WT/DS483/ R 
 
25 April 2017 
(17-2251) Page: 1/64 
  Original: English  
 
  CHINA – ANTI -DUMPING MEASURES ON IMPORTS OF  
CELLULOSE PULP FROM CANADA  
REPORT OF THE PANEL  
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 WT/DS483/R  
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  TABLE OF CONTENTS  
1   INTRODUCTION  ................................ ................................ ................................ ..........  9 
1.1   Complaint by Canada  ................................ ................................ ................................ . 9 
1.2   Panel establishment and composition  ................................ ................................ ...........  9 
1.3   Panel proceedings  ................................ ................................ ................................ ...... 9 
1.3.1   General  ................................ ................................ ................................ .................  9 
1.3.2   Additional working procedures concerning business confidential information (BCI)  ...........  10 
2   FACTUAL ASPECTS  ................................ ................................ ................................ ..... 10 
3   PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  ................................  11 
4   ARGUMENTS OF THE PAR TIES  ................................ ................................ ...................  11 
5   ARGUMENTS OF THE THI RD PARTIES  ................................ ................................ ........  11 
6   INTERIM REVIEW  ................................ ................................ ................................ ...... 11 
7   FINDINGS  ................................ ................................ ................................ .................  11 
7.1   Introduction  ................................ ................................ ................................ .............  11 
7.2   General principles regarding treaty interpretation, the ap plicable standard of review, 
and burden of proof  ................................ ................................ ................................ .........  12 
7.2.1   Treaty interpretation  ................................ ................................ ..............................  12 
7.2.2   Standard of review  ................................ ................................ ................................ . 12 
7.2.3   Burden of proof  ................................ ................................ ................................ ..... 13 
7.3   The legal framework for injury determination ................................ ................................  13 
7.4   Whether MOFCOM's consideration of the volume of dumped imports was consistent 
with Articles  3.1 and 3.2 of the Anti -Dumping Agreement  ................................ ......................  18 
7.4.1   Introduction  ................................ ................................ ................................ ..........  18 
7.4.2   Legal standard under Articles  3.1 and 3.2, first sentence  ................................ .............  19 
7.4.3   MOFCOM's consideration of the volume of dumped imports  ................................ ..........  22 
7.5   Whether MOFCOM's consideration of price effects was consistent with Articles  3.1 
and 3.2 of the Anti -Dumping Agreement  ................................ ................................ .............  25 
7.5.1   Introd uction  ................................ ................................ ................................ ..........  25 
7.5.2   Legal standard under Article  3.2, second sentence  ................................ ......................  26 
7.5.3   MOFCOM's consideration of parallel price trends  ................................ .........................  27 
7.5.4   MOFCOM's consideration of the fact that dumped imports were sold at higher 
prices than the domestic like product  ................................ ................................ ..................  31 
7.5.5   MOFCOM's consideration of changes in the dumped imports' market share  .....................  33 
7.5.6   MOFCOM's consideration of certain business information  ................................ .............  36 
7.5.7   MOFCOM's consideration of evidence and factors collectively  ................................ ........  38 
7.6   Whether MOFCOM's examination of the impact of dumped imports was consistent 
with Articles  3.1 and 3.4 of the Anti -Dumping Agreement  ................................ ......................  39 
7.6.1   Introduction  ................................ ................................ ................................ ..........  39 
7.6.2   Legal standard under Articles  3.1 and 3.4  ................................ ................................ .. 39 
7.6.3   MOFCOM's evaluation of market share  ................................ ................................ ...... 40 
7.6.4   MOFCOM's evaluation of injury factors showing positive trends  ................................ ..... 42 WT/DS483/R  
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  7.7   Whether MOFCOM's demonstration of causation and examination of other factors 
causing injury were consistent with Articles  3.1 and 3.5 of the Anti -Dumping Agreement  ...........  44 
7.7.1   Introduction  ................................ ................................ ................................ ..........  44 
7.7.2   Legal standard under Articles  3.1 and 3.5  ................................ ................................ .. 45 
7.7.3   MOFCOM's demonstrati on of causation  ................................ ................................ ...... 45 
7.7.4   MOFCOM's examination of other known factors allegedly causing injury and 
non-attribution  ................................ ................................ ................................ ................  48 
7.7.4.1    Cotton and VSF prices ................................ ................................ ..........................  48 
7.7.4.1.1    Introduction  ................................ ................................ ................................ .... 48 
7.7.4.1.2    Cotton prices  ................................ ................................ ................................ ... 49 
7.7.4.1.3    VSF prices  ................................ ................................ ................................ ....... 52 
7.7.4.2    Domestic industry overexpansion, overproduction, and inventory build -up ..................  53 
7.7.4.3    Impact of non -dumped imports  ................................ ................................ .............  58 
7.7.4.4    Shortage of cotton linter  ................................ ................................ ......................  61 
7.8   Consequential claims  ................................ ................................ ................................  63 
8   CONCLUSIONS AND RECO MMENDATION  ................................ ................................ ... 63 
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  LIST OF ANNEXES  
ANNEX A  
INTERIM REVIEW AND WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex A -1 Interim Review  A-2 
Annex  A-2 Worki ng Procedures of the Panel  A-7 
Annex  A-3 Additional Working Procedures of the Panel concerning Business Confidential 
Information  A-12 
ANNEX B  
ARGUMENTS OF CANADA  
Contents  Page  
Annex  B-1 First integrated executive summary of the arguments of Canada  B-2 
Annex  B-2 Second integrated executive summary of the arguments of Canada  B-15 
ANNEX C  
ARGUMENTS OF CHINA  
Contents  Page  
Annex  C-1 First integrated executive summary of the arguments of China  C-2 
Annex  C-2 Second integrated executive summary of  the argume nts of  China  C-14 
ANNEX  D 
ARGUMENTS OF THE THIRD PARTIES  
Contents  Page  
Annex  D-1 Integrated executive summary of the arguments of Brazil  D-2 
Annex  D-2 Integrated executive summary of the arguments of the European Union  D-5 
Annex  D-3 Integrated executiv e summary of the arguments of Japan  D-8 
Annex D-4 Integrated executive summary of the arguments of Norway  D-11 
Annex D-5 Integrated executive summary of the arguments of the United States  D-13 
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  CASES CITED IN THIS REPORT  
Short title  Full case title and  citation  
China – Autos (US)  Panel Report, China – Anti-Dumping and Countervailing Duties on Certain 
Automobiles from the United States , WT/DS440/R  and Add.1, adop ted 
18 June 2014, DSR 2014:VII, p. 2655  
China – Broiler Products  Panel Report, China  Anti-Dumping and Countervailing Duty Measures on 
Broiler Products from the United States , WT/DS427/R  and Add.1, adopted 
25 September 2013, DSR 2013:IV, p. 1041  
China – GOES  Appellate Body Report, China – Countervailing and Anti -Dumping Duties on 
Grain Oriente d Flat -Rolled Electrical Steel from the United States , 
WT/DS414/AB/R , adopted 16 November 2012, DSR 2012:XII, p. 6251  
China – HP-SSST (Japan) / 
China – HP-SSST (EU)  Appellate Body Reports, China – Measures Imposing Anti -Dumping Duties on 
High-Performance Stainless Steel Seamless Tubes ("HP -SSST") from Japan / 
China – Measures Imposing Anti -Dumping Duties on High -Performance 
Stainless Steel Seamless Tubes ("HP -SSST") from the European Union , 
WT/DS454/AB/R  and Add.1 / WT/DS460/AB/R  and Add.1, adopted 
28 October 2015  
China – HP-SSST (Japan) / 
China – HP-SSST (EU)  Panel Reports, China – Measures Impos ing Anti -Dumping Duties on 
High-Performance Stainless Steel Seamless Tubes ("HP -SSST") from Japan / 
China – Measures Imposing Anti -Dumping Duties on High -Performa nce 
Stainless Steel Seamless Tubes ("HP -SSST") from the European Union , 
WT/DS454/R  and Add.1 / WT/DS460/R , Add.1 and Corr.1, adopted 
28 October 2015, as modified by Appel late Body Reports WT/DS454/AB/R / 
WT/DS460/AB/R  
China – X-Ray Equipment  Panel Report,  China – Definitive Anti -Dumping Duties on X -Ray Security 
Inspection Equipment from the European Union , WT/DS425/R  and Add.1, 
adopted 24 April 2013, DSR 2013:III, p. 659  
EC – Bed Linen  Panel Report, European Communities – Anti-Dumping Duties on Imports of 
Cotton -Type Bed Linen from India , WT/DS141/R , adopted 12 March 2001, as 
modified by Appellate Body Report WT/DS141/AB/R, DSR 2001:VI, p.  2077 
EC – Bed Linen  
(Article  21.5 – India)  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Impor ts of Cotton -Type Bed Linen from India – Recourse to Article  21.5 of 
the DSU  by India , WT/DS141/AB/RW , adopted 24 April 2003, DSR 2003:III, 
p. 965 
EC – Bed Linen  
(Article  21.5 – India)  Panel Report, European Communities – Anti-Dumping Duties on Imports o f 
Cotton -Type Bed Linen from India – Recourse to Article  21.5 of the DSU  by 
India, WT/DS141/RW , adopted 24 April 2003, as modified by Appellate Body 
Report WT/DS141/AB/RW, DSR 2003:IV, p.  1269 
EC – Fasteners (China)  Panel Report, European Communities – Definitive Anti -Dumping Measures on 
Certain Iron or Steel Fasteners from China , WT/DS397/R  and Corr.1, 
adopted 28 July 2011, as modified by Appellate Body Report 
WT/DS397/AB/R, DSR 2011:VIII, p. 4289  
EC – Hormones  Appellate Body Report, EC Measures Concerni ng Meat and Meat Products 
(Hormones) , WT/DS26/AB/R , WT/DS48/AB/R , adopted 13 February 1998, 
DSR 1998:I, p. 135  
EC – Salmon (Norway)  Panel Report, European Communities – Anti-Dumping Measure on Farmed 
Salmon from Norway , WT/DS337/R , adopted 15 January 2008 , and Corr.1, 
DSR 2008:I, p. 3  
EC – Tube or Pipe Fittings  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Malleable Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/AB/R , 
adopted 18 August 2003, DSR 2003:VI, p. 2613  
EC – Tube or  Pipe Fittings  Panel Report, European Communities – Anti-Dumping Duties on Malleable 
Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/R , adopted 
18 August  2003, as modified by Appellate Body Report WT/DS219/AB/R, 
DSR 2003:VII, p. 2701  WT/DS483/R  
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  Short title  Full case title and  citation  
EC and certain member States 
– Large Civil Aircraft  Appellate Body Report, European Communities and Certain Member States – 
Measures Affecting Trade in Large Civil Aircraft , WT/DS316/AB/R , adopted 
1 June 2011, DSR 2011:I, p. 7  
EU – Biodiesel (Argentina)  Appellate Body R eport, European Union – Anti-Dumping Measures on 
Biodiesel from Argentina , WT/DS473/AB/R  and Add.1, adopted 
26 October  2016 
EU – Biodiesel (Argentina)  Panel Report, European Union – Anti-Dumping Measures on Biodiesel from 
Argentina , WT/DS473/R  and Add.1, adopted 26 October 2016, as modified 
by Appellate Body Report WT/DS473/AB/R  
EU – Footwear (China)  Panel Report, European Union – Anti-Dumping Measures on Certain Footwear 
from China , WT/DS405/R , adopted 22 February 2012, DSR 2012:IX, p. 4585  
Japan – Alcoholic Beverages II  Appellate Body Report, Japan – Taxes on Alcoholic Beverages , 
WT/DS8/AB/R , WT/DS10/AB/R , WT/DS11/AB/R , adopted 1 November 1996, 
DSR 1996:I, p. 97  
Korea – Certain Paper  Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper  from 
Indonesia , WT/DS312/R , adopted 28 N ovember 2005, DSR 2005:XXII, 
p. 10637  
Korea – Dairy  Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R , adopted 12 January 2000, 
DSR 2000:I, p. 3  
Mexico – Anti-Dumping 
Measures on Rice  Appellate Body Report, Mexico – Definitive Anti -Dumping Measures on Beef 
and Rice, Complaint with Respect to Rice , WT/DS295/AB/R , adopted 
20 December 2005, DSR 2005:XXII, p. 10853  
Mexico – Olive Oil  Panel Report, Mexico – Definitive Countervailing Measures on Olive Oil from 
the European Communities , WT/DS341/R , adopted 21 October 2008, 
DSR 2008:IX, p. 3179  
Mexico – Steel Pipes and Tubes  Panel Report, Mexico – Anti-Dumping Duties on Steel Pipes and Tubes from 
Guatemala , WT/D S331/R , adopted 24 July 2007, DSR 2007:IV, p. 1207  
Thailand – H-Beams  Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and 
Sections of Iron or Non -Alloy Steel and H -Beams from Poland , WT/DS122/R , 
adopted 5 April 2001, as modified by Appellat e Body Report 
WT/DS122/AB/R, DSR 2001:VII, p. 2741  
US – Carbon Steel  Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion -Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R  and Corr.1, adopted 19  December 2002, D SR 2002:IX, 
p. 3779 
US – Countervailing Duty 
Investigation on DRAMS  Appellate Body Report, United States – Countervailing Duty Investigation on 
Dynamic Random Access Memory Semiconductors (DRAMS) from Korea , 
WT/DS296/AB/R , adopted 20 July 2005, DSR 2005:X VI, p. 8131  
US – Countervailing Duty 
Investigation on DRAMS  Panel Report, United States – Countervailing Duty Investigation on Dynamic 
Random Access Memory Semiconductors (DRAMS) from Korea , 
WT/DS296/R , adopted 20 July 2005, as modified by Appellate Body Report 
WT/DS296/AB/R, DSR 2005:XVII, p. 8243  
US – Hot-Rolled Steel  Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R , adopted 
23 August  2001, DSR 2001:X, p. 4697  
US – Lamb  Appellat e Body Report, United States – Safeguard Measures on Imports of 
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia , 
WT/DS177/AB/R , WT/DS178/AB/R , adopt ed 16 May 2001, DSR 2001:IX, 
p. 4051 
US – Large Civil Aircraft (2nd 
complaint)  Appellate Body Report, United States – Measures Affecting Trade in Large 
Civil Aircraft (Second Complaint) , WT/DS353/AB/R , adopted 23 March 2012, 
DSR 2012:I, p. 7  
US – Softwood Lumber IV 
(Article 21.5 – Canada)  Appellate Body Report, United States – Final Counterva iling Duty 
Determination with Respect to Certain Softwood Lumber from Canada – 
Recourse by Canada to Article 21.5 of the DSU , WT/DS257/AB/RW , adopted 
20 December 2005, DSR 2005:XXIII, p. 11357  
US – Upland Cotton  Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R , adopted 21 March 2005, DSR 2005:I, p. 3  WT/DS483/R  
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  Short title  Full case title and  citation  
US – Upland Cotton  Panel Report, United States – Subsidies on Upland Cotton , WT/DS267/R , 
Add.1 to Add.3 and Corr.1, adopted 21 March 2005, as modified by Appellate 
Body Report WT/DS267/AB/R, DSR 2005:II, p. 299  
US – Washing Machines  Appellate Body Report,  United States – Anti-Dumping and Countervailing 
Measures on Large Residential Washers from Korea , WT/DS464/AB/R  and 
Add.1, adopted 26 September 2016  
US – Wheat Gluten  Appella te Body Report, United States – Definitive Safeguard Measures on 
Imports of Wheat Gluten from the European Communities , WT/DS166/AB/R , 
adopted 19 January 2001, DSR 2001:II, p. 717  
US – Wool Shirts and Blouses  Appellate Body Report, United States – Measure  Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R , adopted 23 May 1997, 
and Corr.1, DSR 1997:I, p. 323  WT/DS483/R  
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  ABBREV IATIONS USED IN THIS R EPORT  
Abbreviation  Description  
Anti-Dumping Agreement  Agreement on Implementation of Article VI  of the General Agreement on Tariffs 
and Trade 1994  
BCI Business Confidential Information  
Cosmo  Cosmo Specialty Fibers, Inc.  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
Fortress  Fortress S pecialty Cellulose Inc.  
GATT 1994  General Agreement on Tariffs and Trade 1994  
MOFCOM  Ministry of Commerce of the People's Republic of China  
POI Period of investigation  
Rayonier  Rayonier Performance Fibers, LLC.  
Vienna Convention  Vienna Convention on t he Law of Treaties, Do ne at Vienna, 23 May 1969, 
1155 UNTS 331; 8 International Legal Materials 679  
VSF Viscose Staple Fibre  
WTO World Trade Organization  
 WT/DS483/R  
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  1  INTRODUCTION  
1.1  Complaint by Canada  
1.1.  On 15 October 2014 , Canada  requested consultations with China  pursuant to Articles  1 and 4 
of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) , 
Article  XXII:1 of the General Agreement on Tariffs and Trade 1994  (GATT 1994) , and Articles  17.2 
and 17.3 of the Agreement on Implementation  of Article  VI of the General Agreement on Tariffs 
and Trade 1994 (Anti -Dumping Agreement)  with respect to the anti-dumping measure  applied by 
China on imports of cellulose pulp  originating from, inter alia , Canada .1 
1.2.  Consultations were held on 2 November 2 014, but failed to resolve the dispute . On 
12 February 2015, Canada requested the establishment of a panel.2 
1.2  Panel establishment and composition  
1.3.  At its meeting on 10 March 2015 , the Dispute Settlement Body (DSB) established a panel 
pursuant to the request of Canada  in document WT/DS 483/2 , in accordance with Article  6 of the 
DSU.3 
1.4.  The Panel's terms of reference are the following:  
To examine, in the light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter refe rred to the DSB by Canada  in document 
WT/DS 483/2  and to make such findings as will assist the DSB in making the 
recommendations or in giving the rulings provided for in those agreements.4 
1.5.  On 15 April 2015 , Canada  requested the Director -General to determine  the composition of 
the panel, pursuant to Article  8.7 of the DSU. On 27 April 2015 , the Director -General accordingly 
composed the Panel as follows:  
Chairperson:  Mr. Thomas Cottier  
Members:  Mr. Greg Weppner  
 Mr. Shahid Bashir  
1.6.  Brazil, Chile, the European U nion, Japan, Korea, Norway, Si ngapore, Uruguay,  and the 
United  States  notified their interest in participating in the Panel proceedings as third parties.5 
1.3  Panel proceedings  
1.3.1   General  
1.7.  The Panel began its work on this case later than it would have wished d ue to staff constraints 
in the WTO Secretariat .6 After consultation with the parties, on 8 January 2016 the Panel adopted 
its timetable7 and Working Procedures .8  
                                               
1 China – Cellulose Pulp , request for consultations by Canada, (dated 15 Octo ber 2014, circulated 
20 October 2014), WT/DS483/1.  
2 China – Cellulose Pulp , request for the establishment of a panel by Canada, (dated 12 February 2015, 
circulated 13 February 2015), WT/DS483/2 (Canada's panel request).  
3 Dispute Settlement Body, minutes of meeting held on 10 March 2015,  (circulated 20 April 2015), 
WT/DSB/M/358.  
4 China – Cellulose Pulp , constitution note of the panel, (dated 10 March 2015, circulated 
28 April 2015), WT/DS483/3.  
5 China – Cellulose Pulp , constitution note of the panel, (da ted 10 March 2015, circulated 
28 April 2015), WT/DS483/3.  
6 China – Cellulose Pulp , communication from the panel, (issued and circulated on 27 October 2015),  
WT/DS483/4.  
7 The Panel revised its timetable on 1 March 2016, 19 May 2016, 8 August 2016 , and 
12 December  2016. 
8 Working  Procedures of the Panel, Annex A -2. WT/DS483/R  
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  1.8.  The Panel held a first substantive meeting with the parties on 11-12 May 2016 . A session 
with the  third parties took place on 12 May 2016 . The Panel held a second substantive meeting 
with the parties on 3 August 2016 .9 On 22 Sept ember 2016 , the Panel issued the  descriptive part 
of its Report to the parties. The Panel issued its Interim Report to the p arties on  
23 November  2016. The Panel issued its Final Report to the parties on 16 December 2016.  
1.3.2   Additional w orking procedures concerning business confidential information (BCI)  
1.9.  After consultation with the parties, on 8 January 2016 the Panel adopted Additional Working 
Procedures concerning Business Confidential Information (BCI).10 
2  FACTUAL ASPECTS  
2.1.  This dispute concerns  the anti-dumping measure imposed by China on imports of cellulose 
pulp originating from Canada,  as set forth in Ministry of Commerce of the People's Republic of 
China  (MOFCOM) Notice s No. 75 of 6 November 2013  (Preliminary Determination)11 and No. 18 of 
4 April 2014  (Final Determination)12 and accompanying annex es. Specifically , Canada challenges 
MOFCOM's  determination of injury in the anti -dumping investigation at issue.13  
2.2.  MOFCOM initiated anti -dumping investigation s on imports of cellulose pulp from Brazil, 
Canada,  and the United States  on 6 February 201314, following the submission of an application by 
Chinese cellulose pulp producers  on 13 De cember 2012 .15 The period of investigation (POI) for  the 
examination of dumping was from 1 January 2012 to 31 December 2012 , and the POI for the 
examination of injury was from 1 January 2010 to 31 December 2012.16 
2.3.  In its  Preliminary Determination , published on 6 November 2013, MOFCOM found that the 
imports of cellulose pulp from the investigated countries were dumped and caused material injury 
to the domestic industry in China.17 MOFCOM confirmed th ese conclusion s in its Final 
Determination , published on 4 Apr il 2014.18 MOFCOM calculated  final dumping margin s for 
Canadian producers rang ing from 0 .7% to 23.7%.19 MOFCOM also concluded that the dumped 
imports, including those from Canada, caused material injury to the Chinese domestic industry 
producing the like pro duct.20  
2.4.  MOFCOM applied an anti-dumping measure in the form of ad valorem  duties on imports from  
producers in the investigated countries.21 Anti-dumping dut ies of 13% were imposed on 
cooperating Canadian producers , and of 23.7% on all other Canadian producer s. One Canadian 
                                               
9 On 15 September 2016, Canada submitted a letter to the Panel commenting on a recently issued 
Appellate Body report in connection with its arguments in this dispute.  Following an invitation fro m the Panel to 
respond, China on 23 September 2016 replied asking the Panel not to admit the Canadian letter, and going on 
to respond to the substance of Canada's comments.  Despite the unsolicited nature of Canada's submission, in 
light of the fact that Ch ina had the opportunity to, and did, comment on the substance of the submission, the 
Panel decided to deny China's request that Canada's letter be rejected.   
10 Additional Working Procedures of the Panel Concerning Business Confidential Information, Annex A -3. 
11 Ministry of Commerce of the People's Republic of China, Announcement of Anti -Dumping Preliminary 
Determination on Imported Dissolving Pulp from the United States, Canad a, and Brazil, Notice No. 75, 
6 November 2013 (Preliminary Determination), (Exhibi t CAN -2). 
12 Ministry of Commerce of the People's Republic of China, Final Determination on the Anti -Dumping 
Investigation on the Imported Cellulose Pulp Originated in the United States of America, Canada, and Brazil, 
Notice No. 18, 4 April 2014 (Final Dete rmination), (Exhibits CHN -1 and CAN -3). Canada and China submitted 
differing English versions of the Final Determination. The Panel refers principally to the version submitted by 
China throughout this Report. In the few instances where the parties disagree d on the translation from the 
original Chinese, the Panel refers to both versions.  
13 In footnote 2 of its first written submission, Canada specifically abandoned claims regarding the 
determination of dumping and procedural aspects of the investigation set out in paragraphs 1 -3 and 7 -13 of its 
panel request.  (Canada's  first written submission, fn 2).  
14 China's first written submission, para. 15; Canada's first written submission, para. 28.  
15 China's first written submission, para. 14; Canada's first written submission, para. 25.  
16 Final Determination, (Exhibit CHN -1), p. 2.  
17 Preliminary Determination, (Exhibit CAN -2), p. 68.  
18 Final Determination, (Exhibit CHN -1), p. 86.  
19 Final Determination, (Exhibit CHN -1), pp. 57 and 86.  
20 Final Determination, (Exhibit C HN-1), pp. 77 and 78.  
21 Notice on the Final Determination No. 18, 4 April 2014, included in Exhibit CAN -3, pp. 2 and 3.  WT/DS483/R  
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  producer  was excluded from the investigation because its dumping margin was determined to be 
de minimis .22 
3  PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  
3.1.  Canada  requests that the Panel find that the measure at issue  is inconsistent with China 's 
obligations under Articles  3.1, 3.2, 3.4 , and 3.5 of the Anti -Dumping Agreement , and as a 
consequence also inconsistent with Article  1 of the Anti -Dumping Agreement and Article  VI of the 
GATT 1994.23 Canada  further requests, pursuant to Article  19.1 of the DSU, that the Panel 
recommend that China  bring its measure into conformity with the GATT 1994 and the 
Anti-Dumping Agreement .24 
3.2.  China  requests  that the Panel find that the measure at issue is fully consistent with China's 
WTO rights and obligations.25  
4  ARGUMENTS OF THE PAR TIES  
4.1.  The arguments of the parties are reflected in their executive summaries, provided to the 
Panel in accordance with paragraph 19 of the Working Procedures adopted by the Pan el (see 
Annexes B-1, B-2, C-1, and C-2). 
5  ARGUMENTS OF THE  THIRD PARTIES  
5.1.  The arguments of Brazil, the European Union, Japan, Norway,  and the United States  are 
reflected in their executive summaries, provided in accordance with paragraph 20 of the Working 
Procedures adopted by the Panel (see Annexes D-1-D-5). Chil e, Korea, Singapore,  and Uruguay 
did not submit written or oral arguments to the Panel.  
6  INTERIM REVIEW  
6.1.   On 23 November 2016, the Panel issued its Interim Report to the parties. On 
30 November  2016, Canada and China each submitted written requests for the P anel to review 
aspects of the Interim Report. Neither party requested an interim review meeting. On 
7 December  2016, both parties submitted comments on the other party's requests for review.  
6.2.  The parties' requests made at the interim review stage  as well a s the Panel's discussion and 
disposition of those requests  are set out in Annex A-1.  
7  FINDINGS  
7.1  Introduction  
7.1.  This dispute concerns the imposition of anti -dumping duties  by China on imports of cellulose 
pulp from Canada.  Cellulose pulp is described as "a kin d of cellulosic material made from plant 
fibers and used for production of chemical fibers, such as viscose fiber and cellulosic acetate" .26 
Following an investigation initiated based on an application by Chinese cellulose pulp producers, 
MOFCOM concluded t hat cellulose pulp imported from Brazil, Canada, and the United States was 
dumped and causing material injury to the domestic industry producing the like product  in China . 
MOFCOM applied an ad valorem  anti-dumping duty on imports of cellulose pulp from pro ducers in 
the investigated countries.  In the case of Canada, those duties were in the amount of 13% for 
cooperating Canadian producers, and 23.7% for all other Canadian producers.27  
7.2.  Canada requested consultations with China with respect to the anti -dumping  measure applied 
by China on imports of cellulose pulp from Canada. In its request for panel establishment, Canada 
                                               
22 Notice on the Final Determination, No. 18, 4 April 2014, included in Exhibit CAN -3, p. 2.  
23 Canada's first written submission, para. 1 89; second written submission, para. 196.  
24 Canada's first written submission, para. 189; second written submission, para. 196.  
25 China's first written submission, para. 181; second written submission, para. 168.  
26 Final Determination, (Exhibit CHN -1), p. 26. 
27 One Canadian producer was excluded from the investigation because its dumping margin was 
determined to be de minimis . WT/DS483/R  
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  challenged MOFCOM's determinations of injury and dumping, and various procedural aspects of the 
investigation.28 In its first written submissi on, Canada specifically abandoned claims regarding the 
determination of dumping and procedural aspects of the investigation .29 Canada has pursued its 
claims challenging the consistency of  MOFCOM's determination of injury  with Articles  3.1, 3.2, 3.4 , 
and 3.5  of the Anti -Dumping Agreement . It is those claims which are before us in this dispute.   
7.3.  In addressing the complaint in this dispute, we will first set out the relevant principles guiding 
our review, including the relevant principles of treaty interpretati on. Second, we will set out our 
understanding of the fr amework of Article  3 of the A nti-Dumping  Agreement governing the 
determination of injur y, and the interrelationship of its several provisions . Finally, we will set out 
our detailed analysis of the appl ication of Article  3 to the facts of the underlying determination and 
investigation.  
7.2  General principles regarding treaty interpretation, the applicable standard of 
review , and burden of proof  
7.2.1   Treaty interpretation  
7.4.  Article  3.2 of the DSU provides that the d ispute settlement system serves to clarify the 
existing provisions of the covered agreements "in accordance with customary rules of 
interpretation of public international law". Article  17.6(ii) of the Anti -Dumping Agreement similarly 
requires panels to int erpret that Agreement's provisions in accordance with the customary rules of 
interpretation of public internation al law.30 It is generally accepted that the principles codified in 
Articles  31 and 32 of the Vienna Convention are such customary rules.31 
7.2.2   Standa rd of review  
7.5.  Panels generally are bound by the standard of review set forth in Article  11 of the DSU, which 
provides, in relevant part, that:  
A panel should make an objective assessment of the matter before it, including an 
objective assessment of the fac ts of the case and the applicability of and conformity 
with the relevant covered agreements.  
7.6.  In addition, Article  17.6 of the Anti -Dumping Agreement sets forth the special standard of 
review applicable to disputes under the Anti -Dumping Agreement:  
(i) in its assessment of the facts of the matter, the panel shall determine whether 
the authorities' establishment of the facts was proper and whether their evaluation of 
those facts was unbiased and objective. If the establishment of the facts was proper 
and the evaluation was unbiased and objective, even though the panel might have 
reached a different conclusion, the evaluation shall not be overturned;  
(ii) the panel shall interpret the relevant provisions of the Agreement in accordance 
with customary rules of in terpretation of public international law. Where the panel 
finds that a relevant provision of the Agreement admits of more than one permissible 
interpretation, the panel shall find the authorities' measure to be in conformity with 
the Agreement if it rests upon one of those permissible interpretations.  
Thus, Article  11 of the DSU and Article  17.6 of the Anti -Dumping Agreement together establish the 
standard of review we are to  apply with respect to both the factual and the legal aspects of the 
present dispu te.  
                                               
28 Canada's panel request.  
29 Canada's  first written submission, fn 2. As a consequence, there is no dispute concerning China's 
determ ination that subject imports are dumped.  
30 Article  17.6(ii) of the Anti -Dumping Agreement also provides that if a panel finds that a provision of 
the Anti -Dumping Agreement admits of mo re than one permissible interpretation, it shall uphold a measure 
that rests upon one of those interpretations.  
31 Appellate Body Report, Japan – Alcoholic Beverages  II, p. 10.  WT/DS483/R  
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  7.7.  When  a panel is reviewing an investigating authority's determination  of facts , the "objective 
assessment" standard in Article  11 of the DSU requires a panel to review whether the authorities 
have provided a reasoned and adequate explanation as to : (a) how the evidence on the record 
supported its factual findings; and ( b) how those factual findings support the overall 
determination.32 Moreover, with respect to a "reasoned and adequate explanation" , the 
Appellate  Body observed : 
What is "adequate " will ine vitably depend on the facts and circumstances of the case 
and the particular claims made, but several general lines of inquiry are likely to be 
relevant. The panel's scrutiny should test whether the reasoning of the authority is 
coherent and internally con sistent. The panel must undertake an in -depth examination 
of whether the explanations given disclose how the investigating authority treated the 
facts and evidence in the record and whether there was positive evidence before it to 
support the inferences ma de and conclusions reached by it. The panel must examine 
whether the explanations provided demonstrate that the investigating authority took 
proper account of the complexities of the data before it, and that it explained why it 
rejected or discounted alter native explanations and interpretations of the record 
evidence. A panel must be open to the possibility that the explanations given by the 
authority are not reasoned or adequate in the light of other plausible alternative 
explanations, and must take care n ot to assume itself the role of initial trier of facts, 
nor to be passive by "simply accept[ing]  the conclusions of the competent 
authorities ".33  
Finally , it is clear that a panel should not conduct a de novo  review of the evidence, nor substitute 
its judg ment for that of the investigating authority . A panel must limit its examination to the 
evidence that was before the investigating authority  during the course of the investigation and 
must take into account all such evidence submitted by the parties to the  dispute.34 At the same 
time, a panel must not simply defer to the conclusions of the investigating authority; a panel's 
examination of those conclusions must be "in -depth" and "critical and searching".35 
7.2.3   Burden of proof  
7.8.  The general principles applicable to the allocation of the burden of proof in WTO dispute 
settlement require that a party claiming a violation of a provision of a WTO Agreement must assert 
and prove its claim.36 Therefore, as the complaining party, Canada  bears the bur den of 
demonstrating that  the measure  at issue is inconsistent with the provisions of the  covered 
agreements that it invokes. The Appellate Body has stated that a complaining party will satisfy its 
burden when it establishes a prima facie  case, namely, a case which, in the absence  of effective 
refutation by the defending party, requires a panel, as a ma tter of law, to rule in favour of the 
complaining party.37 It is generally for each party asserting a fact to provide proof thereof.38 
7.3  The legal framework for injury determination  
7.9.  As noted above, Canada challenges MOFCOM's injury determination under various provisions 
of Article  3 of the Anti -Dumping Agreement. Previous decisions of panels and the Appellate Body 
have elaborated on the meaning of the provisions of Article  3. In our view , it is useful to explain  
our understanding of the legal framework for injury determination , in order to set out the context 
for our review of the challenged determination  of injury  and our conclusions in this dispute.  
7.10.  Article  3 is entitled "Determination of Injury" and its provisions require an investigating 
authority to consider, examine, and evaluate a broad range of factors, and to demonstrate that 
dumped imports are causing injury to the domestic industry.  As explained below, in our view, 
                                               
32 Appellate Body Reports, US – Countervailing Duty Investigation on DRAMS , para.  186; and US – 
Lamb , para.  103. 
33 Appellate Body Report, US – Softwood Lumber VI ( Article  21.5 – Canada) , para.  93 (referring to 
Appellate Body Report, US – Lamb , para. 106 ). (emphasis original ) 
34 Appellate Body Report, US – Countervailing Duty Investigation on DRAMS , paras. 187 and 188. 
35 Appellate Body Report, US – Softwood  Lumber VI ( Article  21.5 – Canada) , para.  93. 
36 Appellate Body Report, US – Wool Shirts and Blouses , p. 14. 
37 Appellate Body Report, EC – Hormones , para.  104. 
38 Appellate  Body Report, US – Wool Shirts and Blouses , p. 14. WT/DS483/R  
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  there are not eworthy differences in what an investigating authority must do in order to satisfy 
these various requirements so as to make a determination of injury consistent with Article  3 of the 
Anti-Dumping Agreement.  Moreover, the provisions of Article  3 are inter -related in the sense that 
the consideration, examination, and evaluation of the required elements all contribute to the 
explanation of the ultimate determination whether dumped imports are causing material injury to 
the domestic industry .  
7.11.  The application o f anti -dumping measures is subject to the requirements of Article  VI of the 
GATT 1994 and the Anti -Dumping Agreement. The GATT 1994 establishes basic principles for the 
imposition of anti -dumping (and countervailing) measures, and the Anti -Dumping Agreemen t 
provides considerable elaboration of those principles, setting out a series of detailed substantive 
and procedural obligations which must be complied with before an anti -dumping measure may be 
applied.  A WTO Member is entitled to apply an anti-dumping me asure only if the requirements of 
the Anti -Dumping Agreement have been met.  Recently, the Appellate Body observed that :  
Taken as a whole, the object and purpose of the Anti -Dumping  Agreement is to 
recognize the right of Members to take anti -dumping measur es to counteract injurious 
dumping while, at the same time, imposing substantive conditions and detailed 
procedural rules on anti -dumping investigations and on the imposition of anti -dumping 
measures.39 
Article  3 of the Anti -Dumping Agreement sets out the r ules and conditions that apply with respect 
to the determination of injury, which is one of the fundamental prerequisites for the imposition of 
an anti -dumping measure.   
7.12.  Article  3.1 establishes the basic principle s that a determination of injury  for purpos es of 
Article  VI of GATT 1994 : 
[S]hall be based on positive evidence and involve an objective examination of both 
(a) the volume of the dumped imports and the effect of the dumped imports on prices 
in the domestic market for like products, and (b) the cons equent impact of these 
imports on domestic producers of such products.   
It is well established that "positive evidence" refers to "the facts underpinning and justifying the 
injury determination"40, and " the quality of the evidence that an investigating auth ority may rely 
upon in making a determination ".41 "Positive" suggests that the evidence should be "affirmative, 
objective, verifiable, and credible ".42 The "objective examination"  relates to the investigative 
process itself, and  requires that it "conform to the dictates of the basic principles of good faith and 
fundamental fairness", and be conducted "in an unbiased manner, without favouring the interests 
of any interested party, or group of interested parties, in the investigation".43 
7.13.  These basic principles i nform the more detailed provisions set out in the remainder of 
Article  3. They do not, in our view, establish independent obligations which can be judged  in the 
abstract, or in isolation and separately from the substantive requirements set out in the remai nder 
of Article  3. Instead, the y inform the application of all the provisions of Article 3.  
7.14.   The provisions of Article 3 requiring consideration, examination, and evaluation of various 
factors contemplate "a logical progression of inquiry leading to an in vestigating authority's ultimate 
injury and causation determination".44 The inquiries under Articles 3.2 and 3.4 , together with the 
inquiries under Articles 3.7 and 3.8 where relevant45, "contribute[] to, rather than duplicate[]"46, 
the overall determination required under Article 3.5.  Furthermore, in the event of a dispute, they 
                                               
39 Appellate Body Report, EU – Biodiesel (Argentina) , para. 6.25.  
40 Appellate Body Report, US – Hot-Rolled Steel , para. 193. 
41 Appellate Body Report, China – GOES , para. 126 (citing US – Hot-Rolled Steel , para. 192).  
42 Appellate Body Report, China – GOES , para. 126 (citing US – Hot-Rolled St eel, para. 192).  
43 Appellate Body Report, China – GOES , para. 126 (citing US – Hot-Rolled Steel , para. 193).  
44 Appellate Body Report, China – GOES , para. 128. 
45 Article  3.7 establishes additional criteria to be considered in making a determination of thre at of 
material injury, and clarifies that such a determination must be based on facts, and not merely on allegations, 
conjecture , or remote possibility, while Article  3.8 requires that the application of anti -dumping measures shall 
be considered and decide d with special care in cases of threat of material injury.  
46 Appellate Body Report, China – GOES , para. 149. WT/DS483/R  
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  inform a panel's conclusion regarding the investigating authority's compliance with Article 3.1 with 
respect to a determination of injury.  
7.15.  An investigating authority's determination o f injury comprises a broad range of facts which 
must be considered in accordance with those substantive requirements, and upon the basis of 
which the authority must ultimately make a determination as to whether dumped imports are 
causing material injury to  the domestic industry.  That determination may become the subject of a 
dispute, in which case a panel will be required to review it, and decide whether the investigating 
authority complied with the relevant substantive and procedural obligations, consisten tly with the 
fundamental principles set out in Article  3.1. This does not, however, in our view mean that a 
claim of inconsistency with Article  3.1 can  normally  be made independently of other provisions of 
Article  3.  
7.16.  To us, this seems logical, as the "pos itive evidence" to be examined by the investigating 
authority must pertain to the particular substantive elements relevant to the determination made, 
and the "objective examination" must relate to the consideration and evaluation of that evidence 
in the in vestigation at issue.  Thus, we do not believe a panel can, on review of a determination, 
decide whether a particular element of evidence relied upon by an investigating authority is 
"positive" in some absolute or abstract sense, but only in the context of the role and weight given 
to it by the investigating authority . A panel must decide  whether that evidence is " affirmative, 
objective, verifiable, and credible " with respect to the substance of the matter in connection with 
which it is considered and relied  upon by the investigating authority.   
7.17.  Similarly, we do not believe a panel can, on review of a determination, decide whether the 
examination of the evidence by the investigating authority was objective in the abstract, but only 
in the context of the subst ance of the matter with respect to which the authority was considering 
and relying on that evidence.47 Whether  the decision -making process of the investigating authority 
"conform [ed] to the dictates of the basic principles of good faith and fundamental fair ness", and 
was undertaken  "in an unbiased manner, without favouring the interests of any interested party, 
or group of interested parties, in the investigation " can, in our view, only be determined on the 
basis of a careful scrutiny of the decisions made b y the investigating authority in reaching a 
conclusion on the question of whether dumped imports caused injury, as set out in the relevant 
determination and other documents.   
7.18.  Looking at the substantive obligations of Article  3, we see that Article  3.2 provides more 
specific guidance regarding  the objective examination of the volume of dumped imports and the 
objective examination of the effect of those imports on prices in the domestic market , as required 
by Article  3.1. Article  3.2 first sentence provides t hat:  
With regard to the volume of the dumped imports, the investigating authorities shall 
consider whether there has been a significant increase in dumped imports, either in 
absolute terms or relative to production or consumption in the importing Member.   
In our view, this  does not require an investigating authority to make a determination  regarding the 
significance of any increase in the volume  of dumped imports .48 Rather, it requires the authorities 
to consider  whether there was any increase in dumped imp orts, and the significance of any such 
increase , and provides for three different parameters for that consideration.   
7.19.  Article  3.2 second  sentence provides that :  
With regard to the effect of the dumped imports on prices, the investigating 
authorities shall  consider whether there has been a significant price undercutting by 
the dumped imports as compared with the price of a like product of the importing 
                                               
47 Of course, a general claim of bias on the part of the investigating authority would fall squarely under 
Article  3.1. But even in such a situation , it is questionable whether the objective nature of the authority's 
investigation could be determined without going into the substance of the determination which is challenged.  
48 See Appellate Body Report, China – GOES , para.  130. The Appellate Body conc luded that 
consideration of the price effects of dumped imports under Article  3.2 does not require a definitive 
determination such as that required by Article  3.5 with respect to causation . In our view, the same conclusion 
applies with respect to the consi deration of the volume of dumped imports and the significance of any increase 
in that volume under the first sentence of Article  3.2.  WT/DS483/R  
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  Member, or whether the effect of such imports is otherwise to depress prices to a 
significant degree or pr event price increases, which otherwise would have occurred, to 
a significant degree.   
Thus, like the first sentence, the second sentence of  Article  3.2 does not require an investigating 
authority to make a determination  regarding the effects of dumped impo rts on prices, but rather to 
consider  whether there has been a significant price undercutting by the dumped imports, or 
whether the effect of dumped  imports is otherwise significant price depression or price 
suppression.49  
7.20.  Article  3.4 sets out a series of "relevant economic factors and indices having a bearing on 
the state of the industry ", which must be evaluated by the investigating authority in all cases when  
examining the consequential impact of dumped imports on that industry , as required by 
Article  3.1. Like Article  3.2, Article  3.4 does not require an investigating authority to make a 
determination  regarding the impact of dumped imports, but rather to undertake an examination  of 
that impact, including an evaluation  of all relevant economic factors and  indices having a bearing 
on the state of the industry , including those specifically mandated by Article  3.4 itself .  
7.21.  The fact that Articles  3.2 and 3.4 do not require an investigating authority to make 
determinations regarding the matters considered, exam ined, or evaluated, does not diminish the 
scope of the necessary inquiries under those provisions.50 With respect to volume, the necessary 
inquiries call for consideration of the volume of dumped imports and the significance of any 
increase in that volume.  With respect to the effects of dumped imports on prices and their impact 
on the domestic industry, th e necessary  inquir ies call for consideration of the relationship between 
the dumped imports and prices of the domestic like product and the factors relevan t to the 
condition of the industry .51 However, while these inquiries "are necessary in order to answer the 
ultimate question … as to whether subject imports are causing injury to the domestic industry"52, 
the fact that no determinations are made under these provisions makes it clear that no particular 
outcome is a necessary prerequisite for reaching and resolving that "ultimate question" .53  
7.22.  An investigating authority's objective examination may reveal no increase in dumped 
imports, or no significant  increase in those imports, or no price undercutting, depression, or 
suppression, or no impact on one or more of the relevant economic factors and indices evaluated . 
But this does not mean that the investigating authority need not, or may not, go on to an 
examinatio n of all relevant evidence before it to consider whether or not dumped imports are 
causing material injury to the domestic industry.  Of course, in the absence of any increase in the 
volume of dumped imports, any price effects, or any impact on the domestic  industry, the answer 
would be expected to be no.  But in the more likely situation where the results of the inquiries 
under Articles  3.2 and 3.4 are diverse, a thorough consideration of whether there is a causal 
relationship between the dumped imports and injury will be necessary before a determination of 
injury within the meaning of the Anti -Dumping Agreement and Article  VI of the GATT can be made.  
7.23.  The analysis under Article  3.5 covers a broader scope and concerns the ultimate question of 
whether dumped i mports are causing material injury to the domestic industry.54 The elements of 
that ultimate  determination are set out in Article  3.5, which requires a demonstration that the 
dumped imports are, through their volume, price effects, and impact on the domesti c industry, 
causing material injury to that industry.  The results of the inquiries under Articles  3.2 and 3.4 are 
"linked through a causation analysis" to the demonstration that there is a causal relationship  
between the dumped imports and the injury to th e domestic industry.55 Article  3.5 specifically 
refers back to the "effects of dumping, as set forth in [ Articles  3.2 and 3.4]" in the context of the 
                                               
49 Appellate Body Report, China – GOES , para. 130. 
50 Appellate Body Report, China – GOES , para. 131. While the Appellate B ody was referring specifically 
to Article  3.2 in this context, we are of the view that the observation holds for Article  3.4 as well.  
51 Appellate Body Reports, China – GOES , paras. 136 and 138; and China – HP-SSST (Japan) / China – 
HP-SSST (EU) , paras. 5.158-5.160.  
52 Appellate Body Report, China – GOES , para. 128. 
53 We note in this regard that both Article  3.2 and Article  3.4 provide that no one or several of the 
factors listed therein can necessarily give decisive guidance. We understand this as indicating  that no one or 
several of the factors listed can give decisive guidance as to the ultimate question whether dumped imports are 
causing material injury to the domestic industry.  
54 Appellate  Body Report, China – GOES , paras. 147 and 150.  
55 Appellate Body Re port, China – GOES , paras. 128 and 130 and fn 217.  WT/DS483/R  
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  demonstration that dumped imports are causing injury within the meaning of the Agreement, and 
requires a de monstration of a causal relationship between the dumped imports and the injury to 
the domestic industry based on an examination of all relevant evidence.  
7.24.  It seems clear that  a "causal relationship" is a relationship in which dumped imports 
contribute to " bringing about", "producing" or "inducing" the material  injury.56 We note that 
Article  3 does not provide  any specific guidance on how an investigating authority should 
undertake the examination of the relevant evidence in  determining whether dumped imports  are 
causing material injury.57 Thus, "it is for the investigating authorities in the first instance to 
determine the analytical methodologies that will be applied in the course of an investigation []"58 
and will enable it to make the required determination  consistently with Article  3.59 
7.25.  Article  3.5 also requires that an investigating authority examine known factors other than 
dumped imports which are causing injury to the domestic industry simultaneously with the 
dumped imports, and ensure that the injuries ca used by such other factors not be attributed to 
dumped imports.  In order to comply with th is requirement, an investigating authority must :  
[M]ake an appropriate assessment of the injury caused to the domestic industry by 
the other known factors, and … must separate and distinguish the injurious effects of 
the dumped imports from the injurious effects of those other factors.  This requires a 
satisfactory explanation of the nature and extent of the injurious effects of the other 
factors, as distinguished from  the injurious effects of the dumped imports.60 
7.26.  While the investigating authority must find a sufficiently clear contribution by dumped 
imports to demonstrate that they are causing material injury, and explain its determination in that 
regard, nothing in th e first two sentences of Article  3.5 suggests that those imports must be the 
sole cause of that injury.  The language of Article  3.5 as a whole seems clear – the "causal 
relationship" between dumped imports and material injury may exist  even though other fa ctors are 
also contributing, "at the same time", to the situation of the domestic industry.  
7.27.  Similarly, the obligation  to distinguish between the effects caused by dumped imports and 
the effects caused by other factors does  not necessarily imply that dumpe d imports  on their own  
must be capable of causing material  injury.61 Finally, there is no requirement  that dumped imports 
alone, or in and of themselves, must be capable of causing material injury .62 Article  3 does not 
provide  any specific guidance on how an  investigating authority should undertake the examination 
                                               
56 See Appellate Body Report, US – Wheat Gluten , para. 67. While the Appellate Body was referring to 
the meaning of the "causal link" between increased imports and serious injury required under Article  4.2(b) of 
the Safeguards Agreement in this case, we are of the view that prior decisions  relating to the causation 
requirement in the Agreement on Safeguards can provide guidance in interpreting the very similar phrase 
"causal relationship" in  Article  3.5 of t he Anti-Dumping Agreement . (See Appellate Body Report,  US – 
Hot-Rolled Steel, para. 230).  
57 Appellate Body Report,  China – HP-SSST (Japan) / China – HP-SSST (EU ), para. 5.141  (citing 
Appellate  Body Report, EC – Bed Linen ( Article  21.5 – India) , paras.  113 and 118 ). 
58 Panel Report, Thailand – H-Beams , para. 7.159.  
59 In this context, we are of the view that t he use of the word "all" in the phrase s "all relevant economic 
factors" in Article  3.4 and "all relevant evidence" in Article  3.5 indicates that the effe cts of  any factor may be 
relevant to the ultimate determination  of causation , irrespective of whether the particular factor relates to 
dumped imports specifically or to the domestic industry more generally.  In our view, all the factors  and 
evidence having a bearing on the question  are to be included  in the investigating authority's assessment,  and 
the contribution of each relevant factor is to be counted in the determination of injury caused by dumped 
imports according to its impact  on the situation of the domestic industry.  In this context , we do not consider 
that factors  specifically related to dumped imports should be counted towards a  determination of material 
injury caused by dumped imports , while others – those not related to dumped  imports – should be  excluded 
from that determination . (See Appellate Body Report, US – Wheat Gluten , para. 67 (referring to Article  4.2(b) 
of the Safeguards  Agreement)).  
60 Appellate Body Report, US – Hot-Rolled Steel , para. 226  
61 Cf. Appellate Body Report, US – Wheat Gluten , para. 67. The Appellate Body was referring to the 
non-attribution language in the  Agreement on Safeguards , which ca n provide guidance in interpreting the 
non-attribution language in Article  3.5 of the  Anti-Dumping Agreement . (Appellate Body Report, US – 
Hot-Rolled  Steel, para. 230 ). 
62 See, Appellate Body Report, US – Wheat Gluten , para. 79 . While the Appellate Body was referring to 
the causation requirement in Article  4.2(b) of the  Agreement on Safeguards, we are of the view that its 
reasoning in that cont ext is highly relevant to understanding the causation requirement in Article  3.5. 
(Appellate Body Report, US – Hot-Rolled  Steel, para. 230 ). WT/DS483/R  
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  of known factors other than the dumped imports which are injuring the domestic industry, nor how 
it should ensure that i njuries caused by these other factors are not attributed to the dumped 
imports . Thus an investigating authority may rely on any methodology or methodologies it believes 
will enable it to make the required determination  consistently with Article  3.  
7.28.  In addition to the provisions establishing substantive criteria for the determination  of 
material injury caused by dumped imports, Article  3 contains two additional provisions which might 
be viewed as more procedural in nature.  Article  3.3 establishes criteria for the cumulative 
assessment of the effects of dumped imports.  A decision to us e such a cumulative assessment 
necessarily will precede the consideration of the volume, price effects and impact of dumped 
imports, as well as the demonstration of a causal relationship , as it is a necessary element to 
delimit the corpus of dumped imports  to be taken into account under the relevant provisions, 
Articles  3.2, 3.4, 3.5 , and 3.7.  Article  3.6 provides for an alternative to the consideration of the 
effects of dumped imports on domestic production of the like product in certain circumstances.  
Again, this provision would necessarily come into play before the examination of the impact of the 
dumped imports in the context of Article  3.4, as the relevant information on the state of the 
domestic industry will be different if the alternative allowed for  is applied.   
7.29.  Thus, it seems clear to us that while there is a "logical progression" from consideration of 
the various substantive elements set out in Articles  3.2, 3.4, and whe n the issue of threat of 
material injury is raised, Article  3.7, to the ultimat e determination whether the dumped imports 
are causing material injury to the domestic in dustry  under Article 3.5 , there is no obligatory 
sequence for the analysis  by an investigating author ity to be undertaken , and "n o prescribed 
template or format " for a n investigating authority 's determination of injury  exists under Article 3 of 
the AD Agreement .63 As a consequence, we consider it clear that there is no necessary sequence 
to be followed by an investigating authority in setting out its consideration, exami nation, 
evaluation and determination in relevant documentation.64 
7.30.  Finally, an investigating  authority's consideration, examination, evaluation, determinations, 
and importantly, its reasoning and explanations in connection with the foregoing, must be 
reflect ed in relevant documentation, such as a public notice or other separate report of its final 
determination whether or not to impose an anti -dumping measure.65 It is this documentation that 
will be considered, in the first instance, by a panel reviewing a Mem ber's imposition of 
anti-dumping measures, if challenged.  Against the background set out above, it is that task to 
which we now turn in this dispute.  
7.4  Whether MOFCOM' s consideration of the volume  of dumped imports was consistent 
with Articles  3.1 and 3.2 o f the Anti -Dumping Agreement  
7.4.1   Introduction  
7.31.  Canada challenges MOFCOM's consideration of the volume of the dumped imports under 
Articles  3.1 and 3.2 of the Anti -Dumping Agreement. MOFCOM found that the volume of dumped 
imports increased by 43.82% in absolute terms over the POI.66 Canada does not disagree with this 
factual finding, but argues that MOFCOM failed to assess the significance of this increase in light of 
                                               
63 Appellate Body Report, China – HP-SSST (Japan)  / China – HP-SSST (EU) , para. 5.141.  
64 We note that the parties ar e in agreement with us on this point. (Canada's response to Panel 
question  No. 8(i); China's response to Panel question No. 8(i)). Third parties also expressed this view. (Brazil's 
response to Panel question No. 6(i); Japan's response to Panel question No.  6(i); and United States' response 
to Panel question No. 6(i)).  
65 Article  12.2 provides that:  
Public notice shall be given of any preliminary or final determination, whether 
affirmative or negative, of any decision to accept an undertaking pursuant to 
Article 8, of the termination of such an undertaking, and of the termination of a 
definitive anti -dumping duty.  Each such notice shall set forth, or otherwise make 
available through a separate report, in sufficient detail the findings and conclusions 
reached on all issues of fact and law considered material by the investigating 
authorities.   
See, Appellate  Body Report, China – GOES , para. 131 (referring to Panel Reports, Thailand – H-Beams , 
para. 7.161; and Korea – Certain Paper , para. 7.253).  
66 Final Determin ation, (Exhibit CHN -1), p. 59.  WT/DS483/R  
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  evidence which Canada alleges indicated that this increase was not significant.67 Canada bases its  
claim largely on its interpretation of the term "significant" in the first sentence of Article  3.2.68 
Specifically, Canada argues that in order to consider whether an increase in the absolute volume of 
the dumped imports is significant, an investigating au thority has to examine the factual 
circumstances surrounding that increase.69 Canada submits that the relevant factual circumstances 
will vary from case to case, but may include trends in domestic demand, and trends in the volume 
of the domestic like produc t and non -dumped imports.70 
7.32.  China submits that Article  3.2 requires the investigating authority to consider the volume of 
the dumped imports either in absolute or in relative terms, noting that the text of the provision 
uses the disjunctive "or" and the wor ds "either" and "absolute".71 China contends that the 
interpretation suggested by Canada would require the investigating authorities always to consider 
an increase in volume in both absolute and relative terms.72 China points out th at MOFCOM 
considered that there had been a significant increase in dumped imports in absolute terms.73 
According to China, there is no textual basis in Article  3.2 to support Canada's argument that 
relevant factual circumstance s must be taken into account in considering whether ther e has been a 
significant increase in the absolute volume of dumped imports. China submits that Article  3.2 
clearly specifies how the investigating authorities are required to consider the volume of the 
dumped imports, and provides a choice between differen t approaches.74 China asserts that the 
term "absolute" suggests that the increase in imports is to be examined on its own, without the 
need to look at surrounding factual circumstances, and that the magnitude of the increase can be 
in itself significant.75 
7.33.  We will first address the legal standard under the first sentence of Article  3.2 and then 
examine each of Canada's allegations in turn.  
7.4.2   Legal standard under Articles  3.1 and 3.2, first sentence  
7.34.  We start our analysis by considering the relevant  provisions o f the 
Anti-Dumping  Agreement. Article  3.1 of the Anti -Dumping Agreement provides, in relevant part, 
that a determination of injury:  
[S]hall be based on positive evidence and involve an objective examination of both 
(a) the volume of the dumped imports and the effect of the dumped imports on prices 
in the domestic market for like products, and (b)  the consequent impact of these 
imports on domestic producers of such products.  
7.35.  The first sentence of Article  3.2 elaborates on the objective examination of the vo lume of 
imports required by Article  3.1, providing as follows:  
With regard to the volume of the dumped imports, the investigating authorities shall 
consider whether there has been a significant increase in dumped imports, either in 
absolute terms or relat ive to production or consumption in the importing Member.  
7.36.  As discussed above , consideration of the  data and trends with respect to the volume of 
dumped imports is a step in the logical progression toward a determination whether injury is 
caused by dumped i mports.76 However,  even a significant increase in the volume of dumped 
imports may not, standing alone, suffice to demonstrate that dumped imports are causing material 
                                               
67 Canada's first written submission, paras. 66 -76. 
68 Canada's first written submission, para. 69; second written submission, para. 19.  
69 Canada's first written submission, para. 70.  
70 Canada's first written submission, para. 70; second written submission, para. 26.  
71 China's second written submission, para. 25.  
72 China's second written submission, paras. 18 and 37.  
73 China's first written submission, paras. 47 and 48. China notes that, even though not required to do 
so, MOFCOM  also looked at the volume of dumped imports relative to consumption. (China's first written 
submission, para. 48).  
74 China's second written submission, para. 24.  
75 China's second written submission, para. 25.  
76 It seems clear that the greater the volume  of, or any increase in the volume of , dumped imports, the 
greater the likely impact of those dumped imports with respect to factors such as lost sales and consequent 
financial effects, inventories, production capacity, and so on.   WT/DS483/R  
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  injury to the domestic industry.  The impact of those imports and  of any increase  in those  imports  
over the period of investigation  (POI) on the condition of the domestic industry will have to be 
considered before that ultimate question can be answered.  Nonetheless, e ven if the consideration 
of the volume of dumped imports shows no increase, or  an insignificant increase, this does not 
mean a determination that dumped imports are causing material injury is precluded.77  
7.37.  Canada acknowledges that the first sentence of Article  3.2 gives the investigating 
authorities discretion to consider the increas e in dumped imports in absolute terms or relative to 
production or consumption in the importing Member.78 However, Canada asserts that when 
considering any of these perspectives, the authorities must conduct an objective examination 
based on positive eviden ce, and provide reasoned and adequate explanations of its conclusions.79 
For Canada, this means that the significance of an absolute increase in the volume of dumped 
imports must be considered in the context of the factual circumstances in the market.  
7.38.  Howe ver, we cannot distinguish what Canada describes as a contextual consideration of the 
significance of an absolute increase in the volume of dumped imports , taking into account trends 
in domestic  production  of the like product and trends in domestic demand,  from a consideration of 
the significance of any increase in dumped imports relative to domestic production  or 
consumption , or indeed from the consideration of the significance of any increase in dumped 
imports in the analysis of causation. Thus, Canada's argument fails to recognize the separate 
nature of the three inquiries regarding the volume of dumped imports set out in Article  3.2, which 
are clearly distinguished  in the text . In our view, Canada's argument fails to recognize  the 
difference between the consideration of the volume of dumped imports required under Article  3.2 
first sentence and the demonstration of the effects of the volume of dumped imports in the context 
of the demonstration of a causal relationship between dumped imports and material in jury to the 
domestic industry under Article  3.5. 
7.39.  While it is clear that Article  3.1 requires that an injury determination must be based on an 
objective examination of positive evidence, and that this  principle  applies in general to an 
investigating authori ty's consideration of increased imports under Article  3.2, this does not inform 
the substance of that consideration. Nor does it provide guidance, or establish any limitation, as to 
which of the alternatives set out in Article  3.2 for consideration of the volume of dumped imports 
should be undertaken by an investigating authority in any given investigation. The three methods 
for considering the volume of imports set out in Article  3.2 are not mutually exclusive, and the 
investigating authority may rely on o ne, two or all of them in the course of its consideration of the 
significance of any increase in the volume of dumped imports, as well as in its analysis and 
determination with regard to injury and causation at later stages. However, in our view, there is 
no basis in the text of Article  3.2, in light of the disjunctive "either … or", for Canada's view that 
investigating authorities can, on the facts of a particular case,  be required to consider the 
significance of any increase in the volume of dumped import s in relative terms, in addition to 
considering the significance of any absolute increase .80 
7.40.  Turning to the interpretation of "significant", we note that the parties agree that the 
dictionary meaning of the word "significant" is " important, notable, consequ ential".81 In the first 
sentence of Article  3.2, the term "significant" modifies the word "increase" in the phrase "whether 
                                               
77 To us, this distinction is appropriate and indeed, may be significant in a particular case.  An absolute 
increase in the volume of imports in a growing market is likely to have a very different impact on the situation 
of the domestic industry than if the market were stable or cont racting.  In such a situation, there may be no 
increase in the volume of dumped imports relative to domestic production or consumption.  But these are 
considerations to be addressed in the context of the ultimate demonstration whether dumped imports are 
causing injury  under Article  3.5.  
78 Canada's response to Panel question No. 4, para. 1.  
79 Canada's response to Panel question No. 4, para. 2; second written submission, paras. 30 -33. 
80 Our conclusion in this regard is consistent with the views of previous pan els. See Panel Reports, 
Thailand – H-Beams , para. 7.171 ("it is sufficient for the purposes of this provision for the investigating 
authorities to consider whether there has been a significant absolute increase"); and US – Countervailing Duty 
Investigation  on DRAMs , para s. 7.233 and 7.234 (discussing the corresponding, almost identical provision in 
the SCM  Agreement, the panel stated that there are three ways to comply with the obligation to consider 
whether there has been a  significant increase in dumped i mports. The investigating authority may consider 
whether there has been a significant increase in the volume of the dumped imports : (a) in absolute terms; 
(b) relative to domestic production; or (c) relative to domestic cons umption).  
81 Shorter Oxford Engli sh Dictionary , 6th ed., A. Stevenson (ed.) (Oxford University Press, 2007), Vol.  2, 
p. 2833; and  Canada's first written submission, para. 70.  WT/DS483/R  
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  there has been a significant increase in dumped imports, either in absolute terms or relative to 
production or consumption in the imp orting Members ". The inquiry as to the significance of any 
increase in dumped imports implies a consideration of developments, that is, changes or trends, in 
the volume of dumped imports over the period of the injury investigation. Article  3.2 further 
specifies how the invest igating authorities shall consider whether there has been a significant 
increase in imports: in either  absolute terms, or relative to domestic production or consum ption.  
7.41.  The term "absolute" is defined as "not relative", or "not depende nt for meaning or 
significance on a relationship with another term or concept".82 Thus, the consideration of whether 
there has been a significant increase in dumped imports in absolute terms  calls for an assessment 
of whether the increase in dumped imports,  if any, is "importa nt, notable or consequential". In this 
context, we consider that a "significant" absolute increase may be assessed on the basis of the 
magnitude of that increase . Of course, this does not diminish the rigour  of what has to be 
considered , namely "whether th ere has been a significant increase in dumped imports, either in 
absolute terms or relative to production or consumption in the importing Member".83 Moreover, 
such consideration has to be reflected in the final determination in order to demonstrate that the 
investigating authorities have considered the relevant factors.84  
7.42.  The investigating authority will also have to decide w hether any given increase in imports, 
whether considered significant or not, ultimately supports a determination of  injury caused by 
dumped imports . However, in our view, this is a further evaluation of the significance of any 
increase in dumped imports as an element of determining causation under Article  3.5.85 In 
analysing causation, the investigating authority must demonstrate  that the dumped imports are 
causing injury to the domestic industry, based on "all relevant evidence before the authorities", 
which, in light of the structure and logic of Article  3, includes evidence of increases in dumped 
imports. In that anal ysis, the investigating authority will have to take into account any such 
increases in the context of  all the other evidence before it, including evidence concerning, for 
instance, changes in demand, volume of sales of the domestic industry, and non -dumped  imports. 
However, given that Article  3.2 does not require a determination  that any increase in imports, 
whether absolute or relative to domestic production or consumption, is significant86, we do not see 
how these latter elements can be considered necessar y aspects of the consideration of the 
significance of an absolute increase in dumped imports required under Article  3.2. 
7.43.  A different understanding may be appropriate with respect to the consideration of whether 
an increase in imports  is significant  relativ e to domestic production or consumption. In such a 
case, the significance of any increase is considered in relation to another variable, requiring some 
comparison. This suggests a degree of contextual analysis, rather than a n assessment  of the 
magnitude of  an increase . However, even in this context, consideration of the magnitude of any 
increase in dumped imports relative to domestic production or consumption may be sufficient for 
purposes of Article  3.2, keeping in mind that, whether any increase in import s relative to domestic 
production or consumption, significant or not, is ultimately enough to support a determination of 
injury caused by dumped imports will still have to be addressed by the investigating authority in 
                                               
82 Oxford English Dictionary online, definition of "absolute", available at: 
<http://www.oed.com/view/Entry/679?red irectedFrom=absolute#eid>, accessed 13 July 2016.  
83 Appellate Body Report, China – GOES , para. 131.  
84 Appellate Body Report, China – GOES , para. 131.  
85 We note in this regard that an investigating authority may make an affirmative determination of 
injury c aused by dumped imports even where there has been no significant increase, or indeed any increase at 
all, in the volume of dumped imports. This is in contrast to the situation under the Safeguards Agreement, 
where in creased imports are a necessary prerequi site for the imposition of a safeguard measure.  
86 Appellate Body Report, China – GOES , para. 130.  
In Thailand  – H-Beams  the panel observed that:  
While it would certainly be preferable for a Member explicitly to characterize 
whether any increase in import s as "significant", and to give a reasoned 
explanation of that characterization, we believe that the word "significant" does not 
necessarily need to appear in the text of the relevant document in order for the 
requirements of this provision to be fulfilled . Nevertheless, we consider that it must 
be apparent in the relevant documents in the record that the investigating 
authorities have given attention to and taken into account whether there has been 
a significant increase in dumped imports, in absolute or r elative terms.  
(Panel Report, Thailand  – H-Beams , para. 7.161)  
We do not disagree. However, as discussed above, in our view this assessment is an element of the 
ultimate determination of causation.  WT/DS483/R  
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  demonstrating causation. In our view,  the consideration of whether there has been a significant 
increase in the volume of dumped imports under Article  3.2 does not require a duplicative analysis 
of causal linkages and other factors.  
7.44.  Furthermore, Article  3.2 does not provide any guidance as t o what circumstances might be 
relevant to consideration of the "significance" of any increase in imports. Recalling that there is no 
requirement under Article  3.2 for an investigating authority to determine  that an observed 
increase in imports, whether abs olute or relative, is significant, and an investigating authority may 
ultimately find injury caused by dumped imports even in the absence of a significant increase in 
such imports, it would be inappropriate, in our view, to impose requirements for the anal ysis of the 
significance of any increase in imports that are duplicative of elements of the analysis of causation 
relevant to determining whether the dumped imports, whatever their volume, and whether or not 
it increased significantly in absolute or relati ve terms, are causing injury to the domestic industry.  
7.45.  Canada argues in this respect that the interpretation of  the term "significant" in the context 
of Article  3.2 with respect to the effect of the dumped imports on prices is equally applicable with 
respect to the consideration of increases in volume.87 We fail to see how this could be the case.  
The need for a contextual consideration of the significance of any price undercutting, price 
depression, or price suppression derives from the word "effect" in the  second sentence of 
Article  3.2.88 However, unlike the second sentence of Article  3.2, which refers to the effect of 
dumped imports on prices, and Article  3.4, which refers to the impact of dumped imports on the 
domestic industry, the first sentence of Article 3.2 does not refer to any impact or effect of the 
dumped imports, but simply to consideration of whether there has been a significant increase in 
dumped imports. For us, the notion that an increase in the volume of dumped imports, whether 
absolute or r elative to production or consumption, could be considered as an effect or impact of 
those same imports is illogical. We are of the view that no such contextual analysis in respect of 
the effect of the dumped imports is required by the first sentence of Article 3.2. In our view, the 
significance of any particular volume of or increase in dumped imports is, in the first instance, a 
question of the magnitude of that increase.  Whether any given volume of or increase in dumped 
imports may be significant in the u ltimate determination of whether dumped imports cause 
material injury to the domestic industry will, of course,  depend on the evaluation of all the relevant 
facts in each case.  But that is an inquiry under Article  3.5 of the Ant i-Dumping Agreement.   
7.4.3   MOFCOM 's consideration of the volume of dumped  imports  
7.46.  Turning to the facts of the present case, we note that MOFCOM considered the volume of 
the dumped imports in both absolute terms and relative to consumption in the Chinese market. 
Specifically, MOFCOM found an increase in the volume of dumped imports, in absolute terms, 
of 43.82% over the POI, i.e. 2010 -2012.89 MOFCOM further determined that the market share of 
the dumped imports also showed an overall upward trend, increasing by 1.31 percentage points 
over th e POI.90  
7.47.  Thus, MOFCOM found that both the absolute quantity and the quantity of the dumped 
imports relative to consumption showed an increasing trend during the POI. Noting the 
submissions made by interested parties Rayonier Performance Fibers, LLC. (Rayon ier) and Fortress 
Specialty Cellulose Inc. (Fortress ) asserting that there had been no significant increase in volume 
of the dumped imports, especially relative to production and consumption in China, MOFCOM 
further observed that volume of the dumped impor ts relative to production of the domestic like 
                                               
87 Canada's second written submission, paras. 20 -26 (refe rring to Appellate Body Reports, China – 
HP-SSST (Japan) / China – HP-SSST (EU) , para. 5.161; US – Large Civil Aircraft (2nd complaint) , para. 1272; 
EC and certain member States – Large Civil Aircraft , para. 1218; and US – Upland Cotton , para. 427; and  
Panel Report, US – Upland Cotton , paras. 7.1328  and 7.1329). Similarly, we consider that the interpretation of 
the term "significant" in the context of Article  2.4.2 of the Anti -Dumping Agreement is not applicable to the 
analysis of the volume of the dumped i mports, because it concerns a pattern of export prices which differ 
significantly, which involves an assessment of price difference. (Canada's letter dated 15 September 2016 
(referring to Appellate Body Report, US – Washing Machines , paras. 5.63, 5.64 , and 5.66,  and fns 199 
and 202)) . 
88 Appellate Body Report s, China – GOES , paras. 134 -142; and China  – HP-SSST (Japan) / China – 
HP-SSST (EU) , para s. 5.155 -5.163.  
89 Imports first decreased from 421,000 tonnes in 2010 to 419,000 tonnes in 2011 and then increased  
to 605,500 tonnes in 2012. ( Final Determination, (Exhibit CHN -1), p. 59).  
90 After a decline in the dumped imports' market share from 20.70% in 2010 to 18.96% in 2011, 
dumped imports' market share increased to 22.01% in 2012. ( Final Determination, (Exhibit  CHN-1), p. 59).  WT/DS483/R  
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  product showed an increasing trend.91 As noted above92, while it might have been preferable had 
MOFCOM explicitly characterize d the 43.82% increase as "significant" and give n a reasoned 
explanation of that chara cterization, we consider that it would have been apparent to the 
interested parties from the Final Determination . 
7.48.  In light of our interpretation of the first sentence of Article  3.2 set out above, we consider 
that the Final Determination on its face shows that MOFCOM considered, that is, took into account, 
whether there was a significant increase in the volume of dumped imports in both absolute and 
relative terms.  
7.49.  Canada argues that MOFCOM failed to consider the magnitude and factual circumstances 
surround ing the increase in dumped imports, which it asserts would suggest that the increase in 
fact was not significant.93 Canada argues that while the volume of the dumped imports increased 
by almost 44%, the volume of sales of the domestic like product and non -subject imports 
increased by 80% and 78% respectively, and domestic demand increased by 35%.94 Canada also 
contends that MOFCOM failed to address arguments of the interested parties in this regard95, for 
instance, the Rayonier submission, which asserted96: 
[D]emand for dissolving pulp in China increased as a result of market factors that 
were unrelated to subject imports, including the supply shortage and high prices for 
cotton during the first half of the POI. The domestic industry could not satisfy this 
increasing demand, despite rapid attempts to expand capacity. Therefore, 
downstream producers naturally required increased volumes of subject imports … .  
7.50.  In light of our views as set out above, we see no basis to conclude that MOFCOM was 
required to specificall y address arguments regarding the context in which the acknowledged 
43.82% increase in dumped imports occurred in its consideration of whether that increase was 
significant in absolute terms under Article  3.2. In any event, we note that MOFCOM also 
conside red the increase in imports relative to domestic consumption, which of course reflects 
changes in domestic demand. Moreover, MOFCOM did briefly discuss the volume of dumped 
imports relative to production of the domestic like product in response to the argu ments made by 
Fortress during the investigation.  
7.51.  Insofar as Canada argues that MOFCOM was required to consider the interaction between 
sales of the like domestic product and the volume of dumped imports in its consideration of 
whether there was a signific ant increase in dumped imports in absolute terms, as discussed above, 
we do not view such an inquiry to be necessary in the context of Article  3.2. An evaluation of 
domestic sales volume is required under Article  3.4 in the context of examining the impact of 
dumped imports on the state of the domestic industry. The relationship between trends in the 
volume of dumped imports and trends in domestic sales volume may be relevant in that context, 
as well as in the demonstration of a causal link between dumped im ports and injury under 
Article  3.5. However, we fail to see how they would be relevant in considering whether there was 
an increase in the volume of dumped imports in absolute terms . Similarly, the volume or trends in 
sales of non -dumped imports are not a necessary aspect of consideration of the significance of any 
increase in dumped imports, although they may well be relevant to a demonstration of causation, 
and in particular in the context of a non -attribution analysis under Article  3.5. 
7.52.  Finally, Canada a rgues that MOFCOM failed to provide a reasoned and adequate explana tion 
for its conclusion that there was a significant increase in dumped imports in absolute terms.97 
                                               
91 Final Determination, (Exhibit CHN -1), pp. 60 and 61.  
92 See fn 86 above.  
93 Canada's first written submission, paras.  72-74; second written submission, para. 34.  
94 Canada's first written submis sion, para. 74 (referring to Final Determination, (Exhibit CAN -3), p. 73; 
and Apparent Market and Domestic Production Tables, (Exhibit CAN -28), p. 2).  
95 Canada's second written submission, paras. 34 and 35 (referring to Rayonier Performance Fibers, 
LLC., A nti-Dumping Investigation on Imports of Cellulose Pulp, Comments Regarding Material Injury and 
Causality, 29 July 2013, (Exhibit CAN -12), pp. 23 -37; Cosmo Specialty Fibers, Inc., Anti -Dumping 
Investigation on Imports of Cellulose Pulp, Argument of no Injur y, 4 July 2013, (Exhibit CAN -11), pp. 12 -17; 
and Fortress Specialty Cellulose Inc., Response to MOFCOM's Preliminary Determination on the Ant i-Dumping 
Investigation against Imported Dissolving Pulp, (Exhibit CAN -17), p. 7).  
96 Rayonier Performance Fibers, L LC., Anti -Dumping Investigation on Imports of Cellulose Pulp, 
Comments Regarding Material Injury and Causality, 29 July 2013, (Exhibit CAN -12), p. 24.  
97 Canada's opening statement at the first meeting of the Panel, para. 21; second written submission, 
para. 16. WT/DS483/R  
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  China responds that this allegation should be rejected because Canada did not mention it in the 
panel request or in the first written submission.98 China submits  that, in any case, the Final 
Determination makes it clear that MOFCOM considered whether there was a significant increase in 
the volume of dumped imports in accordance with the first s entence of Article 3.2.99 
7.53.  Article  6.2 of the DSU provides that a panel request "shall indicate whether consultations 
were held, identify the specific measures at issue and provide a brief summary of the legal basis of 
the complaint sufficient to present the  problem clearly". Compliance with  Article  6.2 must be 
determined on the basis of the language of the panel request and in light of the circumstances of 
each case.100 Canada's claim under Article  3.2 in its panel request is as follows:  
4. Articles  3.1 and 3. 2 of the Anti -Dumping Agreement because China's 
determination of injury was not based on positive evidence and did not involve an 
objective examination of the volume of the dumped imports and the effect of those 
imports on prices in the domestic market for  like products. China failed to properly 
consider whether there had been:  
a. significant increase in dumped imports; … .101 
7.54.  Although the text of the panel request clearly identifies Canada's claim under Articles  3.1 
and 3.2, it does not specifically refer to  the lack of a "reasoned and adequate explanation" of 
China's conclusion of a significant increase in dumped imports, but rather to an alleged failure to 
properly consider whether there had been such an increase. Canada notes that the alleged failure 
to ex plain a conclusion regarding the significant increase in dumped imports is part of its claim 
under the first sentence of Article  3.2.102 We are not persuaded that by arguing that MOFCOM 
failed to provide an explanation of its conclusion regarding the increas ed volume of the dumped 
imports, Canada is pursuing a claim distinct from the one identified in its panel request. Canada's 
claim regarding MOFCOM's analysis of the volume of the dumped imports is based on both 
Articles  3.1 and 3.2. An investigating author ity's compliance with the requirements of Article  3.1 
must be assessed based on the record of the investigation, and in particular the information and 
explanations provided in the Final Determination.103 Therefore, we consider Canada's allegation 
that MOFCOM  failed to provide a reasoned and adequate explanation of its conclusion regarding a 
significant increase in imports falls within our terms of reference.  
7.55.  Canada's specific argument in this regard is that MOFCOM failed to provide a reasoned and 
adequate exp lanation of how MOFCOM's reference to the share of the dumped imports in total 
imports supported its conclusion that the volume of the dumped imports increased in absolute 
terms.104 In addition, Canada argues that MOFCOM did not take into account the expansi on of the 
market and the increased sales of the domestic like product and non -dumped imports.105 Based on 
our views above, consideration of how any increase in the dumped imports correlates with other 
factors, including sales of the domestic like product and  non-dumped imports, is not a required 
element of the consideration of whether there was a significant increase in the volume of dumped 
imports in absolute terms under Article  3.2. Moreover, we recall that the obligation is to consider  – 
and not to determi ne – whether there was a significant increase in dumped imports in absolute 
                                               
98 China's second written submission, para. 38.  
99 China's second written submission, para. 38.  
100 Appellate  Body Reports, EC and certain member States – Large Civil Aircraft , para. 641; US – Carbon 
Steel, para. 127; and Korea – Dairy , paras. 123 and 12 4. 
101 Canada's panel request, pp. 1 and 2.  
102 Canada's response to Panel question No. 46,  para. 26.  
103 E.g. in US – Hot-Rolled Steel , the Appellate Body stated that absent "satisfactory explanation" as to 
why it was not necessary to examine directly or specif ically the other parts of the domestic industry, an 
examination of only certain parts o f the domestic industry d id not ensure a proper evaluation of the state of 
the domestic industry as a whole, and d id not satisfy the requirement of "objectivity" under Article 3.1. 
(Appellate Body Report, US – Hot-Rolled Steel , paras. 204 -206). See also Panel Report, Mexico – Steel Pipes 
and Tubes , para. 7.252.  
104 Canada's second written submission, para. 40 (referring to the Final Determination, (Exhibit CHN -1), 
p. 77); r esponse t o Panel question No. 46, para. 28. In particular, in the section relating to causal link, 
MOFCOM stated that:  
In addition to the continuous growth of the quantity of import, the proportion of 
the quantity of the dumped imported product to the tota l quantit y of the imported 
cellulose pulp in China always remained high: 49.32% in 2010, 42.77% in 2011 
and 43.96% in 2012.  
105 Canada's response to Panel question No. 46, para. 28.  WT/DS483/R  
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  terms. In the absence of a requirement to make any determination in this regard, we cannot 
conclude that there is an obligation to provide a reasoned and adequate explanation under  
Article  3.2. Whether any increase in dumped imports supports a demonstration that dumped 
imports cause material injury under Article  3.5 will require explanation in order to be consistent 
with the requirements of that Article  and Article  3.1.  
7.56.   We therefo re conclude that Canada has not demonstrated that MOFCOM's consideration of 
the volume of the dumped imports was inconsistent with Articles  3.1 and 3.2 of the 
Anti-Dumping  Agreement.  
7.5  Whether MOFCOM's consideration of price effects was consistent with Artic les 3.1 
and 3.2 of the Anti -Dumping Agreement  
7.5.1   Introduction  
7.57.  Canada asserts that MOFCOM's injury determination was based on a flawed consideration of 
the effect of dumped imports on the prices of the domestic like product, and thus is inconsistent 
with Articles 3.1 and 3.2 of the Anti -Dumping Agreement. Canada argues that MOFCOM's finding 
of price depression from the second half of 2011 to the end of 2012 failed to establish that the 
effect of the dumped imports could explain the significant depression in the  prices of the domestic 
like product. In particular, Canada argues that MOFCOM failed to:  
a. objectively examine the existence of parallel price trends and explain the relevance of 
allegedly parallel trends to its finding of significant price depression;  
b. address the evidence that the prices of the dumped imports were higher than the prices 
of the domestic like product;  
c. conduct an objective examination of positive evidence that the market share of the 
dumped imports remained essentially stable; and  
d. assess wheth er the pricing documents and meeting minutes constituted "positive 
evidence" or, alternatively, conduct an objective examination of this evidence. Canada 
argues that even if the Panel finds that the pricing documents and meeting minutes 
constituted positiv e evidence and were objectively examined, MOFCOM failed to reconcile 
these documents with other evidence showing a lack of price depression.106 
7.58.  China responds that MOFCOM's price effects analysis complies with Articles  3.1 and 3.2 of 
the Anti -Dumping Agreeme nt. China submits, first, that MOFCOM had undisputed evidence of 
parallel price trends on the record and explained their relevance.107 Second, MOFCOM was not 
required to find price undercutting to support its finding of price depression.108 Third, MOFCOM 
based  the price effects analysis o n the increased volume of the dumped imports in absolute terms, 
and it also considered the movements in market share, even though it was not required to do 
so.109 Fourth , MOFCOM based its finding of significant price depression o n positive evidence , 
including pricing documents and meeting minutes showing that the domestic industry was forced 
to lower prices in order to compete with the rapidly increasing volume of dumped imports at 
declining prices110, and an objective examination.111 Finally, China emphasizes that MOFCOM did 
not rely on any single factor in its consideration of price effect s, but instead relied on a collective 
evaluation of various factors, including the competitive relationship between the dumped imports 
and the dome stic like product, the significant increase in the volume of dumped imports, the 
significant decline in the price of the dumped imports, the parallel trends in the prices of the 
dumped imports and the domestic like product, and the information provided in pricing documents 
and meeting minutes , which interacted with each other and collectively informed MOFCOM 's price 
depression analysis .112 
                                               
106 Canada's first written submission, paras. 10, 46, and 83 -103; and second w ritten submission, 
paras.  43, 46, 55, 56, 81, and 91.  
107 China's first written submission, paras. 65 -73; second written submission, paras. 48 -58. 
108 China's first written submission, paras. 74 -82; second written submission, paras. 71 -76. 
109 China's first writ ten submission, paras. 83 -91; second written submission, paras. 77 -82. 
110 China's first written submission, paras. 92 -98; second written submission, paras. 59 -70. 
111 China's first written submission, paras. 9, 10, 61, 65 -71, and 82.  
112 China's response to Pan el question No. 13, para. 31; second written submission, paras. 41 -47; and 
opening statement at the second meeting of the Panel, para. 20 .  WT/DS483/R  
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  7.59.  We will first address the legal standard under the second sentence of Article  3.2 and then 
examine each of Canada's alleg ations in turn.  
7.5.2   Legal standard under Article  3.2, second sentence  
7.60.  The second sentence of Article  3.2 provides, in pertinent part, that the investigating 
authorities shall "[w]ith regard to the effect of the dumped imports on prices … consider whether 
there  has been [significant price undercutting], or whether the effect of such imports is otherwise 
to depress prices to a significant degree …".113  
7.61.  In China – GOES , the Appellate Body noted that price depression means "a situation in 
which prices are pushed dow n, or reduced, by something ".114 The Appellate Body clarified that the 
consideration of price depression req uires investigating authorities to examine the relationship 
between dumped imports and domestic prices.115 The Appellate Body stated that that the mere 
observation of a price decline is not sufficient to demonstrate that the investigating authority has 
considered whether the effect of dumped imports is significant for price depression.116 The 
investigating authorities must consider whether the dumped import s have "explanatory force" for 
the domestic price depression which is observed to have occurred. However, the Appel late Body 
made it clear that the consideration under Article  3.2 does not require a conclusion that dumped 
imports caused price depression.117 The Appellate Body also noted that the effect of the dumped 
imports "stems from the relevant aspects of such import s, including the price and/or the volume of 
such imports".118 
7.62.  Prior panel and Appellate Body reports have recognized that Article  3.2 does not establish a 
specific methodology for investigating authorities' examination of the effects of dumped imports on 
prices. However, although an investigating authority enjoys a certain  latitude in choosing a 
methodology for its consideration of the effect of the dumped imports on prices of the domestic 
like product, this discretion is not unlimited, and is subject to the overarching principle of 
Article  3.1 that a determination of injury be based on positive evidence and involve an objective 
examination.119 
7.63.  Moreover, it is clear that the consideration of price undercutting, price depression , and price 
suppression may be independent of one another .120 Thus, the absence of price undercutting, or 
even the absence of any consideration of price undercutting, is not in i tself inconsistent with 
Article  3.2, and does not preclude consideration of price depression or price suppression, and 
potentially reliance on one of those factors in demonstrating that dumped imports are causing 
material injury to the domestic industry.121 Of course, reliance on only one of these price effects in 
the context of a determination that dumped imports are causing injury will only be consistent with 
Article  3.1 to the extent that the investigating authority does not ignore evidence and arguments 
                                               
113 The provision goes on to require consideration of whether the effect of dumped imports is significant 
price suppre ssion, which is not at is sue in this case and is not further discussed.  
114 Appellate Body Report, China – GOES , para.  141. (emphasis original)  
115 Appellate Body Report, China – GOES , para.  136. 
116 Appellate Body Report, China – GOES , paras.  138 and 141.  
117 Appellate Body Report, China – GOES , paras. 144 and 145.  
118 Appellate Body Report, China – GOES , para.  138. 
119 Panel Reports, China – Autos (US) , para . 7.255; China – Broiler Products , para.  7.474; and China – 
X-Ray Equipment , para. 7.41; and Appellate Body Rep ort, EC – Bed Linen ( Article  21.5 – India) , para. 113 
(discussing the related issue of the investigating authority's examination of the volume of imports).  
120 Appellate Body Report, China – GOES , para. 137 ( The inquiries regarding price undercutting and 
price depression and suppression set out in the second sentence of Article  3.2 "are separated by the words "or" 
and "otherwise". This indicates that the elements relevant to the consideration of significant price undercutting 
may differ from those relevant to  the consideration of significant price depression and suppression" .) 
121 Appellate Body Report, China – GOES , para. 137, (" even if prices of subject imports do not 
significantly undercut those of like domestic products, subject imports could still have a pr ice-depressing or 
price-suppressing effect on domestic prices "). 
Similarly, i n China – HP-SSST , the panel noted:  
The fact that Article  3.2 identifies three distinct price effects, and distinguishes 
between price undercutting on the one hand, and price depr ession and price 
suppression on the other, suggests that there is no need to establish price 
depression or suppression when considerin g the existence of price undercutting, or 
indeed, vice versa.  
(Panel Reports,  China – HP-SSST (Japan) / China – HP-SSST (E U), para. 7.129)  WT/DS483/R  
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  on the record before it suggesting that one or both of the other price effects suggests a different 
result.   
7.64.  As discussed above, consideration of the effects of dumped imports on prices is a step in the 
logical progression toward a determination whether inj ury is caused by dumped imports.122 
However, even significant  price undercutting, depression , or suppression may not, standing alone, 
suffice to demonstrate that dumped imports are causing material injury to the domestic industry.  
The impact of those price e ffects over the POI on the condition of the domestic industry will have 
to be considered before that ultimate question can be answered.  However, even if the 
consideration of the effects of dumped imports on prices shows no, or insignificant, price 
undercut ting, depression , or suppression, this does not mean a determination that dumped 
imports are causing material injury is precluded.   
7.65.  The need for a contextual analysis in respect of prices derives from the requirement to 
consider the effects  of dumped impor ts on prices in the second sentence of Article  3.2. Simply to 
observe the trends in prices does not suffice, as those trends may be the effect of different factors 
other than dumped imports, as well as of the dumped imports.  However, it is difficult to und ertake 
a consideration of the effects of dumped imports on prices from the effects of other factors which 
may be affecting those prices in isolation from the ultimate question whether the dumped imports 
are causing injury to the domestic industry.  This is because Article  3.5 specifically provides that 
the demonstration that dumped imports are causing injury is, in part, dependent on the effects of 
dumped import s on prices.  In our view, i t would be entirely appropriate for an investigating 
authority  to obser ve the levels and trends of dumped import and domestic prices in the first 
instance without addressing the effect of dumped imports on those levels and trends.123 But, of 
course, the investigating authority cannot stop there. The investigating authority must  examine 
these levels and trends in the context of the domestic market and connect them to the effects of 
the dumped imports – that is, assess the explanatory force of dumped imports for the observed 
levels and trends in domestic prices – in reaching its u ltimate determination regarding whether 
dumped imports are causing material injury through their effects on prices.124 
7.5.3   MOFCOM's consideration  of parallel price trends  
7.66.  Canada contends that MOFCOM failed to conduct an objective examination of positive 
evidence  of allegedly parallel price trends between the dumped imports and the domestic like 
product, and failed to explain the relevance of the allegedly parallel price trends to its finding of 
price depression.125 Canada submits that prices did not move in paralle l during part of the POI, 
specifically in 2010, and that even when prices moved in the same direction the rates of change 
were different.126 Canada further submits that price trends were different, because the prices of 
the dumped imports were lower than tho se of the domestic like product in the first part of the POI, 
while the dumped imports were priced higher in the second part of the POI, when the price 
depression was found to be occurring.127 Canada argues that when prices were increasing in the 
first part of the POI, dumped import prices were increasing at faster rate; however when prices 
started to fall in the second part of the POI, domestic like product prices declined faster than the 
prices of the dumped imports.128 
                                               
122 It seems clear that the greater the effect of dumped imports in terms of price undercutting, price 
depression , or price suppression, the greater the likely impact of those dumped imports with respect to factors 
such as lost sales  and mar ket share and consequent financial effects such as deteriorating company profits and 
profitability, as well as on factors such as inventories, production capacity, and so on.  
123 Indeed, this may well be important, if not actually necessary to comply with t he requirements of 
Article  12.2.  
124 As the Appellate Body has observed, this is different from the ultimate analysis of causation under 
Article  3.5, as it focuses on the effect of the dumped imports on individual factors that may, or may not, be  
vectors or  pathways by which the dumped imports are causing injury to  the domestic industry.  The Article  3.5 
analysis focuses on the evaluation of  all relevant evidence, including these individual vectors, in making the 
ultimate determination whether dumped imports cause material injury to the domestic industry.  
125 Canada's first written submission, paras. 83 -87; second written submission; paras. 46 -58. 
126 Canada's second written submission, paras. 47 and 48; opening statement at the first meeting of the 
Panel, paras. 30 and 31; and opening statement at the second meeting of the Panel, para. 21.  
127 Canada's second written submission, para. 47; opening statement at the first meeting of the Panel, 
paras. 29 -32. 
128 Canada's second written submission, paras. 48 and 49; openin g statement at the first meeting of the 
Panel, paras. 31 and 32.  WT/DS483/R  
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  7.67.  China submits that MOFCOM based its fin ding of parallel price trends on substantial record 
evidence. China argues that Canada inappropriately focuses on a single point of the POI, when the 
price trends crossed, whereas MOFCOM examined price trends throughout th e POI.129 China 
objects to Canada's argument that the prices of the domestic like product declined much faster, 
arguing that during the second half of the POI the prices of both the dumped imports and the 
domestic like product declined at almost the same rate.130 For China, the existence of pa rallel price 
trends can indicate the link between prices for imported and domestic products, and can support 
the conclusion that decreases in the prices of dumped imports lead to decreases in the prices of 
domestic like product.131 China submits that MOFCOM explained the relevance of the parallel price 
trends, referring to  pricing documents and meeting minutes , which China contends demonstrated 
that it was the dumped subject imports that forced down the prices of the domestic like product, 
as domestic produce rs had difficulty selling the domestic like product and were repeatedly forced 
to lower prices to meet subject import competition .132 
7.68.  The relevance of parallel prices for a price depression analysis was addressed by the 
Appellate Body in China – GOES . In tha t appeal, China argued that the panel had failed to consider 
a key element of MOFCOM' s price effects analysis, namely that dumped import prices and 
domestic prices followed the same trends. The Appellate Body stated that parallel price trends 
might support  a price depression analysis, e.g. such trends "might indicate the nature of 
competit ion between the products" and "may explain the extent to which factors relating to the 
pricing behaviour of importers have an effect on domestic prices".133 However, in that  case, the 
Appellate Body noted that there was no basis on which to draw such conclus ions, as MOFCOM did 
not provide a meaningful description of the price trends or any explanation or reasoning regarding 
the role such trends played in MOFCOM's price effect s analysis and findings.134 
7.69.  In the case before us, MOFCOM considered that the effect of the dumped imports was to 
depress prices to a significant degree. MOFCOM found that the continued decline of prices and 
increasing volume of the dumped imports in the sec ond part of the POI forced the prices of the 
domestic like product to fall. The Final Determination states:  
From the second half of 2011 to the second half of 2012, the continued decline of the 
Price of the Dumped Imported Product and the quick increase of  the quantity of the 
dumped imported product forced the Domestic Industry to compete with them in 
terms of prices, leading to a fast and continuous decline of the Price of the Like 
Product of the Domestic Industry. Based on these facts, the Investigating a uthority 
determined that the dumped imported product had a depressing effect on the Price of 
the Like Product of the Domestic Industry .135 
7.70.  Canada's claim raises the question whether MOFCOM's finding of parallel price trends is 
supported by the evidence, and whether MOFCOM provided a reasoned explanation of the 
relevance of the parallel prices for its finding of price depression.  
7.71.  MOFCOM relied on the information  shown in Table 1 and depicted graphically in Chart 1  
below  with regard to the prices of the dumped imports and the domestic like product:  
                                               
129 China's second written submission. para. 51.  
130 In particular, China argues that over the second part of the POI the prices of the dumped imports 
and the domestic like product declined by th e same amount, 46% and 47 % respectively. (China's 
second  written submission, para. 52).  
131 China's first written submission, paras. 67 and 68; second written submission, paras. 55 and 56 
(referring to Appellate Body Report, China – GOES , para. 210).  
132 China 's first written submission, paras.  69-71; second written submission, paras. 57 and 58 
(referring to Final Determination, (Exhibit CHN -1), p. 65; and Pricing document s and meeting minutes, 
(Exhibit  CHN-2) (BCI)).  
133 Appellate Body Report, China – GOES , para. 210. 
134 Appellate Body Report, China – GOES , para. 210. 
135 Final Determin ation, (Exhibit CHN -1), pp. 65 and 66.  WT/DS483/R  
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  Table 1: Trends in average prices of the dumped imports and the domestic like product  
POI 2010  2011  2012  
 H1 2010  H2 2010  H1 2011  H2 2011  H1 2012  H2 2012  
Prices of dumped imports 
(RMB/tonne)  8,819.96  
 10,050.44  
 13,040.55  
 12,313.21  
 7,877.85  
 7,024.13  
 
Rate of change   +13.95%  +29.75%  -5.58%  -36.02%  -10.84%  
Prices of the like domestic product  
(RMB/tonne)  10,037.87  
 10,926.06  
 11,767.68  
 9,534.11  
 7,202.34  
 6,192.68  
 
Rate of change   +8.85%  +7.70%  -18.98%  -24.46%  -14.02%  
  Source:  Final Determination, (Exhibit CHN -1), pp. 63 and 64.  
Chart 1: Price Trends of Domestic Like Product and Dumped Imports  
6,0007,0008,0009,00010,00011,00012,00013,00014,000
H1/2010 H2/2010 H1/2011 H2/2011 H1/2012 H2/2012RMB/Tonne
Domestic Like Product Subject Imports
 
Source:  Canada's opening statement at the first meeting of the Panel, figure 1  
7.72.  Based on the above, MOFCOM concluded that prices of both the dumped imports and of the 
domestic like product "first increased and then decreased, showing a decreasing trend in 
general ".136 Further MOFCOM observed that pr ices of the dumped imports and of the domestic like 
product showed the "sa me trend of changes", namely from the first half of 2010 to the first half of 
2011 both had "the same increasing trend" and from the second half of 2011 to the second half of 
2012 – "continuous decreasing trend".137  
7.73.  The product subject to the underlying anti -dumping investigation, cellulose pulp, is a 
commodity and there is no dispute between the parties that the imported and domestic products 
were competitive with and substitutable fo r each other. Hence, their prices might be expected to 
follow similar trends. On this point MOFCOM observed:  
[T]he dumped imported product and the like product of the Domestic Industry were 
basically identical in terms of the product performance, the qual ity, the sales areas 
and the groups of clients, the two were competitive and substitutable to each other 
and there was a certain relevance between the Price of the Dumped Imported Product 
and the Price of the Like Product of the Domestic Industry.138 
7.74.  Canada alleges that MOFCOM's finding of parallel price trends is without support in the 
evidence on the record, contending that the price trends were not parallel because they crossed at 
the end of 2010 (see Chart 1 above ).139 However, even though the trend lines d id cross in the 
second half of 2010, overall, the trend lines moved genera lly in the same direction. We do not 
                                               
136 Final Determination, (Exhibit CHN -1), p. 63.  
137 Final Determination, (Exhibit CHN -1), p. 64.  
138 Final Determination, (Exhibit CHN -1), p. 65.  
139 Canada's opening statement at the first meeting of the Panel, para. 32 and figure 1 (referring to 
Apparent Market and Domestic Production Tables, (Exhibit CAN -28), p. 1).  WT/DS483/R  
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  consider it unreasonable to view these price trends as being generally parallel.  Furthermore, even 
at the time they crossed, they were moving in the same direction – both domestic and import 
prices were increasing.  
7.75.  This is unlike the facts in China – Autos (US) , where the domestic and import price trends 
moved in opposing directions during part of the POI.140 It is noteworthy that, even in that case , 
the panel did not find that parallel price trends could  not be found in the factual circumstance, but 
stated that "a situation of diverging trends during a part of the period examined requires 
explanation before those trends can be characterized as 'para llel'".141 Therefore, we do not 
consider that the fact that price trends crossed at one point during the POI undermines MOFCOM's 
conclusion that the prices of dumped imports and the domestic like product followed the same or 
parallel trends.  
7.76.  Canada also asse rts that the different rates of change in prices of the dumped imports and 
the domestic industry, particularly in 2011 were not considered by MOFCOM, and undermine its 
finding of parallel price trends. In the first half of 2011, the prices of the dumped im ports 
increased by almost 30%, whereas the prices of the domestic like product increased by about 8%. 
In the second part of 2011, when prices began to decline, the dumped imports' prices declined by 
about 6%, while the domestic like product's prices declin ed by 19%. We are not persuaded that 
these different rates of change undermine the finding of the parallel trends in prices per se , given 
that the prices still moved in the same direction and quickly adjusted to the price decline in the 
market, showing the  close competition between the domestic and imported dumped products.  
7.77.  At the same time, however, we recognize that the fact of simultaneous declines in the prices 
of both dumped imports and the domestic like product does not necessarily mean that the 
dome stic prices were pushed down by the declining prices of the dumped imports. As discussed 
below, the prices of the dumped imports, although declining, were higher than the prices of the 
domestic like product over the second part of the POI, when MOFCOM cons idered domestic prices 
were depressed by the dumped imports. In addition, during the investigation interested parties 
argued that in fact it was the domestic like product prices that led prices of the dumped imports to 
decline.142 The absence of any explanat ion in the Final Determination of how , in MOFCOM's view , 
parallel price trends showed  the existence of price depression  leads us to conclude  that the fact of 
parallel price trends provides little if any support for MOFCOM's conclusion that dumped imports 
had the effect of depressing the prices of the domestic like product.143  
7.78.  MOFCOM also referred to the coincidence of a "continuous increasing trend" in the volume of 
dumped imports and a "continuous decreasing trend" in the prices of both dumped imports and 
the domestic like product from the second half of 2011 to the second half of 2012, the period 
during which MOFCOM found significant price depression. The Final Determination states:  
The quantity of the dumped imported product was 220,000 tons in the second half of 
2011, 295,100 tons in the first half of 2012 and 310,400 tons in the second half of 
2012, showing a continuous increasing trend. In the same periods, both the Price of 
                                               
140 Panel Report, China – Autos (US) , para. 7.262. In that case, the record showed that from 2006 to 
2007, the average unit values (AUVs were used as a proxy for prices) of imports and of the domestic like 
product moved in different directions: import AUVs decreased by 8.47%, while the AUV of the domestic like 
product rose by 11.08%. The pane l concluded that this information undermined the factual conclusion of 
parallel prices  reached by the investigating authority , and should have been addressed in the  investigating 
authority's determination. In the absence of any explanation the panel stated  that it could not conclude that 
MOFCOM even considered this divergence of price trends, much less how it was reso lved, and any finding of 
parallel prices  in these factual circumstances would require some indication of the  investigating authority's 
reasoni ng in support of a conclusion of parallel prices . 
141 Panel Report, China – Autos (US) , para. 7.264.  
142 Canada's second written submission, para. 49 (referring to Fortress Specialty Cellulose Inc., 
Response to MOFCOM's Preliminary Determination on the Anti -Dumping Investigation against Imported 
Dissolving Pulp, (Exhibit CAN -17), p. 9; and Rayonier Performance Fibers, LLC., Anti -Dumping Inv estigation  on 
Imports of Cellulose Pulp, Comments Regarding Material Injury and Causality, 29 July 2013, (Exhibit CAN -12), 
pp. 38 -45). 
143 We also note China's argument that the pricing documents and meeting minutes  collected by 
MOFCOM during the verification showed  that the decline of import prices for pulp had led to the domestic 
industry having difficulty selling the domestic  like product and had forced the domestic producers to reduce 
prices . We address MOFCOM's consideration of the pricing documents and meeting minutes in 
paras.  7.101 -7.108  below.  WT/DS483/R  
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  the Dumped Imported Product and the Price of the Like Product of the Domestic 
Industry showed a continuous decreasing trend. The Price of the Dumped Imported 
Product was 12,313.21 RMB/ton in the second half  of 2011, decreased to 
7,877.85  RMB/ton in the first half of 2012 and further decreased to 7,024.13 RMB/ton 
in the second half of 2012. From the second half of 2011 to the second half of 2012, 
under the situations that the quantity of the dumped imported product continuously 
increased and the market share of the dumped imported products continuously 
increased compared with the first half of 2011, the Price of the Dumped Imported 
Product continuously decreased and the Price of the Like Product of the Domestic 
Industry also decreased, from 9,534.11 RMB/ton in the second half of 2011 to 
7202.34 RMB/ton in the first half of 2012 and furth er decreased to 6,192.68 RMB/ton 
in the second half of 2012, at the lowest during the Period of investigation.144 
7.79.  We consider that this assessment is insufficient to allow us to conclude that MOFCOM 
adequately explained how parallel declining price trends were taken  into account in conjunction 
with the increased volume of dumped imports in its consideration  of price depression. While 
MOFCOM referred to the trends in volume and prices of the dumped imports and prices of the 
domestic like product, MOFCOM did no t provide any explanation of how the prices and volume of 
the dumped imports interacted to have a depressing effect on domestic prices.  
7.80.  Without such explanation , the identification of parallel price trends does no more than 
recognize that two variables , domestic and dumped import prices, move together.  Given that the 
product in question in this dispute is a commodity, and both dumped imports and the domestic like 
product are sold in similar quantities, at the same level of trade, with few if any discernible  
differences in quality or other relevant competitive factors145, and are in the same market and 
therefore influenced by the same market pressures and factors , this is hardly surprising.  It may be 
that one of the factors affecting domestic prices is competit ion with dumped imports , but t he mere 
identification of such a parallel trend cannot alone suffice to show that the decline in the price of 
the domestic like product is an effect of the dumped imports . 
7.81.  We therefore conclude that while MOFCOM reasonably fou nd that there were parallel trends 
between dumped import  and domestic like product  prices , it failed to explain the role of those 
parallel price trends in the decline of domestic like product prices and how changes in the prices 
and volume of the dumped im ports affected the domestic like product prices . 
7.5.4   MOFCOM's consideration of the fact that dumped imports were sold at higher 
prices than the domestic like product  
7.82.  Canada argues that MOFCOM failed to conduct an objective examination of positive 
evidence tha t the dumped imports were sold at higher prices than the domestic like product during 
the period in which MOFCOM identified price depression.146 Canada contends that MOFCOM did not 
provide any explanation how dumped imports priced between 9% and 29% higher t han the 
domestic like product could have explanatory force for price depression .147 China responds that 
MOFCOM is not required to m ake a finding of price undercutting to conclude that price depression 
has occurred.148 Article  3.2 allows an investigating author ity to base its finding on one of three 
possible price effects: price undercutting, price depression, or price suppression.149 China considers 
that prices of domestic like products can be depressed by competition with dumped imports, even 
if the prices of th e dumped imports are higher than those of the domestic like product.150  
                                               
144 Final Determinatio n, (Exhibit CHN -1), pp. 64 and 65.  
145 MOFCOM found the dumped imports and the domestic like product to be "competitive and 
substitutable to each other" . (Final Determination, (Exhibit CHN -1), p. 65 ). 
146 Canada's first written submission, paras. 88 -94; second  written submission, paras. 59 -66. 
147 Canada's second written submission, paras. 59 and 60; first written submission, para.  93 (referring 
to Panel Report, China – Autos (US) , para.  7.272).  
148 China's first written submission, paras.  75 and 77 (referring to P anel Reports, EC – Salmon 
(Norway) , para. 7. 638; and China – HP-SSST (Japan) / China – HP-SSST (EU) , para. 7.129; and Appellate 
Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , paras. 5.149 and 5.156); second written 
submission, par as. 71 and  72. 
149 China's first written submission, paras.  75 and 76 (referring to Panel Report, Korea – Certain Paper , 
para. 7.242).  
150 China's first written submission, para.  78. WT/DS483/R  
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  7.83.  In the Final Determination, MOFCOM relied on the following information concerning the 
prices of the dumped imports and the domestic like product:  
Table 2: Averag e prices of the dumped imports and like domestic product  
POI 2010  2011  2012  
 H1 2010  H2 2010  H1 2011  H2 2011  H1 2012  H2 2012  
Prices of dumped imports 
(RMB/tonne)  8,819.96  10,050.44  13,040.55  12,313.21  7,877.85  7,024.13  
Prices of the like domestic 
produc t (RMB/tonne)  10,037.87  
 10,926.06  
 11,767.68  
 9,534.11  
 7,202.34  
 6,192.68  
 
Margin of difference  -12.13%  -8.01%  +10.82%  +29.15%  +9.38%  +13.43%  
  Source:  Final Determination, (Exhibit CHN -1), pp. 64 and 65.151 
 
7.84.  At the beginning of the POI, in the first hal f of 2010, the dumped imports undersold the 
domestic like product by 12%. In the second half of 2010, the prices of both the dumped imports 
and the domestic like product increased, but the prices of the dumped imports increased faster, 
and the underselling  difference fell to 8%. Prices further increased in the first half of 2011, with 
dumped import prices again increasing faster to levels above those of the domestic like product.  
Thus, during the rest of the POI, the prices of the dumped imports were higher  than those of the 
domestic like product. In the first half of 2011, the dumped imports were priced nearly 11% higher 
than the domestic like product, while in the second half of 2011 the prices of the dumped imports 
were almost 30% higher. In 2012, the dum ped imports were priced higher than  the domestic like 
products by 9% and 13% in the first and second half respectively.  
7.85.  Several interested parties, including Cosmo Specialty Fibers, Inc.  (Cosmo)  and Fortress, 
raised the issue of higher priced dumped import s during the investigation.152 They argued that 
because dumped import prices were consistently higher than the prices of the dome stic like 
product, the dumped imports did not have any effect on domestic prices. In the Final 
Determination, MOFCOM addressed th e interested parties' arguments by noting that it had 
assessed the effect of dumped imports from all exporting countries subjec t to the investigation 
cumulatively, and would not conduct a separate price analysis for each exporting country.153 
7.86.  The question wh ether a consideration of price depression may be warranted where the 
prices of dumped imports are higher than the prices of the domestic like product was discussed by 
the panel in China – Autos (US). In that case, the panel confirmed that price depression is not 
contingent on the existence of price undercutting, and may be found in a situation where the  
prices of dumped imports  is higher than the price of the domestic like product .154 However, such a 
finding requires an explanation of how the investigating au thorities reached a conclusion of price 
depression in a situation where the prices of dumped imports are higher during most of the POI.155 
The panel in China – Autos  (US) stated:  
                                               
151 See Japan's third -party submission, annex II . China confirmed the accuracy of the fig ures reported 
by Japan. China's response to Panel question No. 3, para. 3 . 
152 Cosmo Specialty Fibers, Inc., Anti -Dumping Investigation on Imports of Cellulose Pulp, Argument of 
no Injury, 4 July 2013, (Exhibit CAN -11), p. 17. Canada's first written submiss ion, para.  92 (referring to 
Fortress Specialty Cellulose Inc., Injury Brief, Industry Injury Investigation for the Anti -Dumping Investigations 
Against Cellulose Pulp, 5 September 2013, (Exhibit CAN -13), p. 7; Cosmo Specialty Fibers, Inc., Anti -Dumping 
Investigation  on Imports of Cellulose Pulp, Argument of no Injury, 4 July 2013, (Exhibit CAN -11), pp. 8 and 9, 
and 17 -21; Rayonier Performance Fibers, LLC., Anti -Dumping Investigation on Imports of Cellulose Pulp, 
Comments Regarding Material Injury and Causali ty, 29 Ju ly 2013, (Exhibit CAN -12), pp. 39 -45; and American 
Forest and Paper Association, Anti -Dumping Investigation on Imports of Cellulose Pulp, Comments on Industry 
Injury Investigation, 24 September 2013, (Exhibit CAN -10), p. 7); second written submiss ion, para. 61.  
153 Final Determination, (Exhibit CHN -1), p. 71.  China's second written submission, para. 74.  
154 See also Appellate Body Report, China – GOES , para. 137:  
[E]ven if prices of subject imports do not significantly undercut those of like 
domestic p roducts, subject imports could still have a price -depressing or 
price-suppressing effect on domestic prices.  
155 Panel Report, China – Autos (US) , paras. 7.272 and 7.274.  WT/DS483/R  
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  We do not preclude the possibility that price depression may be found to exist in a 
case where there is overselling by subject imports. However, absent analysis and 
explanation by the investigating authority , it is difficult to understand how a 
conclusion of price depression was reached in a situation where prices of imports 
were, fo r the most part, significantly higher than those of the domestic like product 
whose prices were purportedly being depressed during the POI.156 
We agree . This is particularly true where, as here , the issue has been raised by interested parties, 
the respective  products are competitive and substitutable , and the domestic demand is increasing.  
The mere fact that domestic prices  were below dumped import prices and  did not remain stable or 
increase is insufficient to warrant considering that the dumped imports had "explanatory force" for 
the decline in domestic prices . 
7.87.  In our view, MOFCOM's reference to the cumulative assessment of the effects of dumped 
imports does not address the interested parties' arguments concerning the absence of price 
undercutting , which ref erred to the average prices of the dumped imports as well as the prices of 
imports from the individual investigated countries.157 MOFCOM did not adequately explain its 
conclusion that, despite the higher prices of dumped imports , particularly in the latter p art of the 
POI when prices were declining for both dumped imports and the domestic like product, the 
dumped imports had the effect of significant price depression.  
7.88.  We therefore  conclude that MOFCOM failed to provide a n adequate  explanation of its 
considera tion of price depression in light of the undisputed fact that the prices of the dumped 
imports were higher than those of the domestic like product during the latter part of the POI.  
7.5.5   MOFCOM's consideration of  changes in the dumped imports' market share  
7.89.  Canada argues that MOFCOM failed to explain how price depression could be an effect of the 
dumped imports in light of evidence that the market share of the dumped imports remained 
essentially stable .158 Canada argues that MOFCOM failed to explain how the essent ially stable 
market share of dumped imports, which increased only 2.66 percentage points from 19.91% to 
22.57% from the second half of 2011 to the second half of 2012, could have had any downward 
pressure on the prices of the domestic like product, which a ctually gained 7.09 percentage points 
of market share during this period, from 18.64% of the domestic market in the second half of 
2011 to 25.73% in the second half of 2012.159  
7.90.  China responds that MOFCOM focused on the absolute increase in dumped imports in  the 
volume aspect of its price effects analysis, and was not required to consider the changes in market 
share.  China argues that the possibility provided for in the first sentence of Article  3.2 to consider 
an increase in dumped imports in either absolute  or relative terms extends to the consideration of 
the price effects of those same imports under the second sentence of the same provision. In 
China's view, this means that since consideration of market share is not obligatory with regard to 
consideration of the volume of imports, it cannot be compulsory when considering the price effects 
of those same imports.160 Nevertheless, China submits that MOFCOM considered changes in 
market share  and found that the dumped imports' market share did not in fact remain s table, but 
rather increased.161  
7.91.  We begin by addressing China's argument that MOFCOM properly based the volume aspect 
of its price effects analysis on the increased volume of the dumped imports in absolute terms and 
was not required, as a matter of law, to a lso examine the changes in the dumped imports' market 
share. Article  3.2 requires the investigating authorities to consider the vol ume of the dumped 
imports and the effect of these imports on the prices of the domestic like product. As discussed 
above, the  first sentence of Article  3.2 sets out three options for the consideration of the dumped 
                                               
156 Panel Report, China – Autos (US) , para. 7.272.  
157 Cosmo Specialty Fibers, Inc., Anti -Dumping Investigation on Imports of Cellulose Pulp, Argument of 
no Injury, 4 July 2013, (Exhibit CAN -11), p. 17.  
158 Canada's first written submission, para.  95; second written submission, paras. 67 and 74.  
159 Canada's  first written submission, paras.  97 and 9 8; second written submission, paras. 67 and 68.  
160 China's first written submission, para.  84. 
161 China's first written submission, paras.  83 and 87 (referring to Final Determination, (Exhibit CHN -1), 
pp. 59, 61, and 64); second written submission, paras. 78  and 79.  WT/DS483/R  
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  import volume: in absolute terms, or relative to production, or consumption in the importing 
Member. Under the second sentence of Article  3.2, the investigating autho rities shall consider the 
effect of the dumped imports on the prices of the domestic like product. The effect of dumped 
imports on domestic prices may be considered "through the vector of subject import prices, 
subject import volumes, or both".162 We recall that the provisions of Article  3 "contemplate a 
logical progression of inquiry leading to an investigating authority's ultimate injury and causation 
determination".163 We consider that the investigating authorities' volume analysis under the first 
sentence o f Article  3.2 also informs the price effects analysis under the second sentence of the 
same provision. If an investigating authorit y finds that the dumped imports have increased either 
in absolute or relative terms, it is likely to consider the effect of s uch increased volume in its price 
effects analysis. Nevertheless, we do not consider that by relying on one of the options for volu me 
analysis provided in the first sentence of Article  3.2, the investigating authorities limit the evidence 
they can rely upo n in their further inquiries under Article  3.  
7.92.  In the investigation at hand, MOFCOM based the price effects analysis on development s in 
both the prices and the volume of the dumped imports. MOFCOM concluded that the dumped 
imports had a "depressing effect"  on prices of the domestic like product, based on the continued 
decline of dumped imports' prices and the rapid increase in volume of the dumped imports.164 In 
its overall analysis MOFCOM considered the changes in volume of the dumped imports together 
with p rice movements of the imported and domestic products over the POI in assessing price 
depression in the context of injury and causation. This suggests to us that MOFCOM's main focus 
with respect to the volume aspect of the price effects analysis was the eff ect of the change in 
volume of the dumped imports in absolute terms, which it had found increased by 43.82% over 
the POI.  
7.93.  At the sa me time, MOFCOM also took into account the change in market share, observing 
that the market share of the dumped imports "sho wed an increasing trend in general". Further, 
when looking at the price trends of the imported and domestic products together with the 
increased absolute volume of dumped imports, MOFCOM noted that the dumped imports 
"accounted for a certain market share i n China" from the first half of 2010 to the first half of 2011. 
In the context of discussing the changes in volume and prices of the dumped imports and the 
prices of the domestic like product in the second part of the POI, i.e. from the second half of 2011  
to the secon d half of 2012 , MOFCOM observed that the market share of the dumped imports 
"continuously increased compared with the first half of 2011" . MOFCOM also considered 
developments in the domestic industry's market share, which it found had increase d. 
7.94.  The Final Determination contains the following data with regard to market shares of the 
dumped imports and the domestic like product:  
Table 3: Market shares of the dumped imports and the domestic like product  
POI 2010  2011  2012  
 H1 2010  H2 2010  H1 2011  H2 2011  H1 2012  H2 2012  
Market share of dumped imports  20.53%  20.88%  18.02%  19.91%  21.45%  22.57%  
change from previous   +0.35 -2.86 +1.89 +1.54 +1.12 
Market share of the like domestic product  18.00%  21.36%  17.54%  18.64%  26.71%  25.73%  
change from previous   +3.36 -3.82 +1.1 +8.07 -0.98 
  Source: Final Determination, (Exhibit CHN -1), pp. 63 and 64.  
                                               
162 Appellate Body Report, China – GOES , para. 216.  
163 Appellate Body Report, China – GOES , para. 128.  
164 Final Determination, (Exhibit CHN -1), pp. 65 and 66. We note that this is unlike the facts in China – 
Autos (US) , where MOFCOM emphasized that market share gains of the dumped imports caused the downward 
pressure on domestic prices. In that case, the domestic industry lost 4.04 percentage points and the dumped 
imports gained 3.52 percentage points of the market share over the POI. The panel found t hat MOFCOM acted 
inconsistently with Articles  3.1 and 3.2  by failing to explain the linkage between the dumped import market 
share gains and its finding of price depression, in light of changes in market share of other market participants 
and the timing of  the changes in market share and prices. (Panel Report, China – Autos (US) , paras. 7.287 and 
7.288).  In the present case , MOFCOM found that downward pressure was caused by the volume and decline  in 
prices of the dumped imports.  WT/DS483/R  
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  7.95.  Looking at this data , it is apparent that d uring the POI both the dumped imports and the 
domestic like product gained market share. The  market share of the domestic like product 
increased from 18% to 25.73%, a gain of almost 8 percentage points, over the POI. The market 
share of the dumped imports also increased, but by a lesser degree, from 20.53% to 22.57%, a 
gain of 2 percentage points  over the same period. Canada argues that the market share of the 
dumped imports remained "essentially stable" and thus could not have depressed the prices of the 
domestic like product. The question whether an increase in market share of 2 percentage point s 
over the POI is described as an increase or as market share remaining essentially stable is a 
question of judgment and interpretation, not a question of fact. It is a fact that the dumped import 
market share did increase, albeit less overall than the dom estic industry market share. We 
consider that MOFCOM did not err in referring to an increase in dumped import market share in its 
consideration of price effects.  
7.96.  The existence of price depression does not necessarily require that there be a concurrent 
decrease in the domestic industry's market share. Price depression can exist "in a situation where 
there is no increase, or even in some circumstances a decrease, in the volume or market share of 
dumped imports".165 Canada does not disagree that price depressio n can be found without an 
increase in volume or market share; however Canada argues that MOFCOM clearly based the 
volume part of the price depression analysis on the increase of both volume and market share and 
contends  that MOFCOM was under obligation to objectively examine the market  share but failed to 
do so.166 We do not agree. In the Final Determination, MOFCOM explained that in the second half 
of 2011, due to the increased demand, the domestic industry increased its output and sales. As a 
result, the ma rket share of the domestic lik e product increased by 1.10 percentage points 
compared to the first half of 2011. MOFCOM considered that in the same period, the prices of the 
dumped import s decreased "in order to increase its market share". The prices of the  dumped 
imports decreased by 5.58% in the second half of 2011 compared to the first half of 2011, and 
market share increased by 1.89 percentage points. In addition, MOFCOM observed that in the 
second part of 2012 the domestic like product lost 0.98 percent age points of market share to the 
dumped imports, and the domestic industry reduced its prices in order to prevent further declines 
in market share. We also obs erve that the domestic industry'  market share increased by 
8 percentage points in the first half  of 2012, but this development was not addressed in MOFCOM's 
analysis. Although the Final Determination would have benefitted from an explanation regarding 
the effect of the increase of the domestic industry' market share by 8 percentage points in the firs t 
half of 2012, we consider that overall MOFCOM's description and examination of the change in 
dumped imports' market share was both reasonable and objective, p articularly in view of the fact 
that it relied primarily on the increase in the absolute volume of imports in its consideration of 
price effects.  
7.97.  Finally, Canada submits that MOFCOM did not consider market dynamics and changes in the 
market share of the du mped imports in relation to market shares of the domestic industry and the 
non-dumped imports.167 In particular, Canada refers to similar movements in market shares of the 
domestic industry, increases from 18% to 26%, and the market share of the non -dumped imports, 
increased from 21% to 28%, during the POI.168 
7.98.  The market shares were as follows:  
Table 4: Market Shares169 
 2010  2011  2012  
Domestic industry  19.68%  18.09%  26.22%  
Other Chinese producers  38.35%  37.57%  23.71%  
Dumped imports  20.70%  18.96%  22.01%  
Non-dumped imports  21.27%  25.38%  28.06%  
  Source: Apparent Market and Domest ic Production Tables, (Exhibit CAN -28), p. 2.  
                                               
165 Panel Report, EC – Bed Lin en (Article  21.5 – India), para. 6.230.  
166 Canada's second written submission, para. 75.  
167 Canada's opening statement at the first meeting of the Panel, paras. 35 -37. See also Canada's first 
written submission, para.  99 (referring to Panel Report, China – Autos (US) , para. 7.289).  
168 Canada's opening statement at the first meeting of the Panel, paras. 35 and 36.  
169 Apparent Market and Domestic Production Tables, (Exhibit CAN -28), p. 2; Canada's opening 
statement at the first meeting of the Panel, para. 36; and  China's response to Panel question No. 37, table B.  WT/DS483/R  
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  7.99.  Looking at this data, we observe that both the domestic like product and the non -dumped 
imports gained market share, 6.5 and 6.7 percentage points respectively, the dumped imports 
gained 1.3 percentage points o f market share, and other Chinese producers lost 14.6 percentage 
points of market share. Canada refers to the China – Autos  (US) dispute in its argument regarding 
the need to consider changes in market share of various participants in the market. However, 
while it is true that the panel in that case faulted MOFCOM for relying on a decline in domestic 
industry market share without considering and addressing the role and impact of other participants 
in the market before reaching its conclusions, the facts in China – Autos  (US) are different from 
those in this case.170 In China – Autos (US) , the domestic industry had lost market share, and 
most of that lost market share was gained by non -industry producers and non -dumped imports. 
MOFCOM had relied on that decline  in its analysis of price effects. In the case before us, both the 
domestic industry and the dumped imports gained market share. Thus, MOFCOM in this case did 
not rely on lost domestic market share in its consideration of price effects, and a need to expla in 
the relevance of such a loss in the light of the gains of other participants in the market does not 
arise.   
7.100.   We therefore  conclude  that Canada has failed to demonstrate that MOFCOM acted 
inconsistently with Articles  3.1 and 3.2  of the Anti -Dumping Agreem ent in considering  changes in 
the market share of dumped imports  in its consideration of price effects . 
7.5.6   MOFCOM 's consideration of  certain  business information  
7.101.   Canada argues that MOFCOM failed to base its findings of price depression on an objective 
examina tion of positive evidence by relying on the minutes of business analysis meetings and 
pricing reports obtained during on -site verifications .171  
7.102.   MOFCOM referred to certain information obtained during on -site verifications in its 
consideration of price depres sion, as follows:  
Investigating authority had collected evidences from many domestic producers during 
its on -site veri fications, including the minutes of the business analysis meetings and 
the pricing reports, which showed that since the second half of 201 1, the decline of 
the import prices of foreign dissolving pulp had led to the difficulty in the sale of the 
like produ ct of the Domestic Industry, forcing the Domestic Industry to reduce the 
price. This showed that the domestic producers were affected by t he decrease of the 
Price of the Dumped Imported Product when they set the price of the like product of 
the Domestic In dustry.172  
7.103.   The minutes of the business analysis meetings and the pricing reports referred by 
MOFCOM in the Final Determination include:  
a. meeting minutes for reporting sales of cellulose pulp by  [***] ; 
b. meeting minutes regarding sales of cellulose pulp by [***] ;  
c. the proposal for price adjustment of  [***] .173  
In response to a question from the Panel, China clarifi ed that these documents represen t 
approximately one -third of the total domestic production and were dated throughout the price 
depression period.174 
7.104.   Canada asserts that the meeting minutes and pricing documents of [***]  are not positive 
evidence because they refer to imported cellulose pul p in general, without specifying exporting 
countries, and do not provide reliable data with regard to prices of the dumped imports and their 
relationship with the domestic like product. Five of the meeting minutes from  [***] , and one 
                                               
170 Canada's first written submission, para. 99 (referring to Panel Report, China – Autos (US) , 
para. 7.289).  
171 Canada's first written submission, paras. 101 -103. 
172 Final Determination, (Exhibit CHN -1), pa ra. 65.  
173 Pricing documents and meeting minutes, (Exhibit CHN -2) (BCI).  
174 China's response to Panel question No. 14, para. 40.  WT/DS483/R  
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  proposal for price adj ustment of  [***] , do not specifically refer to imports from investigated 
countries, i.e. Brazil, Canada, and the United States, but to the prices of imported dissolving pulp 
without specification of origin. Having examined these documents, we consider that  although they 
support MOFCOM's conclusion that the domestic producers had to lower their prices due to the 
intense competition with imported cellulose pulp, the probative value of these documents is 
limited, because they refer to imported cellulose pulp i n general. This means that these documents 
might refer to price competition with the dumped imports as well as non -dumped imports. 
Nonetheless, in our view, it was not improper for MOFCOM to have taken this information into 
account, given the obligation un der Article  3.2 is to consider the effect of the dumped imports on 
prices, rather than to conclude that the price depression was caused by the dumped imports. As 
well, there is no obligation to conduct a non -attribution analysis under Article  3.2. However,  the 
absence of any indication of the specific source of the imported cellulose pulp referred to in those 
documents calls into question the weight they should be given in considering the explanatory force 
of the dumped imports for the existence of price de pression, as opposed to the effect of non -
dumped imports.   
7.105.   Further, the meeting minutes and pricing documents of [***]  do name investigated 
exporting countries in referring to competition with imported cellulose pulp from Brazil, Canada 
and the United Stat es.175 In this regard, Canada maintains that the remaining documents from 
[***]  are not representative of the domestic industry, because they originate from only one 
petitioner, which accounted for less than [***]  of total domestic output.176 China responds th at 
that there is no requirement that the specific examples of price depression must account for a 
certain percentage of overall sales during the investigation.177 China asserts these pricing 
documents and meeting minutes illustrate specific instances over th e POI in which domestic 
producers were forced to reduce prices due to price pressure from the dumped imports.178 In our 
view, MOFCOM's consideration of price effects was primarily driven by the data on the volume and 
prices of the dumped imports and the pric es of the domestic like product. While not determinative, 
the documents in question do corroborate MOFCOM's view that the domestic prices were 
depressed by the declining  prices and increased volume of the dumped imports. Therefore, we 
consider that a  reaso nable and objective  investigating authority could have taken this information 
into account in its consideration of price effects.  
7.106.   Canada also submits that MOFCOM neither verified the pricing documents against relevant 
sales contracts, purchase orders, and  VAT invoices, nor did it verify this information with 
purchasers or data collected from the interested parties, e.g. downstream viscose staple fibre  
(VSF) producers .179 The Final Determi nation explicitly states that these documents were obtained 
during on -site verifications, the very purpose of which is to verify information obtained during the 
investigation. We note in this regard that while an investigating authority is required to sati sfy 
itself as to the accuracy of the information supplied by interested  parties pursuant to Article  6.6 of 
the Anti -Dumping Agr eement, there is no particular means by which it is required to do so.  
Verification, as provided for in Article  6.7 of the Anti -Dumping Agreement, which may include such 
steps as suggested by Canada i s not a requirement in any case.  Moreover, Canada does not even 
allege any errors or lack of accuracy in the pricing documents or meeting minutes.  In these 
                                               
175 The parties disagree whether the list of exporting countries in these documents is exhaustive. 
Canada submits that the translat ion into English omits the word " deng", which it asserts means "et cetera" and 
suggests that the list includes other countries. China responds that the word " deng" has two mea nings in 
English: one is "et cetera", and the other is "namely" or "as such". Chi na submits that in the context of these 
documents the second meaning is more accurate, because the list of countries is followed by the specific 
percentage of imports, i.e. "more than half of China's total imports of cellulose pulp". China further submits 
that this is confirmed by import data, because imports from Brazil, Canada, and the United States represent 
approximately half of total imports. The dumped imports accounted f or 49% in 2010, 43% in 2011, and 44% 
in 2012 of the total imports of cellulose pu lp to China, or approximately half of total imports. While some of the 
imports discussed in the documents may have been from other s ources, in our view, the specific references to 
Brazil, Canada, and the United States are sufficient for MOFCOM to have used  the word " deng" as meaning 
"namely" or "as such".  (Canada's opening statement at the firs t meeting of the Panel, para. 41 ; response to 
Panel question No. 12, para. 41; second written submission, para. 85 and fn 105; China's response to 
Panel  question No. 14, paras. 35 -38; second written submission, paras. 61 -63; and opening statement at the 
second meeting of the Panel, paras. 37 and 38).  
176 Canada's second written submission, paras. 83 and 84.  
177 China's response to Panel question No. 14, para. 41.  
178 China' s resp onse to Panel question No. 14, para. 33.  
179 Canada's second written submission, para s. 85 and 90. WT/DS483/R  
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  circumstances, and given that Canada has made no claim in this regard, we do not consider that 
the failure of MOFCOM to undertake "verification" as suggested by Canada was erroneous.  
7.107.   Canada also contends that MOFCOM failed to explain how the domestic industry could have 
had difficulty in making sales of the like product, given that the volume of domestic  sales 
increased, as did the domestic market share.180 In this regard, we note that MOFCOM found that 
domestic prices declined while market share increased, which is consistent with th e domestic 
industry having achieved increased sales only by lowering price s, which in our view suggest that 
the industry had difficulty making sales of the like product – until it lowered its prices. The pricing 
documents and meeting minutes also lend supp ort to this view. In the price effects analysis, 
MOFCOM specifically found  that due to increased demand, in the second half of 2011 the domestic 
industry increased its output and sales of the like product leading to an increase in market share, 
but decreased its prices, which again is consistent with a conclusion that the domest ic industry had 
to lower prices to make sales .181 We note  that China has relied heavily on the meeting reports in 
arguing that MOFCOM did not err in its consideration of price effects.  In the circumstances of this 
case, we are of the view that these document s, on their own, cannot suffice to show that dumped 
imports had the effect of depressing domestic prices.  However, this is a different question from 
whether taking these documents in to account in the consideration of the price effects of dumped 
imports is,  in itself, inconsistent with Articles  3.1 and 3.2 .  
7.108.   We therefore find that Canada has failed to demonstrate that MOFCOM acted inconsistently 
with Articles  3.1 and 3.2 by taking into account pricing documents and meeting minutes in its 
consideration of the  price effects.  
7.5.7   MOFCOM 's consideration of evidence and factors collectively  
7.109.   China argues that MOFCOM based its conclusion that the dumped imports had an effect to 
depress prices of the domestic like product on a "variety of evidence" , specifically : (a) in tense 
price competition between dumped imports and domestic like product; (b) a dramatic 43% 
increase in the dumped import volume; (c) a drastic decline in domestic like product price s; 
(d) parallel price trends ; (e) pricing documents and meeting minutes;  and ( f) significant dumping 
margins.182 China asserts that MOFCOM examined these factors "collectively" and did not rely 
"solely on any single factor" .  
7.110.   We have found  that MOFCOM failed to adequately explain the role of parallel price trends 
in its considera tion of price depression and how parallel declining price trends in conjunction with 
the increased volume of dumped imports explained  its consideration  of price depression , and how 
it found price depression in a situation where dumped import prices were hi gher than those of the 
domestic like product d uring the second part of the POI . The fact of price competition between the 
dumped imports and the domestic like product, even if that competition was intense, may explain 
the observation of parallel price tren ds, but goes no further to explain how dumped import prices 
had the effect of depressing the domestic industry's prices.   
7.111.   An increase in the volume of dumped imports might lead the domestic industry to lower 
prices to maintain market share.  This would be a rational response if the dumped imports were 
entering at lower prices than those of the domestic industry, which was not the case during the 
second half of the POI . Moreover, the increased volume of dumped imports entered a growing and 
highly price compet itive market which further calls into question the explanatory force of dumped 
imports for the decline in domestic like product prices.  Thus, as with the observed parallel price 
trends, the mere fact th at prices declined dramatically in the second half of the POI does not 
suffice, on its own, to explain how dumped import prices had the effect of depressing the domestic 
industry's prices.   
7.112.   We conclude that MOFCOM's consideration of price effects was not consistent with 
Articles  3.1 and 3.2 of the Anti -Dumpin g Agreement.  
                                               
180 Canada's first written submission, para. 102.  
181 Final Determination, (Exhibit CHN -1), para. 65.  
182 China's  first written submission, para. 93; second wr itten submission, paras. 41 -47; response to 
Panel question No. 13, paras. 24 -31. We note that China refers to the significant dumping margins as one of 
the factors considered in MOFCOM's consideration of price effects, but we find no mention of the margin of 
dumping in connection with price effects in  the Final Determination.  WT/DS483/R  
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  7.6  Whether MOFCOM's examination of the impact of dumped imports was consistent 
with Articles  3.1 and 3.4  of the Anti -Dumping Agreement  
7.6.1   Introduction  
7.113.   Canada claims that MOFCOM's examination of the impact of the dumped imports on the 
domestic indust ry is inconsistent with Articles  3.1 and 3.4 of the Anti -Dumping Agreement, 
because : 
a. MOFCOM failed to objectively examine the domestic industry's market share; and  
b. MOFCOM failed to properly analyse and interpret data relating to factors that showed an 
improvement in the state of the domestic industry.183 
7.114.   We will first address the legal standard under Article  3.4 and then examine each of 
Canada's allegations in turn.  
7.6.2   Legal standard under Articles  3.1 and 3.4  
7.115.   The text of Article  3.1 of the Anti -Dumping Agreeme nt is set out in paragraph  7.12 above. 
Article  3.4 reads as follows:  
The examination of the impact of the dumped imports on the domestic industry 
concerned shall include an evaluation of all relevant economic factors and indice s 
having a bearing on the state of the industry, including actual and potential decline in 
sales, profits, output, market share, productivity, return on investments, or utilization 
of capacity; factors affecting domestic prices; the magnitude of the margin  of 
dumping; actual and potential negative effects on cash flow, inventories, employment, 
wages, growth, ability to raise capital or investments. This list is not exhaustive, nor 
can one or several of these factors necessarily give decisive guidance.  
7.116.   Article 3.4 requires an investigating authority to examine the impact of the dumped 
imports on the domestic industry on the basis of an evaluation of all relevant economic factors and 
indices having a bearing on the state of the industry. T he evaluation of the relevant factors must 
respect the overarching principle set out in Article  3.1 concerning the objective examination of 
positive evidence .184 Neither Article  3.4 nor any other provision of the Anti -Dumping Agreement 
provides  any guidance regarding a specific methodology on how these factors and indices shall be 
evaluated.  
7.117.   The "evaluation" required under Article  3.4 suggests that an investigating authority must 
undertake an analysis and assessment of all relevant economic factors and indices.185 At the same 
time, there is no requirement that all relevant factors, or even most or a majority of them, reflect 
negative developments in order to point to an overall assessment of negative impact on the 
relevant domestic industry.186 The last sentence of Article  3.4 specif ies that no one or several of 
the relevant factors can necessarily "give decisive guidance". Article  3.4 requires an overall 
                                               
183 Canada's second written submission, paras. 95 -117. In its first written submission, Canada refers to 
the Appellate Body's interpretation of Article  3.4 in China – GOES  to claim that MOFCOM failed to evaluate the 
relationship between the dumped imports and the state of the domestic industry, and to examine whether 
subject imports explained the state of the domestic industry. (Canada's first written submission, paras. 108, 
110, and 111 ). From Canada's response to Panel question number 18, we understand that Canada refers to the 
interpretation of Article  3.4 developed in China – GOES to support its claims under Articles  3.1 and 3.4 that 
MOFCOM failed both to objectively evaluate the domes tic industry's market share, and to properly analyse and 
interpret data relating to factors that showed an improvement in the state of the domestic industry.  
184 Appellate  Body Reports, US – Hot-Rolled Steel , paras.  196 and 197; and China – HP-SSST (Japan) /  
China – HP-SSST (EU) , para.  5.203.  
185 Panel Report, China – X-Ray Equipment , para. 7.180 (referring to Panel Report, EC – Bed Linen 
(Article  21.5 – India) , para. 6.162).  
186 Panel Report, EU – Footwear (China) , para. 7.413 (referring to Panel Reports, EC – Tube or Pipe 
Fittings , para.  7.329; and EC – Bed Linen ( Article  21.5 – India) , para.  6.163).  WT/DS483/R  
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  evaluation of the information, in context, as well as an explanation of how the facts considered by 
an investigating authority supp ort its assessment.187  
7.118.   Article  3.4 does not require merely an examination of the state of the domestic industry in 
the abstract. Rather, it contemplates that an investigating authority must also "derive an 
understanding of the impact of  subject imports on t he basis of such an examination".188 Article  3.4 
"[is] concerned with the relationship between subject imports and the state of the domestic 
industry".189 In other words, Article  3.4 requires an examination of "the explanatory force" of the 
subject imports for  the state of the domestic industry.190 
7.119.   The examination under Article  3.4 is necessary to provide a "meaningful basis" for the 
authority's determination under Article  3.5 as to whether dumped imports are causing injury to the 
domestic industry.191 The examinat ion under Article  3.4 "contributes to , rather than duplicates", 
the determination required under Article  3.5.192 For this reason, "an investigating authority is 
required to examine  the impact of subject imports on the domestic industry", but it "is not 
required to demonstrate  that subject imports are causing injury to the domestic industry", which is 
an analysis specifically mandated by Article  3.5.193 The demonstration of the causal relationship 
under Article  3.5 requires the examination of "all relevant evide nce" as well as other factors 
causing injury to the domestic industry, and thus covers a broader scope than the examination 
under Article  3.4.194  
7.6.3   MOFCOM's evaluation  of market share  
7.120.   Canada contends that MOFCOM's evaluation of actual and potential decline in  market share 
was inconsistent with Articles  3.1 and 3.4. Therefore, the question before us is whether MOFCOM's 
evaluation of the domestic industry's market share, in the context of its overall examination of the 
state of the industry, was reasonable  and o bjective.  
7.121.   In the Final Determination, in its evaluation of relevant economic factors and indices, 
MOFCOM examined the domestic industry's market share and found that:  
During the Period of investigation, the market share of the Like Product of the 
Domestic  Industry was 19.68% in 2010; 18.09% in 2011, 1.59 percentage points less 
than 2010; and 26.22% in 2012, 8.13 percentage points more than 2011 .195 
Further, in its examination of the state of the domestic industry, MOFCOM described the domestic 
industry's mar ket share as having " remained low" .196, 197 
7.122.   There is no disagreement bet ween the parties on the level of the market share held by the 
domestic industry. Canada however takes issue with MOFCOM's characterization of that level of 
                                               
187 Panel Report, EU – Footwear (China) , para. 7.413 (referring to Panel Reports, Mexico – Olive Oil , 
para. 7.372; EC – Bed Linen , paras.  6.163 and 6.213; and EC – Tube or Pipe Fittings , para.  7.329).  
188 Appellate  Body Reports, China – GOES , para.  149; and China – HP-SSST (Japan) / China – 
HP-SSST  (EU), para.  5.205. (emphasis original)  
189 Appellate  Body Reports, China – GOES , para.  149; and China – HP-SSST (Japan) / Chin a – 
HP-SSST  (EU), para.  5.205.  
190 Appellate  Body Reports, China – GOES , para.  149; and China – HP-SSST (Japan) / China – 
HP-SSST  (EU), para.  5.205.  
191 Appellate  Body Reports, China – GOES , para.  154; and China – HP-SSST (Japan) / China – 
HP-SSST  (EU), para.  5.205.  
192 Appellate  Body Reports, China – GOES , para.  149; and China – HP-SSST (J apan) / China – 
HP-SSST  (EU), para.  5.205. (emphasis original)  
193 Appellate  Body Reports, China – GOES , para.  150; and China – HP-SSST (Japan) / China – 
HP-SSST  (EU), para.  5.205. (emphasis original)  
194 Appellate  Body Report, China – GOES , para.  150. 
195 Final Determination, (Exhibit CHN -1), p. 72.  
196 Final Determination, (Exhibit CHN -1), p. 76.  
197 We note that the parties disagree whether the correct translation of the description of  market share 
in the original Chinese, " shizhong … dimi ", is "remained low" (China's version) or "consistently depressed" 
(Canada's version). The Panel considers that it does not have to decide on which of the two translations is 
correct, given that Canada  disagrees with MOFCOM's characterization of the market share regardless of the 
translation. ( China's first written submission, paras. 108 and 109; and Canada's second written submission, 
paras. 100 and 101 ). WT/DS483/R  
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  market share as having "remained  low". Canada refers to MOFCOM's own findings that the 
domestic indu stry's market share increased by 6.54 percentage points during the POI.198 Canada 
also argues that MOFCOM assessed the amount or level of market sh are, but failed to consider 
trends in the m arket share and to evaluate whether there was actual and potential decline in 
market share, as required by Article  3.4.199 China responds that MOFCOM did examine trends in 
market share, referring to MOFCOM's finding  that during the POI the market share of th e like 
domestic product was " 19.68% in 2010; 18.09% in 2011, 1.59 percentage points less than 2010; 
and 26.22% in 2012, 8.13 percentage points more than 2011".200 China further submits that it 
was not unreasonable f or MOFCOM to characterize the market share as having "remained low", 
given that the domestic industry held approximately one quarter or less of the market during the 
POI.201  
7.123.   Having considered MOFCOM's finding regarding the market share as mentioned above, we 
make the following observations. MOFCOM e xamined trends and developments in market share 
over the POI on a year -on-year basis, stating that in 2011 market share slightly decreased, and in 
2012 increased by 8 percentage points compared with 2010. In its discussion of price effects, 
MOFCOM looked a t developments in market share on a half -yearly basis , acknowledged that the 
domestic industry's market share was generally increasing, and provided the following assessment 
of the changes in market share over the POI:  
The domestic market share of the like  product of the Domestic Industry was generally 
in an increasing trend: 18.00% in the first half of 2010; 21.36% in the second half of 
2010, 3.36 percentage points more than the first half of 2010; 17.54% in the first half 
of 2011, 3.82 percentage points l ess than the second half of 2010; 18.64% in the 
second half of 2011, 1.1 percentage points more than the first half of 2011; 26.71% 
in the first half of 2012, 8.07 percentage points more than the second half of 2011; 
and 25.73% in the second half of 2012, 0.98 percentage points less than the first half 
of 2012 and 7.73 percentage points more than the first half of 2010 at the beginning 
of the Period of investigation.202 
In the same context, MOFCOM noted that in the second part of 2011 the domestic industry 
increased its output in order to meet the growing demand for cellulose pulp in China, leading to an 
increase in domestic industry's sales, and consequently to an increase in market share. Further, 
MOFCOM stated that at the end of the POI, in the second part of 2012, the dumped imports  
"squeezed" the market share of the domestic like product, which declined from 26.71% to 
25.73 %.203 Given these findings and explanations by MOFCOM, we consider that MOFCOM did 
evaluate the trends and developments of the market sha re over the POI.  
7.124.   Canada argues however that MOFCOM's characterization of the market share as having 
"remained low"204 is not an objective evaluation of the facts. MOFCOM states:  
During the Period of investigation, the market share of the Like Product of the  
Domestic Industry remained low and its operation rate stayed at a low level.205 
7.125.   Moreover, MOFCOM also observed that the market for cellulose pulp in China had 
expanded.206 Demand had been growing over the POI, and this had induced the domestic industry 
to inc rease its production capacity, output and sales. We consider that the characterization of the 
domestic market share as "remained low" is not unreasonabl e in light of the fact that the demand 
for cellulose pulp had grown considerably, by 35.26% over the POI . In addition,  although domestic 
                                               
198 Canada's first written submission, paras.  112-114; second written submission, para. 105; and 
opening statement at the first meeting of the Panel, paras. 50 and 51.  
199 Canada's second written submission, paras. 103 and 104 (referring to Panel Report in China – X-Ray 
Equipment , paras. 7.201 and 7.216); opening statement at the first meeting of the Panel, para. 49; and 
opening statement at the second meeting of the Panel, para. 31.  
200 China's second written submission, para. 86 (referring to Final Determination, (Exhibit CHN -1), 
p. 72); opening statement a t the second meeting of the Panel, paras. 40 and 41.  
201 China's second written submission, para. 87.  
202 Final Determination, (Exhibit CHN -1), p. 63.  
203 Final Determination, (Exhibit CHN -1), p. 65.  
204 Final Determination, (Exhibit CHN -1), p. 76.  
205 Final Determi nation, ( Exhibit CHN -1), p. 76.  
206 Final Determination, (Exhibit CHN -1), pp. 65, 72, and 76.  WT/DS483/R  
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  production capacity had been increased to meet the increased demand, the domestic industry's 
market share had not increased commensurate with the available production capacity.  In this 
respect, by the end of the POI, the do mestic industry was using only half of its production 
capacity, its capacity utilization rate decreased from 66.01% in 2010 to 53.77% in 2011 and to 
52.35% in 2012.207 In these circumstances, we consider that MOFCOM's characterization of 
domestic industry ma rket share as having "remained low" is one a reasonable and objective 
investigating authority could reach in light of the evidence before it.  
7.126.   We therefore we conclude that Canada has failed to demonstrate that MOFCOM acted 
inconsistently with Articles  3.1 and 3.4 of the Anti -Dumping Agreement in its evaluation of the 
domestic industry's market share.  
7.6.4   MOFCOM's evaluation  of injury factors showing positive trends  
7.127.   Canada contends that MOFCOM failed to evaluate factors that showed an improvement in 
the state of  the domestic industry.208 Canada argues that, while MOFCOM mentioned these factors, 
it failed to assess them and explain the role, relevance and weight each factor had in the 
investigation.209 Canada asserts that apart from the discussion on the relationship between 
domestic demand and the construction and renovation of production facilities, MOFCOM did not 
explain the trends of the positive factors and how they related to each other and to the negative 
factors.210 In addition, Canada submits that MOFCOM failed to properly assess the role of "market 
share" and "investing and financing ability" in its overall evaluation of the state of the domestic 
industry.211 
7.128.   China responds that MOFCOM recognized that trends in several factors were positive, but 
concluded that dum ped imports forced prices to fall, leading to declines in profits, return on 
investments, and net cash flow.212 China submits that Article  3.4 calls for overall examination of 
the impact of the dumped imports on the domestic industry .213 However, while this ex amination 
includes an evaluation of all relevant factors and indices, it  does not require examination of the 
role, relevance, and weight of each individual factor.214 China refers to the last sentence of 
Article  3.4 to argue that the existence of positive fa ctors of injury did not preclude MOFCOM from 
concluding imports had an overall negati ve impact on the domestic industry .  
7.129.   We recall that Article  3.4 requires an investigating authority to derive an understanding of 
the impact of the dumped imports on the s tate of the domestic industry based on examination of 
all relevant factors and indices having a bearing on the state of the domestic industry. There is no 
requirement in Article  3.4 that all relevant factors, or even most or a majority of them, have to 
show negative developments in order to arrive at an understanding that dumped imports are 
having a negative impact on the domestic industry.215 At the same time, positive developments in 
other factors would require an investigating authority to provide a compel ling explanation of why 
and how, despite such positive trends, it ultimately concludes under Article  3.5 that the domestic 
industry is injured.216 The question before us is whether MOFCOM's evaluation of the positive and 
negative trends in examining the stat e of the domestic industry under Article  3.4 was reasonab le 
and sufficiently explained in the Final Determination.  
                                               
207 Final Determination, (Exhibit CHN -1), p. 73.  
208 Canada's first written submission, para.  118. 
209 Canada's first written submission, para.  119 (referring to Panel Re port, China – X-Ray Equipment , 
para. 7.216).  
210 Canada's second written submission, para. 111.  
211 Canada's argument, which refers to MOFCOM's failure to properly assess the role of factors "such as" 
those mentioned, suggests that MOFCOM's analysis was defici ent in other respects. However, Canada only 
specifically addressed the two factors mentioned, and therefore we will only make findings with respect to 
them.  
212 China's  first written submission, para.  114; second written submission, paras. 90 -92 (referring to 
Final Determination, (Exhibit CHN -1), p. 76).  
213 China's second written submission, para. 96.  
214 China's second written submission, para. 96.  
215 Panel Report, EU – Footwear (China) , para. 7.413 (referring to Panel Reports, EC – Tube or Pipe 
Fittings , para.  7.329; and EC – Bed Linen ( Article  21.5 – India) , para.  6.163).  
216 Panel Report, Thailand – H-Beams , para. 7.249.  WT/DS483/R  
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  7.130.   In its examination of impact MOFCOM specifically examined the following factors: domestic 
demand, production capacity, output, sales volume, market share,  sales revenue, employment, 
labour  productivity, and salary per capita  showed an increasing trend ; selling price, pre -tax profit, 
return on investment, operation rate, net cash flow from operating activities were decreasing; 
ending inventor ies grew, and investing and financing abiliti es were weakened.217 MOFCOM then 
provided an overall assessment of the state of the domestic industry218, in which it acknowledged 
that several injury factors showed positive developments, stating:  
[D]uring the Period of investigation, the demand of the domest ic cellulose pulp market 
was strong: the demand in 2011 was 8.67% more than 2010 and the demand in 2012 
was 24.47% more than 2011; the demand at the end of the Period of investigation 
was 35.26% more than that at t he beginning of the Period of investigatio n. With the 
increase of the demand of the domestic cellulose pulp market, the Domestic Industry 
constructed and renovated a number of production facilities; the production capacity, 
output, sales volume and sales r evenue of the Domestic Industry all showed an 
increasing trend and the employment, labor productivity and salary per capita all 
showed a small increase .219  
7.131.   We cannot agree with Canada's view that MOFCOM failed to provide any explanation 
regarding positive t rends in some factors .220 MOFCOM's Final Determination states that, due to the 
increase in demand, the domestic industry constructed and renovated a number of production 
facilities, which l ed to increases in production capacity, output, sales volume, sales r evenue, 
employment, labour  productivity, and salary per capita. Thus, MOFCOM provided a plausible and 
reasonable explanation of the positive trends in several factors  in that they were driven by the 
expansion of the market for cellulose pulp in China and t he domestic industry's expans ion.  
7.132.   Next, MOFCOM observed that prices of the domestic like product continued to decrease 
and the unit sales cost was in a decreasing trend generally. However, the degree of decline in 
prices was greater than the decline in th e unit sales costs, leading to a significant decline in the 
gross profits of the domestic industry.221 As a consequence, the domestic industry showed 
significant declines in pre -tax profits, and in fact suffered significant losses, declines in return on 
investments and net cash flow, and also significant increases in ending inventor ies.222 MOFCOM 
stated that domestic producers that submitted questionnaire responses reported reductions of 
output or shutdowns to some degree. Some of the companies had to sell thei r assets in order to 
maintain the operations, and some of them had closed down.223 MOFCOM noted that the domestic 
industry's market share remained low, and capacity utilization rate also remained at a low level.224 
Thus, MOFCOM explained its overall assessment  of dumped imports' negative impact on the 
domestic industry notwithstanding positive trends in some factors.  
7.133.   Canada submits that MOFCOM failed to properly assess the role of two "critical" injury 
factors, namely market share and ability to raise capital a nd investments  in its overall evaluation 
of the state of the domestic industry .225 Canada argues that MOFCOM improperly considered that 
these two factors supported a finding of injury. We have addressed Canada's arguments regarding 
the market share above and  found that MOFCOM's evaluation of mar ket share complies with the 
requirements of Articles  3.1 and 3.4. Regarding the ability to raise capital and investment, Canada 
argues that this factor should have been assessed through the prism of the increased produ ction 
capacity of the domestic industry and the investments that increase implies.226 According to 
Canada, had this been done, MOFCOM could not have found this factor to be indicative o f injury.  
                                               
217 Final Determination, (Exhibit CHN -1), pp. 71 -74. 
218 Final Determination, (Exhibit CHN -1), pp. 74 -76. 
219 Final Determination, (Exhibit CHN -1), p. 76.  
220 Canada's second written submission, para. 111.  
221 Final Determination, (Exhibit CHN -1), p. 76. The gross profit of the  domestic industry was 
1,775.31  RMB/tonne in the first half of 2011; -23.16 RMB/tonne (loss) in the second half of 2011; 
770.94  RMB/tonne in the first half of 2012; and -327.49 RMB/tonne (loss) in the second half of 2012.  
222 Final Determination, (Exhibit CHN -1), p. 76.  
223 Final Determination, (Exhibit CHN -1), p. 76.  
224 Final Determination, (Exhibit CHN -1), p. 76.  
225 Canada's second writt en submission, para. 114.  
226 Canada's second written submission, para. 114.  WT/DS483/R  
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  7.134.   MOFCOM noted in examining the impact of the dumped imports the  information received 
from the domestic industry during on -site verifications, and in the responses to questionnaires 
which indicated that some companies had to sell their assets in order to stay in operation, and 
some of them had to close down. MOFCOM als o noted that the investing and financi ng abilities of 
some companies were weakened and plans for capacity expansion were put aside, because banks 
terminated credits for investment plans due to declining profitability and increasingly worsened 
business situ ations.227 In our view, it was not unreasonable for MOFCOM to consider that the 
shutdown of companies and selling of assets were negative developments in the state of the 
domestic indus try, even in a situation of the domestic industry's increased capacity. T hus, in our 
view, MOFCOM's examination in this respect was that of a reasonable and objective investigating 
authority.228  
7.135.   We recall that under Article  3.4 the investigating authorities are not required to 
demonstrate  that the dumped imports are causing inju ry to the domestic industry, which is an 
analysis specifically mandated by Article  3.5. The evaluation of all relevant economic factors and 
indices under Article  3.4, including market share and the ability to raise capital and investments, 
must provide a m eaningful basis for the final determination whether injury is caused by dumped 
imports under Article  3.5.  
7.136.   Finally, we note China's argument that certain part s of the  examination  of the  impact of 
the dumped imports on the state of the domestic industry can  be found in the causation 
analysis.229 We recall that Article  3 "does not prescribe a specific methodology to be relied on by 
an investigating authority in its determination of injury ".230 Article  3 also does not provide a 
"prescribed template or format that an investigating authority must adhere to in making its 
determination of injury, provided that its determination comports with the disciplines that apply 
under the discrete paragraphs of Article  3".231 Thus, "it is for the investigating authorities in the 
first instance to determine the analytical methodologies that will be applied in the course of an 
investigation ."232 
7.137.   We have found above that MOFCOM evaluated the mandatory economic factors and indices 
set forth in Article  3.4. In doing so , it noted that some of the factors were negative and some were 
positive.  MOFCOM further considered these factors and indices in its demonstration of the 
causation  relationship between dumped imports and material injury.233 We recall that  Article  3 
contemplate s "a logical progre ssion of inquiry leading to an investigating authority's ultimate injury 
and causation determination" .234 Thus, it is unsurprising that the outcome of the investigating 
authorities'  examination under Article  3.4 is further discussed in the causation section of a final 
determination.   
7.138.   We therefore conclude that Canada has not established that MOFCOM acted inconsistently 
with Articles  3.1 and 3.4 of the Anti -Dumping Agreement in its examination of the impact of the 
dumped imports on the state of the domestic in dustry.  
7.7  Whether MOFCOM's demonstration of causation and examination of other factors 
causing injury were  consistent with Articles  3.1 and 3.5 of the Anti -Dumping Agreement  
7.7.1   Introduction  
7.139.   Canada claims that MOFCOM's demonstration of a causal relationship betw een the dumped 
imports and the injury to the domestic industry is inconsistent with Articles  3.1 and 3.5 of the 
Anti-Dumping Agreement. Canada also claims that MOFCOM failed to objectively examine several 
                                               
227 Final Determination, (Exhibit CHN -1), pp. 73 and 74. 
228 We also note that increased production capacity and overexpansion of the domestic industry is raised 
by Canada as an alleged  "other factor" causing injury to the domestic industry under Article  3.5 of the 
Anti-Dumping Agreement. We address this issue further in paragraph s 7.173 -7.185  of the Report.  
229 China's first writte n submission, paras. 102 -107; China's response to Panel question No. 17, 
paras.  54-62.  
230 Appellate Body Report s, China – HP-SSST ( Japan) / China – HP-SSST  (EU), para. 5.141; see also EC 
– Bed Linen ( Article  21.5 – India) , paras. 113 and 118.  
231 Appellate B ody Report s, China – HP-SSST ( Japan) / China – HP-SSST  (EU), para. 5.141.  
232 Panel Report, Thailand – H-Beams , para. 7.159.  
233 Part VI.1 "Causal Relationship " (Final Determination, (Exhibit CHN -1), pp. 77 and 78). 
234 Appellate Body Report, China – GOES , para.  128. WT/DS483/R  
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  other factors allegedly causing injury to the domes tic industry simultaneously with the dumped 
imports, namely: (a) changes in cotton and VSF prices; (b) domestic industry overexpansion, 
overproduction and inventory build -up; (c) non -dumped imports; and (d) shortage of cotton linter.  
7.140.   We will first address  the legal standard under Article  3.5 and then examine each of 
Canada's allegations in turn.  
7.7.2   Legal standard under Articles  3.1 and 3.5  
7.141.   As discussed above, Article  3.5 of the Anti -Dumping Agreement requires the demonstration 
of a causal relationship  between  the dumped imports and the material injury.235 It provides 
specifically that it must be "demonstrated that the dumped imports are, through the effects of 
dumping, as set forth in paragraphs 2 and 4, causing injury with the meaning of this Agreement". 
Article 3.5 further requires that the demonstration of the causal relationship "shall be based on an 
examination of all relevant evidence before the authorities". Article  3.5 also requires the 
investigating authority  to examine any other known factors that may b e simultaneously causing 
injury to the domestic industry and to ensure that the injuries caused by those other factors are 
not attributed to the dumped imports.236 It is well established that there are three relevant 
elements for determining when such a "non -attribution" analysis is required : the "other factor " 
allegedly causing injury must be: (a) known to the investigating authority; ( b) a factor other than 
dumped imports; and ( c) injuring the domestic industry at the same time as the dumped 
imports.237 If these elements are satisfied, the investigating authority "must appropriately assess 
the injurious effects of those other factors", which "must involve separating and distinguishing the 
injurious effects of the other factors from the injurious effects of the  dumped imports".238 
7.142.   Article  3.5 does not provide  any guidance on methodology for either of these 
requirements. Thus, there is no specific guidance as to how an investigatin g authority can or 
should demonstrate that there is a causal link between dumped impo rts and injury, or how it can 
or should ensure that it does not attribute to the dumped imports injuries caused by a known 
"other factor".239 Various methods are used by investigating authorities for the required 
demonstration of a causal link and examinatio n of other factors and assurance of non -attribution. 
While a numb er of panel and Appellate Body reports have reviewed the decisions of investigating 
authorities in these respects, they have focused on the specific facts, analysis and conclusions, 
rather th an on the methods of analysis relied upon, in the abstract. Thus, in the context of 
non-attribution, prior decisions have generally focused on "a careful and in depth scrutiny" of the 
determinations made by the investigating authority in order to evaluate whether the investigating 
authority's explanations and conclusions are "such reasonable conclusions as could be reached by 
an unbiased and objective investigating authorit y in light of the facts and arguments before it and 
explanations given".240 
7.7.3   MOFCOM's de monstration of c ausation  
7.143.   In its Final Determination, MOFCOM found that significantly increased volumes of the 
dumped imports at decreasing prices depressed the prices of the domestic like product. In turn, 
the depressed price of the domestic like product l ed to a continuous decline in the domestic 
industry's pre -tax profit, return on investments and net cash flow from operating activities. Since 
the degree of decline in the domestic like product's prices was greater than the degree of decline 
in unit sales costs, profitability declined, and at the end of the POI the domestic industry was 
showing serious losses. In addition, the domestic industry's market share and capacity utilization 
rate were low, and inventories increased over the POI. Based on all of the se factors, MOFCOM 
                                               
235 See above paras.  7.23-7.27. 
236 Panel Report, EU – Biodiesel (Argentina) , para.  7.438; Appellate Body Report, EU – Biodiesel 
(Argentina) , para. 6.125 (referrin g to Appellate Body Reports in China – HP-SSST (Japan)  / China – 
HP-SSST  (EU), para.  5.283 ; and China – GOES , para.  151). 
237 Panel Report, EU – Biodiesel (Argentina) , para.  7.438  (referring to Appellate Body Report, EC – Tube 
or Pipe Fittings , para. 175). 
238 Panel Report, EU – Biodiesel (Ar gentina) , para.  7.438  (referring to Appellate Body Report s, US – 
Hot-Rolled Steel , para.  223; EC – Tube or Pipe Fittings , para. 188; China – GOES , para.  151; and China – 
HP-SSST (Japan)  / China – HP-SSST (EU) , para.  5.283 ). 
239 Panel Report, EU – Biodiesel ( Argentina) , para.  7.439.  
240 Panel Report, EU – Biodiesel (Argentina) , para.  7.439 (referring to Panel Reports, EU – 
Footwear  (China) , para . 7.483; and EC – Salmon (Norway) , para.  7.655).  WT/DS483/R  
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  determined that during the POI the dumped imports of cellulose pulp caused material injury to the 
domestic industry producing  the like product.241  
7.144.   Canada argues that MOFCOM's causation analysis is based on flawed volume and price 
effects analyses and therefore is necessarily inconsistent with Articles  3.1 and 3.5.242 In the 
alternative, Canada submits that MOFCOM failed to demonstrate how dumped imports actually 
caused injury to the domestic industry, given that the dumped imports' market sh are did not 
change  considerably, the prices of dumped imports were significantly higher than those of the 
domestic like product and the volume of sales of the domestic like product increased more than 
those of the dumped imports.243  
7.145.   China responds that MOFC OM's causation analysis was based on an objective examination 
of positive evidence demonstrating a dramatic increase in the volume of dumped imports in 
absolute terms, increased market share of the dumped imports and declining prices of the 
domestic like p roduct, in parallel with the declining prices of the dumped imports.244 China submits 
that documents examined by MOFCOM during the verification showed that domestic producers 
were forced to lower their prices to maintain sales in the Chinese market.245 China a rgues that 
MOFCOM also careful ly considered the economic factors and indices concerning the state of the 
domestic industry that showed the domestic industry suffered material injury. It found that, due to 
the dumped imports, the domestic industry had to re duce significantly the prices of the like 
product, resulting in a significant decline in the profitability and a sharp decline in the pre -tax 
profit and return on investments of the domestic industry.246  
7.146.   Canada's claim under Article  3.5 regarding MOFCOM's c ausation analysis is dependent in 
part on its claims under  Articles  3.2 and 3.4. We have found ab ove that China acted inconsistently 
with Articles  3.1 and 3.2 of the Anti -Dumping Agreement in its consideration of the effect of the 
dumped imports on prices.247 In particular, we found that MOFCOM failed to adequately explain 
both the role of parallel price trends in its consideration  of price depression and how the effect of 
dumped imports was to depress domestic prices in a situation where dumped import prices  were 
higher than those of the domestic like product during the second part of the POI. Thus, to the 
extent that MOFCOM merely relied on its con sideration of price effects under Article  3.2 in 
demonstrating causation, we conclude that its demonstration of causation was  inconsistent with 
Articles  3.5 and 3.1.248  
7.147.   In its demonstration of causation, MOFCOM specifically acknowledged that the price of the 
dumped imports was higher than the price of the domestic like product.249 MOFCOM found that 
starting from the se cond half of 2011 until the end of the POI, the prices of the dumped imports 
decreased continuously and the volume of the dumped imports increased quickly, which forced the 
domestic industry to decrease its prices, and concluded that the dumped imports dep ressed the 
price of the like domestic product.250 Even though MOFCOM acknowledged that the dumped 
imports were priced higher in the first half of 2011, it did not explain  how, the dumped imports 
depressed domestic like product prices, thereby contributed to causing material injury to the 
domestic industry , when the decreasing prices of the dumped imports  remained higher than the 
price of the domestic like product during the remainder of the POI . Therefore, in light  its flawed 
price effects analysis and conclu sions, MOFCOM has failed to demonstrate that the dumped 
imports caused injury to the domestic industry through their price effects.  
                                               
241 Final Determination, (Exhibit CHN -1), p. 77.  
242 Canada's first writte n submission, paras. 10 and 48; second written submission, paras. 119 -121. 
243 Canada's first written submission, paras. 125 -138; second written submission, para.  122. 
244 China's first written submission, para s. 123, 127,128, and 129 (referring to Final Deter mination, 
(Exhibit CHN -1), pp. 59, 63-66, 77, and 78); second written submission, paras. 9, 79, and 80.  
245 China's fir st written submission, para. 129  (referring to Final Deter mination, (Exhibit CHN -1), p. 65 ). 
246 China's first written submission, paras. 127 -134; second written submission, para. 82.  
247 See section 7.5 above.  
248 In this regard, we recall the panel's statement in China – Autos (US)  that "i t would be difficult, if not 
impossible, to make a determination of causation co nsistent with the requirements of the Articles  3 … in a 
situation where an important element of that determination, th e underlying price effects analysis, is itself 
inconsistent with the provisions of [the Anti -Dumping Agreement]." (Panel Report, China – Autos (US), 
para. 7.327 ). 
249 Final Determination, (Exhibit CHN -1), p. 77.  
250 Final Determination, (Exhibit  CHN-1), pp. 77 and 78.  WT/DS483/R  
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  7.148.   Turning to the role of the volume of dumped imports in MOFCOM's demonstration of 
causation, we recall our conclusion above t hat MOFCOM did not act inconsistently with Article  3.2 
of the Anti -Dumping Agreement in its consideration of whether there was a significant increase in 
the volume of dumped imports.251 In our view, MOFCOM did not rely on the increased volume of 
imports as a n independent causal factor. Rather, we understand MOFCOM to have relied on a 
significant increase in the volume of dumped imports in absolute terms in its consideration of the 
effects o f dumped imports on prices, and its conclusion that the dumped imports  caused material 
injury.252 However, MOFCOM failed to explain how parallel declining price trends, even considered 
in conjunction with the increased volume of dumped imports, played a role in price depression and 
thus contributed to causing material injury.  
7.149.   In its demonstration of causation, MOFCOM noted the "significant growth" in the volume of 
the dumped imports, and that the proportion of the dumped imports in the total imports was 
high.253 MOFCOM relied on the "impact brought by the significant growth of t he quantity" of the 
dumped imports to explain the continuous price decline of the domestic like product since the 
second half of 2011, which in turn led to negative developments in the state of the domestic 
indus try, including decline in profitability, ret urn on investment and net cash flow from operating 
activities.254 Thus, MOFCOM's causation determination relies on both the volume and price effects 
of dumped imports. Nothing in MOFCOM's Final Determination suggests that it took the view that 
the significan tly increased volume of dumped imports alone was a sufficient basis to conclude that 
those imports caused material injury . We fail to see, and MOFCOM failed to explain, the relevance 
of the "high proportion" of total imports accounted for by the dumped imp orts, to its causation 
demonstration .255 In this context, we note that while the volume of dumped imports increased by 
43.82% over the POI, demand for cellulose pulp in the Chinese market also increased, by 35.26% 
in the same period.256 Had MOFCOM considered t he increased volume of dumped imports alone to 
be sufficient to demonstrate a causal relationship to material injury , we would have expected some 
discussion of the significance of that increase in the context of increasing market demand.  
7.150.   MOFCOM also refer red to the increase in the market share of the dumped imports over the 
POI in its assessment of causal link, an increase of 1.3 percentage points.257 In this regard, we 
note that the domestic industry's market share also increased, by 6.5 percentage points258, while 
the market share of non -dumped imports increased by 6.7 percentage points  during the same 
period.259 The increase in the market share of non -dumped imports, which were sold at prices 
close to those of the dumped imports, was not addressed by MOFCOM in  the context of its 
demonstration of a causal relationship between dumped imports and material injury .260 However, 
we would have  expected a reasonable and objective investigating authority to at least consider in 
these circumstances the possible role of non -dumped imports in the price depression MOFCOM 
found to have been contributing to causing material injury to the domestic industry.  
                                               
251 See section 7.4 above.  
252 Final Determination, (Exhibit CHN -1), pp. 63 -66. 
253 Specifically, MOFCOM s tated:  
The statistical data of China Customs showed that during the Period of 
investigation, the quantity of the dumped imported product showed the significant 
growth in general, 43.82% more at the end of the Period of investigation than at 
the beginning of the Period of investigation. In addition to the continuous growth of 
the quantity of import, the proportion of the quantity of the dumped imported 
product to the total quantity of the imported cellulose pulp in China always 
remained high: 49.32% in 2010 , 42.77% in 2011 and 43.96% in 2012.  
(Final Determination, (Exhibit CHN -1), p. 77)  
254 Final Determination, (Exhibit CHN -1), p. 78.  
255 In this regard, we note that dumped imports accounted for just under half of total imports 
throughout the POI, and the volu me of non -dumped imports was argued to be, and considered by MOFCOM, as 
an "other factor " causing injury to the domestic industry simultaneously with the dumped imports.  
256 Final Determination, (Exhibit CHN -1), pp. 76 and 77.  
257 Final Determination, (Exhibit  CHN-1), p. 77.  
258 Final Determination, (Exhibit CHN -1), p. 72.  
259 Apparent Market and Domestic Production Tables, (Exhibit CAN -28), p. 2; Canada's opening 
statement at the first meeting of the Panel, para. 36; and China's response to Panel question No. 37, table B.  
260 MOFCOM did address the allegedly injurious impact of the non -dumped imports on the domestic 
industry as an "other  factor" in its non -attribution analysis. Canada's claim in this regard is discussed below.  WT/DS483/R  
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  7.151.   We therefore conclude  that MOFCOM failed to demonstrate a causal relationship between 
the dumped imports and the injury to t he domestic industry consistently with Articles  3.1 and 3.5 
of the Anti -Dumping Agreement.  
7.152.   We consider that the above findings are a sufficient basis for us to conclude that China has 
failed to act consistently with its obligations under the Anti -Dumping A greement in connection with 
the anti -dumping measure at issue in this dispute.  However, as it may provide some useful 
guidance in the context of implementation of any DSB recommendation in this dispute, we go on 
to consider Canada's claims regarding non -attribution.   
7.7.4   MOFCOM's examination of other known factors allegedly causing injury and 
non-attribution  
7.7.4.1   Cotton and VSF prices  
7.7.4.1.1   Introduction  
7.153.   Canada  contends that MOFCOM failed to properly examine positive evidence submitted by 
the interested parties concerning  the effects of changes in cotton and VSF prices and failed to 
separate and distinguish their injurious effect on the domestic industry from the impact of the 
dumped imports.261  
7.154.   The import ed product at issue in the underlying investigation, cellulose pulp, is made from 
wood, cotton, or bamboo as a principal input, and is in turn the primary raw material in the 
production of VSF, which is used by the textile industry. The interested parties argued that since 
VSF is a close substitute for cotton fibre, the pri ce of VSF is highly correlated with the price of 
cotton.262 In 2010 -2011, due to a global supply shortage of cotton caused by cotton crop failures, 
global cotton price increased significantly, to historically high levels, leading to high demand for 
VSF and a  similar increase in VSF prices.263 The increased demand for VSF stimulated demand for 
cellulose pulp and an increase in prices of cellulose pulp during the first part of the POI.264 The 
Chinese government introduced a policy, based on environmental concerns, limiting cotton 
production in China and favouring VSF production, which also contributed to increased demand for 
VSF in China.265 However, in the second part of the POI, starting from the second half of 2011, 
additional supplies  of cotton became available an d global cotton prices started to decline.266 
Consequently, the price  of VSF also began to fall, leading to a decline in the price of cellulose 
                                               
261 Canada's first written submission, par a. 159. 
262 Fortress Specialty Cellulose Inc., Response to MOFCOM's Preliminary Determination on the 
Anti-Dumping Investigation against Imported Dissolving Pulp, (Exhibit CAN -17), p. 12; Fortress Specialty 
Cellulose Inc., Injury Brief, Industry Injury Invest igation for the A nti-Dumping Investigations Against Cellulose 
Pulp, 5 September 2013, (Exhibit CAN -13), p. 2; and American Forest and Paper Association, Anti -Dumping 
Investigation on Imports of Cellulose Pulp, Comments on Industry Injury Investigation, 24 September 2013, 
(Exhibit CAN -10), p. 8.  
263 Fortress Specialty Cellulose Inc., Response to MOFCOM's Preliminary Determination on the 
Anti-Dumping Investigation against Imported Dissolving Pulp, (Exhibit CAN -17), p. 12; Fortress Specialty 
Cellulose Inc., Inju ry Brief, Industry Injury Investigation for the Anti -Dumping Investigations Against Cellulose 
Pulp, 5 September 2013, (Exhibit CAN -13), p. 2; American Forest and Paper Association, Anti -Dumping 
Investigation on Imports of Cellulose Pulp, Comments on Indust ry Injury Investigation, 24 September 2013, 
(Exhibit CAN -10), pp. 9 and 10; and Rayonier Performance Fibers, LLC., Anti -Dumping Investigation on 
Imports of Cellulose Pulp, Comments Regarding Material Injury and Causality, 29 July 2013, (Exhibit CAN -12), 
p. 16. 
264 Fortress Specialty Cellulose Inc., Response to MOFCOM's Preliminary Determination on the 
Anti-Dumping Investigation against Imported Dissolving Pulp, (Exhibit CAN -17), p. 12; and Rayonier 
Performance Fibers, LLC., Anti -Dumping Investigation on Impor ts of Cellulose Pulp,  Comments Regarding 
Material Injury and Causality, 29 July 2013, (Exhibit CAN -12), p. 17.  
265 Rayonier Performance Fibers, LLC., Anti -Dumping Investigation on Imports of Cellulose Pulp, 
Comments Regarding Material Injury and Causality, 2 9 July 2013, (Exhibit  CAN-12), p. 16; and American 
Forest and Paper Association, Anti -Dumping Investigation on Imports of Cellulose Pulp, Comments on Industry 
Injury Investigation, 24 September 2013, (Exhibit CAN -10), p. 10.  
266 American Forest and Paper Ass ociation, Anti -Dumping Investigation on Imports of Cellulose Pulp, 
Comments on  Industry Injury Investigation, 24 September 2013, (Exhibit CAN -10), pp. 11 and 12; and 
Multi-Client Study: Outlook for Global Dissolving Pulp Market 2011, (Exhibit CAN -6) (BCI),  p. 3. WT/DS483/R  
BCI deleted, as indicated  [***]  
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  pulp.267 Interested parties argued that the dramatic decline in prices of cotton and VSF from 2011 
to the second hal f of 2012 pulled down the price of the cellulose pulp in the domestic market.268 
7.155.   MOFCOM discussed the effect of both cotton and VSF prices in the  section of the Final 
Determination concerning  its consideration of the effect of dumped imports on domestic pric es, 
and did not specifically address these prices in the  section of the Final Determination concerning  
non-attribution of injury to "other factors" allegedly causing injury to the domestic industry. The 
Anti-Dumping Agreement does not provide any guidance as to the structure of an investigating 
authority's final determination. Nor does compliance with the requirements of the Anti -Dumping 
Agreement require any particular order of analysis, or that aspects of an investigating authority's 
analysis and determin ation be specifically linked to the specific requirements of that Agreement. In 
our view, while it is clear that an investigating authority must comply with the legal requirements 
set out in the Anti -Dumping Agreement, and that if challenged in dispute set tlement, such 
compliance must be demonstrable based on the relevant determinatio ns and underlying 
information in the record, a Member may rely on the entirety of the challenged determination, and 
refer to supporting information in the record, in doing so, regardless of where the relevant 
discussion, analysis, or conclusion appears in the determination.269 Of course, this does not mean 
that a reviewing panel can be expected to comb through the determination to find the relevant 
aspects o f the investigating aut hority's discussion, analysis, or conclusion, or that a defending 
Member can cobble together an analysis from disparate elements in the determination. But it does 
mean that simply because an explanation for a particular analytical approach or conclusion is  set 
out in one part of a determination in the context of one aspect of the analysis does not mean that 
it cannot be considered, if relevant, with respect to a different aspect of the analysis addressed 
principally in another part of the determination. The refore, the question before us is whether 
MOFCOM complied with the non -attributi on requirements of the Anti -Dumping Agreement, 
regardless of where the discussion China relies on in defending MOFCOM's determination  explicitly 
appears in the Final Determinat ion.  
7.7.4.1.2   Cotton prices  
7.156.   MOFCOM found that "the cotton price was not the main factor that determined the price of 
viscose fiber".270 MOFCOM based its conclusion on several considerations. First, MOFCOM found 
that, due to differences in the properties of the produ cts, there is no necessary connection 
between VSF and cotton prices. Second, MOFCOM found that due to government intervention in 
the Chinese market for cotton, specifically quotas and policies to protect cotton prices, changes in 
the price of cotton were n ot the main factor affecting the price of VSF or cotton cellulose pulp. As a 
result of these interventions, while cotton prices fluctuated on the international market, cotton 
prices in China were higher and more stable than the international prices.271 Finally, MOFCOM 
determined that because the cellulose pulp under investigation included all cellulose pulp products, 
including wood - and bamboo -based cellulose pulp, and not only cotton -based cellulose pulp, the 
price of cotton was not the primary factor affect ing the prices of the domestic like product. In this 
regard, MOFCOM noted that during the POI sales of wood and bamboo cellulose pulp reached 
nearly 70% of the total sales volume of the like product.272  
7.157.   Canada argues that MOFCOM failed to objectively examin e the relationship between the 
prices of cotton, VSF, and cellulose pulp.273 Canada contends that MOFCOM failed to consider 
evidence submitted by several interested parties regarding the effect of global cotton prices; 
instead MOFCOM focused on government -supported domestic cotton prices in China.274 Canada 
                                               
267 Cosmo Specialty Fibers, Inc., Anti -Dumping Investigation on Imports of Cellulose Pulp, Argument of 
no Injury, 4 July 2013, (Exhibit CAN -11), p. 29; and Rayonier Performance Fibers, LLC., Anti -Dumping 
Investigation on Imports of Cellulose Pulp, Com ments Regarding Material Injury and Causality, 29 July 2013, 
(Exhibit CAN -12), p. 18.  
268 Fortress Specialty Cellulose Inc., Response to MOFCOM's Preliminary Determination on the 
Anti-Dumping Investigation against Imported Dissolving Pulp, (Exhibit CAN -17), p. 13; and American Forest 
and Paper Association, Anti -Dumping Investigation on Imports of Cellulose Pulp, Comments on Industry Injury 
Investigation, 24 September 2013, (Exhibit CAN -10), p. 9.  
269 E.g. Panel Report, EU – Biodiesel (Argentina) , para. 7.526.  
270 Final Determination, (Exhibit CHN -1), p. 67.  
271 Final Determination, (Exhibit CHN -1), p. 67.  
272 Final Determination, (Exhibit CHN -1), p. 67.  
273 Canada's second written submission, paras. 131 -133. 
274 Canada's first  written submission, para.  150. WT/DS483/R  
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  submits that MOFCOM failed to explain how any distinction between products is relevant to the 
question of whether viscose fibre is a substitute for cotton, referring to the submissions of 
interested parties suggesting that viscose fibre is a close substitute for cotton fibre.275 Canada 
argues that cotton prices affected VSF prices, and in turn, prices of all cellulose pulp, regardless of 
whether it was produced using wood, bamboo, or cott on linter. Therefore Ca nada contends that 
the fact that sales of bamboo - and wood - based cellulose pulp, at their peak, accounted for 70% of 
the total sales volume of cellulose pulp does not support MOFCOM's finding with respect to the 
effect of cotton prices.276  
7.158.   China submits th at MOFCOM examined the impact of cotton prices, even though it did not 
have to since the relevant question before it was whether VSF prices impacted the prices of 
cellulose pulp, and therefore MOFCOM did not have to consider further upstream factors that m ay 
have affected the prices of VSF.277 China asserts that MOFCOM properly relied on domestic cotton 
prices, rather than on international cotton prices, because the Chinese cotton market was affected 
by government intervention leading to domestic cotton price s that were higher and more stable 
than the international prices.278 China argues that MOFCOM reasonably concluded that there is no 
necessary relationship between VSF and cotton prices due to the different properties of the 
products an d "non -substitutability ", noting that VSF has superior dyeing and moisture absorption 
properties as compared to cotton fibre.279 China submits that cotton prices could not constitute the 
main factor affecting the domestic like product overall, because the do mestic cellulose pulp 
industry includes not only cotton -based pulp, but also wood - and bamboo -based pulp.280 
7.159.   As noted above, there is no prescribed methodology as to how a non -attribution analysis is 
to be conducted. Thus, the question before us with respect to Canada's claim rega rding the 
allegedly injurious effect of cotton prices is whether a reasonable and objective investigating 
authority could have concluded that changes in international cotton prices were not the main 
factor that determined the price of VSF, and therefore we re not the main factor affecting the prices 
of cellulose pulp.  
7.160.   We begin  by addressing Canada's argument that MOFCOM wrongly confined its analysis to 
the trends in cotton prices in China, while  the interested parties argued that VSF prices in China 
were aff ected by fluctuations of international cotton prices. MOFCOM found that cotton prices in 
China were more stable , and higher , than international cotton prices .  
7.161.   In this regard,  MOFCOM  reported the prices of cotton, VSF and cotton -based cellulose pulp 
in Chi na during  POI to be as follows:  
Table 5: Average annual prices of cotton, VSF, and cotton -based cellulose pulp in China  
POI 2010  2011  2012  
    
Cotton price (RMB/tonne)  
 19,563  24,269  19,327  
    
VSF price (RMB/tonne)  
 20,726  21,524 15,442  
    
Price of cotton cellulose pulp produced by 
domestic industry (RMB/tonne)  14,610  14,639  8,010  
 Source:  Final Determination, (Exhibit CHN -1), p. 67.  
MOFCOM stated that the prices of cotton in China "first increased and then decreased and bas ically 
remained unchanged", while prices of both VSF and cotton pulp were "in decreasing trend in 
                                               
275 Canada's fir st written submission, paras. 148 and 149; second written submission, 
paras.  134 and 135. 
276 Canada's second written submission, para. 140.  
277 China's second written submission, para. 114.  
278 China's first written submission, para.  148; second written submiss ion, paras. 117 and 118 (referring 
to Final Determination, (Exhibit CHN -1), p. 67).  
279 China's first written submission, para.  146; second written submission, para. 115 (referring to Final 
Determination, (Exhibit CHN -1), p. 67).  
280 China's first written subm ission , para.  150 (referring to Final Determination, (Exhibit CHN -1), p. 67).  WT/DS483/R  
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  general". MOFCOM concluded that during the POI "the cotton price was not the main factor that 
determined the price of viscose fiber, and it was not the main f actor that affect the price of cotton 
pulp of the Domestic Industry in Chinese market" .281  
7.162.   China contends that these findings suggest that domestic VSF and cot ton pulp prices did 
not follow the trends in domestic cotton prices.282 We do not consider it inappr opriate for MOFCOM 
to have focussed on domestic prices in its analysis . However, w e do not agree that a reasonable 
and objective investigating authority could reach the conclusion reached by MOFCOM on the basis 
of the domestic price information before it. It is clear from the data shown in Table 5 and depicted 
graphically in Chart 2 that the Chinese prices of cotton, VSF and cotton cellulose pulp were closely 
correlated, especially in t he second part of the POI, declining in 2012, at the same time as the 
prices of domestic like product were allegedly depressed by the dumped imports:  
Chart 2: Average annual prices of cotton, VSF, and cotton -based cellulose pulp in China  
 
Source: Final Determination, (Exhibit CHN -1), p. 67.  
Cotton pric es in China, like international cotton prices, increased significantly in 2011 and then 
dropped in 2012 to about the level they had been at the beginning of the POI. This could be 
viewed as suggesting that cotton prices in China were affected by the global  cotton shortage and 
consequent price increase, at least to some extent.  Yet MOFCOM simply did not address this 
possible impact of international cotton prices. Furthermore, even accepting that there are some 
differences in the physical properties  of the pr oducts , the data suggests that prices of VSF and 
cotton followed similar trends, especially in the second half of the POI . In our view,  this suggests 
that there is at least some relationship between the prices of these products, which casts doubt on 
MOFCOM 's conclusion, which rests on the finding that there is no ne cessary relationship between 
prices of cotton and VSF.  China's assertion that there was no general correlation between domestic 
cotton prices, VSF prices, and cotton cellulose pulp prices is beli ed by the data.  The domestic data 
that China relied on, in our view, shows the same general trend as international prices – cotton, 
VSF and cellulose pulp prices rose in the first half of the POI and declined in the second half. The 
correlation between the  domestic prices is less pronounced than that between the international 
market prices relied on by Canada in its arguments, but is by no means insignificant.   
7.163.   In addition , we note that although  the Chinese  cotton market was regulated by the 
government, international cotton prices would nonetheless appear  relevant to MOFCOM's analysis , 
because Chinese producers of the downstream product, VSF, competed globally and thus would 
seem likely to be  affected by the international market prices for cotton, as it affe cted other VSF 
                                               
281 Final Determination, (Exhibit CHN -1), p. 67.  
282 China's first written submission, para.  149; second written submission, para. 118 (referring to Final 
Determination, (Exhibit CHN -1), p. 67).  WT/DS483/R  
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  producers  and thus the world market in which Chinese VSF producers competed . Even though 
export sales were only [***]  of VSF production in China283, given the size of the Chinese 
market284 this is not insignificant. Moreover, export sales of VSF  increased rapidly over the POI, by  
[***] .285 To the extent that Chinese VSF producers purchasing domestic cellulose pulp for VSF 
production sought lower prices to enable them to compete better in export markets with producers 
whose input costs directly bene fitted from the decline in international cotton  prices, Chinese prices 
for cellulose pulp may have been affected by those declines as well.  MOFCOM's analysis fails to 
consider these interconnections at all.  
7.164.   In addition, MOFCOM considered that since cotton  is the raw material for cotton -based 
cellulose pulp only, prices for cotton had no effect on the prices of wood - and bamboo -based pulp. 
However, as MOFCOM recognized, all cellulose pulp, regardless of whether it is cotton -, wood - or 
bamboo -based, is used in the production of VSF.286 It seems to us likely that there is some 
correlation, or at least a connection between the prices of cellulose pulp made from the different 
inputs, as the cellulose pulp, regardless of input, all competes for sales to VSF produce rs. Thus, 
while prices for cotton may not have a direct effect on the prices of wood - and bamboo -based pulp 
as a raw material, the possible indirect effect through the competition for sales to downstream 
users, would seem to merit consideration, which MOFC OM did not undertake.  
7.165.   To conclude, we consider that whi le MOFCOM may have been justified in concluding that 
the international price of cotton was not the main factor affecting the prices of the downstream 
product VSF, MOFCOM's  explanations are insufficien t to demonstrate, in light of the arguments and 
evidence concerning international cotton prices, that they were not a factor affecting VSF prices, 
and consequently cellulose pulp prices. Thus, MOFCOM failed to properly examine whether cotton 
prices were an other factor causing injury to the domestic industry.  
7.7.4.1.3   VSF prices   
7.166.   MOFCOM found that "the change of the price of viscose fiber as a downstream product was 
not the direct cause of the decline of the Price of the Like Product of the Domestic Industry."287 
7.167.    Canada argues that cellulose pulp is primarily used to produce VSF, which creates a 
prima  facie presumption that the price of VSF has a causal impact on the price of cellulose pulp.288 
Canada submits that MOFCOM failed to explain how its discussion regarding gro wth in VSF output 
and subsequent growth in demand for cellulose pulp related to correlations between prices of 
viscose fibre and cellulose pulp.289 Canada contends that interested parties submitted evidence 
showing that there is a close link between cellulos e pulp and VSF prices; therefore MOFCOM's 
conclusion that interested parties failed to provide evidence of a direct link between decline in 
prices of VSF and cellulose pulp cannot stand.290  
7.168.   China responds that MOFCOM properly considered evidence submitted b y interested 
parties, but after objectively examining both this evidence and the supply and demand relationship 
between VSF and cellulose pulp, determined that VSF prices were not the direct cause of the 
changes in cellulose pulp prices.291 China submits tha t parallel trends in VSF and cellulose pulp 
prices on their own do not demonstrate that the downward trend in VSF prices led to the 
                                               
283 CCFGroup , China Viscose Industry Chain Report 2012, (February 2 013), (Exhibit CAN -4) (BCI), 
p. 35, table 20.  
284 China is "the predominant global producer and user of VSF". (Cana da's response to Panel 
question  No. 56, paras. 61 -66). 
285 Source: CCFGroup, China Viscose Industry Chain Report 2012, ( February 2013), 
(Exhibit  CAN-4) (BCI), p. 3 5, table 20.  
286 "The comments and opinions submitted by the downstream companies showed that wood pulp, 
cotton pulp and bamboo pulp were substitutable to each ot her when used as raw materials for the production 
of viscose fibers and the quality of viscose fibers made from any of the three types of pulp was the same." 
(Final Determination, (Exhibit CHN -1), p. 62).  
287 Final Determination, (Exhibit CHN -1), p. 69.  
288 Canada's second written submission, para. 145.  
289 Canada's first written submission, para. 154; second written submission, paras. 147 and 148.  
290 Canada's first written submission; para. 152; second written submission, paras. 143 and 144; 
response to Panel que stion No. 28, paras. 55 -63. 
291 China's first written submission, para.  152; second written submission, para. 119.  WT/DS483/R  
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  downward trend in cellulose pulp prices.292 For China, MOFCOM reasonably considered that the 
relationship between VSF output a nd domestic demand for cellulose pulp is  relevant to the analysis 
of the impact of VSF prices on cellulose pulp prices, and in this context, considering that domestic 
demand for cellulose pulp was strong as VSF output increased, and cellulose pulp supply c ould not 
meet the demand, the price of cellulose pulp should have remained stable or increased, but 
instead the price had declined.293 
7.169.   MOFCOM observed that VSF prices declined while VSF output increased rapidly, leading to 
increased  demand for cellulose pulp . It noted that while total domestic production capacity for 
cellulose pulp was equal to the total demand, total output could not meet th at demand.294 
MOFCOM relied on the following data:  
Table 6: Chinese VSF output, demand for cellul ose pulp, and total output of cellulose 
pulp 
POI 2010  2011  2012  
    
VSF output (tonnes)  
 1,955,500  2,125,000  2,645,000  
    
Total domestic demand for cellulose pulp  
(tonnes)  2,033,700  2,210,000  2,750,800  
    
Total output of all domestic producers of 
cellulose pulp (tonnes)  1,329,800  1,397,600  1,641,500  
 Source:  Final Determination, (Exhibit C HN-1), pp. 68 and 69 . 
7.170.   MOFCOM concluded that since there was strong demand for cellulose pulp in China and 
domestic supply could not meet the demand, the price for  cellulose pulp should have been stable, 
but instead it had declined.295 Therefore, the decline in VSF prices was not the direct cause of the 
decline in cellulose pulp prices. However, MOFCOM's analysis is based on the assumption that 
because domestic supply  could not satisfy demand for cellulose pulp, prices should have remained 
stable, which ignores the presence of a significant supply of imported cellulose pulp in the Chinese 
market, which might itself be expected to affect domestic prices.  Moreover, MOFCO M failed to 
explain how its conclusion diminishes the relevance of declines in VSF prices at the same time as 
cellulose pulp prices declined as a possible factor contributing to the decline in Chinese cellulose 
pulp prices.  
7.171.   Overall, we are of the view that  MOFCOM's explanations fail to engage satisfactorily the 
arguments of the interested parties concerning the allegedly injurious impact of international  
cotton prices and VSF prices . Given the fact that MOFCOM's determination of causation was to a 
large ext ent driven by the declining price of cellulose pulp , MOFCOM's explanations are thus 
insufficient to allow us to find that MOFCOM's conclusions in this regard were those of a reasonable 
and objective investigating authority in light of the evidence and argu ments before it . 
7.172.   We therefore conclude  that MOFCOM failed to properly examine the effects of cotton and 
VSF prices and failed to ensure that any injuries caused by cotton and VSF prices w ere not 
attributed to the dumped imports and the refore acted in consis tently with Articles  3.1 and 3.5 of 
the Anti -Dumping Agreement.  
7.7.4.2   Domestic industry overexpansion, overproduction , and inventory build -up 
7.173.   MOFCOM considered the impact of the expansion of domestic production capacity as an 
"other factor" causing injury to the  domestic industry. It concluded that the possible impact of the 
increased production capacity on the domestic cellulose pulp industry "cannot be excluded", but 
that the effect of this factor was not sufficient to break the causal link between the dumped 
                                               
292 China's first  written submission, para.  153 (referring to Canada's first written submission, 
para. 157); second written submission, para. 120 . 
293 China's first written submission, paras. 155 and 156; second written submission, paras. 121 -124. 
294 Final Determination, (Exhibit CHN -1), pp. 68 and 69.  
295 Final Determination, (Exhibit CHN -1), pp. 68 and 69.  WT/DS483/R  
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  imports and material injury to the domestic industry.296 In making this conclusion, MOFCOM 
observed that total production capacity of all domestic cellulose pulp producers increased during 
the POI, but "there was no serious excessive production capacity", sin ce the increased production 
capacity was almost equal to the demand for cellulose pulp in China.297 MOFCOM also examined 
the domestic industry's unit production costs and inventories, finding that unit production costs of 
the like domestic product decreased due mainly to declines in raw material costs, and that while 
the domestic industry's inventories increased, this was not directly caused by the increased output 
and expanded production capacity.298  
7.174.   Canada submits that MOFCOM acted inconsistently with Articles 3.1 and 3.5 by relying on 
data pertaining to all domestic cellulose pulp producers, which included data for domestic 
producers t hat were not part of the domestic industry as defined by MOFCOM, in addressing the 
issue of dome stic production capacity.299 Canada argues that this is not permissible under 
Article  3.5 and distorted the true magnitude of the capacity expansion of the domestic industry.300 
Canada submits that regardless of the data used, production capacity increased far in excess of 
growth in deman d. Canada submits that the examination of manufacturing costs reflects expenses 
incurred due to increased capacity, and that other costs are irrelevant for this analysis. Finally , 
Canada argues that the increased inventories and low capacity utilization ra te shows that domestic 
industry's overexpansion resulted in surplus capacity.301  
7.175.   China notes that MOFCOM acknowledged the significa nt growth of the domestic industry's 
production capacity and examined  the effect of this growth by assessing the domestic indu stry's 
costs. MOFCOM found that the unit production costs declined over the POI302, showing that 
expenditures for increased production capacity did not injure the financial performance of the 
domestic industry.303 China acknowledges that MOFCOM looked at both the production capacity of 
the domestic industry as defined by MOFCOM, and that of all Chinese producers of cellulose 
pulp.304 China submits that it was reasonable for MOFCOM to examine the relationship between the 
production capacity of all Chinese producer s of cellulose pulp and total domestic demand: since 
prices for cellulose pulp would be driven by total output and total demand , an overall expansion of 
production capacity could impact the domestic industry, if it caused the prices of the domestic 
industr y to decline.305 
7.176.   We begin by considering whether it was permissible for MOFCOM to rely on data pertaining 
to all Chinese cellulose p ulp producers in the context of examining production capacity as an 
alleged other factor causing injury to the domestic indust ry. We recall that Article  3.5 of the 
Anti-Dumping Agreement requires the investigating authorities to examine any known factors 
other than the dumped imports which are injuring the domestic industry at the same time as 
dumped imports, and not attribute th e injuries caused by these other factors to the dumped 
imports. It is clear to us that the domestic industry referred to in this aspect of Article  3.5 is the 
same domestic industry as to which material injury must be demonstrated to be caused by the 
dumped  imports, that is, the domestic industry producing the like product, as defined by the 
investigating authority in the investigatio n at issue. It is also clear to us that both the 
demonstration of causation of material injury to the domestic industry and th e ensuring that injury 
caused by other causal factors is not attributed to dumped imports should be based on information 
                                               
296 Final Determination, (Exhibit CHN -1), p. 82 . 
297 Final Determination , (Exhibit CHN -1), p. 81.  
298 Final Determination, (Exhibit CHN -1), p. 82.  
299 Canada's first written submission, para.  164; second written submission, para. 161.  
300 Canada's second written submission, para. 164. Canada notes that, accord ing to MOFCOM figures, 
total domestic demand increased by 35.26% during the POI, while the production capacity of the domestic 
industry increased by 122.49% and production capacity of all Chinese producers increased by 72.41%. Canada 
emphasizes that in 201 1 the production capacity of the domestic industry increased by 62.98%, whereas the 
production capacity of other domestic producers declined by 6.71%. Canada also notes that the domestic 
industry's production capacity increased by 62.98% during 2011 -2012, when the prices of the domestic 
industry were falling and being allegedly depressed and causing injury to the dom estic industry. (Canada's 
first written submission, paras. 163 -165; second written submission, paras. 165 and 166 (referring to Final 
Determina tion, (Exhibit CAN -3), p. 74) ). 
301 Canada's second written submission, para. 169.  
302 There was a small increase in manufacturing expenses in 2012, but this represented only 4% of total 
per unit sales costs. (China's response to Panel question No. 31, para. 9 6). 
303 China's first written submission, para.  164; second written submission, paras. 137 -139. 
304 China's second written submission, para s. 135 and 136. 
305 China's second written submission, paras. 141 -143; response to Panel question No. 59 . WT/DS483/R  
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  related to that same domestic industry, as defined.306 However , this basic principle does not 
preclude investigating authorities from con sidering and, in appropriate circumstances, relying on 
information pertaining to a larger group of domestic producers than the domestic industry as 
defined, so long as that reliance is properly justified.307 
7.177.   Considering the above, we have examined the partic ular arguments raised by the 
interested parties concerning the expanded production capacity of the domestic industry as an 
"other  factor" of injury to see whether there was a justification for MOFCOM to consider data for 
the larger group of domestic produc ers. It is apparent that interested parties raised two sets of 
arguments. First, that the expansion of production capacity caused  the cellulose pulp market to 
slow down, and second, that overcapacity affected domestic producers' costs. It is not clear, 
however, that these arguments are necessarily limited to only the situation of the domestic 
industry as defined by MOFCOM.308 In our view, it was not unreasonable for MOFCOM to consider 
the data pertaining to changes in the  production capacity of all domestic c ellulose pulp producers 
in addressing the first argument of the interested parties' regarding the slowdown in the Chinese 
cellulo se pulp market. Indeed, to focus only on the capacity of the domestic industry as defined in 
considering the impact of capacity  expansion of the Chinese market for cellulose pulp would be to 
ignore capacity that would necessarily be affecting that market overall. Thus, we do not consider 
that MOFCOM erred in considering overall domestic capacity in this context.  
7.178.   However, turning t o the conclusion MOFCOM drew on the basis of that information, it is not 
clear to us how the fact that, despite having increased,  production capacity of all domestic 
producers was generally in balance with domestic demand, explains how any injury caused by  that 
increase was not attributed to dumped imports. In this regard, we recall that MOFCOM recognized 
the increased capacity may have had "a certain impact" on the domestic industry, but discounted 
this impact because " during the Period of investigation, t he total output of the domestic cellulose 
pulp industry was always far less than the total domestic demand" and the situation tha t total 
supply of the domestic cellulose pulp industry exceeded the total demand did not occur.309 Again, 
                                               
306 In EC –Bed Line n, the panel observed that in the context of Article  3.4: 
[I]nformation concerning companies that are not within the domestic industry is 
irrelevant to the evaluation of the "relevant economic factors and indices having a 
bearing on the state of the indust ry" required under Article  3.4. This is true even 
though those companies may presently produce, or may have in the past 
produced, the like product, bed linen.  
(Panel Report, EC – Bed Linen , para. 6.182)  
Similarly, in EC – Fasteners (China) , in the context of a non -attribution analysis under Article  3.5, the 
panel noted the "fundamental principle " expressed in the above -quoted statement in EC – Bed Linen  and 
concluded:  
We see no reason why the same fundamental principle should not be adhered to in 
the contex t of analysis of causation, including the examination of other factors 
which may be causing injury to the domestic industry at the same time as imports.  
(Panel Report, EC – Fasteners (China) , para. 7.437)  
307 Like the panel in EC-Fasteners (China) : 
We do not  preclude the possibility that information for all producers might, in some 
circumstances, be an appropriate proxy for information specific to the domestic 
industry at issue, for instance where information for the industry is not available or 
not provided.  However, in such a situation, we woul d consider it imperative that 
the investigating authority explain why, in the particular case, it considers reliance 
on information to be appropriate, and how any weaknesses in the information have 
been taken into acco unt. 
(Panel Report, EC – Fasteners (Ch ina), fn 912)  
308 For instance, Fortress argued before MOFCOM that "over -expansion of production capacity of 
domestic producers further increased their marginal cost and resulted in the market slump" . (Fortress Specialty  
Cellulose Inc., Response to MOFCOM's Preliminary Determination on the Anti -Dumping Investigation against 
Imported Dissolving Pulp, (Exhibit CAN -17), p. 11). Cosmo submitted that "the increase in actual DC Pulp 
production capacity and potential production capacity added new supply or potential new supply to the global 
DC Pulp market which placed downward pressure on global prices for DC Pulp." ( American Forest and Paper 
Association, Anti -Dumping Investigation on Imports of Cellulose Pulp, Comments on Indust ry Injury 
Investigation, 24 September 2013, (Exhibit CAN -10), p. 12). Weyerhaeuser argued that by the second quarter 
of 2011 "capacity increases resulted in an almost immediate softening of the market". ( Weyerhaeuser, 
MOFCOM Presentation, 4 June 2013, (Exh ibit CAN -21), p. 6). Weyerhaeuser added that "as additional capacity 
came on, the market became heavily oversupplied and pricing continued to decrease down to the point where 
higher cost producers were losing money." ( Weyerhaeuser, MOFCOM Pres entation, 4 J une 2013, 
(Exhibit  CAN-21), p. 7).   
309 Final Determination , (Exhibit CHN -1), p. 81.  WT/DS483/R  
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  MOFCOM appears to have ignored the presence of substantial volumes of imports on the Chinese 
market, which supply could be expected to affect prices, and thus exacerbate the effect of 
increased capacity, resulting in a general situation of over -supply, with a consequent potentia l 
negative effect on prices.  
7.179.   Second, interested parties argued that overcapacity affected the domestic 
producers'  costs.  With regard to this argument, MOFCOM relied on information concerning the unit 
production costs of the domestic industry as defined. MOFCOM found that that the unit production  
costs for the domestic like product declined  over the POI , mainly as a result of declines in raw 
material costs : 
[D]uring the Period of investigation, the unit production cost of the Like Product of the 
Domestic In dustry increased first and then dropped, showing a decline in general. 
Through the analysis of the questionnaire responses for Domestic Producers , the 
Investigating authority found that compared to 2010, the unit production cost of the 
Like Product of the Domestic Industry reduced by 2,462.72 RMB/ton in  2012; among 
it, the direct material cost reduced by 2,597.03 RMB/ton, the direct labor cost reduced 
by 37.12 RMB/ton, the fuel and power cost reduced by 87.99 RMB/ton, and the 
manufacturing cost increased by  259.42 RMB/ton . It showed that the reduction of the 
raw material cost was the main cause of the decline of the unit production cost of the 
Like Product of the Domestic Industry.310  
7.180.   Canada argues that evidence before MOFCOM shows that manufacturing costs (w hich 
include capital expenses) increased, and asserts that other costs are irrelevant to the question of 
whether the increased production capacity of the domestic industry had an injurious impact on 
manufacturing costs.311 China responds that MOFCOM consider ed total per unit costs of the 
domestic industry and found that the total costs declined. China submits that MOFCOM also 
considered the cost structure of the domestic industry, including manufacturing costs , finding that 
the increase in manufacturing costs  in 2012 represented only 4% of total per unit sales costs. 
According to China, it reasonably concluded that an increase in  costs accounting for such a small 
proportion of the total costs could not have broken the causal link between the dumped imports 
and material injury.312 
7.181.   China submitted data from the record of the investigation regarding the components of 
unit production costs, including manufacturing costs:  
Table 7: Components of production cost of cellulose pulp in China  
POI 2010 2011  2012  
A. Direct Materials  (RMB/ton)  [***]  [***]  [***]  
    
B. Direct Labo ur (RMB/ton)  [***]  [***]  [***]  
    
C. Fuel and Power (RMB/ton)  [***]  [***]  [***]  
    
D. Manufacturing Costs (RMB/ton)  [***]  [***]  [***]  
    
A+B+C+D =Total Production Co st 
(RMB/ton)  [***]  [***]  [***]  
Source: China's response to Panel question No. 60, para. 38.  
7.182.   In our view, it was not unreasonable of MOFCOM to have focused on the decline in total 
production  costs, rather than increase in manufacturing costs in 2012, which  represented only a 
small proportion of total production costs, and did not affect the fact that total production costs 
declined by almost one third  over the POI. Canada may be correct that manufacturing costs are 
most directly relevant to the question of the effect of increased production capacity on the 
domestic industry . On the facts of this case, Canada's argument does not persuade us that 
                                               
310 Final Determination, (Exhibit CHN -1), pp. 81 and 82. (italics original, underlining added)  
311 Canada's second written submission, para. 168.  
312 China's second written submis sion, paras. 138 and 139; response to Panel question No s. 31, 
paras.  95 and 96  and 60, para. 39 . WT/DS483/R  
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  MOFCOM erred in focusing on the overall decline in production costs, and we therefore consider  
that MOFCOM's conclu sions in this regard are such as could have been reached by a reasonable 
and objective  investigating authority in light of the evidence and arguments before it.   
7.183.   MOFCOM also examined the increase in the domestic industry's inventories based on the 
data pro vided by the domestic producers:  
[T]he ending inventory of the Like Product of the Domestic Industry in 2012 was 
118,000 tons higher than 2011. Although the production capacity of the Like Product 
of the Domestic Industry in 2012 increased by 687,800 tons compared to 2011, the 
output of the Like Product of the Domestic Industry in 2012 increased by merely 
344,600 tons compared to 2011, while the domestic sales volume of the Like Product 
of the Domestic Industry in 2012 increased by 321,500 tons compared to 2011. It 
showed that, encouraged by the increase of 540,800 tons of the domestic demand in 
2012 compared to 2011, the Domestic Industry increased the output, but the 
increased part of the output due to the expansion of the production capacity was not 
the d irect cause of the increase of the ending inventory of the Like Product of the 
Domestic Industry.313  
MOFCOM set out the following information regarding domestic demand, production capacity, 
capacity utilization, output, sales, and inventories:  
Table 8: Domestic demand, capacity, output, sales volume, operating rate, and ending 
inventories  
POI 2010  2011  2012  
Total domestic demand for cellulose pulp (tonnes)  2,033,700  2,210,000  
+8.67%  2,750,800  
+24.47%  
Production capacity (tonnes)  800,000 1,092,100  
+36.51%  1,779,900  
+62.98%  
Output (tonnes)  528,100  587,200  
+11.19%  931,800  
+58.69% 
Domestic sales volume (tonnes)  400,200  399,800  
-0.1%  721,300  
+80.42%  
Operating rate  66.01%  53.77%  
-12.24  52.35%  
-1.42 
Ending Inventories  (tonnes)  66,400  102,300  
+54.07%  220,300  
+115.35%  
  Source: Final Determination, (Exhibit CHN -1), pp. 72 and 73.  
7.184.   In the overall evaluation of the state of the domestic industry, MOFCOM noted the 
significant increase in inventories, by 231.78% over the POI, as one of the "ne gative factors" 
showing material injury to the domestic industry. In the causation analysis, MOFCOM also stated 
that "the ending inventory increased continuously" .314 In this respect, Canada submits that 
MOFCOM's data shows that the domestic industry's outpu t was exceeding the volume of sales, and 
that this caused an increase in inventories.315 Indeed, the data show s that throughout the POI, the 
domestic industry's output increased roughly in line with increases in capacity, and exceeded its 
sales, resulting in  continued and significant increases in inventor ies. Thus, the data indicate s that 
the domestic industry increased production  capacity in excess of  the increase in  total domestic 
demand , which suggests that to the extent injury was manifested in increased inventories, 
capacity expansion played a role in that injury. MOFCOM failed to address this possibility, and 
indeed dismissed it altogether.   
7.185.   We therefore  conclude  that MOFCOM failed to adequately examine the domestic industry's 
overcapacity, overexpansion , and inventory build -up as other factors causing injury and failed to 
ensure that the injuries caused by these other factors were not attributed to the dumped imports , 
and therefore acted  inconsistently with Articles  3.1 and 3.5 of the Anti -Dumping Agreem ent.  
                                               
313 Final Determination, (Exhibit CHN -1), p. 82.  
314 Final Determination, ( Exhibit CHN -1), pp. 76 -78. 
315 Canada's  second written submission, para. 169.  WT/DS483/R  
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  7.7.4.3   Impact of non -dumped imports  
7.186.   With respect to the allegedly injurious impact of non -dumped imports316, MOFCOM looked 
at prices of dumped and non -dumped imports, and found  that there were no large differences 
between imported dumped and non -dumped produc ts in terms of price and quantity, but 
acknowledged that the dumped import s were generally better quality. MOFCOM noted that 
non-dumped imports constituted a significant proportion of total imports, and specifically discussed  
non-dumped imports from the largest sources, i.e.  South  Africa, Indonesia , and Sweden.  MOFCOM 
concluded that non -dumped imports did not break the causal link between the dumped imports 
and the material injury to the Chinese domestic industry .317 
7.187.   Canada  argues that MOFCOM's analysis is ba sed on a consideration of non -dumped 
imports in relation to the dumped imports.318 Canada submits that Article  3.5 requires an 
investigating  authority to examine the effect of the non -dumped imports on the domestic industry, 
not in relation to dumped imports .319 Canada contends that MOFCOM's analysis was subjective and 
biased, and  asserts that MOFCOM should have considered data on sales volumes, market share 
and price s of non -dumped imports and compared this data with those for the dumped imports and 
the domest ic industry. In addition, Canada submits that MOFCOM's examination of the 
non-dumped imp orts is flawed because MOFCOM failed to present any quantity or price data with 
regard to non -dumped imports, failed to support its statement regarding a quality differ ence 
between dumped and non -dumped imports with "positive evidence", and failed to present any 
explicit data to support its assertions with regard to imports from South Africa, Sweden, and 
Indonesia.320  
7.188.   China responds that MOFCOM conducted an objective exam ination of positive evidence 
with regard to the impact of non -dumped imports on the  state of the domestic industry. In 
particular, MOFCOM observed that non -dumped imports constituted a significant proportion  of total 
imports.321 It further examined the relat ionship between the p rices of dumped imports and 
non-dumped imports and concluded that th ere were no significant differences, albeit the dumped 
imports were generally of better quality.322 MOFCOM specifically addressed the relative prices and 
volume of non -dumped imports from South  Africa, Sweden , and Indonesia, major producers of 
cellulose pulp.323 
7.189.   We recall that Article  3.5 does not provide  any guidance regarding how a non -attribution 
analysis is to be conducted.  Therefore, we see no basis in the text to supp ort Canada's view that 
the methodology used by MOFCOM was impermissible. Nor do we see any basis in the text that 
would require an investigating authority to examine the effect of non -dumped imports on the 
domestic industry, and not in relation to dumped i mports. As discussed above, in the absence of 
any particular methodological requirements, t he question before us is whether MOFCOM 
sufficiently explained its conclusion that the effect of non -dumped imports did not break the causal 
link between the dumped imports and the material injury to the domestic industry, and thus 
whether this was a conclusion that could be reached by a reasonable and objective investigating 
authority on the basis of the evidence before it, and in light of the arguments made by the 
interested parties.  
7.190.   MOFCOM found that the share of the non -dumped imports in total imports was 50.68% in 
2010, 57.23% in 2011 and 56.04% in 2012.324 MOFCOM observed that there were no large 
differences in the quantity and prices of non -dumped imports  and dump ed imports. While the 
actual data regarding the volume and prices of non -dumped and dumped imports are not set out 
in the Final Determination , China provided the following information on the record in this regard:  
                                               
316 Imports  of cellulose pulp  not found to be dumped pursuant to the investigation.  
317 Final Determination, (Exhibit CHN -1), pp. 84 and 85.  
318 Canada's second written submission, para. 178.  
319 Canada's second written submission, para. 178.  
320 Canada's first written submissi on, para s. 172-174; second written submission, para. 179.  
321 China's first written submission, para. 169; second written submission, paras. 153 and 154.  
322 China's first written submission, para.  169; second written submission, paras. 153 -156. 
323 China's firs t written submission, para.  171. 
324 Final Determination , (Exhibit CHN -1), p. 84.  WT/DS483/R  
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  Table 9: Volume an d prices of dumped and non -dumped imports  
POI 2010  2011  2012  
Dumped imports (tonnes)  421,009.93  419,050.31  605,470.23  
Non-dumped imports (tonnes)  432,584.92  560,720.54  771,971.03  
Prices of dumped imports (US dollars)  1384.05  1946.96  1165.33  
Prices of n on-dumped imports (US dollars)  1378.17  1721.21  1051.75  
 Source:  China's response to Panel question No. 35, paras. 103 and 105.  
We observe that in 2010 the quantity of dumped and non -dumped imports was almost identical . 
During the rest of the POI , the volu me of non -dumped imports was greater than that of dumped 
imports, while t he prices of the non -dumped imports were lower. MOFCOM also stated that the 
dumped imports were generally of better quality than the non -dumped imports, which , China 
contends , suggest s that the dumped imports were in a stronger competitive position relative to the 
domestic like product than the non -dumped imports and the differences in prices would be 
mitigated by quality differences.325 While this explanation is not unreasonable, it doe s not appear 
in MOFCOM's Final Determination, which does not discuss this alleged relationship between 
competition, price, and quality. Thus, it is an ex post  explanation which we cannot take it into 
account in our evaluation of MOFCOM's determination.  
7.191.   MOFCOM specifically discussed the quantity and prices of non -dumped imports only from  
South Africa, Indonesia, and Sweden.326 China explains that these were the three largest sources 
of non -dumped imports.327 China provided data from the record of the investigati on on the volume 
of non -dumped imports from all sources in support of MOFCOM's conclusions on the impact of 
non-dumped imports.328 In our view, given that the non -dumped imports MOFCOM did not 
specifically discuss accounted for between 18% and 25% of total i mports over the POI, a 
reasonable and objective investigating authority would have to take these imports into account in 
its non -attribution analysis, which MOFCOM appears to have done in considering the total volume 
and prices of non -dumped imports . While  it might have been preferable had MOFCOM set out and 
discussed the data on the volumes and prices of non -dumped imports in its Final Determination in 
greater detail, the failure to do so is not in itself erroneous, as the data were in the record.   
Table 10: Volume of Dumped and Non -Dumped imports and share of total imports 
accounted for by countries other than South Africa, Sweden,  and Indonesia  
POI 2010  2011  2012  
Volume of dumped imports  421,009.93  419,050.31  605,470.23  
Volume of  non-dumped imports329 432,584.92  560,720.54  771,971.03  
Volume of non -dumped imports from South Africa, 
Sweden , and Indonesia*  273,363.38  321,713.66  419,322.73  
Volume of non -dumped imports from countries  other 
than South Africa, Sweden , and Indonesia  159,2 21.54  239,006.88  352,648.30  
Total imports*  853,594.85  979,770.85  1,377,441.26  
    
Share of total imports accounted of by countries  
other than South Africa, Sweden , and Indonesia * 18.65%  24.40%  25.60%  
 Source:  China's response to Panel question No. 37, table A.  
 * calculated by the Secretariat  
                                               
325 China' s response to Panel question No . 65, para. 56.  
326 Final Determination , (Exhibit CHN -1), p. 85 . 
327 China's response to Panel question No. 67, para. 60.  
328 China's response to Panel question No. 37, table A.  
329 China's  response to Panel question No. 35, para. 103.  WT/DS483/R  
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  7.192.   The data before MOFCOM suggests that the effect of the non -dumped imports on prices 
and consequently on the domestic industry was similar to that of the dumped imports  – the 
volumes and prices were similar, and mo ved similarly over the POI. MOFCOM found that the 
dumped imports were causing injury to the domestic industry . It would seem that non -dumped 
imports might therefore be having a similarly injurious effect on the domestic industry. Indeed, 
MOFCOM did not fin d that non -dumped imports did not have such an effect, but rather concluded 
that they did not break the causal link between the dumped imports and the injury to the domestic 
industry. However, there is little explanation of how MOFCOM reached this conclusion. Simply to 
state that MOFCOM did indeed separate and distinguish the injury or that non -dumped imports did 
not break the causal link , without further explanation,  does not suffice to persuade us that the 
investigating authority did in fact undertake the  necessary examination and reach an objective 
conclusion warranted by the evidence and arguments before it that injuries caused by non -dumped 
imports were not attributed to the dumped imports.  Taken together, the failure to specifically 
discuss non -dumped imports accounting for between 18% and 25% of  total imports over the POI, 
and the failure to explain how MOFCOM reached the conclusion that non -dumped imports, whose 
volume was greater than that of dumped imports throughout the POI and whose prices were be low 
those of the dumped imports in 2011 and 2012 when MOFCOM found that dumped imports were 
depressing domestic prices and causing injury, did not break the causal link between dumped 
imports and material injury, leads us to the view  that MOFCOM's conclusi ons were not such as 
could have been reached by a reasonable and objective  investigating authority in light of the 
evidence and arguments before it.   
Table 11: Market shares of domestic industry, dumped and non -dumped imports  
POI H1/2010  H2/2010  H1/2011  H2/2011  H1/2012  H2/2012  
Market share of like product of 
the domestic industry  18% 21.36%  17.54%  18.64%  26.71%  25.73%  
Market share of dumped 
imports  20.53%  20.88%  18.02%  19.91%  21.45%  22.57%  
Market share of other Chinese 
producers  38.35%  37.58%  23.71%  
Market share of non -dumped 
imports*  21.27%  25.36%  28.06%  
Total 100%  100%  100%  100%  100%  100%  
 Source: China's response to Panel question No. 37 , table B.  
 * calculated by the Secretariat  
Table 12: Prices of du mped and non -dumped imports  
 2010  2011  2012  
Prices of dumped imports 
(USD  Annual)  1384.05  1946.96  1165.33  
Prices of imports from 
South  Africa (USD Annual)   1049 1397 948 
Prices of imports from 
Indonesia (USD Annual)   1487 1717 1039 
Prices of imports f rom Sweden 
(USD Annual)   1404 1883 1104 
Prices of non-dumped imports 
from other countries 
(USD  Annual)  1436.75  1810.02  1084.35  
 Source:  China's response to Panel question No. 37 , table C.  
7.193.   We therefore  conclude that MOFCOM failed to adequately examine th e non -dumped 
imports as a factor other than dumped imports causing injury and failed to ensure that  the injuries 
caused by these imports were not attributed  to the dumped imports, and therefore acted 
inconsistently with Articles  3.1 and 3.5 of the Anti -Dumping Agreement .  WT/DS483/R  
BCI deleted, as indicated  [***]  
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  7.7.4.4   Shortage of cotton linter  
7.194.   During the investigation, interested parties argued that the domestic industry had a low 
rate of capacity utilization due to an insufficient supply of cotton linter, the main raw material for 
production of cotton -based cellulose pulp.330 MOFCOM addressed these arguments in its 
examination of the impact of the dumped imports on the domestic industry and concluded that the 
low capacity utilization rate, which MOFCOM considered an aspect of injury, was not caused by an  
insufficient supply of cotton linter.331 
7.195.   Canada argues that MOFCOM's concl usion that a shortage of cotton linter was not a cause 
of the domestic industry's low capacity utilization rate was erroneous because MOFCOM failed to 
objectively examine positive evi dence indicating that there were producers of other products using 
cotton  linter as a input, and that total cotton linter demand surpassed total cotton linter supply.332 
China asserts that MOFCOM conducted an objective examination of positive evidence regard ing the 
supply of cotton linter and found that the supply was sufficient and that the changes in supply of 
cotton linter were not the cause of the domestic industry's low capacity utilization rate and thus 
there was no need to separate and distinguish the effect of this factor from the injurious effect of 
dumped imports .333  
7.196.   MOFCOM noted that the domestic industry produced three types of cellulose pulp: wood -, 
bamboo -, and cotton -based cellulose pulp. Cotton linter is a raw material for the production of 
cotton-based cellulose pulp only.334 MOFCOM found that in 2012, the volume of wood - and 
bamboo -based cellulose pulp accounted for 70% to total sales of cellulose pulp. MOFCOM  
acknowledged that the output and price of cotton linter had a direct effect on producti on of 
cotton -based cellulose pulp, and that cotton linter was mainly use d by producers of cotton -based 
cellulose pulp. MOFCOM examined the total production capacity, output, and capacity utilization of 
cotton cellulose pulp producers and the domestic suppl y of cotton linter over the POI.335 Having 
considered the supply of cotton linter available on the market MOFCOM found that the capacity 
utilization rate of the producers of cotton -based cellulose pulp could have been higher had the full 
production of cotton  linter available been used by those pulp  producers, however, it stayed at a 
                                               
330 Canada's  first written submission, para. 178 (referring to Final Determination, (Exhibit CAN -3), 
pp. 75 and 76; Cosmo Specialty Fibers, Inc., Anti -Dumping Investig ation on Imports of Cellulose Pulp, 
Argument of no Injury, 4 July 2013, (Exhibit CAN -11), pp. 37 and 38; Rayonier Performance Fibers, LLC., 
Anti-Dumping Investigation on Imports of Cellulose Pulp, Comments Regarding Material Injury and Causality, 
29 July 2 013, (Exhibit CAN -12), p. 18; American Forest and Paper Association, Anti -Dumping Investigation on 
Imports of Cellulose Pulp, Comments on Industry Injury Investigation, 24 September 2013, (Exhibit CAN -10), 
p. 11; Weyerhaeuser, MOFCOM Presentation, 4 June 2 013, (Exhibit CAN -21), p. 8; Tangshan Sanyou Group 
Company Limited, Impact of "Anti -Dumping [Measures]" Against Imported Dissolving Pulp on the Viscose 
Industry , (Exhibit CAN -18), p. 3; and Xingda Chemical Fiber Co., Ltd. of the Tangshan Sanyou Group, Report 
on the Impact of Anti -Dumping Measures Applied to Imported Dissolving Pulp , (5 December 2013), 
(Exhibit  CAN-15), pp. 3 and 4).  
331 Final Determination, (Exhibit CHN -1), pp. 74 -76. 
332 Canada's first written submission, paras. 181, 182, and 185 (referring to  CCFGroup, China Viscose 
Industry Chain Report 2011, (March 2012), (Exhibit CAN -5) (BCI), p. 6; Multi -Client Study: Outlook for Global 
Dissolving Pulp Market 2011, (Exhibit CAN -6) (BCI) , pp. 4 and 8; and CCFGroup, China Viscose Industry Chain 
Report 2012, (February 2013), (Exhibit CAN -4) (BCI) , p. 6); second written submission, paras. 189 and 190 . 
333 China's first written submission, paras. 175 -180; second written submission, paras. 160 -167. 
334 In this regard, we note that  MOFCOM relied in its analysis on a u nit consumption ratio of 1 tonne of 
cotton -based cellulose pulp from approximately 1.3 tonnes of cotton linter. Canada disagrees with this ratio, 
and argues that the ratio should have been 1 tonne of cotton -based cellulose pulp from approximately 
[***]  tonnes of cotton linter. (Canada's first written submission, para. 186). We consider tha t the difference 
between the two ratios is so small that the use of Canada's proposed ratio would not have an impact on 
MOFCOM's analysis, and Canada has not demonstrated otherwise.  
335 MOFCOM found that total production capacity of the domestic cotton cellulose pulp industry was 
1.4 million tonnes in 2010, 1.4 million tonnes in 2011, and 1.8 million tonnes in 2012; total output of the 
domestic cotton cellulose pulp industry was 720,000 tonnes in 2010, 810, 000 tonnes in 2011, and 
830,000  tonnes in 2012; capacity utilization rate of cotton cellulose pulp industry was 51.43% in 2010, 
57.86% in 2011, and 46.11% in 2012. Th e total domestic supply of cotton li nter was 1.44 million tonnes 
in 2010, 1.35 million tonnes in 2011, and 1.64 million tonnes in 2012.  (Final Det ermination, (Exhibit CHN -1), 
p. 75). WT/DS483/R  
BCI deleted, as indicated  [***]  
- 62 - 
 
  lower rate.336 MOFCOM concluded that the low capacity utilization rate of the domestic industry 
was therefore not caused by an insufficient supply of cotton linter.337 
7.197.   Canada argues t hat MOFCOM failed to consider a report that had been submitted during 
the investigation  indicating that there were producers of products other than cotton -based 
cellulose pulp using cotton linter as an input, and that overall, cotton linter demand was high er 
than available supply.338 China asserts that MOFCOM considered this evidence and found that the 
supply of cotton linter was sufficient. China notes that the  report referred to by Canada supports 
this conclusion, stating that the shortage of cotton linters  was covered by linters made of waste 
cotton and that "the supply in 2012 was relatively sufficient".339  
7.198.   According to the data referred by Canada, the proportion of total demand for cotton linter 
from other producers, namely producers of specialty pulp and refined cotton, was approximately 
[***]  in 2010, [***]  in 2011, and [***]  in 2012 .340 In our view, although it might  have been 
preferable had MOFCOM specifically recognized that there was demand for cotton linter from other 
producers in its discussion, this omission does not undermine MOFCOM's overall conclusion that a 
shortage of cotton linter was not a cause of the domestic cellulose pulp industry's low capacity 
utilization rate. We recall in this regard that that the domestic industry produced cellulose pu lp 
from three different raw materials, and cotton linters are used only in the production of 
cotton -based cellulose pulp. China provided data regarding the shares of cotton -, wood -, and 
bamboo -based cellulose pulp in total sales of cellulose pulp during th e POI:  
Table 13: Share of cotton - based and  wood - and bamboo -based cellulose pulp in total 
sales of  cellulose pulp  
Year  Share of Cotton Pulp Sales  Share of Wood and Bamboo Pulp Sales  
   
2010 [***] % [***] % 
   
2011 [***] % [***] % 
   
2012 [***] % [***] % 
  Source: China's response to Panel question No. 69 , para. 70.341 
7.199.   In our view, this data could suggest that the shortage of cotton linter led to increased sales 
of cellulose pulp made from wood and bamboo. We recall that the sales of the domestic like 
produc t increased in general during the POI by 80% and specifically in 2012342, when the sales of 
wood - and bamboo -based cellulose pulp, which had accounted for less than 30% of total sales at 
the beginning of the POI, accounted for 70% of total sales of the domes tic industry. Therefore, it 
would appear that the domestic industry reacted to any shortage of cotton linter by increasing 
sales of the other two types of cellulose pulp.  
7.200.   Canada also argues that MOFCOM failed to examine the proportion of sales of differen t 
types of cellulose pulp over the entire POI, but rather focused on the proportion of sales of wood 
and bamboo cellulose pulp in 2012 .343 The 70% proportion of sales of wood - and bamboo -based 
cellulose pulp was the highest level during the POI, and occurred  during the period in which 
MOFCOM found material injury caused by dumped imports. Furthermore, MOFCOM found the 
prices of the domestic like product were depressed by the dumped imports in the second part of 
the POI, starting from the second part of 2011 u ntil the end of 2012. Therefore, in our view, it was 
                                               
336 Final Determination, (Exhibit CHN -1), p. 75.  
337 Final Determination, (Exhibit CHN -1), p. 76.  
338 Canada's first written submission p aras. 181 and 185,  and table 4 (referring to CCFGroup, China 
Viscose Industry Chain Report 2012, (February 2013), (Exhibit CAN -4) (BCI), p. 6); second written submission, 
para. 193. 
339 China's first written submission, para. 176 (referring to CCFGroup, Chin a Viscose Industry Chain 
Report 2012, (February 2013), (Exhibit CAN -4) (BCI), p. 5); second written submission, para. 161.  
340 Canada's first written submission, table 4 (referring to CCFGroup, China Viscose Industry Chain 
Report 2012, (February 2013), (Exhi bit CAN -4) (BCI), p. 6).  
341 China clarified that this data was derived by MOFCOM from the responses to questionnaires provided 
by the domestic industry. (China's response to Panel question No. 69, para. 70).  
342 Sales of the domestic like product were 400,200  tonnes in 2010; 399,800 tonnes in 2011; 
721,300  tonnes in 2012. (Final Determination, (Exhibit CHN -1), p. 72).  
343 Canada's second written submission, paras. 191 and 192.  WT/DS483/R  
BCI deleted, as indicated  [***]  
- 63 - 
 
  not unreasonable for MOFCOM to focus on the fact that in 2012 the main proportion of domestic 
sales included cellulose pulp made of wood and bamboo.  
7.201.   In addition, Canada submits that the low capacity uti lization rate of cotton pulp producers 
was driving down the overall capacity util ization rate of the domestic industry.344 Although the 
capacity utilization rate of cotton -based cellulose pulp producers was lower than that of the 
domestic industry  during cer tain parts of the POI , it did not differ considerably .345 Even granting 
that the lower rates for the cotton -based cellulose pulp producers accounted for part of the decline 
in the domestic industry's  capacity utilization rate, we note that cotton -based cellu lose pulp 
producers' capacity utilization rate was higher than the domestic industry's rate in 2011, when 
cotton -based cellulose pulp producers accounted for more than half of production of cellulose pulp, 
and declined more in 2012 than the capacity utiliz ation rate of the domestic industry, when their 
share in total domestic production also declined significantly. This does not suggest to us that the 
decline in cotton -based cellulose pulp producers' capacity utilization drove down the overall 
capacity util ization rate of the domestic industry.  
7.202.   We therefore  conclude that MOFCOM did not fail to adequately examine the injury 
allegedly caused by  the shortage of cotton linter and did not fail to ensure that such injury was not 
attributed to the dumped imports, and therefore did not act inconsistently with Articles  3.1 and 3.5 
of the Anti -Dumping Agreement.   
7.8  Consequential claims  
7.203.   Canada claims that the MOFCOM acted inconsistently with Article  1 of the 
Anti-Dumping  Agreement and Article  VI of the GATT 1994, as a con sequence of the alleged 
violations of the Anti -Dumping Agreement.346 
7.204.   Canada's claims under Article  1 of the Anti -Dumping Agreement and Article  VI of the 
GATT  1994 are purely consequential, in the sense that they depend on the outcome of other 
claims brought by Canada under other provisions of the Anti -Dumping Agreement. As a 
consequence of the inconsistencies with the Anti -Dumping Agreement above, we find that  China 
acted inconsistently with  Article  1 of the Anti -Dumping Agreement and Article  VI of the 
GATT  1994. 
8  CONCLUSIONS AND RECO MMENDATION  
8.1.  For the reasons set forth in this Report, we conclude that Canada has failed to establish that 
China acted inconsistently with:  
a. Articles  3.1 and 3.2 of the Anti -Dumping Agreement with respect to MOFCOM's 
consideration of  the volume of the dumped imports;  
b. Articles  3.1 and 3.2 of the Anti -Dumping Agreement with respect to MOFCOM's 
consideration of price effects in light of changes in dumped imports' market share, and 
by taking into account pricing documents and meeting minu tes in that consideration;  
c. Articles  3.1 and 3.4 of the Anti -Dumping Agreement with respect to MOFCOM's 
examination of the impact of the dumped imports on the domestic industry; and  
d. Articles  3.1 and 3.5 of the Anti -Dumping Agreement with respect to MOFCOM's  
examination of the shortage of cotton linter as an allegedly known factor other than the 
dumped imports allegedly causing injury to the domestic industry.  
8.2.  For the reasons set forth in this Report, we further conclude that Canada has established that 
China  acted inconsistently with:  
                                               
344 Canada's first written submission, para. 182.  
345 The capacity utilization rate for co tton-based cellulose pulp producers was 51.43% in 2010, 57.86% 
in 2011, and 46.11% in 2012, while the capacity utilization rate for the domestic industry was 66.01% in 2010, 
53.77% in 2011, and 52.35% in 2012. (Final Determination, (Exhibit CHN -1), pp. 73 and 75).  
346 Canada's first written submission, para. 189; second written submission, para. 196.  WT/DS483/R  
BCI deleted, as indicated  [***]  
- 64 - 
 
  a. Articles  3.1 and 3.2 of the Anti -Dumping Agreement with respect to MOFCOM's 
consideration of price effects by failing to adequately explain both the role of parallel 
price trends and the fact that dumped import prices were highe r than those of the 
domestic like product ; 
b. Articles  3.1 and 3.5 of the Anti -Dumping Agreement with respect to MOFCOM's 
demonstration of a causal relationship between the dumped imports and injury ; and  
c. Articles  3.1 and 3.5 in connection with MOFCOM's examin ation of the effects of changes 
in cotton and VSF prices; domestic industry overexpansion, overproduction and 
inventory build -up; and the impact of non -dumped imports as allegedly known factors 
other than the dumped imports causing injury to the domestic i ndustry, and MOFCOM's 
failure to ensure that injuries caused by these factors were not attributed to the dumped 
imports.   
8.3.  As a consequence of the inconsistencies we have found, we further conclude that Canada has 
established that China acted inconsistently  with Article  1 of the Anti -Dumping Agreement and 
Article  VI of the GATT 1994.  
8.4.  Under Article  3.8 of the DSU, in cases where there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to constitute a  case of 
nullification or impairment. We conclude that, to the extent that the measure at issue has been 
found to be inconsistent with the Anti -Dumping Agreement and GATT 1994, it has nullified or 
impaired benefits accruing to Canada under these agreements .  
8.5.  Pursuant to Article  19.1 of the DSU, we recommend that China bring its measure into 
conformity with its obligations under the Anti -Dumping Agreement and GATT 1994 . 
__________