 
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  10. Consequently, the Appellate Body should also reverse the Panel 's findings that Article 2(5), 
second subparagraph, of the Basic Regulation is not inconsisten t with Article XVI:4 of the 
WTO Agreement and Article 18:4 of the Anti -Dumping Agreement.6 
3  REVIEW OF THE PANEL 'S FINDINGS WITH RESP ECT TO ARGENTINA 'S CLAIMS 
CONCERNING THE ANTI -DUMPING MEASURES IMP OSED BY THE EUROPEAN  UNION ON 
IMPORTS OF BIODIESEL  FROM ARGENTINA  
3.1  Review of the Panel 's findings with respect to Argentina 's claim under Article 2.4 of 
the Anti -Dumping Agreement  
11. Argentina seeks review by the Appellate Body of the Panel 's findings and conclusions 
concerning Argentina 's claim that the European Union violated Article 2.4 of the  Anti-Dumping 
Agreement by failing to make a fair comparison between normal value and export price, and in 
particular, by failing to make due allowances for differences affecting price comparability.7 The 
Panel erred in its interpretation and application o f Article 2.4 of the Anti -Dumping Agreement, 
amongst others, in the following respects:  
- the Panel erred in finding that the difference at issue is not a difference affecting price 
comparability, in particular because it is one that arose from the methodo logy used to 
construct the normal value;  
 
- the Panel erred when finding that its conclusion is consistent with the views of the 
Appellate Body in EC – Fasteners (China) (Article 21.5 – China) . 
 
12. Argentina requests the Appellate Body to reverse the Panel 's findings and conclusions and to 
find that the European Union violated Article 2.4 of the Anti -Dumping Agreement because by 
failing to make adjustment for differences affecting price comparability, including differences in 
taxation, it failed to make a fair  comparison between the normal value and the export price.  
3.2  Review of the Panel 's findings with respect to Argentina 's claim under Articles 3.1 
and 3.5 of the Anti -Dumping Agreement  
13. Argentina seeks review by the Appellate Body of the Panel 's findings and co nclusions 
concerning Argentina 's claim that the European Union violated A rticles 3.1 and 3.5 of the 
Anti-Dumping Agreement in failing to ensure that the injury caused by the overcapacity of 
the European Union industry was not attributed to the allegedly du mped imports.8 The Panel erred 
in the interpretation and application of Articles 3.1 and 3.5 of the Anti -Dumping Agreement when 
it concluded that the European Union did not act inconsistently with Articles 3.1 and 3.5 with 
respect to the treatment of overc apacity as an "other factor " of injury to the EU domestic industry. 
In that respect, Argentina has identified, inter alia , the following errors in the issues of law and 
legal interpretations developed by the Panel:  
- the Panel erred in its interpretation a nd application of the obligation to make an 
"objective examination " based on "positive evidence " of the overcapacity of the 
EU industry pursuant to Articles 3.1 and 3.5 of the Anti -Dumping Agreement;  
 
- the Panel erred in its application of Articles 3.1 an d 3.5 when it failed to distinguish 
overcapacity from capacity utilization and when it failed to note the inconsistency of 
the EU authorities ' conclusion in light of the evidence before it.  
 
14. Argentina requests the Appellate Body to reverse the Panel 's find ings and conclusions with 
respect to Argentina 's claim under Articles 3.1 and 3.5 of the Anti -Dumping Agreement with regard 
to the issue of overcapacity, and to find that the European Union violated these provisions with 
respect to overcapacity as an "other factor " of injury to the EU domestic industry.  
                                                
6 Panel Report, paras. 7.175 and 8.1(b)(iii).  
7 Panel Report, paras. 7.292 –7.306 and 8.1(c)(v).  
8 Panel Report, paras. 7.462 –7.472 and  8.1(c)(x).  WT/DS473/AB/R/Add.1  
 
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  3.3  Review of the Panel 's findings with respect to Argentina 's claim under 
Article  2.2.1.1 of the Anti -Dumping Agreement  
15. If the Appellate Body reverses the Panel 's findings under Article 2.2.1.1 of the Anti -Dump ing 
Agreement concerning the European Union 's failure to calculate the cost of production of the 
product under investigation on the basis of the records kept by A rgentinean producers, 
Argentina  requests the Appellate Body to complete the analysis of Argent ina's second claim under 
Article 2.2.1.1 of the Anti -Dumping Agreement for which the Panel did not make findings.9 
16. In that regard, Argentina requests the Appellate Body to find that the European Union acted 
inconsistently with Article 2.2.1.1 of the Anti -Dumping Agreement by including costs not 
associated with the production and sale of biodiesel in the calculation of the cost of production of 
that product.   
_______________  
 
 
 
                                                
9 Panel Report, paras. 7.268 –7.269 and 8.1(c)(iii).  WT/DS473/AB/R/Add.1  
 
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  ANNEX  B 
ARGUMENTS OF THE PAR TICIPANTS  
Contents  Page  
Annex  B-1 Executive summary  of the European Union 's appellant's submission  B-2 
Annex  B-2 Executive summary of Argentina 's other appellant's submission  B-7 
Annex  B-3 Executive summary of Argentina 's appellee's submission  B-13 
Annex  B-4 Executive summary of the European Union 's appellee's submission  B-16 
 
 WT/DS473/AB/R/Add.1  
 
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  ANNEX  B-1 
EXECUTIVE SUMMARY OF  THE EUROPEAN UNION'S  APPELLANT'S SUBMISSI ON 
1   EXECUTIVE SUMMARY  
1.1   THE PANEL ERRED BY FINDING THAT THE EUROPEAN UNION "FAILED TO 
CALCULATE THE COST OF PRODUCTION OF THE PRODUCT UNDER INVESTIGATION 
ON THE BASIS OF THE RECORDS KEPT BY THE PRODUCERS" PURSUANT TO 
ARTICLE 2.2.1.1 OF THE ANTI -DUMPING AGREEMENT  
1.1.1   Overview of the correct interpretation of the condition at issue, considered 
in its context and in light of the relevant object and purpose  
1. The co ndition at issue is the phrase "records … reasonably reflect the costs …" in 
Article  2.2.1.1. The specific and narrow  issue that is before the Appellate Body is how the 
condition at issue  should have been interpreted and applied to the specific factual and  
evidential pattern in this case . The Appellate Body should not adjudicate on other issues 
that might arise under the Anti -Dumping Agreement or Article VI of the GATT 1994.  
2. Article 2 sets out a definition  which contains the most fundamental elements  of the 
determination of dumping, including normal value  and price comparability . 
Article  2.2.1.1 is framed as a provision to be applied "for the purpose of paragraph 2 ", 
namely for the purpose of establishing a normal value .  
3. It is important to note that an investigating authority may need to apply Article 2.2.1.1 
more than once  in the same dumping margin calculation: for example, in determining 
whether or not domestic sales are in the ordinary course of trade by reason of price; and 
then again in determin ing normal value based on costs of production, SG&A and profit.  
4. The interpretation and application of Article 2.2 should be systematic and coherent with 
reference to several issues: in particular, the consistent references to all costs , and the 
consist ent references to reasonableness .  
5. There are no costs excluded from Article 2.2.1 , which refers to " all costs ". By 
definition, when Article 2.2.1 refers to "selling … costs" it is also referring to the cost of 
sales. The first sentence of Article 2.2.1. 1 refers to all costs . It is with respect to all costs  
that the records kept by the investigated firm must be in accordance with the local GAAP. 
And it is with respect to all costs  that the records kept by the investigated firm must 
reasonably reflect the costs associated with the production and sale of the product under 
consideration.  
6. A standard of reasonableness is referenced in several parts of Article 2.2 as a whole and 
throughout that provision, and, in the condition at issue, informs not only the t erm reflect, 
but also the determination of the costs of production and sale. Any unreasonable costs 
cannot be reasonably reflected in the records of an investigated firm.  
7. The first sentence of Article 2.2.1.1 contains two conditions . The first relates to GAAP, 
whilst the second is the condition at issue ("records … reasonably reflect the costs …"). This 
is not an obligation, but a condition. Such a condition – consequence structure is not the 
same , as a matter of law, to a general rule – exception struc ture. 
8. If the relevant conditions are fulfilled, then, according to Article 2.2.1.1, a particular 
consequence follows: normally  the costs shall be calculated on the basis of the records of 
the investigated firm. The meaning of this part of the provision is not before the Appellate 
Body in this appeal.  WT/DS473/AB/R/Add.1  
 
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  9. Article 2.2.1.1 indicates some of the circumstances in which it may be justified to replace or 
adjust specific cost items in the records of the investigated firm, although these issues are 
not before the Appellate Body in this appeal  (cost allocations "historically utilized", non -
recurring items of cost and start -up operations, and the existence of an "association or 
compensatory arrangement").  
10. Articles 2.2.1.1 and Article 2.2.2 are not mutually exclus ive. The phrase at issue cannot be 
properly interpreted as meaning that a standard of reasonableness informs the term 
"reflect", but not the determination of the costs associated with production and sale.  
11. There are several indicators supporting the EU 's view in the overall context. First, the 
repeated use of the term " normal " throughout the relevant provisions, including in 
Articles  2 of the Anti -Dumping Agreement and VI of the GATT 1994. Second , the repeated 
references to the concept of a " proper comp arison " or "comparable prices" or a "fair 
comparison" throughout the relevant provisions. Third, the references to the concept of 
something that is " representative " throughout the relevant provisions. Fourth , the 
repeated use of the term "reasonable" throu ghout the relevant provisions. How could it be 
that, in the condition at issue, a standard of reasonableness informs the 
determination of the costs associated with sales, but not production ?  
12. Fifth, it may be reasonable/necessary in certain circumstanc es to refer to an external proxy 
for the purposes of applying the two conditions in the first sentence of Article 2.2.1.1. This is 
exactly what the first condition foresees, by reference to local GAAP, which is an external 
element to the records kept by th e investigated firm.  
13. Sixth, the phrase " associated  with the production and sale" is drafted in relatively general 
and abstract terms and should govern the matter, not the term "actual", which does not 
appear in the text.  
14. Seventh , Article 2.2.1.1 provides that the investigating authority must consider all 
available evidence  on the proper allocation of costs, not limited  to the evidence coming 
from the investigated firm.  
15. Eighth , if one of the conditions provided for in Article 2.2.1.1 is not sa tisfied, then the 
obligation to normally use the records kept by the investigated firm does not apply. The 
provision is silent as to what method is to be used to establish the costs of production and 
sale in such circumstances, which should be informed by a standard of reasonableness .  
16. Ninth , an investigating authority could either replace or adjust specific costs in the records 
kept by the investigated firm. The reference to taxation in Article 2.4 confirms that an 
adjustment pursuant to the first sent ence of Article 2.2.1.1 is an appropriate and objective 
response to a de jure discriminatory export tax designed precisely to have the effect of 
masking the dumping. As a matter of law , dumping is also defined  as arising when the 
export price is less than the normal value calculated on the basis the costs  associated with 
production and sale, properly and reasonably determined .  
17. Tenth , it is precisely because export taxes are not covered by Article XI of the GATT 1994 
that one must be careful to make sur e that other disciplines are correctly understood so as 
to permit a reasonable and appropriately calibrated response to the existence of such de 
jure discriminatory and trade -distorting measures.  
1.1.2   Legal errors in the Panel's reasoning, findings and conclus ions 
18. Even before embarking on its analysis, the Panel appears to have pre -judged the issue by 
framing the question using tendentious language.  
19. The Panel opined that the purpose  of paragraph 2 is to elaborate rules for determining the 
cost of produ ction in the country of origin. Rather, the purpose of paragraph 2 is to 
elaborate rules for determining a value that is normal, or a normal value.  WT/DS473/AB/R/Add.1  
 
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  20. The Panel opined that the first sentence of Article 2.2.1.1 consists of a " general rule " and 
two " deroga tions ". None of the three previous cases invoked supports the Panel's 
statement.  
21. The Panel considered that the focus of the condition at issue is on the specific 
producer/exporter under investigation, and what is contained in its records. Instead, the 
focus of the condition is equally  on both the records  kept by the investigated firm and the 
costs associated with the production and sale of the product under consideration.  
22. The Panel's reference to Article 6.10  is misplaced. Article 2 provides that, i n certain 
circumstances, the same data from the same source may be used in order to determine, in 
part, the dumping margins of several exporters.  
23. The Panel opines that GAAP generally encompass a requirement that all costs have actually 
been incurred, concluding then that the second condition must also be referring to the 
"actual" costs. The Panel fails to explain how its observation relates to its line of reasoning. 
The Panel's reference to an association or compensatory arrangement  between the 
investi gated firm and one of its suppliers sheds contextual light on what situations might 
justify replacing or adjusting the records kept by the investigated firm.  
24. The Panel makes a series of statements that confirm that one should search for a "proxy" 
that is "appropriate", "accurate" and "reliable".  
25. The Panel erroneously finds support in footnote 6 , which it construes as suggesting that the 
cost data must in all circumstances be specific to each individual exporter or producer.  
26. The Panel fails to lo ok properly at the context in Article 2.2.2, as it refers to actual data 
pertaining to production and sales in the ordinary course of trade . 
27. The Panel makes three erroneous statements about object and purpose, relating to the lack 
of a preamble of the Anti-Dumping Agreement, a confusion with the supplementary means 
of interpretation and the very language of Article 2.2.1.1. The Panel rejects the 
EU's submission that the second Ad note to Articles VI:2 and VI:3 of the GATT 1994 (on 
multiple currency prac tices) supports its arguments in this case.  
28. The Panel makes certain assertions about provisions in the protocols of accession of certain 
Members.  
29. Having concluded this part of its analysis, the Panel then reviews three other panel reports. 
In fact,  each of them ( US – Softwood Lumber V , Egypt – Steel Rebar  and EC - Salmon 
(Norway) ) lends support to EU's position. Investigating authorities may at least test the 
recorded costs against market values, in order to determine whether the records reasonably 
reflect the costs. Taken together, those findings confirm that previous panels did not 
foreclose the possibility that an investigating authority may disregard or adjust costs which 
do not reflect market values.  
1.1.3   The Panel erred not only in its interpretatio n but also in its application of 
Article 2.2.1.1 and particularly the condition at issue, in light of the Vienna 
Convention and the existing case law  
30. The Panel failed to conduct a holistic analysis of the ordinary meaning, context and object 
and purpos e of Article 2.2.1.1.  
31. With respect to its ordinary meaning , the Panel understood the first sentence of 
Article  2.2.1.1 to relate exclusively to a cost allocation issue. This is contradicted by the 
panel's findings in US - Softwood Lumber V .  
32. The ph rase "costs associated with" refers to the costs related to, which cannot be equated to 
"costs actually incurred". Article 2.2.1.1 does not include the words "expenses actually 
incurred by the producer".  WT/DS473/AB/R/Add.1  
 
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  33. The immediate context of the phrase  at issue sug gests that to "reasonably reflect costs 
associated with production and sale", records must reflect something more than simply the 
"expenses actually incurred".  
34. The Panel's reliance on Article 6.10 fails for several reasons, related to the calculation o f the 
normal value or the export price.  
35. The object and purpose  of the WTO anti -dumping rules can be discerned from Article VI:1 
of the GATT 1994, as to prevent the industries of an exporting country from damaging the 
industries of an importing country through the use of prices that are artificially low, because 
of some abnormal condition (hence the reference to "normal" value), within reasonable 
limits. The second Ad Note to Articles VI:2 and VI:3 of the GATT 1994 confirms that in 
certain circumstances price distortion caused by governmental action can also cause 
dumping . 
1.2   THE PANEL ERRED WHEN FINDING THAT THE EUROPEAN UNION "FAILED TO 
CONSTRUCT THE NORMAL VALUE ON THE BASIS OF THE COST OF PRODUCTION IN 
THE COUNTRY OF ORIGIN" AS REQUIRED BY ARTICLE 2.2 O F THE ANTI -DUMPING 
AGREEMENT  
1.2.1   Legal standard under Article 2.2 of the AD Agreement  
36. A distinction must be made between "cost…in the country of origin" and the evidence 
pertaining to such cost. Indeed, Article 2.2, as a whole, does not forbid outright the  use of 
data on the cost of production from countries other than the country of origin. 
Article  2.2.2(iii) expressly refers to the use of "any other reasonable method".  
37. The Anti -Dumping Agreement contains no rule that precludes securing evidence from 
outside the country of origin in order to identify the costs in the country of origin. Article 6 
does not impose any limits on the countries from which evidence may be obtained.  
38. Article 2.5 is instructive: normal value is based on the comparable price either in the country 
of export or in the country of origin, according to the circumstances.  
1.2.2   The Panel erred when finding that the European Union violated Article 2.2 of 
the Anti -Dumping Agreement by "not using the actual costs "in the country 
of origin" w hen constructing the normal value"  
39. The Panel stated that certain claims of Argentina under Article 2.2 were consequential, and 
it did not make findings in that respect. However, the Panel opined that the measure at 
issue is inconsistent with Article 2. 2 because the normal value was not constructed on the 
basis of the "actual" costs "in the country of origin".  
40. A price derived from a price at the border can by definition be simultaneously characterised 
as both an international price and a price in Ar gentina. The Panel fails to recognise that the 
subtraction of the fobbing costs renders the result a reasonable proxy for the normal price of 
soya in Argentina.  
41. During the first substantive meeting, Argentina confirmed that the prices used by the 
Europ ean Union's investigating authority were indeed "constructed" by the Government of 
Argentina on the basis of various sources, including information from Argentinean  ports. 
Accordingly, they were prices "in the country of origin" as per Article 2.2.  
42. Costs and evidence pertaining to those costs are separate elements. First, the notion of "the 
cost of production in the country of origin" set out in Article 2.2 is a legal one, while 
establishing the cost in a particular case involves determinations of fact,  made with the aid 
of evidence. Second, the possibility of using "any othe r reasonable method" in 
Article  2.2.2(iii) implies that Article 2.2, as a whole, does not impose an absolute prohibition 
on the use of data on the cost of production from countries o ther than the country of origin 
(when sales are not in the "ordinary course of trade").  WT/DS473/AB/R/Add.1  
 
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  1.3   THE PANEL ERRED WHEN FINDING THAT THAT THE EUROPEAN UNION "IMPOSED 
ANTI -DUMPING DUTIES IN EXCESS OF THE MARGINS OF DUMPING THAT SHOULD 
HAVE BEEN ESTABLISHED UNDER ARTI CLE 9.3 OF THE ANTI -DUMPING 
AGREEMENT"  
1.3.1   Legal standard under Article 9.3 of the Anti -Dumping Agreement  
43. It is undisputed that the ordinary meaning of the phrase "the margin of dumping as 
established under Article 2" is that of a margin of dumping establ ished in accordance with 
the provisions of Article 2 . 
44. A Member's failure to comply with the provisions of Article 2 does not automatically 
constitute a failure to comply with Article 9.3.  
1.3.2   The Panel's errors regarding Argentina's claim under Article 9.3  of the 
Anti-Dumping Agreement  
45. The Panel made several errors in interpreting and applying Article 9.3 to the facts of the 
present case.  
46. First, the European Union submits that Article 9.3 addresses the comparison between the 
anti-dumping duties and the dumping margins, as opposed to addressing the calculation of 
the normal value  
47. Second , the Panel erred when it inferred from its previous findings with regard to 
Articles  2.2.1.1 and 2.2 that the European Union also breached Article 9.3.  
48. Third, the Panel erred by seeking to rely on the dumping margins calculated in the 
Provisional Regulation, effectively implying that this is what the determination should have 
been, thus exceeding the authority vested in it pursuant to the DSU and the rules in t he 
Anti-Dumping Agreement, which is to determine whether or not the measure at issue is 
WTO consistent. The Panel should have limited itself to determining if the investigating 
authority's evaluation of the facts was unbiased and objective, as provided for  in 
Article  17(6)(i).  
1.4   CONCLUSIONS  
49. As a consequence, the European Union requests the Appellate Body to find that the Panel 
erred when finding that the European Union acted inconsistently with Articles 2.2.1.1, 2.2 
and 9.3, reverse the Panel's findings and conclusions in paragraphs 7.247, 7.248, 7.249, 
7.260, 7.367 and 8.1 (c)(i),(ii) and (vii) of its Report.  
50. Having reversed the Panel's respective findings and conclusions the Appellate Body is not in 
a position to complete the legal analysis, and sho uld not do so.  
 WT/DS473/AB/R/Add.1  
 
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  ANNEX B -2 
EXECUTIVE SUMMARY OF  ARGENTINA'S  OTHER APPELLANT'S SU BMISSION  
1   INTRODUCTION  
1. The Report issued by the Panel in the case European Union – Anti-Dumping Measures on 
Biodiesel from Argentina contains several legal errors of interpreta tion and application of the 
provisions of the Anti -Dumping Agreement and the GATT 1994, which led the Panel to erroneous 
findings and conclusions with respect to Argentina's claims against Article 2(5), 
second  subparagraph, of the Basic Regulation and the anti-dumping measures imposed by the 
European Union on imports of biodiesel originating in Argentina. The Panel also acted  
inconsistently with Article 11 of the DSU. More specifically, in this submission, Argentina presents 
six claims of errors, including one conditional appeal, with respect to the Panel's findings regarding 
Argentina's claims under Articles 2.2, 2.2.1.1, 2.4, 3.1, 3.5 and 18.4 of the Anti -Dumping 
Agreement, Article  VI:1(b)(ii) of the GATT 1994 and Article XVI:4 of the WTO Agreement.  
2   THE PANEL ERRED WHEN FIN DING THAT ARTICLE 2( 5), SECOND SUBPARAGR APH, 
OF THE BASIC REGULAT ION IS NOT "AS SUCH " WTO INCONSISTENT  
2.1   The Measure at Issue  
2. The measure at issue is Article 2(5), second subparagraph , of Council Regulation 
(EC) No 1225/2009 ( "the Basic Regulation "), laying down the rules governing the determination of 
costs inter alia  for the purpose of constructing normal value. It is crucial to note that the second 
subparagraph of Article 2(5) was not included in the original version of Article 2(5), a s adopted in 
1994 to implement the Anti -Dumping Agreement. Instead, the second subparagraph was only 
added in 2002 by Council Regulation (EC) No 1972/2002. The latt er instrument, provided for 
two other modifications: (i) Article 2(3) of the Basic Regulatio n was amended in order to clarify 
what circumstances could be considered as constituting a "particular market situation " in which 
sales of the like product do not permit a proper comparison, and (ii) the Russian Federation was 
granted full market economy s tatus. Both of these modifications are highly relevant for 
understanding the scope of the second subparagraph of Article 2(5).  
2.2   The Panel erred when finding that Article 2(5), second subparagraph, of the Basic 
Regulation is not inconsistent as such with Ar ticle 2.2.1.1 of the Anti -Dumping 
Agreement  
3. Argentina submits that the Panel erred when finding that Article 2(5), second subparagraph, 
of the Basic Regulation is not inconsistent "as such " with Article 2.2.1.1 of the Anti -Dumping 
Agreement.  
4. First, Argenti na submits that the Panel erred in the application  of Article 2.2.1.1 of the 
Anti-Dumping Agreement when finding that Article 2(5), se cond subparagraph, of the 
Basic Regulation only deals with what has to be done after the EU authorities have determined 
that a producer 's records do not reasonably reflect the costs of production pursuant to the 
first subparagraph.  Such a conclusion is based on an erroneous assessment of the meaning of the 
text of the measure and of its context, as well as of the understandin g flowing from the practice of 
the EU authorities and the General Court 's judgments.  
5. The Panel erred in its assessment of the meaning of t he text of Article 2(5), 
second  subparagraph, in particular because the Panel wrongly based its analysis on the 
consideration that the second subparagraph of Article 2(5) begins with a condition, and thus, only 
takes effect following a determination under the first subparagraph that a producer 's records do 
not reasonably reflect the costs associated with the production a nd sale of the product under 
investigation. The Panel also erred when reading the tw o parts of Article 2(5), 
second  subparagraph, in isolation from each other. Argentina submits that the fact that the 
authorities must adjust or establish the costs on any o ther reasonable basis, including information WT/DS473/AB/R/Add.1  
 
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  from other representative markets where costs of other domestic producers or exporters "cannot 
be used " implies that the very reason why such information cannot be used is also relevant when 
examining the record s of the producers/exporters subject to the investigation. Furthermore, the 
Panel erred when reading a sequential order between the two sub -paragraphs of Article 2(5). The 
Panel also erred when it ignored the fact that the terms or concepts used by Argenti na to describe 
the measure at issue, such as "distortion ", "abnormally low " and "artificially low ", can be found in 
the contextual elements referred to by Argentina and are reflected in the consistent practice of the 
EU authorities as well as the judgments  of the General Court of the European Union.  
6. The Panel further erred in its analysis of the different contextual elements submitted by 
Argentina, namely the legislative history of Article 2(5), second subparagraph, Recital 4 of 
Regulation No 1972/2002, Art icle 2(3) of the Basic Regulation and the writings of scholars. All 
these elements support Argentina 's interpretation of Article 2(5), second subparagraph.  
7. The Panel also erred in its analysis of the consistent practice of the EU authorities in 
applying A rticle 2(5), second subparagraph, of the Basic Regulation. In particular, the Panel erred 
in concluding that the decisions cited by Argentina do not esta blish that Article 2(5), 
second  subparagraph, is the provision pursuant to which the determinations tha t the costs were 
not reasonably reflected in the records were made. The Panel also erred in finding that the 
decisions cited by Argentina cannot be regarded as establishing a "consistent practice ". Absent any 
case on the record in which, although costs wer e found to be artificially or abnormally low as a 
result of a distortion, the EU authorities considered that the records reasonably reflected the costs 
of the product under consideration,  the Panel should have concluded that the cases referred to by 
Argent ina established a consistent practice.  
8. The Panel erred in its analysis of the judgments of the General Court of the European Union. 
Indeed, contrary to the Panel 's assessment, the judgments of the General Court confirm that 
where the records contain costs which are artificially or abnormally low due to a distortion, they do 
not reasonably reflect the costs associated with the production of a product. These judgments also 
confirm that such determination is made pursuant to the second subparagraph of Article 2(5), and 
not pursuant to the first subparagraph.  
9. The Panel erred in its assessment of the meaning of Article 2(5) because its analysis is 
based on two erroneous premises: (i) that the first and the second subparagraphs necessarily 
concern different steps and (ii) that the determination that the records do not reasonably reflect 
the costs is necessarily distinct from the determination as to which data to use when the records 
do not reasonably reflect the costs associated with the production and sale of the product under 
consideration.  
10. Second , the Panel committed a legal error to the extent that it concluded that Article 2(5), 
second subparagraph, of the Basic Regulation does not "require " the European Union to determine 
that a producer 's records do not reaso nably reflect the costs associated with the production and 
sale of the product under consideration when these records reflect prices that are considered to be 
artificially or abnormally low as a result of a distortion. Argentina s ubmits that the text of 
Article 2(5), second subparagraph, its context, the consistent practice of the EU authorities and 
the judgments of the General Court of the European Union clearly indicate the mandatory nature 
of Article 2(5), second subparagraph .  
11. Third, the Panel failed to  make an objective assessment of the matter before it when 
examining the scope, meaning and content of Article 2(5), second subparagraph, thereby acting 
inconsistently with Article 11 of the DSU. More specifically, the Panel failed to make a thorough 
exami nation of all the elements put forward by Argentina beyond the text of the measure. The 
Panel also failed to make a holistic assessment of all these elements taken together in order to 
determine the real meaning of Article 2(5), second subparagraph. The Pa nel first erred in that it 
reached its conclusion as to the scope, meaning and content of the measure at issue mainly on the 
basis of the text, only examining the context, consistent practice of the EU authorities and the 
judgments of the General Court to confirm the conclusion already reached on the basis of the text. 
Secondly, the Panel erred in examining each of the other elements submitted by Argentina in 
isolation. Indeed, the Panel examined individual pieces of evidence, finding that they failed to 
contradict its prior conclusion reached on the basis of the text of Article 2(5), rather than 
examining the evidence as a whole and assessing the interplay of each element with the others. 
By failing to evaluate each element in relation to the others and all  of the elements together, the WT/DS473/AB/R/Add.1  
 
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  Panel made a fragmented analysis which did not reveal the actual scope, meaning and content of 
the second subparagraph of Article 2(5) of the Basic Regulation.  
12. If the Appellate Body reverses the Panel 's finding that Article 2 (5), second subparagraph, 
only deals with "what has to be done after the EU authorities have determined that a producer 's 
records do not reasonably reflect the costs of production pursuant to the first subparagraph " and 
confirms that this measure covers th e determination that the records do not reasonably reflect the 
costs where costs are found to be artificially low or abnormally low as a result of a distortion, 
Argentina requests the Appellate Body to complete the analysis determining that Article 2(5), 
second subparagraph, of the Basic Regulation violates Article 2.2.1.1 of the Anti -Dumping 
Agreement.  
13. Argentina considers that Article 2(5), second subparagraph, of the Basic Regulation requires  
the EU authorities to determine that a producer 's records do n ot reasonably reflect the costs of 
production in situations in which the records reflect prices which are artificially or abnormally low, 
by reference to prices prevailing in other markets.  However, even if Article 2(5), second 
subparagraph, were to be fou nd as only providing for the possibility (and not requiring) to make 
such a determination, quod non , it should still be found to be inconsistent with Article 2.2.1.1. 
Indeed, to the extent that Article 2.2.1.1 prohibits the rejection of data in the exporte r/producer 's 
records merely because those data are found to be "abnormally low " or "artificially low " because of 
an alleged distortion, Article 2(5), second subparagraph, must be found to be inconsistent with 
Article 2.2.1.1 because such rejection falls wi thin the category of w hat is prohibited under 
Article  2.2.1.1 of the Anti -Dumping Agreement.  
2.3   The Panel erred when finding that Article 2(5), second subparagraph, of the Basic 
Regulation is not inconsistent as such with Article 2.2 of the Anti -Dumping 
Agre ement and Article VI:1(b)(ii) of the GATT 1994  
14. Argentina submits that the Panel erred when finding that Article 2(5), second subparagraph, 
of the Basic Regulation is not inconsistent "as such " with Article 2.2 of the Anti -Dumping 
Agreement and with Article  VI:1(b)(ii) of the GATT 1994.  
15. First, the Panel erred in its interpretation of Article 2.2 of the Anti -Dumping Agreement and 
of Article VI:1(b)(ii) of the GATT 1994, when finding that these provisions "do not limit the sources 
of information that may be us ed in establishing the costs of production ", that they do not "prohibit 
an authority resorting to sources of information other than producers ' costs in the country of 
origin " but "would […] require that the costs of production established by the authority reflect 
conditions prevailing in the country of origin ". The Panel reached its conclusion without making any 
analysis of the ordinary meaning of the terms included in Article 2.2 of the Anti -Dumping 
Agreement and Article VI:1(b)(ii) of the GATT 1994, nor o f their context or the object and purpose 
of the relevant agreements, as required by the general rules of treaty interpretation. It is clear 
that the ordinary meaning of the terms "cost of production in the country of origin " refers to the 
costs, i.e. the charges or expenses incurred, for producing the product concerned in the country of 
origin. This understanding is further supported by the immediate context, in particular Articles 2.1, 
2.2, 2.2.1.1 and 2.2.2 of the Anti -Dumping Agreement, the Ad Note to A rticle VI:1 of the 
GATT  1994, as well as by the object and purpose of the Anti -Dumping Agreement. Having 
reversed the Panel 's findings, the Appellate Body should conclude that Article 2(5), 
second  subparagraph, is inconsistent as such with Article 2.2 of t he Ant i-Dumping Agreement and 
Article  VI:1(b)(ii) of the GATT 1994.  
16. Second, the Panel erred in its determination of the meanin g, scope and content of 
Article  2(5), second subparagraph of the Basic Regulation. In particular, the Panel erred in finding 
that the phrase at issue is formulated in "permissive terms " and that the provision "lays out a 
series of options for the EU authorities in establishing the costs of production once it has been 
determined that the producers ' records do not reasonably reflect t he costs associated with the 
production and sale of the product being investigated ". The analysis of the text of Article 2(5), 
second subparagraph, demonstrates that this provision imposes an obligation on the 
EU investigating authorities to use "any other  reasonable basis, including information from other 
representative markets ", every time information of other domestic producers/exporters "is not 
available or cannot be used ". This is further confirmed by the legislative history of this provision, 
the cons istent practice of the EU authorities and the judgments of the General Court. Furthermore, 
the Panel also erred in considering that the language of Article 2(5), second subparagraph, WT/DS473/AB/R/Add.1  
 
- B-10 - 
 
  "pertains to the sources of information ", "as opposed to the costs themse lves". Article 2(5), 
second subparagraph, expressly describes the "costs of other producers or exporters " as being 
"information ". Thus "costs" constitute "information ". This understanding is supported by the 
legislative history and the consistent practice of the EU authorities. Argentina further notes that 
given that information from other representative markets is used in order to correct ( "adjust ") or 
replace ( "establish ") the costs of the producer/exporter concerned, the information that is used 
will ine vitably reflect the conditions prevailing in such other mark et. Thus, even if the 
Appellate  Body were to uphold the Panel 's interpretation of Article 2.2 of the Anti -Dumping 
Agreement and Article VI:1(b)(ii) of the GATT 1994 (namely that these provisions d o not prohibit 
an authority resorting to sources of information other than producers ' costs in the country of origin 
but only require that the costs of production reflect conditions prevailing in the country of origin), 
Argentina submits that the Appellate  Body should still con clude that Article 2(5), 
second  subparagraph, violates those provisions.  
17. The Panel also failed to make an objective assessment of th e matter as required by 
Article  11 of the DSU. In particular, the Panel failed to make a thorough exam ination of the 
elements submitted by Argentina, in particular in relation to the legislative history and the 
consistent practice of the EU authorities and failed to make a true "holistic assessment " of these 
different elements. Given that the Panel failed to make a thorough analysis of these different 
elements and because it examined all of them separately, it failed to see that, together, they show 
how Article 2(5), second subparagraph, operates in practice. Indeed, once the text of Article 2(5), 
second su bparagraph, is seen in the context of its legislative history and in light of the manner in 
which it has been consistently applied by the EU authorities since its adoption, it leaves no doubt 
that it requires the use of information from other representativ e markets which is inconsistent with 
Article 2.2 of the Anti -Dumping Agreement.  
18. Third, the Panel applied an erroneous legal standard for the establishment of the "as such " 
claim when it found that Argentina was required to demons trate that Article 2(5), 
second subparagraph "cannot be applied in a WTO -consistent manner " and erroneously found, as 
a consequence, that Argentina has not established that Article 2(5), second subparagraph, of the 
Basic Regulation is inconsistent "as such " with Article 2.2 of the A nti-Dumping Agreement and with 
Article VI:1(b)(ii) of the GATT 1994. Argentina submits that in order to succeed with a claim of "as 
such" violation, the complainant is not required to demonstrate that the measure will be applied in 
a WTO -inconsistent manne r in all instances  in which that measure is applied. The Panel also erred 
to the extent that its findings imply that the measure being challenged must "require " the 
authorities to act in a WTO -inconsistent manner and that the authorities cannot have any 
discretion. Argentina submits that even though the authorities may have discretion whether or not 
to use information which reflects costs prevailing in countries other than the country of origin, 
every time they do so, this will necessarily be inconsistent w ith Article 2.2 of the Anti -Dumping 
Agreement and Article VI:1(b)(ii) of the GATT 1994.  
2.4   The Panel erred when finding that Article 2(5), se cond subparagraph, of the 
Basic  Regulation is not inconsistent as such with Article XVI:4 of the WTO 
Agreement and A rticle 18.4 of the Anti -Dumping Agreement  
19. Argentina submits that the Panel erred when finding that Article 2(5), second subparagraph, 
of the Basic Regulation is not inconsistent with Article XVI:4 o f the WTO Agreement and 
Article  18.4 of the Anti -Dumping A greement.  
20. Argentina requests the Appellate Body to reverse the Panel 's findings and to find instead 
that given that Article 2(5), second subparagraph, of the Basic Regulation is inconsistent "as such " 
with Articles 2.2.1.1 and 2.2 of the Anti -Dumping Agree ment and Article VI:1(b)(ii) of the 
GATT  1994, the European Union failed to ensure the conformity of its laws, regulations and 
administrative procedures with the provisions of the Anti -Dumping Agreement and the GATT 1994 
thereby violating Article XVI:4 of the WTO Agreement and Article 18.4 of the Anti -Dumping 
Agreement.  WT/DS473/AB/R/Add.1  
 
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  3   THE PANEL 'S LEGAL ERRORS WITH REGARD TO ARGENTINA 'S CLAIMS 
CONCERNING THE ANTI -DUMPING MEASURES IMP OSED BY THE EUROPEAN  UNION 
ON IMPORTS OF BIODIE SEL FROM ARGENTINA  
3.1   The Panel erred when fi nding that the European Union did not violate Article 2.4 of 
the Anti -Dumping Agreement by failing to make a fair comparison between the 
normal value and the export price  
21. Argentina claims that the Panel erred in its interpretation and application of Articl e 2.4 of the 
Anti-Dumping Agreement when finding that the European Union did not violate Article 2.4 by 
failing to make a fair comparison between the normal value and the export price.  
22. First, the Panel erred in finding that the difference identified by Arg entina was not a 
difference which affects price comparability within the meaning of Article 2.4. The Panel specifically 
erred when finding that this difference does not represent "a tax " or "some other identifiable 
characteristic ". The difference at issue results from the use in the normal value of the reference 
FOB price, minus fobbing costs, for soybeans, which includes the export tax, while the export price 
is based on the domestic cost for soybeans and does not include any export tax at all. To the 
extent that this difference "more or less amounted to the level of the export tax ", it is in fact 
equivalent to a difference in taxation. In any case, even if the difference was not regarded as 
being a difference in "taxation ", it nonetheless constitutes an id entifiable characteristic.  
23. The Panel is also wrong when stating that "[i]t was a methodological approach that affected 
the price of biodiesel, but it did not affect the price comparability  of the normal value and the 
export price. Argentina fails to see h ow the methodological approach, leading to such a difference, 
can be held to affect the price of biodiesel but not the price comparability  of the normal value and 
the export price.  
24. The Panel also erred when concluding that there is a "general proposition " that differences 
arising from the methodology used to construct the normal value are not "differences affecting 
price comparability " within the meaning of Article 2.4.  There is nothing in Article 2.4 or any other 
provision of the Anti -Dumping Agreement whi ch would support such a proposition. This implies 
that the fact that a difference is the result of a particular methodology does not render it irrelevant 
for the purpose of Article 2.4 of the Anti -Dumping Agreement.  
25. Based on a proper interpretation of Art icle 2.4, correctly applied to the difference at issue, 
the Appellate Body should conclude that the difference at issue is a "difference affecting price 
comparability " within the meaning of Article 2.4.  
26. Second, the Panel erred when concluding that its conc lusion is consistent with the Appellate 
Body's findings in EC – Fasteners (China) (Article 21.5 – China) . In fact, contrary to what has been 
argued by the Panel, the Appellate Body in that case held that the fact that certain differences 
affecting price co mparability may be the result of a methodology used for establishing the normal 
value does not disqualify such differences from being subject to adjustment under Article 2.4 of 
the Anti -Dumping Agreement.  
27. In light of the foregoing, Argentina requests the Appellate Boyd to reverse the Panel 's 
findings and conclusions and to find that the European Union violated Article 2.4 because, by 
failing to make adjustments for differences affecting price comparability, it failed to make a fair 
comparison as required b y that provision.  
3.2   The Panel erred in finding that the European Union 's non -attribution analysis did 
not violate Article 3.1 and Article 3.5 of the Anti -Dumping Agreement  
28. Argentina claims that the Panel erred in the interpretation and application of Articl es 3.1 and 
3.5 of the Anti -Dumping Agreement when assessing Argentina 's claim concerning the 
European  Union 's treatment of overcapacity in the non -attribution analysis.  
29. First, the Panel erred in its interpretation and application of the obligation to make an 
"objective examination " based on "positive evidence " of the overcapacity of the EU industry 
pursuant to Articles 3.1 and 3.5 of the Anti -Dumping Agreement. More specifically, the Panel erred WT/DS473/AB/R/Add.1  
 
- B-12 - 
 
  in considering that it was relevant to examine whether "the re vised data [did or] did not have a 
significant  role in the EU authorities ' conclusion in the Definitive Regulation on overcapacity as an 
'other factor ' causing injury ". Argentina submits that to the extent the EU authorities relied on the 
revised data, whi ch do not constitute "positive evidence " and did not involve an objective 
examination, this should lead to the conclusion that the analysis made by the European Union 
regarding "overcapacity " is not consistent with Articles 3.1 and 3.5 of the Anti -Dumping 
Agreement. In any event, even if the Appellate Body were to conclude that the Panel was right in 
examining the role played by the revised data in the determination of the EU authorities, quod 
non, the Panel did not correctly apply Article 3.1 when concludi ng that "the issue of overcapacity 
was [not] based on, or affected by, the revised data ".  
30. Second, the Panel erred in its application of Articles 3.1 and 3.5 as it rela tes to the 
EU authorities ' conclusions regarding "capacity " as another "known factor " in its causation 
analysis. In particular, the Panel failed to distinguish overcapacity from capacity utilization. 
Argentina submits that, although related, overcapacity and capacity utilization are two distinct 
concepts that should not be equated. In the pre sent case, in order to act "in an unbiased manner ", 
the EU authorities should have examined "overcapacity ", as this was the factor identified by the 
interested parties during the investigation as causing injury. In ad dition to the fact that the 
EU authorit ies failed to address the substantial increase in overcapacity, Argentina notes that the 
Panel further failed to note the inconsistency of the EU authorities ' conclusion that this factor could 
not be "a major cause of injury " on the basis of the evidence b efore it.  
31. On the basis of the above, Argentina requests that the Appellate Body reverse the Panel 's 
findings and find that the European Union acted inconsistently with A rticles 3.1 and 3.5 of the 
Anti-Dumping Agreement with regard to the issue of overcapac ity. 
3.3   Review of the Panel 's findings under Article 2.2.1.1 of the Anti -Dumping 
Agreement  
32. Argentina submits that if the Appellate Body were to reverse the Panel 's findings under 
Article 2.2.1.1 of the Anti -Dumping Agreement concerning the European Union 's failure to 
calculate the cost of production of the product under investigation on the basis of the records kept 
by Argentinean producers, the Appellate Body should complete the analysis with regard to 
Argentina 's second claim under Article 2.2.1.1 that the European Union acted inconsistently with 
that provision by including costs not associated with the production and sale of biodiesel in the 
calculation of the cost of production, for which the Panel did not make any findings.  
33. Argentina requests the Appellat e Body to find that the European Union violated 
Article  2.2.1.1 of the Anti -Dumping Agreement because by using the FOB reference price of 
soybean instead of the actual price of soybean incurred by Argentinean producers, it included costs 
not associated wit h the production and sale of biodiesel in the calculation of the cost of production 
of the product under consideration pursuant to Article 2.2.1.1.  
4   CONCLUSION  
34. For the reasons set out in this submission , Argentina respectfully requests the 
Appellate  Body t o reverse the Panel 's findings and conclusions,  
a. with regard to Argentina 's "as such " claims concerning Article 2(5), 
second  subparagraph, of the Basic Regulation under Articles 2 .2, 2.2.1.1 and 18:4 of the 
Anti-Dumping Agreement, Article VI:1(b)(ii) of the  GATT 19 94 and Article XVI:4 of the 
WTO Agreement. Argentina also request that the Appellate Body complete the analysis 
with regard to Argentina 's "as such " claim under Article 2.2.1.1.  
b. with regard to Argentina's claims concerning the anti -dumping measures  on imports of 
biodiesel under Articles 2.4, 3.1 and 3.5 of the Anti -Dumping Agreement, and to 
complete the analysis with regard to Argentina's claim under Article 2.2.1.1 of the 
Anti-Dumping Agreement if the Appellate Body reverses the Panel's findings un der 
Article  2.2.1.1 of the Anti -Dumping Agreement concerning the European Union's failure 
to calculate the cost of production of the product under investigation on the basis of the 
records kept by Argentinean producers . WT/DS473/AB/R/Add.1  
 
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  ANNEX B -3 
EXECUTIVE SUMMARY OF  ARGE NTINA'S  APPELLEE'S SUBMISSIO N 
1   INTRODUCTION  
1. Argentina requests the Appellate Body to reject all European Union 's claims of error 
presented in its Appellant Submission, which are all without merit.  Argentina is concerned about 
what it considers as an attemp t by the European Union to seek to disregard an entire set of rules 
(mainly those contained in Article 2 of the Anti -Dumping Agreement), a well -established 
jurisprudence and a common understanding amongst Members about a given set of principles.  
2   THE PANEL  CORRECTLY FOUND THAT  THE EUROPEAN UNION A CTED 
INCONSISTENTLY WITH ARTICLE 2.2.1.1 OF T HE ANTI -DUMPING AGREEMENT "BY 
FAILING TO CALCULATE  THE COST OF PRODUCTI ON OF THE PRODUCT UN DER 
INVESTIGATION ON THE  BASIS OF THE RECORDS  KEPT BY THE PRODUCER S" 
2. Argentina  submits that the Panel correctly interpreted and appl ied Article 2.2.1.1 of the 
Anti-Dumping Agreement. Therefore, the Appellate Body should reject the European Union 's 
arguments and uphold the Panel 's findings in paragraphs 7.247, 7.248, 7.249 and 8.1(c) (i) of its 
Report.  
3. Although each party is free to determine how it presents its arguments, in Argentina 's view, 
the European Union has followed an incorrect approach when starting to examine the "broad " 
context and object and purpose in the first place.  The interpretation of the provisions of the 
covered agreements must be based on the customary rules of interpretation as included in the 
Vienna Convention. Consequently, the interpretation of Article 2.2.1.1, first sentence, should start 
by the ordinary mean ing of the relevant terms of that provision in their context and in the light of 
the object and purpose of the relevant agreement.  
2.1   Interpretation of Article 2.2.1.1, first sentence, and, in particular, of the part of 
that sentence which provides that the records "reasonably reflect the costs 
associated with the production and sale of the product under consideration " 
4. The analysis of the first sentence of Article 2.2.1.1, pursuant to the customary rules of 
interpretation set out in the Vienna Convention, doe s not support the European Union 's position 
that a standard of reasonableness informs the determination of the costs associated with the 
production and sale of the product under consideration.  
5. First, the analysis of the structure and the ordinary meaning  of the terms used in the 
first sentence of Article 2.2.1.1 demonstrates that the condition that the records "reasonably 
reflect the costs associated with the production and sale of the product under consideration " does 
not permit a test as to whether the co sts included in the records are "reasonable " including by 
reference to international prices or hypothetical costs, which, the investigating authorities consider 
as more "reasonable ", as argued by the European Union.  
6. Second, the context provided by Article 2.2.1.1, Article 2.2.2, Article 2.2 and the definition 
of dumping confirms that the second condition in the first sentence of Article 2.2.1.1 is concerned 
with the costs that have actually been incurred by the exporter/producer at issue and whether 
such co sts are reasonably reflected in the records kept by this exporter/producer. The contextual 
arguments put forward by the European Union in the first section of its Appellant Submission are 
either distorted or taken out of their context and should therefore all be rejected.  
7. Third, the object and purpose of the Anti -Dumping Agreement also does not support the 
interpretation put forward by the European Union. The purpose of the Anti -Dumping Agreement 
can be described as  being to increase and improve GATT discip lines relating to the use of 
anti-dumping measures and not, as argued by the European Union, "to prevent the industries of an 
exporting country from damaging the industries of an importing country through the use of prices 
that are artificially low, because  of some abnormal condition ". WT/DS473/AB/R/Add.1  
 
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  2.2   The alleged legal errors in the Panel 's reasoning, findings and conclusions  
8. The European Union addresses a number of "legal errors " that the Panel would have 
allegedly committed when finding that the European Union ac ted inco nsistently with 
Article  2.2.1.1. These claims of error must all be rejected.  
9. First, the Panel did not make any error when addressing the purpose of paragraph 2. 
Second, the Panel correctly noted that the records of the investigated producer are the preferr ed 
source of information for the establishment of the costs of production. Third, the Panel correctly 
emphasised that there is a "general rule " in Article 2.2.1.1, first sentence, expressed by the use of 
the verb "shall" and that the word "normally " indica tes that this rule is not "absolute ", namely that 
there may be situations in which the general rule does not need to be followed. Fourth, the Panel 's 
statement that the focus of the condition at issue is on the specific exporter/producer under 
investigatio n is not "inaccurate and tendentious ". In fact, it merely reflects the fact that the 
subject of both conditions in Article 2.2.1.1, first sentence, is the producer/exporter 's records. 
Fifth, the Panel 's analysis of the immediate context in Article 2.2.1.1 is correct and coherent. 
Sixth, the Panel did not err when examining Article 2.2.2.There is simply no legal basis to claim 
that "a standard of reasonableness does inform Article 2.2.2 as a whole " and even less with 
respect to the costs of production. Seven th, while the Panel could have addressed in more detail 
the arguments with regard to the object and purpose of the Anti -Dumping Agreement, it would 
ultimately have to reach the same conclusion and therefore, the European Union 's arguments on 
that issue are  without merit. Eighth, contrary to what is claimed by the European Union, all the 
cases referred to by the Panel provide support to the Panel 's understanding of Article 2.2.1.1. 
Indeed, the reports of the panels in US – Softwood Lumber V , Egypt – Steel Re bar and EC – 
Salmon (Norway)  confirm that the second condition in Article 2.2.1.1, first sentence, focuses on 
the records of the exporter/producer concerned, the purpose of the test being to determine 
whether such records appropriately reflect the costs th at are associated with the production and 
sale of the product under consideration for that exporter/producer in that case.  
3   THE PANEL CORRECTLY FOUND THAT THE EUROPEAN UNION VIOLA TED 
ARTICLE  2.2 OF THE ANTI -DUMPING AGREEMENT AN D ARTICLE VI:1(B)(II ) OF THE 
GATT 1994 BY FAILING  TO CONSTRUCT THE NOR MAL VALUE ON THE BAS IS OF THE 
"COST OF PRODUCTION I N THE COUNTRY OF ORI GIN" 
10. Argentina submits that all aspects of the European Union 's appeal with regard to Argentina 's 
claims under Article 2.2 of the Anti -Dumping A greement and Article VI:1(b)(ii) of the GATT 1994 
are without merit and should be dismissed in their entirety. The Panel correctly concluded that the 
costs of production used by the EU investigating authority when constructing the normal value 
were not cos ts "in the country of origin " and that therefore the European Union acted 
inconsistently with Article 2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the 
GATT  1994. It follows that the Appellate Body should uphold the  Panel 's findings in 
parag raphs  7.260 and 8.1(c)(ii) of its Report.  
11. With regard to the legal standard under Article 2.2 of the Anti -Dumping Agreement, 
Argentina notes that the distinction made by the European Union between the "cost" and the 
"evidence " is artificial. Even if one we re to make a distinction between the "cost" and the evidence 
pertaining to such cost, the terms "cost of production in the country of origin " mean "domestic 
costs" or charges or expenses incurred for the production in the country of origin. Consequently, 
the "evidence pertaining to such costs " is the evidence pertaining to the domestic costs. Therefore, 
it necessarily prevents the use of data relating to or pertaining to costs other than the "domestic 
costs", such as costs in markets other than the domestic  market of the country of origin.  
12. Argentina submits that the Panel correctly found that the European Union violated Article 2.2 
of the Anti -Dumping Agreement by not using the costs "in the country of origin " when constructing 
the normal value and that all arguments to the contrary as raised by the European Union should 
be rejected. Indeed, the reference price (reflecting the level of international prices)  used by the 
European Union is not consistent with the requirement in Article 2.2 to construct normal va lue on 
the basis of the "cost of production in the country of origin ". The "cost of production in the country 
of origin " is not a hypothetical cost, but the domestic cost actually incurred in that country.  WT/DS473/AB/R/Add.1  
 
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  4   THE PANEL CORRECTLY FOUND THAT THE EUROP EAN UNION  VIOLATED 
ARTICLE  9.3 OF THE ANTI -DUMPING AGREEMENT AN D ARTICLE VI:2 OF TH E GATT 
1994 BY IMPOSING ANT I-DUMPING DUTIES IN EX CESS OF THE MARGIN O F 
DUMPING THAT SHOULD HAVE BEEN ESTABLISHE D UNDER ARTICLE 2  
13. Argentina submits that the Panel correctly interprete d and applied Article 9.3 of the 
Anti-Dumping Agreement and Article VI:2 of the GATT 1994. Therefore, the Appellate Body should 
uphold the Panel 's findings regarding Argentina 's claim under Article 9.3 of the Anti -Dumping 
Agreement and Article VI:2 of the GATT 1994 in paragraphs 7.367 and 8.1(c)(vii) of the Report. 
All three aspects of the European Union 's appeal with regard to Article 9.3 are without merit and 
should, consequently, be dismissed in their entirety.  
14. First, the Panel correctly found that Artic le 9.3 require s a comparison between the 
anti-dumping duties actually imposed and the dumping margin that should have been calculated 
by the investigating authority, in the absence of any errors or inconsistencies with Article 2 of the 
Anti-Dumping Agreeme nt.  
15. Second, the Panel did not err when inferring from its previous findings with regard to 
Articles 2.2.1.1 and 2.2 that the European Union also breached Article 9.3. To the extent that the 
European Union violated Articles 2.2.1.1 and 2.2, this violation leading to the determination of 
margins of dumping that are higher than what should have been if the margins had been 
calculated in accordance with Article 2, the Panel appropriately relied on its previous findings when 
examining Argentina 's claim under Ar ticle 9.3. However, even if the Appellate Body were to 
reverse some of the Panel 's findings with regard to Argentina 's claims under Article 2.2.1.1 or 2.2, 
this should not automatically result in the reversal of the Panel 's findings with respect to 
Article  9.3. 
16. Third, the Panel did not violate Article 17.6(i) of the Anti -Dumping Agreement by seeking to 
rely on the dumping margins as calculated in the Provisional Regulation. Since the European Union 
did not include a claim of violation of Article 17.6(i) of the Anti -Dumping Agreement in its Notice of 
Appeal, this claim of error is not properly before the Appellate Body in this appeal. In any event, 
this claim should be rejected as the Panel used the findings from the Provisional Regulation only as 
a "reasonab le approximation " and did not suggest that the same results should have been reached 
had the dumping margins determination been done in accordance with Article 2, as erroneously 
argued by the European Union.  
5   CONCLUSIONS  
17. The claims raised by the European U nion in its Appellant Submission are without merit. 
Argentina therefore respectfully requests the Appellate Body to reject the European Union 's appeal 
in its entirety.  
18. Argentina notes, however, that if the Appellate Body decides to reverse some of the Pane l's 
findings, given that the Panel record contains sufficient factual findings and undisputed facts, the 
Appellate Body should complete the analysis, contrary to what has been suggested by the 
European Union.  
 WT/DS473/AB/R/Add.1  
 
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  ANNEX B -4 
EXECUTIVE SUMMARY OF  THE EUROPEAN UN ION'S  APPELLEE'S SUBMISSIO N 
1   EXECUTIVE SUMMARY  
1.1   ARTICLE 2.2.1.1 OF THE ANTI -DUMPI NG AGREEMENT AND THE SECOND 
SUB-PARAGRAPH OF ARTICLE 2(5) OF THE BASIC REGULATION "AS SUCH"  
1. The first sub-paragraph of Article 2(5) is concerned with the application of the first 
sentence of Article 2.2.1.1 as a matter of EU law. If a simple comparison is made between 
the two  provisions it is clear that there is no "as such" inconsistency.  
2. By contrast, the second sub-paragraph of Article 2(5) is concerned to set out what is to  be 
done, as a matter of EU law, if one of the two conditions is not met: in effect, it partially 
completes the silence , for the purposes of EU law.  
3. With regard to the text of the second sub -paragraph  of Article 2(5), first, a provision can 
govern a partic ular question even if it does not elaborate further detailed criteria. Second , 
just because one provision might be context for another does not mean that the 
determination provided for in the first is in fact made pursuant to the second. Third, the 
Europea n Union does not understand how the second sub -paragraph can be applied before 
the first.  
4. With regard to the context of the second sub -paragraph  of Article 2(5), first, Argentina 
confuses the alleged preparatory work (supplementary means of interpretation)  with the 
context. None of Argentina's assertions lends support to its interpretation. Second, in EU law 
recitals do not "establish rules", they provide reasons . The relevant EU law rule is in the 
first sub -paragraph. Third, the sequence of determinations mooted by Argentina does not 
demonstrate that the second sub -paragraph does anything other than partially complete the 
silence, for the purposes of EU law. Fourth , none of the quoted authors suggests that the 
second sub -paragraph of Article 2(5) governs th e question at issue.  
5. With regard to the alleged consistent EU practice , Argentina did not seek its review "as 
such" before the Panel. An analysis of all cases invoked reveals that, conceptually, each of 
them has a two -step structure.  
6. With regard to the judgments of the General Court of the European Union , they clearly 
reflect the two -step structure. The Court found that the second sub -paragraph partially 
completes the silence as a matter of EU law.  
7. Argentina asserts that the Panel 's analysis is vitiated by two erroneous premises . 
However, the rule in the first sub -paragraph of Article 2(5) provides for the relevant criteria, 
and no further criteria are supplied by the second sub -paragraph.  
8. With regard to the so-called mandatory/discretionary analytical tool , the language 
that concerns the determination of whether or not the records of the firm reasonably reflect 
the costs associated with production and sale is contained in the first sub -paragraph.  
9. With regard to Article 11 of the DSU , the Panel made an objec tive assessment of the 
matter before it, including an objective assessment of the facts.  
10. The Appellate Body does not need to reach the stage of completing the legal analysis , 
because Argentina's submission does not disclose any basis on which to reverse th e Panel's 
findings.  WT/DS473/AB/R/Add.1  
 
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  1.2   ARTICLE 2.2 OF THE ANTI -DUMPING AGREEMENT AND THE SECOND SUB -
PARAGRAPH OF ARTICLE 2(5) OF THE BASIC REGULATION "AS SUCH"  
11. With regard to the interpretation of Article 2.2 , the Panel did not err by finding that it 
does not limit the sour ces of information that may be used in establishing the costs of 
production. Argentina ignores the possibility that there may be situations where information 
from the country of origin is deficient or absent.  
12. The Panel did not err in its determination of the scope,  meaning and content of Article  2(5), 
second sub -paragraph . 
13. With regard to the text of Article 2(5), second sub -paragraph , first, resort to "any other 
reasonable basis" is part of several options that the authorities have at their disposal. There 
is no obligation to use information from "other representative markets". Second , there may 
be other reasonable "bases" in the country of origin. Third, "other representative markets" 
may include other relevant product markets in the country of origin. Fourth, Article 2(5), 
second  sub-paragraph, refers to the sources of information  that may be used to establish 
an investigated producer's costs, as opposed to the costs  themselves.  
14. With regard to the legislative history , neither the second sub -paragraph of Art icle 2(3) nor 
Recital 4 of Regulation 1972/2002 suggest that the EU authorities must systematically resort 
to information not in the country of origin. They both inform only the case of a "particular 
market situation".  
15. With regard to the alleged consistent  practice of the EU authorities , Argentina did not 
challenge the alleged practice itself. The practice, as a (potential) measure, should be 
distinguished from the instrument. Several examples confirm that the authorities enjoy a 
broad discretion.  
16. With reg ard to the judgments of the General Court of the European Union , they show 
that the EU authorities are entitled  to establish the producer's costs on the basis of sources 
that are unaffected by that distortion.  
17. Finally, the Panel did not fail to make an obj ective assessment of the matter  as required by 
Article 11 of the DSU.  
18. The Panel did not apply an erroneous legal standard for the establishment of the 
"as such " claim . Argentina has not demonstrated that the provision at issue cannot be 
applied in a WTO -consistent manner and that it will necessarily be inconsistent with the 
EU's WTO obligations . The second sub -paragraph does not require  the investigating 
authority to use information from outside the country in all cases , as confirmed by the 
practice.  
1.3   ARTIC LE 2.4 OF THE ANTI -DUMPING AGREEMENT AND THE EU ANTI -DUMPING 
MEASURES ON BIODIESEL FROM ARGENTINA  
19. The claims and arguments under Article 2.2.1.1 and Article 2.4 are closely related. 
Fundamentally, the EU is arguing that an adjustment was justified, because  a standard of 
reasonableness  informs the interpretation and application of the entirety of the 
second  condition in the first sentence of Article 2.2.1.1.  
20. Article 2.4 is important context for understanding the circumstances in which it is justified to 
make  an adjustment under Article 2.2.1.1. Article 2.4 expressly mentions taxation, which is 
an action done by the State. Furthermore, Article VI of the GATT 1994 relates to both 
dumping and subsidisation.  
21. It is not disputed in this case that there is an appro ximate correlation  between the rate of 
the export tax and the consequent reduction in the price of soya in Argentina. The 
difference  in Article 2.4 is not the result  of the comparison. The " difference " pertains to 
what has to be adjusted before  the compari son is made.  WT/DS473/AB/R/Add.1  
 
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  22. The measure at issue did not make the adjustment pursuant to Article 2.4, but following the 
determination that the second condition in the first sentence of Article 2.2.1.1 was not 
fulfilled; and on the basis of the second sub -paragraph of Art icle 2(5), which partially 
completes the silence for EU law purposes. If the adjustment was reasonable and justified, 
there is no basis for making an un -adjustment under Article 2.4. If the measure is 
inconsistent with Article  2.2.1.1, the position under A rticle 2.4 is moot.  
1.4   THE PANEL'S FINDINGS UNDER ARTICLES 3.1 AND 3.5 OF THE ANTI -DUMPING 
AGREEMENT  
23. The EU authorities concluded that (i) during the period considered the state of the domestic 
industry deteriorated, while (ii) low capacity utilization was a  constant or permanent feature 
of the EU biodiesel industry.  
24. The conclusion of the EU authorities on the issue of overcapacity is unchanged from the 
Provisional to the Definitive Regulation. The Panel did not err when finding that the revised 
data in the D efinitive Regulation did not have a role in the EU authorities' conclusion on 
overcapacity as an "other factor" causing injury. The EU authorities relied on what Argentina 
accepts as the correct data (Provisional Regulation), determining that overcapacity was a 
constant during the investigation period and therefore could not be a relevant factor.  
25. A finding of inconsistency with Articles 3.1 and 3.4 does not automatically render the 
non-attribution analysis with respect to overcapacity inconsistent with Arti cles 3.1 and 3.5.  
26. The absolute figures revealed nothing about the significance of the increase. An objective 
and unbiased investigating authority may examine the issue of overcapacity on the basis of 
capacity utilization.  
1.5   REVIEW OF THE PANEL'S FINDINGS UN DER ARTICLE 2.2.1.1  
27. First, Argentina has not requested the Appellate Body to reverse the Panel's exercise of 
judicial economy with respect to Argentina's second claim under Article 2.2.1.1.  
28. Second , the first sentence of Article 2.2.1.1 does not create an obligation on importing 
Members to only use, in the construction of normal value, costs associated with the 
production and sale of the product under consideration.  
29. Third, Argentina merely repeats its prior claims and arguments.  
30. Fourth , the process to whic h Argentina is referring is not governed by the first sentence of 
Article 2.2.1.1, but by the second sub -paragraph of Article 2(5), which partially completes 
the silence for the purposes of EU law.  
 
_______________  
 
 
 WT/DS473/AB/R/Add.1  
 
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  ANNEX  C 
ARGUMENTS OF THE THI RD PARTIC IPANTS  
Contents  Page  
Annex  C-1 Executive summary of Australia 's third participant's submission  C-2 
Annex  C-2 Executive summary of China 's third participant's submission  C-3 
Annex  C-3 Executive summary of Colombia 's third participant's submission  C-6 
Annex C-4 Executive summary of Indonesia's third participant's submission  C-7 
Annex  C-5 Executive summary of Mexico's third participant's submission  C-8 
Annex  C-6 Executive summary of Russia's third participant's submission  C-9 
Annex  C-7 Executive summary  of Saudi Arabia's third participant's submission  C-10 
Annex  C-8 Executive summary of United States' third participant's submission  C-11 
 
 WT/DS473/ AB/R/Add.1  
 
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  ANNEX  C-1 
EXECUTIVE SUMMARY OF  AUSTRALIA'S  THIRD PARTICIPANT'S SUBMISSION  
1. Australia addresses the standard of revie w under the Anti -Dumping Agreement, the 
interpretation of Article 2.2.1.1, and the flexibility drafted into the Agreement.  
2. Taking into account the appropriate principles of standard of review and interpretation under 
the Anti -Dumping Agreement, the phrase "reasonably reflects the costs" does not have to 
require only a reasonable reflection, or reasonable costs. The word "reasonable" relates to 
both the reasonableness of the reflection, as well as the reasonableness of the costs, 
depending on the circumstanc es.  
3. Specifically, in determining what it means for records to "reasonably reflect the costs" for 
the purposes of Article 2.2.1.1 of that Agreement, Australia maintains that a holistic analysis 
of costs may be warranted in order to arrive at a proper cost calculation. All costs, not 
merely "actual costs", that would be reasonably related to the production of the goods may 
be relevant to such an analysis.  
4. In addition, while the first sentence of Article 2.2.1.1 provides a rule which "shall normally" 
be foll owed in constructing the costs of production, panels have found that there could be 
situations which are not "normal", where the records of a producer or exporter's costs 
should not determine what constitutes costs under Articles 2.2.1.1 and 2.2.  
5. The flex ibility highlighted by these interpretations is important and ought to be maintained 
to ensure investigating authorities can respond appropriately to different circumstances 
which could arise in anti -dumping investigations.  WT/DS473/AB/R/Add.1  
 
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  ANNEX C -2 
EXECUTIVE SUMMARY OF  CHINA'S  THIRD PARTICIPANT'S SUBMISSION  
I. INTRODUCTION: THE CO NCEPT OF "DUMPING "  
1. This dispute raises an important interpretive issue regarding the foundational concept of 
"dumping " that applies throughout the Anti-Dumping Agreement . "Dumping " involves int ernational 
price discrimination by individual producers and/or exporters . Anti -dumping measures may 
counteract such discriminatory pricing practices when they cause injury to domestic competitors. 
Anti-dumping measures are not a tool for importing countrie s to counteract the regulatory policies 
of exporting countries , such as WTO -consistent export duties. These government actions may be 
the subject of specifically negotiated commitments, or they may be disciplined under the 
SCM Agreement , as specific subsid ies. However, it would subvert the carefully negotiated balance 
of rights and obligations to allow importing countries to impose anti -dumping measures to 
counteract the effects of another government's regulatory policies, by permitting an upward 
adjustment  to an individual producer/exporter's normal value in anti -dumping proceedings.  
II. APPEALS REGARDING TH E INTERPRETATION AND  APPLICATION OF 
ARTICLE  2.2.1.1  
2. Under Article 2.2.1.1, an authority must calculate the producer's costs on the basis of its 
records , provided that they: (i) are in accordance with the generally accepted accounting principles 
("GAAP ") of the exporting country; and (ii) reasonably reflect the costs associated with the 
production and sale of the product under investigation.  
3. The issue is  whether an investigating authority is entitled to reject specific items of the 
production costs in a producer's GAAP -compliant records because it considers that the costs are 
lower than hypothetical  costs that might prevail in a hypothetical  market in whi ch governmental 
policies do not "distort " costs.  
4. The ordinary meaning of the first sentence of Article 2.2.1.1, in light of its context, and the 
object and purpose of the Anti-Dumping Agreement , means that an authority can reject a 
producer's GAAP -complian t records only if those records do not reflect the true costs – what the 
Panel calls "actual " costs – incurred by a producer to produce the product under consideration.  
5. Article 2.2.1.1, first sentence, states that "costs shall normally be calculated on th e basis of 
records kept by the export or producer under investigation ". As noted by the Panel, the subject of 
this clause is the records  kept by the exporter or producer  under investigation. This indicates that 
this requirement is focused on the costs incu rred by that specific producer  to make the product. As 
such, Article 2.2.1.1 is focussed on the economic costs borne by the producer when producing the 
investigated product.  
6. Article 2.2.1.1, first sentence, also requires that records of costs are compliant  with the 
exporting country's GAAP. The reference to GAAP is relevant in two respects. First, GAAP clarifies 
that Article 2.2.1.1 deals with a producer's accounting records and the amounts recorded therein, 
which by their nature are specific to that produc er. These costs, therefore, cannot be judged 
against a hypothetical benchmark that does not reflect that producer's economic reality. Second , 
the reference is to the GAAP of the exporting country , thereby confirming the focus of the 
provision is on the exp orter under investigation and their true costs.  
7. Article 2.2.1.1, first sentence, also requires that producers' records "reasonably reflect the 
costs associated with… production ". This element of the first sentence of Article 2.2.1.1 forms the 
heart of the  dispute before the Appellate Body. To China, the treaty text does not ask an abstract 
question about generic costs of producing the product under consideration. Rather, it asks a much 
more specific question about whether the investigated producer is engag ed in discriminatory 
pricing practices and about the true costs incurred by the producer when producing the product 
under investigation. As such, the recorded costs should be measured against the true costs 
incurred, and not a hypothetical benchmark that d oes not reflect a producer's economic reality.  WT/DS473/ AB/R/Add.1  
 
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  8. The ordinary meaning of the first sentence of Article 2.2.1.1 is confirmed by the context 
provided, inter alia , by the second and third sentences of that same Article, which provide 
examples of where recorded GAAP -compliant records may not "reasonably reflect " a producer's 
costs of production. Each of the factors listed is an accounting consideration that reflects the 
particular accounting choices made by a specific producer or exporter. This supports 
China's  understanding that "reasonably reflect " in Article 2.2.1.1 requires as assessment of 
whether recorded costs are a true account of a producer's economic reality.  
9. China's understanding is supported by the object and purpose of the Anti-Dumping 
Agreement , whi ch addresses the discriminatory pricing practices of exporters/producers and is, 
thereby, exporter -focussed. Consequently, a determination of whether a producer's records 
"reasonably reflect " the costs of production requires an assessment of whether these costs reflect 
the true costs to the producer and not factors exogenous to the producer.  
III. APPEALS REGARDING TH E INTERPRETATION AND  APPLICATION OF ARTIC LE 2.2  
10. Article 2.2 requires that domestic prices normally be used to establish normal value. In 
some circumstances, however, an authority may construct normal value on the basis of the "cost 
of production in the country of origin " plus administrative, selling and general costs and profit.  
11. There are two broad issues before the Appellate Body. First, whethe r the "cost of 
production " under Article 2.2 refers to the costs incurred by producers to produce the product, or 
whether it refers to hypothetical costs that producers "would have " borne, had they sourced inputs 
from a market other than the country of ori gin. Second , whether information used by an authority 
to establish the costs of production in the country of origin must necessarily  be limited to the 
country of origin.  
12. With respect to the first issue, the ordinary meaning of "cost of production in the c ountry of 
origin " in light of the context surrounding Article 2.2 and the object and purpose of the 
Anti-Dumping Agreement , demonstrates that the costs of production must be those of the exporter 
in their domestic market. Article 2.2 does not refer to hypothetical costs that producers "would 
have" borne.  
13. With respect to the second issue, the task of establishing "costs of production in the country 
of origin " begins with the producer's records, which, by definition, reveal costs "in the country of 
origin ". Where a producer's true costs are not reflected in its records, the "cost of production in the 
country of origin " need to be determined through evidence other than the producer's own 
accounts. In such a case, the authority must clearly look for evidence in the country of origin  
because this evidence is the best evidence of the true cost to the producer "in the country of 
origin ". China does not exclude that in exceptional circumstances – i.e. when there is no evidence 
in the country of origin – an investiga ting authority may need to turn to evidence outside of the 
country of origin. However, the investigating authority is not permitted to substitute  the costs 
prevailing in another market for the "cost of production in the country of origin ". This means that 
any evidence used must be revealing of the producer's  true costs (which, by definition, are 
incurred "in the country of origin "). This, in turn, means that any such evidence must be adjusted 
so that it is representative of the costs of production within th e country of origin. An investigating 
authority must take full account of specific market conditions in the exporter's domestic market, 
including any government intervention in the market that may affect the price of the inputs, for 
example, trade policy m easure such as an export tax on certain commodities.  
IV. APPEAL REGARDING THE  LEGAL CHARACTERIZATI ON OF ARTICLE 2(5), 
SECOND  SUBPARAGRAPH, BASIC REGULATION AND ARGEN TINA'S "AS SUCH " 
CLAIMS  
14. The issues before the Appellate Body are: (i) whether, due to erro rs in its legal 
characterization of the second sub -paragraph of Article 2(5) of the Basic Regulation, the 
Panel  erred in its application, as such, of Articles 2.2.1.1 and 2.2 to this provision and (ii) the 
Panel violated DSU Article 11 when considering the  Basic Regulation.  
15. To show that a legislative measure is, as such, inconsistent with a WTO obligation, a 
complainant need not show that the measure leads to a WTO -inconsistent outcome in every WT/DS473/AB/R/Add.1  
 
- C-5 - 
 
  instance. Argentina demonstrated, in China's view, that the re levant provision of the 
Basic Regulation leads to WTO -inconsistent conduct in certain circumstances.  
16. Specifically, China agrees with Argentina that the relevant provision leads the EU authority 
to reject a producer's GAAP -compliant records as not "reasona bly reflect[ing] " costs when there a 
finding by the authority that the costs are lower than they would have been if the producer had 
incurred hypothetical costs from a different market. This flows from the text of the relevant 
provision, read together with  the first sub -paragraph of Article 2(5), and read in light of its 
context. This is also demonstrated by the manner in which the authority, in practice, consistently 
applies the relevant provision to reject producer's records in anti -dumping proceedings. 
Court decisions concerning this practice support the same view.  
17. When assessing whether the Panel erred in its legal characterization of the Basic Regulation, 
the Appellate Body should also consider whether the Panel undertook a sufficiently holistic analys is 
of all of the relevant elements the Basic Regulation, starting with the text of the law and moving 
to, inter alia , relevant practice and General Court decisions.  
V. APPEAL REGARDING THE  INTERPRETATION AND A PPLICATION OF ARTICL E 2.4  
18. The question whether , under Article 2.4, an allowance was required to ensure fair 
comparison should not have arisen in connection with the Biodiesel case, since the producers' 
records "reasonably reflect[ed] " the "costs of production " and the relevant cost adjustments 
should never have been made. Nevertheless, assuming ( quod non ) that the adjustments made by 
the EU authority in the Biodiesel investigation were permissible, China considers that, under 
Article  2.4, the EU authority bore an obligation to make a fair comparison  and, therefore, to make 
due allowance for differences affecting price comparability introduced by adding the amount of 
export tax to the producers' costs when constructing normal value. The addition of the amount for 
export tax introduced an asymmetry betwee n the components reflected in the normal value and 
export price sides of the comparison.  WT/DS473/ AB/R/Add.1  
 
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  ANNEX C -3 
EXECUTIVE SUMMARY OF  COLOMBIA'S  THIRD PARTICIPANT'S SUBMISSION  
1. Colombia will provide its views on: 1. Whether the Panel erred in its assessment of the 
meanin g of the text and context of Article 2(5), second subparagraph, of the Basic 
Regulation and; 2. Whether the Panel erred in finding that the European Union's non -
attribution analysis did not violate Article 3.5 of the Anti -Dumping Agreement.  
2. First, Colombia  notes that there was not an in depth analysis of the text of Article 2(5) of 
Council Regulation and other domestic law and regulations as context1, in order to provide 
an objective assessment of Argentina 's "as such claim". In spite of the fact that the P anel 
underlined "the need to conduct a 'holistic assessment ' of the evidence put forward by the 
parties"2, it examined Article 2(5) alone and it isolated most of its elements from relevant 
legal texts found in EU 's municipal law. In view of this, Colombia notes with concern the fact 
that the Panel seems to be doing a superficial analysis of Article 2(5); hence, taking a stance 
that completely supports one Party over the other, with no trace of an objective assessment 
of the facts. Consequently, Colombia res pectfully requests the Appellate Body to determine 
whether the Panel erred when analy zing and interpreting the scope of article 2(5) and 
whether it disregarded its obligation under Article 11 of the DSU.  
3. In Colombia 's opinion, the Panel 's analysis is prim arily ba sed on the fact that the 
second  subparagraph of Article 2(5) begins with a condition; which is why it "strongly 
suggests that this provision takes effect following  a determination under the first 
subparagraph that a producer 's records do not reason ably reflect the costs associated with 
the production and sale of the product under investigation."3 In hope of rectifying this, 
Colombia calls upon the Appellate  Body to determine whether the analysis and interpretation 
of Article 2(5) made by the Panel i s pursuant to the obligations acquired under Article 11 of 
the DSU.  
4. Second , Colombia is of the opinion that the magnitude of the margin of dumping included in 
ADA Article 3.4, after being re -calculated, might have been a determinant cause of injury, 
along with the rest of factors listed in such Article.  
5. Colombia also agrees with Argentina when stating that Article 3 contemplates a "logical 
progression" for the IA´s examination, leading to an ultimate determination of whether 
dumped imports are causing mate rial injury to the domestic industry. This process entails a 
consideration of the volume of dumped imports and their price effects, and requires an 
examination of the impact of such imports on the state of the domestic industry as revealed 
by a number of e conomic factors. These elements are linked through a causation and non -
attribution analysis between the dumped imports and the injury to the domestic industry, 
taking into account all factors that must be considered and evaluated."4 
6. Finally, Colombia recog nizes that the object and purpose of the WTO Agreement is to 
liberalize trade and eliminate distortions that provide unfair advantages to products. It also 
acknowledges that the EU's power to conduct investigations of products that are imported 
under condi tions that favor the imported product or causes damages to the national 
industry. However, Colombia also recognizes that the WTO provides Members with tools 
designed to address different barriers to trade under different Agreements, and that 
Members should  use these tools accordingly.  
                                                
1 Panel Report, para. 7.127 -7-144. 
2 Ibid, para. 7.126 . 
3 Ibid, para. 7.132 . 
4 AB Report, China – HP-SSST, para. 5.140.  WT/DS473/AB/R/Add.1  
 
- C-7 - 
 
  ANNEX C-4 
EXECUTIVE SUMMARY OF  INDONESIA'S  THIRD PARTICIPANT'S SUBMISSION  
1. Indonesia agrees with the Panel 's interpretation of Art icle 2.2.1.1. Rather than 
first examining the " ordinary meaning " and, as a second step, examinin g the context and the 
object and purpose, the European Union 's holistic interpretation is focused on an examination of 
the broad context and the object and purpose of the provision and not its ordinary meaning.  
2. Indonesia submits that neither the ordinary meaning nor the context, object and purpose of 
Article 2.2.1.1 support the presence of a reasonableness standard linked to costs. By linking the 
word " reasonable " to costs, the European Union is reading words into that provision that are 
simply not there.  
3. That the focus in the first sentence of Article 2.2.1.1 is on the records and not on whether 
costs are reasonable is supported by the context and the object and purpose. The first sentence of 
Article 2.2.1.1 confirms that, in its analysis of the two condit ions in that sentence, an authority 
must limit itself to the universe of the records.  
4. Indonesia considers it particularly instructive that, to the extent Article 2.2.2 contains a 
"reasonableness test", such a separate "reasonableness test" is absent from A rticle 2.2.1.1 and 
that while Article 2.2 refers to " a reasonable  amount for administrative, selling and general costs ", 
the qualifier "reasonable" is absent before the words " cost of production ". 
5. Indonesia is therefore concerned that were the Appellate Bo dy to side with the interpretation 
of the European Union, this will have far -reaching repercussions resulting in significant uncertainty 
and unpredictability in anti -dumping proceedings. Such an interpretation would also result in 
findings of dumping no lo nger being the  result of the pricing behaviour of individual entities, but 
the result of any perceived government intervention in a market.  
6. On the interpretation of Article 2.2, by creating a distinction between the costs and the 
evidence pertaining to suc h costs, the European Union is attempting to invent a distinction which is 
not supported by the text, context, object and purpose of Article 2.2.  
7. Indonesia is also not persuaded by the European Union 's reference to (1) Article 2.2.1.1 – 
that provision add ressing cost allocations and not the costs themselves – and (2) the possibility of 
using " any other reasonable method " under Article 2.2.2 (iii) as that provision addresses the 
determination of administrative, selling and general costs only.  
 
 WT/DS473/ AB/R/Add.1  
 
- C-8 - 
 
  ANNEX C-5 
EXECUTIVE SUMMARY OF MEXICO'S  THIRD PARTICIPANT'S SUBMISSION* 
1. In Mexico's view, the Panel's interpretation of the expression "reasonably reflect the costs 
associated with the production and sale of the product under consideration" is inappropriate 
because: (1) it is not consistent with Article 2.2, 2.2.1.1, 2.2.2 and 2.7 of the Anti -Dumping 
Agreement (ADA); and (2) does not take into account the fact that the preference of the ADA for 
the actual data is only that, a predilection which never seeks to limit th e methodological options to 
use secondary sources different from the actual data.  
2. Mexico considers that a proper interpretation of ADA Article 2.2 and 2.2.1.1 and of the 
meaning of the word "normally" contained in the latter subparagraph allows it to be co ncluded that 
calculation of the costs does not have to be based exclusively on the costs incurred by the specific 
producer/exporter.  
3. Moreover, Mexico believes that certain problems might arise from the Panel's interpretation 
on this point. As part of its r easoning in arriving at this determination, the Panel qualifies the 
second condition in Article 2.2.1.1 as exceptional and subsidiary to the first requirement, which, in 
Mexico's opinion, is contrary to the text of the provision. Likewise, Mexico considers  that some of 
the Panel's reasoning in fact supports the EU's position.  
4. Mexico disagrees with the Panel's interpretation in US — Softwood Lumber V , as, in this 
dispute, data from the accounting records were indeed disregarded, despite the fact that they 
reflected actual data.  
5. Mexico further considers that the preference of the ADA for the actual information does not 
justify limiting the methodological options to replace it. This is evidenced by the fact that 
Article  2.2.2 of the ADA, which also refers to th e construction of normal value, provides the 
flexibility of replacing the actual data by "any other reasonable method". In addition, Mexico 
considers that some of the Panel's determinations contradict the basic premises on which it relies.  
6. Along those same  lines, Mexico considers that the Panel's interpretations, taken to the 
extreme, would imply that the "facts available" provisions may not be used either, although these 
are set out in the ADA itself, because they imply an option other than that of the cos ts incurred.  
7. Lastly, Mexico considers that, on account of the distortions, the prices of soya in Argentina 
might not be "accord with how they would need to be considered in the context of an anti -dumping 
investigation", and since the Panel itself recognize s that this might be a reason to use a source 
other than the actual data, Mexico's opinion is that this aspect should have been  examined.  
 
 
 
                                                
* This text was originally submitted in Spanish by Mexico.  WT/DS473/AB/R/Add.1  
 
- C-9 - 
 
  ANNEX C-6 
EXECUTIVE SUMMARY OF  RUSSIA'S  THIRD PARTICIPANT'S SUBMISSION  
1. The Russian Federation agrees with Argentin a that the Panel's approach towards the 
analysis of contextual elements of the contested measure, characterized as fragmentation 
technique , interfered with its obligation  to make an objective assessment of the matters before it 
regarding "as such" claims. Contrary to the requirements of Article 11 of the DSU, the Panel held a 
fragmented analysis of contextual elements of the text of Article 2(5) of the Basic Regulation , as if 
they existed autonomously from the contested measure.  
2. Furthermore, the Russian Fe deration shares Argentina 's view that the Panel has improperly 
shifted the European Union 's burden of proof to Argentina, in fact suggesting that the Complaining 
Party needs to demonstrate the facts supporting the European Union 's position on "as such" 
claims. This approach is inconsistent with due process princ iples as established in the 
WTO jurisprudence.  
3. Finally, the Russian Federation believes that the Panel in its an alysis of Article 2.2 of the 
AD Agreement and Article VI:1(b)(ii) of the GATT 1994 has  neither established the ordinary 
meaning of the term "costs of production in the country of origin", nor examined this term in its 
context. Thus, the Panel 's findings that Article 2.2 of the AD Agreement and Article VI:1(b)(ii) of 
the GATT 1994 "require t hat the costs of production established by the authority reflect conditions 
prevailing in the country of origin" but do not "prohibit an authority resorting to sources of 
information other than producers ' costs in the country of origin" appear to be legall y flawed.  
 
 
 
 
 WT/DS473/ AB/R/Add.1  
 
- C-10 - 
 
  ANNEX C-7 
EXECUTIVE SUMMARY OF  SAUDI ARABIA'S  THIRD PARTICIPANT'S SUBMISSION  
1. Saudi Arabia's comments concern two important systemic issues that are central to this 
appeal. Saudi Arabia refrains from expressing a view on the underlying fact s or the 
Panel's  application of the law to the facts of the dispute.  
2. First, Saudi Arabia submits that Article 2.2.1.1 of the Anti -Dumping Agreement does not 
permit the rejection of the producers' recorded costs simply because the investigating authority 
considers those to be "artificially low" or distorted by virtue of some regulatory or tax measure in 
operation in the country of export. The rule set forth in Article 2.2.1.1 is simple. It provides that 
"costs shall normally be calculated on the basis of the  records kept by the exporter or producer 
under investigation". The term "reasonably" is an adverb that qualifies the reflection of the costs in 
the records. It does not qualify the costs. The adverb is used to ensure that the records are a 
reliable source  of relevant cost information. This requirement is the substantive counterpart to the 
first condition that the records must be kept in accordance with the generally accepted accounting 
principles of the exporting country. Both conditions seek to ensure tha t the records in question 
form a reliable basis for the actual costs related to the production and sale of the product under 
consideration. This provision concerns the records and their reliability to accurately present the 
actual costs incurred for the pr oduction of the product under consideration. This provision does not 
relate to the amount of the costs and does not require that the costs be reasonable.  
3. The aim of the anti -dumping instrument is to discipline the response of Members to private 
pricing beh avior of foreign producers causing material injury to domestic producers of the 
importing country. It is not aimed at preventing Members from adopting WTO -consistent measures 
or undoing Members' comparative advantages by correcting the reported costs of pr oduction in 
light of international reference prices and costs different from those actually incurred by the 
producer that are reasonably associated with the product under consideration. The allegedly "low" 
level of the input costs does not affect the compa rison between normal value and export price.  
4. Saudi Arabia has systemic concerns with a contrary reading. The Anti -Dumping Agreement 
cannot be used to circumvent the disciplines on countervailing measures imposed by the 
Agreement on Subsidies and Countervai ling Measures ("SCM Agreement"). In addition, the 
anti-dumping instrument cannot be used to counteract what otherwise could not be obtained 
through multilateral, bilateral or accession negotiations such as the elimination of export taxes.  
5. Second, Article 2 .2 of the Anti -Dumping Agreement imposes a clear obligation on 
investigating authorities to base the normal value on costs in the country of origin. Article 2.2 
requires a direct "comparison with" the cost of production in the country of origin and does no t 
permit constructing costs based on international reference prices or even a proxy that merely 
"relates to" the country of origin but that is not the cost of production "in" the country of origin. 
Articles 2.2.1.1 and 2.2.2 of the Anti -Dumping Agreement e laborate "for the purpose of 
paragraph  2" on the basis for constructing normal value. Both reflect a producer -specific and a 
country -specific focus. Article 2.2 allows the construction of the normal value but not the 
construction of the costs, irrespective  of whether these costs are considered to have been 
"affected" or "distorted" by government measures in the country of exportation.  
 
 
 
 WT/DS473/AB/R/Add.1  
 
- C-11 - 
 
  ANNEX C-8 
EXECUTIVE SUMMARY OF  THE UNITED STATES'  THIRD PARTICIPANT'S SUBMISSION  
1. In this submission, the United States addresses a number o f issues related to the 
Panel's  interpretation of Article 2 of the AD Agreement and the consideration of "as such" claims.   
2. First, the United States agrees with the EU that the Panel 's interpretation of the 
second  condition of Article 2 .2.1.1 of the AD Agreement is in error. The United States first recalls 
that where records are kept in accordance with generally accepted accounting principles ("GAAP") 
of the exporting country and reasonably reflect the costs associated with the productio n and sale 
of the product under consideration, the investigating authority is normally obligated to use those 
records. However, when considering the meaning of the second condition in Article 2.2.1.1, 
whether the records "reasonably reflect" costs associat ed with production and sale, the Panel erred 
by failing to properly evaluate the text of Article 2.2.1.1. In particular, the Panel 's analysis of 
"costs associated with production and sale" relied on a misundersta nding of the purpose of 
Article  2.2, and the  text of Article 6.10, rather than the ordinary meaning of the text of 
Article  2.2.1.1. An appropriate reading of this provision would result in a finding that it is not 
restricted to consideration of costs actually  incurred. Further, with respect to the s econd condition 
of Article 2.2.1.1, the Panel also erred in its analysis of the phrase "reasonably reflects." In total 
the second condition of Article 2.2.1.1 should be interpreted in a manner that does not render the 
condition superfluous when considering  the meaning of other elements of Article 2.2.1.1.  
3. Second, as raised by the EU 's appeal, the Panel erred in its interpretation of Article 2.2 of 
the AD Agreement. In particular, the text of Article 2.2 does not contain the evidentiary limitations 
suggested  by the Panel. Third, contrary to the claims of Argentina, the Panel did not err with 
respect to its interpretation of Article 2.4 of the AD Agreement.  
4. Fourth, with respect to the "as such" claims raised by Argentina, the United States notes 
that the argu ments made by Argentina are appropriately considered under Article 11 of the DSU. 
The arguments presented by Argentina regarding the Panel 's analysis of context, legislative 
history, consistent practice, and judgments of EU 's General Court are issues of a factual nature, 
and thus, the Appellate Body may resolve the issue by examining whether the Panel failed to make 
an objective assessment of the meaning of Article 2(5) of the Basic Regulation within the EU legal 
system under DSU Article 11. Finally, the Un ited States views the legal standard applied by the 
Panel to the "as such" claims as appropriate. The Panel correctly based its conclusion upon 
whether Article 2(5), subparagraph two, requires WTO -inconsistent conduct, and not whether, if 
the investigating  authority exercises its discretion to take a particular action, that action would be 
WTO-inconsistent.   
 
_______________  
 
 
 
 WT/DS473/AB/R/Add.1  
 
- D-1 - 
 
  ANNEX D  
PROCEDURAL RULING S 
Contents  Page  
Annex  D-1 Procedural Ruling of 9 July 2016  regarding timeline for filing additional 
memorandum and response  D-2 
Annex  D-2 Procedural Ruling of 11 July 2016  regarding the European Union's request for 
additional procedures  D-3 
 
 WT/DS473/AB/R/Add.1  
 
- D-2 - 
 
  ANNEX D -1 
PROCEDURAL RULING OF  9 JULY 2016  
1. On 30 June 2016, we received a letter from the European Union requesti ng a period of 
fifty minutes to deliver its oral statement at the hearing. The European Union expressed the view 
that there is an "unusual volume of third participant submissions in this appeal", that these "refer 
to a number of points that have not been r aised by Argentina",  and asserted that it needs to have 
a full opportunity to address these additional points on "its own motion" and in "an appropriately 
structured way".  
2. After requesting and receiving comments from Argentina and the third participants, and 
pursuant to Rule 28(1) of the Working Procedures for Appellate Review, on 6 July 2016 we invited 
the European Union to submit an additional memorandum by 11 July 2016 to identify the precise 
points referred to by the third  participants that allegedly h ave not been raised by Argentina, and  to 
explain the reasons for its concerns with these points. In the same communication, and pursuant 
to Rule 28(2) and (3) of the Working Procedures, we also invited Argentina and the 
third participants to respond, if th ey so wish, in writing to the European Union's additional 
memorandum by 14 July 2016.  
3. In the afternoon of 8 July 2016, we received a letter from the European Union, requesting us 
to extend the deadline for filing the additional memorandum by 4 days, to 15 July, due to the 
exceptional circumstance that all of the lawyers representing the European Commission in this 
appeal are currently unavailable. Earlier the same day, we had received a letter from China 
requesting that we extend the deadline to respond to the European Union's additional 
memorandum by 1 day, to 15 July. China expressed the view that the amount of time granted to 
third participants is "disproportionately brief compared to the amount of time allowed to the 
European Union to prepare its additio nal memorandum", and noted in this regard that 
third participants cannot begin to prepare their responses until after they have received the 
European Union's additional memorandum.  
4. In view of the timing of the above requests, the short time -frame between n ow and the oral 
hearing, the need to strike an appropriate balance between the respective time periods for the 
European Union to prepare its written memorandum and for Argentina and the third participants to 
prepare any memoranda in response, and taking ac count of the need for the Division to have 
sufficient time to consider the requested memoranda before the oral hearing, we decline the 
requests by the European Union and China to extend the time -periods for filing additional 
memoranda. Accordingly, and as indicated in our letter of 6 July 2016, the Division invites the 
European Union to submit its additional memorandum by 5 p.m. on Monday, 11 July 2016, and 
further invites Argentina and the third participants in this appeal, should they wish to respond to 
such memorandum, to do so by 5 p.m. on Thursday, 14 July 2016. Such additional memoranda 
should be submitted in writing to the Appellate  Body Secretariat, and served on the participants 
and the third  participants.  
 
 WT/DS473/AB/R/Add.1  
 
- D-3 - 
 
  ANNEX D -2 
PROCEDURAL RULING OF  11 JULY 20 16 
1. On 30 June 2016, we received a letter from the European Union requesting that we adopt 
additional procedures concerning: (i) public observation of the oral hearing; and (ii) viewing of a 
recording of the oral hearing by third participants. On 1 July 201 6, we invited Argentina and any 
third participant that wished to comment on these requests  to do so by 12 noon on Tuesday, 
5 July 2016. In response, Argentina, China, Mexico, and the United States submitted comments.1  
1  REQUEST TO OPEN THE ORAL HEARING TO P UBLIC OBSERVATION  
2. With respect to the oral hearing in this appeal, the European Union requests that we allow 
public observation of the statements and answers to questions of the participants, as well as those 
of third participants who agree to make their s tatements and responses to questions public. The 
European Union proposes that public observation be permitted via simultaneous closed -circuit 
television broadcasting with the option for the transmission to be turned off when issues involving 
confidential i nformation are discussed, or if a third participant indicates that it wishes to keep its 
oral statements and responses to questions confidential.  
3. Argentina expresses regret that the European Union chose to make this request on a 
unilateral basis rather th an approaching Argentina and seeking to proceed on a joint basis. 
Argentina states that it is not aware of any valid reason for opening the hearing to public 
observation at the appellate stage when this was not done at the panel stage and notes, in this 
regard, that the European Union did not make such a request to the Panel in this dispute. While 
stating that it is not opposed to increasing the transparency of dispute settlement proceedings, 
Argentina expresses reservations about the timing of the request,  and questions the extent of the 
benefit that the public could derive from observing a highly technical discussion of an anti -dumping 
measure without having had the opportunity to be informed, as well, of the underlying facts. For 
these reasons, Argentina indicates that it would prefer not to have the oral hearing opened to 
public observation in the present case.  
4. China states that, without prejudice to its systemic position on issues concerned by the 
European Union's request, should the oral hearing be ope n to public observation, it wishes to keep 
its oral statements and responses to questions confidential. Mexico submits that it does not object 
to allowing the oral hearing to be opened to public observation in these appellate proceedings, but 
maintains tha t its position in these proceedings is without prejudice to its systemic opinions on this 
issue. The United States suggests that we grant the request by the European Union for public 
observation of the oral hearing, and confirms its intent to make its oral  statements and answers to 
questions open to public observation.  
5. We recall that requests to allow public observation of the oral hearing have been made, and 
have been authorized, in 12 previous appeals.2 In its rulings, the Appellate Body has held that it 
has the power to authorize such requests by the participants, provided that this does not affect the 
confidentiality in the relationship between the third participants and the Appellate Body, or impair 
the integrity of the appellate process. We take note o f the reasons previously expressed by the 
Appellate Body and its interpretation of Article 17.10 of the DSU, and consider that such 
interpretation also applies in these appellate proceedings.  
6. We note  that the request to open the oral hearing in these proce edings was made by only 
one of the participants, the European Union. According to Argentina, the European Union did not 
consult with Argentina or seek to persuade Argentina to make a joint request to allow public 
                                                
1 Australia indicated by email that it would not be making written comments with respect to these 
requests by the European Union.  
2 The first time the Appellate Body authorized, at the request of the participants, public observation of 
the oral hearing was in 2008 in  United States / Canada – Continued Suspension of Obligations in the EC – 
Hormones Dispute  (WT/DS320/AB/R / WT/DS321/AB/R ); most recently the Appellate Body authorized public 
observation of the oral hearing in United States – Certain Country of Origin Labe lling (COOL) Requirements – 
Recourse to Article 21.5 by Canada and Mexico (WT/DS384/AB/RW/ WT/DS386/AB/RW) . WT/DS473/AB/R/Add.1  
 
- D-4 - 
 
  observation of the oral hearing. We also ta ke note of the concerns expressed by Argentina 
regarding the European Union's request, and its preference not to have the oral hearing open to 
public observation. Moreover, we observe that the request was made merely three weeks prior to 
the oral hearing.  
7. In the light of the above, we decline the European Union's request to allow public 
observation of the oral hearing in these appellate proceedings.  
2  REQUEST TO ALLOW THI RD PARTICIPANTS TO V IEW A VIDEO RECORDIN G OF THE 
ORAL HEARING  
8. The European Union further  requests that we adopt additional procedures to enable 
third participants to view a video recording of the oral hearing, including from a location other than 
Geneva. Specifically, the European Union proposes that a password protected, electronic version o f 
the video recording be made available as soon as practicable upon conclusion of the oral hearing, 
to which third participants would have access during a limited period of one week. The 
European  Union further proposes that the video recording could be vie wable by each 
third participant once, without pausing, re -winding or fast -forwarding, and that only persons who 
would be entitled to be members of that third participant's delegation at the oral hearing would be 
authorized to be present during the viewing.  The European Union also suggests procedures to 
prevent recording, reproduction, or dissemination of the video recording of the oral hearing, and to 
protect the confidentiality of business information.  
9. Argentina states that it does not oppose the European  Union's request in principle, although 
it is uncertain what transparency requirement or purpose would be served by the adoption of the 
proposed procedures. Argentina observes that those Members allowed to view the recording of the 
oral hearing would be th e same Members allowed to take part in the oral hearing, and that none of 
the third participants in this dispute are least -developed country Members. Argentina also wonders 
about the extra administrative burden that this request might entail if granted, in  particular in view 
of the already scarce WTO resources available for the dispute settlement system. Mexico maintains 
that we should not allow the hearing to be recorded, considering that this request should be 
reviewed carefully and that the possible bene fits or downsides of recording an oral hearing should 
be discussed openly by the entire WTO Membership. The United States submits that it sees neither 
the purpose of the additional procedures proposed by the European Union, nor the value that such 
procedur es would add. The United States considers that the proposed additional procedures would 
be complex and burdensome for third participants while not giving the participants significant 
confidence in the control maintained on the recording, and adds that it i s not clear that such 
procedures would be technically feasible.  
10. We note that, to date, procedures such as those proposed by the European Union have not 
been adopted in WTO dispute settlement proceedings. Moreover, although the proposed 
procedures appear co mplex, both technically and administratively, the request was made only 
three weeks before the oral hearing in these proceedings. We further note that, while the 
European Union indicates that its proposed procedures are for the benefit of third participant s, its 
request has not been expressly supported by any of the third participants in these 
appellate  proceedings.  
11. For these reasons, we decline the European Union's request to adopt additional procedures 
to enable third participants to view a video recordi ng of the oral hearing.  
 
 
__________