WT/DS488/R/Add.1  
 
14 November  2017 
(17-6130) Page: 1/91 
  Original: English  
 
  UNITED STATES – ANTI -DUMPING MEASURES ON CERTAIN OIL  
COUNTRY TUBULAR GOOD S FROM KOREA  
REPORT OF THE PANEL  
Addendum  
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This addendum  contains Annexes A to F to the Report of the Panel to be found in document  
WT/DS488/R . 
 
 
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 WT/DS488/ R/Add.1  
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  LIST OF ANNEXES  
ANNEX A  
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  A-2 
Annex  A-2 Additional Working Procedures of the Panel concerning business confidential 
information  A-7 
 
ANNEX  B 
ARGUMENTS OF  KOREA  
Contents  Page  
Annex B -1 Executive Summary of the First Written Submission of Korea  B-2 
Annex B -2 Executive Summary of the Oral Statements of Korea at the First Panel Meeting  B-10 
Annex B -3 Executive Summary of the Second Written Submission of Kor ea B-14 
Annex B -4 Executive Summary of the Oral Statements of Korea at the Second  Panel 
Meeting  B-22 
 
ANNEX  C 
ARGUMENTS OF THE UNITED STATES  
Contents  Page  
Annex  C-1 Executive Summary of the First Written Submission of the United  States  C-2 
Annex  C-2 Executive Summary of the Oral Statements of the United States at the 
First Panel Meeting  C-10 
Annex  C-3 Executive Summary of the Second Written Submission of the United  States  C-14 
Annex  C-4 Executive Summary of the Oral Statements of the United States at  the 
Second  Panel Meeting  C-22 
 
ANNEX D  
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex D -1 Executive Summary of the Arguments of China  D-2 
Annex D -2 Integrated  Executive Summary of the Arguments of the European Union  D-4 
Annex D -3 Executive Summar y of the Arguments of Turkey  D-8 
 WT/DS488/ R/Add.1  
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  ANNEX E  
PROCEDURAL R ULING  
Contents  Page  
Annex E -1 Procedural ruling on the United States' request to partially open the 
substantive meetings for public observation  E-2 
 
ANNEX F  
INTERIM REVIEW  
Contents  Page  
Annex F-1 Interim Review  F-2 WT/DS488/ R/Add.1  
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  ANNEX A  
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  A-1 Working Procedures of the Panel  A-2 
Annex  A-2 Additional Working Procedures of the Panel concerning business confidential 
information  A-7 
 WT/DS488/ R/Add.1  
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  ANNEX A -1 
WORKING PROCEDURES O F THE PANEL  
Adopted on 30 October 2015  
1.  In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules 
and Procedures Governing the Settlement of Disputes (DSU). In addition, the following Working 
Procedures shall apply . 
General  
 
2.  The deliberations of the Panel and the documents submitted to it shall be kept confidential. 
Nothing in the DSU or in these Working Procedures shall preclude a party to the dispute (hereafter 
"party") from disclosing statements of its own po sitions to the public. Members shall treat as 
confidential information submitted to the Panel by another Member which the submitting Member 
has designated as confidential. Where a party submits a confidential version of its written 
submissions to the Panel , it shall also, upon request of a Member, provide a non -confidential 
summary of the information contained in its submissions that could be disclosed to the public.  
3.  The parties and third parties shall treat business confidential information in accorda nce with the 
procedures set forth in the Additional Working Procedures o f the Panel Concerning 
Business  Confidential Information adopted by the Panel.  
4.  The Panel may open its meetings with the parties and third parties to the public, either in 
whole or  in part, subject to appropriate procedures to be adopted by the Panel after consulting 
with the parties and third parties. The parties, and Members having notified their interest in the 
dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU (hereafter 
"third  parties"), shall be present at the meetings only when invited by the Panel to appear before 
it.  
5.  Each party and third party has the right to determine the composition of its own delegation 
when meeting with the Panel. Each party and third party shall have the responsibility for all 
members of its own delegation and shall ensure that each member of such delegation acts in 
accordance with the DSU and these Working Procedures, particularly with regard to the 
confidentiality of the proceedings.  
Submissions  
 
6.  Before the first substantive meeting of the Panel with the parties, each party shall submit a 
written submission in which it presents the facts of the case and its arguments, in accordance with 
the timetable adopted by th e Panel. Each party shall also submit to the Panel, prior to the second 
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by 
the Panel.  
7.  A party shall submit any request for a preliminary ruling at the earli est possible opportunity 
and in any event no later than in its first written submission to the Panel. If Korea requests such a 
ruling, the United States shall submit its response to the request in its first written submission. If 
the United States requests  such a ruling, Korea shall submit its response to the request prior to 
the first substantive meeting of the Panel, at a time to be determined by the Panel in light of the 
request. Exceptions to this procedure shall be granted upon a showing of good cause.  
8.  Each party shall submit all factual evidence to the Panel  no later than during the 
first substantive meeting, except with respect to evidence necessary for purposes of rebuttal, 
answers to questions or comments on answers provided by the other party. Exceptions to this 
procedure shall be granted upon a showing of good cause. Where such exception has been 
granted, the Panel shall accord the other party a period of time for comment, as appropriate, on 
any new factual evidence submitted after the first su bstantive meeting.  WT/DS488/ R/Add.1  
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  9.  Where the original language of exhibits is not a WTO working language, the submitting party or 
third party shall submit a translation into the WTO working language of the submission at the 
same time. The Panel may grant reasonable e xtensions of time for the translation of such exhibits 
upon a showing of good cause. Any objection as to the accuracy of a translation should be raised 
promptly in writing, preferably no later than the next filing or meeting (whichever occurs earlier) 
following the submission which contains the translation in question. Any objection shall be 
accompanied by a detailed explanation of the grounds of objection and an alternative translation.  
10.  To facilitate the maintenance of the record of the dispute and m aximize the clarity of 
submissions, each party and third party shall sequentially number its exhibits throughout the 
course of the dispute, indicating the submitting Member and the number of each exhibit on its 
cover page. For example, exhibits submitted b y Korea could be numbered KOR -1, KOR -2, etc. If 
the last exhibit in connection with the first submission was numbered KOR -5, the first exhibit of 
the next submission thus would be numbered KOR -6. 
Questions  
 
11.  The Panel may at any time pose questions to the parties and third parties, orally or in writing, 
including prior to each substantive meeting.   
Substantive meetings  
 
12.  Each party shall provide to the Panel the list of members of its delegation in advance of each 
meeting with the Panel and no lat er than 5.00  p.m. the previous working day.  
13.  The first substantive meeting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall invite Korea to make an opening statement to present its case first. 
Subsequently, the Panel sha ll invite the United States to present its point of view. Before 
each party takes the floor, it shall provide the Panel and other participants at the 
meeting with a provisional written version of its statement. In the event that 
interpretation is needed, e ach party shall provide additional copies for the interpreters, 
through the Panel Secretary. Each party shall make available to the Panel and the other 
party a final written version of its opening statement, as well as of its closing statement 
if possible,  preferably at the end of the meeting, and in any event no later than 
5.00 p.m. on the first working day following the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make c omments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shall send in writing, 
within a timeframe to be determined by the Panel, any questions to the other party to 
which it wishes to receive a res ponse in writing. Each party shall be invited to respond in 
writing to the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportuni ty to answer these questions orally. The Panel shall send in writing, within a 
timeframe to be determined by it, any questions to the parties to which it wishes to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a brief closing statement, with Korea presenting its statement first.  WT/DS488/ R/Add.1  
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  14.  The second substantive me eting of the Panel with the parties shall be conducted as follows:  
a. The Panel shall ask the United States if it wishes to avail itself of the right to present its 
case first. If so, the Panel shall invite the United States to present its opening statemen t, 
followed by Korea. If the United States chooses not to avail itself of that right, the Panel 
shall invite Korea to present its opening statement first. Before each party takes the 
floor, it shall provide the Panel and other participants at the meeting w ith a provisional 
written version of its statement. In the event that interpretation is needed, each party 
shall provide additional copies for the interpreters, through the Panel Secretary. Each 
party shall make available to the Panel and the other party a  final written version of its 
opening statement, as well as of its closing statement if possible, preferably at the end 
of the meeting, and in any event no later than 5.00  p.m. of the first working day 
following the meeting.  
b. After the conclusion of the statements, the Panel shall give each party the opportunity to 
ask each other questions or make comments, through the Panel. Each party shall then 
have an opportunity to answer these questions orally. Each party shall send in writing, 
within a timeframe to  be determined by the Panel, any questions to the other party to 
which it wishes to receive a response in writing. Each party shall be invited to respond in 
writing to the other party's written questions within a deadline to be determined by the 
Panel.  
c. The Panel may subsequently pose questions to the parties. Each party shall then have an 
opportunity to answer these questions orally. The Panel shall send in writing, within a 
timeframe to be determined by it, any questions to the parties to which it wishe s to 
receive a response in writing. Each party shall be invited to respond in writing to such 
questions within a deadline to be determined by the Panel.  
d. Once the questioning has concluded, the Panel shall afford each party an opportunity to 
present a br ief closing statement, with the party that presented its opening statement 
first, presenting its closing statement first.  
Third parties  
 
15.  The Panel shall invite each third party to transmit to the Panel a written submission prior to 
the first substant ive meeting of the Panel with the parties, in accordance with the timetable 
adopted by the Panel.  
16.  Each third party shall also be invited to present its views orally  during a session of this 
first substantive meeting, set aside for that purpose. Each third party shall provide to the Panel the 
list of members of its delegation in advance of this session and no later than 5.00  p.m. the 
previous working day.  
17.  The third -party session shall be conducted as follows:  
a. All third parties may be present d uring the entirety of this session.  
b. The Panel shall first hear the arguments of the third parties in alphabetical order. 
Third parties present at the third -party session and intending to present their views 
orally at that session, shall provide the Pan el, the parties and other third -parties with 
provisional written versions of their statements before they take the floor. Third parties 
shall make available to the Panel, the parties and other third parties the final versions of 
their statements, preferabl y at the end of the session, and in any event no later than 
5.00 p.m. of the first working day following the session.  
c. After the third parties have made their statements, the parties may be given the 
opportunity, through the Panel, to ask the third part ies questions for clarification on any 
matter raised in the third parties' submissions or statements. Each party shall send in 
writing, within a timeframe to be determined by the Panel, any questions to a third party 
to which it wishes to receive a respons e in writing.  WT/DS488/ R/Add.1  
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  d. The Panel may subsequently pose questions to the third parties. Each third party shall 
then have an opportunity to answer these questions orally. The Panel shall send in 
writing, within a timeframe to be determined by it, any questions to  the third parties to 
which it wishes to receive a response in writing. Each third party shall be invited to 
respond in writing to such questions within a deadline to be determined by the Panel.  
Descriptive part  
 
18.  The description of the arguments of th e parties and third parties in the descriptive part of the 
Panel report shall consist of executive summaries provided by the parties and third parties, which 
shall be annexed as addenda to the report. These executive summaries shall not in any way serve 
as a substitute for the submissions of the parties and third parties in the Panel's examination of 
the case.  
19.  Each party shall submit executive summaries of the facts and arguments as presented to the 
Panel in its written submissions, other than respons es to questions, and its oral statements, in 
accordance with the timetable adopted by the Panel. Each executive summary of a written 
submission shall be limited to no more than 10 pages, and each summary submitted by each party 
of both opening and closing statements presented at a substantive meeting shall be limited to no 
more than 5 pages. The Panel will not summarize in the descriptive part of its report, or annex to 
its report, the parties' responses to questions.  
20.  Each third party shall submit an e xecutive summary of its arguments as presented in its 
written submission and statement in accordance with the timetable adopted by the Panel. This 
summary may also include a summary of responses to questions, where relevant. The executive 
summary to be pro vided by each third party shall not exceed 6  pages.  
21.  The Panel reserves the right to request the parties and third parties to provide executive 
summaries of facts and arguments presented by a party or a third party in any other submissions 
to the Pane l for which a deadline may not be specified in the timetable.  
Interim review  
 
22.  Following issuance of the interim report, each party may submit a written request to review 
precise aspects of the interim report and request a further meeting with the Pan el, in accordance 
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no 
later than at the time the written request for review is submitted.  
23.  In the event that no further meeting with the Panel is requested,  each party may submit 
written comments on the other party's written request for review, in accordance with the timetable 
adopted by the Panel. Such comments shall be limited to commenting on the other party's written 
request for review.  
24.  The interim report, as well as the final report prior to its official circulation, shall be kept 
strictly confidential and shall not be disclosed.  
Service of documents  
 
25.  The following procedures regarding service of documents shall apply:  
a. Each party and third p arty shall submit all documents to the Panel by filing them with 
the DS  Registry (office No. 2047).  
b. Each party and third party shall file 2 paper copies of all documents it submits to the 
Panel. Two paper copies of all exhibits shall be filed. If Exhib its are submitted on 
CD-ROM or DVD, 2 copies shall be filed. The DS  Registrar shall stamp the documents 
with the date and time of the filing. The paper version shall constitute the official version 
for the purposes of the record of the dispute.  
c. Each par ty and third party shall also provide one electronic copy of all documents, other 
than exhibits submitted on CD -ROM or DVD, it submits to the Panel at the same time as WT/DS488/ R/Add.1  
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  the paper versions, preferably in Microsoft Word format, either on a CD -ROM, a DVD or 
as an e-mail attachment. If the electronic copy is provided by e -mail, it should be 
addressed to DSRegistry@wto.org, with a copy to xxxxx@wto.org  and xxxxx@wto.org . If 
a CD-ROM or DVD is provided, it shall be filed with the DS Registry.  
d. Each party shall serve any document submitted to the Panel directly on the other party. 
Each party shall, in addition, serve on all third parties its written submissions in advance 
of the first substantive meeting with the Panel. Each third party shall serve any 
document s ubmitted to the Panel directly on the parties and all other third parties. Each 
party and third party shall confirm, in writing, that copies have been served as required 
at the time it provides each document to the Panel.  
e. Each party and third party shal l file its documents with the DS Registry and serve copies 
on the other party (and third parties where appropriate) by 5.00  p.m. (Geneva time) on 
the due dates established by the Panel. A party or third party may submit its documents 
to another party or th ird party in electronic format only, subject to the recipient party or 
third party's prior written approval and provided that the Panel Secretary is notified.  
f. The Panel shall provide the parties with an electronic version of the descriptive part, the 
interim report and the final report, as well as of other documents as appropriate. When 
the Panel transmits to the parties or third parties both paper and electronic versions of a 
document, the paper version shall constitute the official version for the purp oses of the 
record of the dispute.  
26.  The Panel reserves the right to modify these procedures as necessary, after consultation with 
the parties.  WT/DS488/ R/Add.1  
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  ANNEX A -2 
ADDITIONAL WORKING PROCEDURES O F THE PANEL  CONCERNING  
BUSINESS CONFIDENTIA L INFORMATION  
Adopted 30  October 2015  
These procedures apply to any business confidential information (BCI) that a party wishes to 
submit to the Panel in the course of the Panel proceedings in DS488.  
 
1. For the purposes of these Panel proceedings, BCI is any information that ha s been 
designated as such by the party submitting the information and that was previously treated as 
confidential within the meaning of Article 6.5 of the Agreement on Implementation of Article VI of 
the General Agreement on Tariffs and Trade 1994 by the U .S. Department of Commerce in the 
course of the anti -dumping proceeding at issue in this dispute, entitled Certain Oil Country Tubular 
Goods from the Republic of Korea (A -580-870). However, these procedures do not apply to any 
information that is available  in the public domain. In addition, these procedures do not apply to 
any BCI if the entity which provided the information in the course of the aforementioned 
investigation agrees in writing to make the information publicly available.  
2. If a party conside rs it necessary to submit to the Panel BCI as defined above from an entity 
that submitted that information in the investigation at issue, the party shall, at the earliest 
possible date, obtain an authorizing letter from the entity and provide such authoriz ing letter to 
the Panel, with a copy to the other party. The authorizing letter from the entity shall authorize 
both Korea and the United States to submit in this dispute, in accordance with these procedures, 
any confidential information submitted by that entity in the course of the investigation.  
3. No person may have access to BCI except a member of the Secretariat or the Panel, an 
employee of a party or third party, and an outside advisor for the purposes of this dispute to a 
party or third party. Howev er, an outside advisor is not permitted access to BCI if that advisor is 
an officer or employee of an enterprise engaged in the production, sale, export, or import of the 
products that were the subject of the investigation at issue in this dispute or an of ficer or 
employee of an association of such enterprises. All third party access to BCI shall be subject to the 
terms of these working procedures.  
4. Each party shall, at the request of the other party, facilitate the communication to an entity 
in its terr itory of any request to provide an authorization letter referred to in paragraph 2. Each 
party shall encourage any entity in its territory that is requested to grant the authorization 
referred to in paragraph 2 to grant such authorization. If an entity ref uses to grant the 
authorization referred to in paragraph 2, a party may bring the situation to the attention of the 
Panel.  
 
5. A party or third party having access to BCI shall treat it as confidential, i.e., shall not 
disclose that information other than  to those persons authorized to receive it pursuant to these 
procedures. Each party and third party shall have responsibility in this regard for its employees as 
well as any outside advisors used for the purposes of this dispute. BCI obtained under these 
procedures may be used only for the purpose of providing information and argumentation in this 
dispute and for no other purpose.  
6. The party submitting BCI shall mark the cover and/or first page of the document containing 
BCI, and each page of the documen t, to indicate the presence of such information. The specific 
information in question shall be placed between double brackets, as follows: [[xx,xxx.xx]]. The 
first page or cover of the document shall state "Contains Business Confidential Information", and 
each page of the document shall contain the notice "Contains Business Confidential Information" at 
the top of the page.  
7. Where a party submits a document containing BCI to the Panel, the other party or any third 
party referring to that BCI in its docume nts, including written submissions and oral statements, 
shall clearly identify all such information in those documents. All such documents shall be marked WT/DS488/ R/Add.1  
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  as described in paragraph 6. In the case of an oral statement containing BCI, the party or third 
party making such a statement shall inform the Panel before making it that the statement will 
contain BCI, and the Panel will ensure that only persons authorized to have access to BCI pursuant 
to these procedures are in the room to hear that statement. The wri tten versions of any such oral 
statements submitted to the Panel shall be marked as provided for in paragraph 6.  
 
8. Any BCI that is submitted in binary -encoded form shall be clearly marked with the 
statement "Contains Business Confidential Information" o n a label of the storage medium, and be 
clearly marked with the statement "Contains Business Confidential Information" in the binary -
encoded files.  
9. If a party or third party considers that information submitted by the other party or a 
third party conta ins information which should have been designated as BCI and objects to such 
submission without BCI designation, it shall forthwith bring this objection to the attention of the 
Panel, the other party, and, where relevant, the third parties. The Panel shall  deal with the 
objection as appropriate. Similarly, if a party or third party considers that the other party or a third 
party submitted information designated as BCI which should not be so designated, it shall 
forthwith bring this objection to the attentio n of the Panel, the other party, and, where relevant, 
the third parties, and the Panel shall deal with the objection as appropriate.  
 
10. Any person authorized to have access to BCI under the terms of these procedures shall treat 
it as confidential and sh all not disclose that information other than to those persons authorized to 
receive it pursuant to these procedures. All documents and electronic storage media containing 
BCI shall be stored in such a manner as to prevent unauthorized access to such inform ation.  
 
11. The Panel will not disclose BCI, in its report or in any other way, to persons not authorized 
under these procedures to have access to BCI. The Panel may, however, make statements of 
conclusion drawn from such information. Before the Panel cir culates its final report to the 
Members, the Panel will give each party an opportunity to review the report to ensure that it does 
not contain any information that the party has designated as BCI.  
12. Submissions containing BCI will be included in the rec ord forwarded to the Appellate Body in 
the event of an appeal of the Panel's Report.  
 
 
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 WT/DS488/R/Add.1  
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  ANNEX  B 
ARGUMENTS OF KOREA  
Contents  Page  
Annex B -1 Executive Summary of the First Written Submission of Korea  B-2 
Annex B -2 Executive Summary of t he Oral Statements of Korea at the First Panel Meeting  B-10 
Annex B -3 Executive Summary of the Second Written Submission of Korea  B-14 
Annex B -4 Executive Summary of the Oral Statements of Korea at the Second  Panel 
Meeting  B-22 
 
 
 WT/DS488/R/Add.1  
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  ANNEX B -1 
EXECUTIVE SU MMARY OF THE FIRST W RITTEN  
SUBMISSION OF KOREA  
I. INTRODUCTION  
1. This dispute concerns anti -dumping measures imposed by the United States on oil country 
tubular goods ("OCTG") imported from the Republic of Korea ("Korea"). The U.S. Department of 
Commerce  ("USDOC") found in its Preliminary Determination that no dumping margin existed for 
the Korean exporters of OCTG. However, the USDOC ultimately reversed its finding in the Final 
Determination, having completely shifted its approach on calculating construc ted normal value, 
and, in particular, the constructed value profit rate of the two Korean respondents. The USDOC's 
determination and its conduct in the investigation are inconsistent with a number of provisions of 
the Agreement on Implementation of Article  IV of the General Agreement on Tariffs and 
Trade  1994 (the "Anti -Dumping Agreement"), the General Agreement on Tariffs and Trade 1994 
(the "GATT 1994"), and the Marrakesh Agreement Establishing the World Trade Organization (the 
"WTO Agreement").    
2. During the course of the investigation, the USDOC did not allow the Korean respondents to 
present data on their sales of the merchandise under investigation to third countries, because 
these sales did not meet the so -called "viability test" under the relevant  U.S. law. This viability test 
violates Article 2.2 of the Anti -Dumping Agre ement "as such" and "as applied ", because Article 2.2 
does not contemplate such a rigid quantitative test for determining the appropriateness of third -
country sales.   
3. The USDOC 's use of constructed value ("CV") in the investigation was also inconsistent with 
the Anti -Dumping Agreement. First, the USDOC disregarded actual data regarding Korean 
respondents' home market and third -country market profit rates in violation of the chap eau of 
Article 2.2.2. Second, the USDOC applied an impermissibly narrow interpretation and application of 
"same general category of products" . Third, the USDOC failed to calculate a "profit cap" as it was 
required to do under Article 2.2.2(iii). Fourth, th e USDOC's use of financial data from Tenaris S.A. 
("Tenaris") was not "reasonable" under Article 2.2.2(iii) given that Tenaris had no sales or 
production in Korea. Fifth, the USDOC's use of Tenaris' financial data violated Article 2.4, as the 
USDOC failed to make due allowances for differences between Tenaris and the Korean producers 
that affected price comparability.  
4. The USDOC also improperly found an association between NEXTEEL and its raw material 
supplier, POSCO, based on an erroneous interpretation of Article 2.3, and impermissibly 
disregarded NEXTEEL's export price to its customer. This erroneous finding of association led the 
USDOC to improperly disregard POSCO's price of raw materials to NEXTEEL in violation of 
Article  2.2.1.1.  
5. In addition, the  USDOC failed to protect the Korean respondents' due process rights in the 
course of the investigation.  In failing to make a ruling regarding the placement of Tenaris' Annual 
Report on the record despite objections by Korean respondents, the USDOC did not  provide Korean 
respondents a full and ample opportunity to defend their interests before the issuance of the Final 
Determination, in violation of Articles 6.2, 6.4, and 6.9. Its failure to place records of ex parte  
communications on the administrative rec ord in a timely manner also violates Articles 6.4 and 6.9. 
Furthermore, the USDOC did not include in its Final Determination and Final Decision Memo all 
relevant information leading to its imposition of anti -dumping duties as required in Article 12.2.2. 
The USDOC also failed to protect the interests of other Korean producers by improperly limiting 
the number of mandatory respondents and failing to examine data submitted by voluntary 
respondents in violation of Article 6.10.   
6. These violations give rise t o consequential violations of Articles 1, 9.3, and 18.4 of the Anti -
Dumping Agreement, as well as Article VI of the GATT 19 94 and Article XVI:4 of the 
WTO Agreement. Moreover, the USDOC's less favorable treatmen t of Korean OCTG as compared 
to OCTG from oth er Members subject to parallel anti -dumping investigations is inconsistent with WT/DS488/R/Add.1  
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  Article I:1 of the GATT 1994. Finally, the USDOC did not administer its laws and regulations in a 
uniform, impartial, and reasonable manner as required under Article X:3(a) of the GATT 1994 as 
its decisions were influenced by extreme political pressure, and it failed to provide any other 
rationale for its sudden change in practice.  
II. STATEMENT OF FACTS  
7. On 22  July 2014, the USDOC initiated an anti -dumping duty investigation  on OCTG from 
Korea based on a petition filed by petitioners representing the U.S. domestic steel industry, and 
subsequently selected NEXTEEL and HYSCO as the two mandatory respondents in the 
investigation. Because the USDOC considered that neither NEXTEEL  nor HYSCO had sufficient sales 
of the merchandise under consideration in the country of expor t ("home market") or in a 
third country to use in the calculation of normal value, the USDOC resorted to the calculation of a 
"constructed value" ("CV").   
8. On February 14, 2014, the USDOC issued its Preliminary Determination, in which it 
determined that OCTG from Korea was not being, and was not lik ely to be, dumped in the 
United  States. In particular, the USDOC declined to use profit information for Tenaris as argued by 
petitioners, as the report submitted by petitioners on Tenaris showed that it was a non -Korean 
corporation that had "neither production nor sales in the market under consideration" . Instead, the 
USDOC calculated HYSCO's CV profit rate based on HY SCO's own sales of the same general 
category of products – i.e., line pipe and standard pipe – in Korea. For NEXTEEL, the USDOC used 
the weighted average profit rate of all Korean respondents for home market sales of the same 
general category of products. The USDOC also addressed allegations by petitioners that NEXTEEL 
was associated with its raw materials supplier, POSCO, and that a Korean trading company was 
involved in most of NEXTEEL's sales of OCTG in the United States. Acknowledging that it had not 
yet reached a decision on the issue of affiliation, the USDOC stated that it would be seeking 
additional clarification from NEXTEEL about its relationships with these companies.  
9. The USDOC issued supplemental questionnaires to the Korean respondents, incl uding a 
supplemental questionnaire to NEXTEEL relating to its cost of production. Petitioner U.S. Steel 
submitted as "rebuttal" information the 2012 Annual Report of Tenaris. U.S. Steel's submission, 
however, did not bear any relation to the factual inform ation submitted by NEXTEEL in the 
questionnaire response. NEXTEEL immediately requested that the USDOC reject U.S. Steel's 
untimely submission, as it did not rebut, clarify, or correct NEXTEEL's questionnaire response, but 
rather, was clearly intended to o ffer unsolicited CV profit source data past the USDOC's deadline. 
The USDOC did not rule on, or even acknowledge, NEXTEEL's objection to the placement of the 
Annual Report on the record until the Final Determination, where it concluded that the petitioner 
had properly submitted Tenaris' Annual Report.  
 
10. After the Preliminary Determination's negative findings, the U.S. industry and its allies 
escalated their political activities to unprecedented levels. Notably, among the numerous records 
of meetings and phone calls by lawmakers and industry representatives to the U.S. Secretary of 
Commerce on behalf of the U.S. industry, 57 U.S. Senators signed a letter addressed to the 
Secretary complaining specifically of the USDOC's calculation of profit in i ts Prelimi nary 
Determination.   
 
11. In its Final Determination, the USDOC drastically departed from its Preliminary 
Determination, calculating a dumping margin of 9.89% for NEXTEEL and 15.75 for HYSCO. To 
reach this result, the USDOC reversed course and recalculate d CV profit for both NEXTEEL and 
HYSCO, improperly using the 26.11% profit rate of Tenaris as depicted in the financial statements 
that U.S. St eel had untimely submitted.    
 
III. ARGUMENTS  
A. The U.S. Viability Test is Inconsistent with Article 2.2 of the  Anti-Dumping 
Agreement  
12. When there are no sales or low volume sales in the ordinary course of trade in the domestic 
market of the exporting country, or when such sales do not permit a proper comparison because 
of the particular market situation, Articl e 2.2 of the Anti -Dumping Agreement permits an WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-4 - 
 
  investigating authority to calculate normal value based on third country sales, "provided that this 
price is representative" .   
13. The conditions for using third -country sales to calculate normal value under United States 
law is embodied in the "viability test" pursuant to which the USDOC may use sales prices in a third 
country to calculate normal value when it is unable to use sales in the country of export, provided 
three separate and cumulative criteria are  met: (1) the price is "representative"; (2) the quantity 
or value of sales to the third country meets or exceeds five percent of the company's sales to the 
United States; and (3) no "particular market situation" exists that would make third country 
market  sales prices inappropriate.   
14. As explained above, Article 2.2 requires that the price to the third country market be 
"representative" , but does not contemplate a mechanistic minimum threshold as applied by the 
United States. In particular, Article 2.2  provides "low volume sales" as a factor for excluding the 
domestic market sales as the basis of normal value, but it does not apply such a standard to third -
country sales, demonstrating that the drafters of the Agreement did not intend for the quantitativ e 
threshold that may be applied to domestic market sales to be applied to third -country sales.   
15. Thus, the U.S. viability test as it applies to third -country market sales is "as such" 
inconsistent with Article 2.2, as it applies a rigid quantitative te st not permitted under the Article. 
It is also "as applied" inconsistent with Article 2.2, insofar as the Korean respondents were 
precluded from presenting third -country market data pursuant to the USDOC's application of the 
viability test in the underlyin g investigation.  
B. The USDOC's Use of Constructed Value in the OCTG Investigation is Inconsistent 
with the Anti -Dumping Agreement  
16. First, the USDOC failed to comply with the Article 2.2.2 requirement to use "actual data" as 
a CV profit source when ava ilable. Article 2.2.2 provides in its chapeau that, when calculating 
normal value using constructed value, "the amounts for administrative, selling and general costs 
and for profits shall be based on actual data pertaining to production and sales in the or dinary 
course of trade of the like product by the exporter or producer under investigation" . The 
Appellate  Body in EC – Tube or Pipe Fittings  confirmed that it is only when SG&A and profits 
cannot be calculated based on "actual data" that an investigating authority is permitted to proceed 
to employ one of the other three methods provided in subparagraphs (i) -(iii). The Appellate Body 
further confirmed that "low -volume sales" that have failed to meet the five percent threshold for 
the purposes of determining  the viability of the domestic market as a comparison market are not 
excluded from the "actual data" that must be used to calculate th e profit rate under the 
Article  2.2.2 chapeau.  
17. In the underlying investigation, the USDOC refused to use HYSCO's or N EXTEEL's actual 
data to calculate profit rate, simply stating that it was unable to use the "preferred method" , i.e., 
use of actual data, "absent a viable home or third -country market" . Based on requirements of 
Article 2.2.2 and the guidance provided by th e Appellate Body, even if the USDOC had properly 
disregarded the respondents' sales in the country of export for the purpose of determining an 
appropriate comparison market due to their "low volume" , it was nonetheless obligated to use the 
actual profit ra tes for these sales for the purpose of calculating CV profit.  The chapeau of 
Article  2.2.2 does not require that the "actual data" must derive from sales of the like product in 
the home market. HYSCO and NEXTEEL indicated early in the investigation in thei r initial 
questionnaire responses that they both had sales of the like product to third -country markets, and 
the USDOC had on the record actual profit data for both respondents' OCTG sales in the home 
market and third -country markets. Because the USDOC dis regarded NEXTEEL's and HYSCO's 
"actual data" pertaining to the respondents' profit rates in the home market and third -country 
market based on the determination that sales to these markets were of "low volume" , the USDOC 
failed to act consistently with its obligations under the chapeau of Article 2.2.2.  
18. Second, the USDOC's decision to rely on Article 2.2.2(iii) and reject other viable options was 
premised on an impermissibly narrow interpretation and application of the "same general category 
of products ". As the Thailand – H-Beams  panel clarified, using information from "same general 
category of products" is meant to provide for the "database to be broadened" in instances where 
actual data pertaining to "like products" is not available.  WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
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  19. Rather than b roadening the database, the USDOC's Final Determination rested on an overly -
narrow interpretation of the "same general category" of products. In its Final Determination, the 
USDOC reversed course from its Preliminary Determination and found that OCTG was n ot in the 
"same general category" of products as non -OCTG pipe products manufactured by the Korean 
producers, such as line pipe and standard pipe. The USDOC stated that the same general  category 
of OCTG would only include "subject OCTG, non -scope OCTG such  as stainless steel tubular 
products, and drill pipes."  
20. Having found in its Final Determination that OCTG was not in the "same general category" of 
products as non -OCTG pipe products, the USDOC determined that it did not have data to calculate 
the CV p rofit rate using actual amounts incurred by the producer in the country of origin for the 
production and sale of the "same general category of merchandise" under Article 2.2.2(i). The 
USDOC further found that, it was also unable to calculate "the profit no rmally realized by other 
exporters or producers on sales of products of the same general category in the domestic market 
of the country of origin" , i.e., a "profit cap" , as required under Article 2.2.2(iii).  
21. By including only one product outside of OCT G – i.e., drill pipe – within the "same general 
category of products" , the USDOC applied a definition of "same general category" that was 
effectively limited to the "like product" . In fact, the USDOC has considered drill pipe to be a "like 
product" in defi ning the product scope of OCTG in both the underlying investigation as well as its 
previous investigations involving OCTG. At the same time, the USDOC has recognized non -OCTG 
pipe products such as line pipe and standard pipe to be within the "same general category of 
products" as OCTG in its previous investigations involving OCTG.  
22. In sum, the USDOC's definition of the "same general category" in this case resulted in a 
database that was identical to that containing only "like products" , and also contrave ned its own 
prior determinations that non -OCTG pipe products such as line pipe and standard pipe fell within 
the "same general category of products" as OCTG. Thus, the USDOC violated Article 2.2.2 by 
applying an incorrect standard in its analysis of CV pro fit calculation methods under the 
subparagraphs of Article 2.2.2.  
23. Third, the USDOC's failure to apply a profit cap is inconsistent with Article 2.2.2(iii).  
Article  2.2.2(iii) permits the investigating authority to calculate CV profit based on "any othe r 
reasonable method, provided that  the amount for profit so established shall not exceed the profit 
normally realized by other exporters or producers on sales of products of the same general 
category in the domestic market of the country of origin" , i.e., the "profit cap" .   
24. The obligation in Article 2.2.2(iii) to calculate a profit cap is unqualified, and there is no 
indication in the text to suggest that there may be circumst ances in which an 
investigating  authority is excused from calculating and app lying a profit cap. Indeed, the panel in 
Thailand H – Beams  found that the profit cap is in effect a separate reasonability test. The 
obligatory nature of calculating a profit cap was further confirmed in EU – Footwear , where the 
panel held that the unavai lability of relevant data did not excuse a Member from complying with 
the requirements of Article 2.2.2(iii). Thus, calculation and application of a profit cap is a 
mandatory requirement when an investigation authority opts to rely on Article 2.2.2(iii), a nd 
failure to calculate and apply a profit cap constitutes a per se  violation of Article 2.2.2(iii).  
25. Moreover, Article 2.2 requires that, when relying on constructed value to calculate normal 
value, the constructed value is to comprise of the cost of production in the country of origin plus a 
"reasonable" amount for profit. Because the USDOC did not ensure that its calculation of CV profit 
was "reasonable" by failing to calculate a profit cap, the USDOC also failed to calculate a 
"reasonable" amount fo r profit under Article 2.2.  
26. In addition, as discussed above, the USDOC determined that it was unable to calculate a 
profit cap based on an erroneous determination that the administrative record did not contain data 
regarding the "same general category of products" . Thus, because the USDOC did not calculate a 
profit cap based on an erroneous interpretation of "same general category" , the USDOC violated 
Article 2.2.2(iii).  
27. Fourth, the USDOC's construction of profit on the basis of Tenaris' financial statement is 
inconsistent with the "reasonable method" requirement of Article 2.2.2(iii). While the Anti -WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
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  Dumping Agreement does not delineate the exact ambit of what constitutes a "reasonable method" 
for purposes of Article 2.2.2(iii), if a specific method  of constructing SG&A and CV profit is to 
satisfy this "reasonableness test" , it must, at the minimum, be consistent with the central 
principles of the anti -dumping mechanism enshrined in the Anti -Dumping Agre ement, including 
Article 2.1.  
28. According to  Article 2.1, "dumping" means introduction of a product "into the commerce of 
another country " at less than the "comparable price" for the like product "when destined for 
consumption in the exporting country ". Therefore, in calculating a normal value under  the 
alternative methods, the investigating authority must approximate the actual data that companies 
under investigation would achieve in the domestic country of manufacture .   
29. The USDOC relied on the profit rate of Tenaris, despite the existence on t he record of 
various CV profit sources that originated from the country of export, Korea. Tenaris is a 
multinational company based in Argentina and incorporated under the laws of Luxembourg that 
has no record of sales of production in Korea. No reasonable basis exists to conclude that Tenaris' 
profit rate is reflective of the profit rate that the Korean producers would have achieved if they had 
sold OCTG in the country of export. Indeed, the only rationale the USDOC provided in its Final 
Determination to ju stify its reliance on Tenaris' profit is that Tenaris realizes profit primarily on the 
basis of OCTG sales from across the globe. Yet, the USDOC never explained why the profits of 
Tenaris in other geographic market would reasonably reflect the level of pro fits obtained by 
producers or exporters in the Korean  market. Because the profit used by the USDOC to construct 
the normal value in the underlying investigation was not representative of the profits obtained by 
producers or exporters in the Korean market a nd not comparable with the export prices of the 
Korean exporters, the method used by the USDOC's use of Tenaris' financial data to calculate CV 
for the Korean exporters does not constitute a "reasonable method" under Article 2.2.2(iii).  
30.  Fifth, the USD OC failed to make a fair comparison as required by Article 2.4 of the Anti -
Dumping Agreement.  Article 2.4 requires an investigating authority to conduct a "fair comparison" 
between the export price and normal price. In doing so, "{d}ue allowance shall be made in 
each case, on its merits, for differences which affect price comparability" . The Appellate Body in 
US – Hot-Rolled Steel  interpreted these "differences" broadly, stating that "Article 2.4 expressly 
requires that allowances be made for any other dif ferences  that are demonstrated to affect price 
comparability, and that there are no differences affecting price comparability that would be 
precluded, as such from being the object of an 'allowance'."  
31. The USDOC failed to make a fair comparison because it did not take into account substantial 
differences between Tenaris and the Korean respondents that affected the price comparability 
between the Korean respondents' export price and the normal values derived using the profit rate 
of Tenaris. For example, Tenaris focused on specialized and premium products designed to 
generate a high profit margin, compared to the low -end products manufactured by Korean 
respondents. The scale of Tenaris' business operations grossly overshadowed that of Korean 
respondents, a s demonstrated by its production and sales volume, as well as its workforce and 
facilities. Importantly, because Tenaris sold directly to end users, it was able to retain the entirety 
of the profits generated between manufacture and retail sale. The Korean  respondents, on the 
other hand, sold OCTG products through resellers at wholesale prices. These factors directly 
impacted the calculation of the normal value using Tenaris' financial data, and therefore, also 
affected the comparability between the normal value and the Korean respondents' export price. 
Because USDOC did not ensure the price comparability between the export price and normal value 
despite several differentiating factors identified by the Korean respondents, the USDOC failed to 
comply with Art icle 2.4.  
C. The USDOC's Finding of Association is Inconsistent with Article 2.3 of the Anti -
Dumping Agreement  
32. As a general rule, an investigating authority must make a dumping determination based on 
the normal value and the export price of the product  exported from one country to  another. 
Article  2.3 permits the investigating authority to disregard export prices when: (i) an association 
or compensatory arrangement exists between the exporter and the importer/third party; and (ii) it 
appears to the inve stigating authority that the export prices are unreliable because of that 
association or compensatory arrangement.   WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
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  33. The USDOC improperly disregarded NEXTEEL's sales prices to its customer, a Korean trading 
company ("Customer"), and instead constructed  an export price based on the Customer's price to 
its own U.S. customer. The USDOC's decision was based on an erroneous determination that 
NEXTEEL was "associated" with its supplier, POSCO, because it was reliant on POSCO, giving 
POSCO "control" over NEXTE EL. The USDOC found that POSCO was "operationally in a position to 
exercise restraint or direction over NEXTEEL in a manner that affects the pricing, production, and 
sale of OCTG" . However, in conducting its analysis, the USDOC replaced the requirement to find 
"control" based on "restraint or direction" with a much less stringent standard.  Furthermore, 
realizing that POSCO, as a raw materials supplier, could only affect NEXTEEL's costs and not its 
sales prices, the USDOC reasoned that POSCO exercised contro l over NEXTEEL's sales prices based 
on the "combination of {POSCO's} involvement on both the production and sales side" by virtue of 
POSCO's affiliation with the Customer. However, the USDOC did not find that NEXTEEL was 
"reliant" on the Customer for its U .S. sales. Rather, the USDOC simply noted that a majority of 
NEXTEEL's sales were made to the Customer, and automatically assumed that POSCO and the 
Customer were in a position to control NEXTEEL's export price based on the Customer's 
relationship with POS CO. Thus, the USDOC's conclusion that POSCO controlled NEXTEEL's export 
price was not based on an objective assessment of whether either POSCO or the Customer was in 
fact in a position to control NEXTEEL's pricing.  
34. Finally, the USDOC ignored evidence on the record demonstrating that NEXTEEL was not 
reliant on POSCO for its raw material supply, and did not even conduct any meaningful analysis of 
whether NEXTEEL's sales price to the Customer was "unreliable," as it was required to do before it 
could disr egard NEXTEEL's export prices under Article 2.3. Rather, the USDOC assumed that the 
export price was unreliable simply by virtue of the Customer's relationship with POSCO. Therefore, 
the USDOC's disregard of NEXTEEL's export price is inconsistent with Arti cle 2.3 of the Anti -
Dumping Agreement.  
D. The USDOC Improperly Disregarded NEXTEEL's Costs in Violation of Article 2.2.1.1 
of the Anti -Dumping Agreement  
35. Article 2.2.1.1 requires that, in calculating a producer's cost of production, "costs shall 
norma lly be calculated on the basis of records kept by the exporter or producer under 
investigation" , provided that: (1) such records are in accordance with the generally accepted 
accounting principles of the exporting country; and (2) reasonably reflect the co sts associated with 
the production and sale of the product under consideration.  
36. Having improperly found that NEXTEEL was affiliated with POSCO, the USDOC disregarded 
NEXTEEL's own records with respect to the price it paid POSCO for raw materials and ap plied 
calculated prices for these raw materials. However, the record demonstrates that NEXTEEL kept its 
records in accordance with the generally accepted accounting principles of Korea. Moreover, the 
USDOC's decision to disregard NEXTEEL's own cost data wa s based on an erroneous determination 
that NEXTEEL was affiliated with POSCO, as explained above.   
37. Because the USDOC's determination of affiliation was improper and such determination was 
the sole basis provided by the USDOC to disregard NEXTEEL's cos ts, it follows that the USDOC 
acted inconsistently with its obligation under Article 2.2.1.1.  
E. Procedural Claims  
38.  Article 6.2 of the Anti -Dumping Agreement requires investigating authorities to ensure that 
"all interested parties shall have a full o pportunity for the defence of their interests," while 
Article  6.4 requires investigating authorities to provide "timely opportunities for all interested 
parties to see all information that is relevant to the presentation of their cases … and to prepare 
presentations on the basis of this information" . The Appellate Body in EC – Tube or Pipe Fittings  
clarified that whether certain information is "relevant" is not determined by the investigating 
authority. Moreover, the panel in EC – Salmon (Norway)  explained that information that the 
investigating authority considers during the course of the anti -dumping investigation 
presumptively falls within the scope of Article 6.4. Finally, Article 6.9 requires investigating 
authorities to, "before a final determination i s made, inform all interested parties of the essential 
facts under consideration which form the basis for the decision whether to apply definitive 
measures" .   WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-8 - 
 
  39. Tenaris' Annual Report constituted "relevant" information under Article 6.4 as the USDOC 
did, in fact, use the data to calculate the Korean respondents' dumping margins. By failing to 
address the Korean respondents' objections and delaying a ruling on the matter until the Final 
Determination, the USDOC failed to provide respondents with a full op portunity to defend their 
interests and prepare presentations based on relevant information, as required under Articles 6.2 
and 6.4. Furthermore, whether the USDOC would accept the placement of the Tenaris financial 
statements on the record constituted an "essential fact" under Article 6.9. The financial statements 
were clearly "under consideration" and an "essential fact" that formed the basis of the USDOC's 
determination, as evidenced by the USDOC's decision to rely on the financial data to impose anti -
dumping duties on Korean respondents. Therefore, the USDOC was obligated to disclose the fact 
that it was accepting Tenaris' Annual Report on the record before the Final Determination, in 
accordance with Article 6.9.  
40. The USDOC also failed to comply with  its obligations under Articles 6.4 and 6.9 with respect 
to the disclosure of several ex parte  communications on the administrative record. It was not until 
the Korean respondents demanded that USDOC provide the corr espondence that USDOC 
disclosed  a large amount of correspondence between USDOC officials and representatives from the 
U.S. government and domestic industry on behalf of petitioners. These documents included a 
letter addressed to the Secretary of Commerce signed by 57 U.S. Senators, and a separat e letter 
addressed to the Secretary signed by 155 House Representatives, evidencing extreme political 
pressure focusing specifically on the issue of CV profit.     
41. The various letters sent to the Secretary of Commerce by prominent members of the U.S. 
Congress and by industry leaders constituted "relevant" information used by the investigating 
authorities under Article 6.4, as well as "essential facts under consideration" that formed the basis 
for the USDOC's decisions under Article 6.9. Because the USDO C did not disclose these ex parte  
communications in sufficient time before the Final Determination for respondents to defend their 
interests, it violated Articles 6.4 and 6.9.   
42. Finally, the USDOC failed to comply with its obligations under Article 12. 2.2, which requires 
public notices of the conclusion of an investigation to contain "all relevant information on the 
matters of fact and law and reasons which have led to the imposition of final measures" . These 
public notices must include "the reasons for  the acceptance or rejection of relevant arguments or 
claims made by the exporters and importers" . As described above, the USDOC failed to address 
the Korean respondents' arguments regarding the inappropriateness of using Tenaris' financial 
data to calcula te the Korean respondents CV profit rate in light of the substantial differences 
between the companies. In addition, the USDOC's determination regarding the "same general 
category of products" focused only on the differences in physical characteristics bet ween OCTG, 
line pipe, and standard pipe, and failed to address the arguments raised by the Korean 
respondents. Finally, the USDOC analysis regarding the alleged association between NEXTEEL and 
POSCO simply ignored extensive arguments presented by NEXTEEL c ontradicting allegations by 
petitioners, in violation of Article 12.2.2.  
F. The USDOC's Limitation of Mandatory Respondents and Failure to Consider 
Information Submitted by Voluntary Respondents is Inconsistent with Article 6.10 of the 
Anti-Dumping Agreem ent 
43.  Article 6.10 requires that investigating authorities determine an individual dumping margin 
for each known exporter or producer of the subject merchandise, and only permits deviation from 
this rule when the number of exporters/producers is so larg e that individual determination would 
be "impracticable" . Even when limiting its investigation, Article 6.10.2 obligates the investigating 
authority to determine individual dumping margins for voluntary respondents that provide timely 
information. The inve stigating authority is relieved of this obligation only when "the number of 
exporters or producers is so large that individual examinations would be unduly burdensome to the 
authorities and prevent the timely completion of the investigation" . 
44. Although the USDOC discussed at length its limitations in examining all identified exports, it 
failed to provide any explanation of why it considered only two respondents to be a "reasonable 
number" , or why it would not be reasonable to examine any additional r espondents. Moreover, 
although Husteel, ILJIN, and SeAH timely submitted voluntary responses to the USDOC's 
questionnaire, the USDOC declined to consider these responses citing to various resource 
constraints not limited to the immediate investigation. Because  the USDOC did not adequately WT/DS488/R/Add.1  
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- B-9 - 
 
  explain why it could not consider additional mandatory or voluntary responses, it failed to comply 
with its obligations under Article 6.10.  
G. The United States' Measures are Inconsistent with Articles 1, 9.3, and 18.4 of the 
Anti-Dumping Agreement  
45. As discussed above, the anti -dumping duties calculated by the USDOC in this case derived 
from an erroneous and impermissible application of Article 2 that resulted in an artificially high 
dumping margin, in violation of Article 9 .3. Moreover, the panel in China – HP-SSST 
(Japan)/China  – HP-SSST (EU) confirmed that a violation of a substantive claim will 
consequentially result in a violation of Article 1. Finally, the U.S. viability test constitutes a law or 
regulation that is not in conformity with the Anti -Dumping Agreement, demonstrating that the 
United States has failed to take all necessary measures to ensure conformity of its measures with 
the Antidumping Agreement, thereby acting inconsistently with Article 18.4.  
H. The Unite d States' Measures are Inconsistent with Article VI of the GATT 1994 and 
Article XVI:4 of the WTO Agreement  
46.  The panel in China – HP-SSST (Japan)/China – HP-SSST (EU) likewise found that violation 
of other provisions of the Anti -Dumping Agreement conse quentially res ulted in a violation of 
Article  VI. Accordingly, this Panel should find that, in violating its obligations under the Anti -
Dumping Agreement, the USDOC also failed to comply with its obligations under Article VI of the 
GATT 1994. Furthermore, to the extent the challenged measures are inconsistent with the Anti -
Dumping Agreement and Article VI of the GATT 1994, the United States has failed to comply with 
Article XVI:4 of the WTO Agreement.  
I. The United States Failed to Comply with Fund amental O bligations of the 
GATT  1994  
47. Article I:1 of the GATT 1994 requires that "any advantage, favor, privilege or immunity 
granted by any contracting party to any product originating in or destined for any other country 
shall be accorded immediately and uncon ditionally to the like product originating in or destined for 
the territories of all other contracting parties" . The USDOC's relatively lenient treatment of the 
products from other country respondents in parallel investigations of OCTG imports compared to 
its treatment of products from Korean respondents resulted in an "advantage, favour, privilege, or 
immunity" that was not granted to OCTG products originating in Korea. Moreover, the USDOC 
discriminated against the products from Korean respondents in the u nderlying investigation by 
providing an opportunity for respondents in the Turkey investigation to provide comments on the 
Tenaris financial statements, while no such opportunity was afforded to Korean respondents.  
48.  The USDOC's conduct is also inconsi stent with Article X:3(a) of the GATT 1994, which 
requires WTO Members to administer laws, regulations, decisions, and rulings in a "uniform, 
impartial, and reasonable manner" . The USDOC's administration of its laws and regulations was 
not uniform because it reversed decades of past practice with no justification for its departure, and 
also afforded inconsistent treatment of the Tenaris Annual Report between its anti -dumping 
investigations of Korea and Turkey. In its Final Determination, the USDOC dramatica lly and 
inexplicably changed its approach to CV from past practice as well as the Preliminary 
Determination after unprecedented political pressure from the U.S. domestic industry and U.S. 
Congress that specifically focused on the use CV profit, thereby sug gesting that the USDOC's 
administration of its laws and regulations was not impartial. Finally, the use of Tenaris' financial 
data as a CV profit source required a drastic departure from USDOC's past practices and no 
rational justification was provided for  the sudden change in practice, which indicates that the 
USDOC's administration of its laws and re gulations was not reasonable.  
IV. CONCLUSION  
49. For the reasons set forth above, Korea requests that the Panel recommend that the 
United  States bring its me asures into compliance with the A nti-Dumping Agreement, the 
GATT  1994, and the WTO Agreement.  WT/DS488/R/Add.1  
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  ANNEX B -2 
EXECUTIVE SUMMARY OF  THE ORAL STATEMENTS OF KOREA  
AT THE FIRST PANEL M EETING  
EXECUTIVE SUMMARY OF KOREA 'S OPENING STATEMENT  
 
I. INTRODUCTION  
 
1. There was no basis in this case to apply anti -dumping duties on imports of oil country 
tubular goods, or "OCTG, " from Korea. This was indeed the conclusion of the United States 
Department of Commerce ( "USDOC ") in its Preliminary Determination, before it was put under 
tremendous political pressure from members of the U.S. Congress and the domestic industry to 
change its conclusion in its Final Determination.   
 
2. What followed after the Preliminary Determination was a politically -motivated, results -
oriented inves tigation, in which USDOC deviated from its own practices, violated respondents ' due 
process rights, and ignored the obligations of the AD Agreement, in an effort to find the positive 
dumping margin required to impose anti -dumping measures.   
 
3. The USDOC achieved the result demanded by members of the U.S. Congress and the 
domestic industry by relying on an improperly high constructed value profit rate, or "CV profit ". 
The CV profit source that the USDOC used did not reflect profits in the exporting country  and was 
derived from a company —Tenaris —that sells premium products with a profit margin three times 
higher than the profit margin initially alleged by petitioners.  
 
4. However, the USDOC could not simply use the Tenaris data. Instead, it had to reason 
backward and first lay the groundwork to use such data. USDOC did so by adopting an excessively 
narrow definition of the "same general category of products " that precluded from consideration 
other data source on the record. The USDOC 's overly narrow definiti on of the "same general 
category of products " in this case, its improper dismissal of other data, and its ultimate use of the 
Tenaris data are all actions that were inconsistent with the United States ' obligations under the 
AD Agreement.    
 
5. Korea also challenges, in these proceedings, the "U.S. Viability Test ", which imposes an 
overly rigid threshold that is not permissible under Article 2.2 of the AD Agreement.  
 
II. THE U.S. VIABILITY TEST IS INCONSIS TENT WITH ARTICLE 2.2 OF THE 
AD AGREEMENT  
 
6. The U. S. Viability Test for third -country markets is "as such " inconsistent with Article 2.2 of 
the AD Agreement. Article 2.2 sets out the circumstances under which the sales price in the home 
market may not be an appropriate option for normal value. When these circumstances are met, 
the AD Agreement permits an investigating authority to calculate normal value based on either: 
(1) the comparable price of the like product exported to an appropriate  third country, provided 
that this price is representative , or (2) the constructed normal value.  
 
7. Under U.S. law, the USDOC may use third -country sales only where three cumulative 
requirements are met: (i) the third -country sales price is representative; (ii) the quantity or value 
of sales to the third -country market m eets a five percent threshold; and (iii) no "particular market 
situation " exists.   
 
8. As should be immediately apparent, the requirement in U.S. law that the quantity or value 
of sales to the third -country market must meet a five percent threshold is not  found in Article 2.2 
or elsewhere in the AD Agreement. The establishment in U.S. law of this additional requirement is 
inconsistent with Article 2.2 of the AD Agreement, which does not contemplate such a rigid 
quantitative rule to determine whether third -country sales should be used to cal culate normal 
value.  
 WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-11 - 
 
  9. Korea also challenges the U.S. Viability Test for third -country markets "as applied " in the 
OCTG investigation. The application of the Viability Test in the underlying antidumping proceeding 
is shown clearly in the Section A questionnaire that the USDOC issued to the mandatory 
respondents. The Section A questionnaire specifically instructed the Korean respondents not to 
report third -country market sales if those sales were "less than five percent of the volume of your 
sales to the United States ". Thus, the USDOC applied the rigid U.S. Viability Test through its 
questionnaire and precluded respondents from submitting third -country market data that did not 
meet the strict five percent threshold. .  
 
III. THE OCTG INVESTIGATION  
 
A. The USDOC 's Use of Constructed Value in the OCTG Investigation is Inconsistent 
with the Anti -Dumping Agreement  
 
10. In its Final Determination, the USDOC used the profit rate  of Tenaris to calculate the 
CV profit rate applica ble to the Korean respondents. This was inconsistent with the United States ' 
obligations because the USDOC: (1) impermissibly disregarded the respondents ' actual data for 
calculating profits under the preferred method provided in the chapeau of Article 2.2 .2; (2) applied 
an overly narrow definition of "same general category " of products under Articles 2.2.2(i)  
and 2.2.2(iii); (3) disregarded its obligation to calculate a "profit cap " under Article 2.2.2(iii); 
(4) failed to comply with the "reasonable method " requirement of Article 2.2.2(iii); and (5) ignored 
the differences between Tenaris and the Korean respondents, thereby failing to ensure a fair 
comparison between the export price and constructed normal value under Article 2.4.   
 
B. The USDOC 's Finding of Association is Inconsis tent with Article 2.3 of the 
AD Agreement  
 
11. Article 2.3 permits the investigating authority to disregard export prices if the investigating 
authority finds an "association " between the exporter and importer or a third party. Al though the 
AD Agreement does not directly define the term "association, " the definition of "relationship " 
enshrined in footnote 11 of the Agreement provides interpretive guidance. An examination of the 
U.S. statute shows that the United States itself has a dopted the definition of "relationship " 
contained in footnote 11 to define "affiliation " in the context of an anti -dumping proceeding.   
 
12. The USDOC 's determination of affiliation in its Final Determination was erroneous because 
the USDOC did not examin e whether POSCO was in a position to "exercise restraint " over 
NEXTEEL, but rather determined only that POSCO was in a position to [[***]]  NEXTEEL. Because 
the USDOC used an erroneous standard for determining association, its decision must be rejected.  
 
13. The USDOC 's assessment of the facts was also flawed. While the USDOC relied on 
arguments that NEXTEEL maintained a robust business relationship with POSCO, and that 
NEXTEEL purchased a large portion of its raw material input from POSCO, these facts do n ot 
establish that POSCO was in a position, legally or operationally, to exercise restraint or direction 
over NEXTEEL 's pricing of exported OCTG as required to find an "association " under Article 2.3. 
Rather, they demonstrate relationships that are common a mong suppliers and customers that seek 
to maintain positive business relations.  
 
14. Moreover, even assuming that footnote 11 did not apply under Article 2.3, the USDOC 's 
decision to disregard NEXTEEL 's export price to its Customer is still inconsistent w ith the 
requirements of the latter provision. In this case, the USDOC 's analysis of "association " focused on 
the relationship between NEXTEEL and its supplier, POSCO. The USDOC then automatically 
deemed the export price to be unreliable, not because of NEX TEEL's association with "the importer 
or a third party, " but based on POSCO 's relationship with NEXTEEL 's Customer.  Finally, Korea 
notes that the USDOC 's determinations were based on a static analysis.  
 
C. The USDOC Improperly Disregarded NEXTEEL 's Costs i n Violation of Article 2.2.1.1  
 
15. The USDOC also acted inconsistently with Article 2.2.1.1 of the AD Agreement by improperly 
disregarding NEXTEEL 's own cost data and relying, instead, on POSCO 's cost data to calculate 
constructed value. The record demons trates that NEXTEEL kept its records in accordance with the 
generally accepted accounting principles of Korea, as required under Article 2.2.1.1. Moreover, the WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-12 - 
 
  USDOC did not make any finding that NEXTEEL 's costs did not reasonably reflect the costs 
associa ted with the production and sale of th e product under consideration.  
 
D. Procedural Claims  
 
16. The USDOC only accepted Tenaris 's financial statements into the administrative record when 
it issued its Final Determination, thereby denying respondents an am ple and full opportunity to 
defend their interests contrary to Article 6.2 of the AD Agreement. Second, in contravention of 
Article 6.4, the USDOC failed to "provide timely opportunities to … see the information … that is 
used by the authorities … and to p repare presentations on the basis of this information" . Third, the 
USDOC did not comply with the requirements of Article 6.9. Whether the Tenaris financial 
statements were properly on the record was an "essential fact " in that it defined the universe of 
sources that the USDOC was considering for its determination of CV profit. Because the USDOC did 
not disclose this fact until the Final Determination, the respondents did not have a complete view 
of the "facts" that the USDOC considered relevant in its CV pr ofit determination, and were unable 
to fully formulate arguments against its use.   
 
17. The USDOC also improperly withheld from the Korean respondents various ex parte  
communications received between the Preliminary and the Final Determinations in violati on of 
Articles 6.4 and 6.9. In addition, several aspects of the USDOC 's determinations and disclosures 
did not meet the AD Agreement 's requirement for disclosure of all relevant information leading to 
the imposition of final measures, as required under Art icle 12.2.2.    
 
E. The USDOC 's Limitation of Mandatory Respondents and Failure to Consider 
Information Submitted by Voluntary Respondents is Inconsistent with Article 6.10  
 
18. The USDOC 's Respondent Selection Memo did not establish why it would be imprac ticable to 
examine all known producers and exporters or to consider any of the voluntary responses on the 
record submitted by non -selected respondents. Also, the USDOC failed to explain why selecting 
only two mandatory respondents was "reasonable ".   
 
F. The USDOC 's Conduct is Inconsistent with Article X:3(a) of the GATT 1994  
 
19. The USDOC acted inconsistently with Article X:3(a) of the GATT 1994 because it failed to 
administer its laws and regulations in a uniform, impartial, and reasonable manner.   
 
 
EXECUTIVE SUMMARY OF KOREA 'S CLOSING STATEMENT  
 
20. The United States has failed both in its written submission and in its presentations over the 
last two days to demonstrate that its laws allow the USDOC to do anything other than 
automatically apply a 5 per cent threshold, the so -called Viability Test, to third country sales. U.S. 
law only permits the USDOC to use third -country sales prices to calculate normal value when the 
aggregate quantity or value of the foreign like product sold by the exporter or produ cer in the third 
country is 5% or more  of the aggregate quantity or value of the subject merchandise sold to the 
United States. Therefore, as a rule, U.S. law requires the USDOC to disregard third country sales 
when they do not meet the Viability Test.  
 
21. Turning now to the USDOC 's use of constructed value, the United States ' interpretation 
applies a viability test that does not exist in the first sentence of Article 2.2.2, as a precondition to 
using actual data under the preferred method. Further, the Un ited States argues that the Korean 
exporters did not sell any OCTG in their home market. This statement is contradicted by the 
record, which clearly shows that the Korean exporters sold non -prime OCTG.   
 
22. The USDOC adopted an overly narrow definition o f "same general category of products ". The 
USDOC defined the "same general category of products " more narrowly than even the scope of the 
investigation, which includes products that cannot be used for down -hole applications. As the 
United States has admitt ed, this is not permissible – the "same general category " must be broader 
than the like product.   
 
23. Despite the plain text of Article 2.2.2(iii) of the AD Agreement, which states that "the 
amount for profit so established shall not exceed the profit no rmally realized by other exporters or WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-13 - 
 
  producers on sales of products of the same general category in the domestic market of the country 
of origin ", the United States argues that the USDOC 's decision not to apply a profit cap was 
consistent with Article 2.2 .2(iii). However, the United States again is effectively deleting an entire 
phrase from the Agreement. The United States admits that the USDOC failed to apply a profit cap, 
but claims that it was justified in doing so because the necessary data to calculat e a profit cap was 
not on the record. This is factually incorrect, as the Korean exporters provided all the necessary 
data with which USDOC could calculate the profit cap.   
 
24. The USDOC 's reliance on the Tenaris financial statement was inconsistent with  Article 6.9. 
The USDOC 's actual use of the Tenaris financial statements as a CV profit source was also 
inconsistent with the purpose of the subparagraphs of Article 2.2.2 because the Tenaris financial 
statements do not reflect products in the same general  category of the "domestic market of the 
country of origin ". The United States cannot point to any evidence that Tenaris had any meaningful 
activity in Korea, nor does it consider whether Tenaris had any connection with Korea as relevant.   
 
25. Article 2. 3 prescribes two separate requirements, namely, a finding of association and a 
finding of unreliability of the export price. Meeting the first requirement does not automatically 
satisfy the second requirement, as the United States argues. In this case, the  USDOC did not 
conduct any assessment of whether th e export price was unreliable. Second, Article 2.2.1.1 is 
concerned with the reliability of the records  examined, not the appropriateness of the costs that 
those records reflect. There is nothing on the re cord to indicate that NEXTEEL 's actual records 
associated with raw materials used to produce OCTG were inaccurate or unreliable.  
 
26. Finally, Korea respectfully requests that the Panel rule on the Remand Redetermination as 
part of this dispute, as the US DOC's Remand Redetermination is inconsistent with the 
United  States ' obligations under the AD Agreement. Korea notes that a WTO panel has previously 
found it appropriate to include in its examination the USDOC 's remand redetermination.  WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-14 - 
 
  ANNEX B -3 
EXECUTIV E SUMMARY OF THE SEC OND WRITTEN  
SUBMISSION OF KOREA  
I. INTRODUCTION  
1. By adopting the Anti -Dumping Agreement, the United States made a commitment to refrain 
from imposing anti -dumping measures except when the existence of dumping and its injurious 
effect s are properly demonstrated after an unbiased investigation in which the due process rights 
of exporters are respected. In this case, the United States did not abide by this commitment.  After 
the negative preliminary determination, the investigation turned  into a politically -motivated, 
results -driven process in which the obligations of the Anti -Dumping Agreement were set aside in 
the interest of arriving at an affirmative dumping determination and the highest margins possible.   
 
2. In its submissions, Kore a has demonstrated that the USDOC made a 180 degree turn as to 
the usefulness of Tenaris's profit rate and how it withheld this decision from the respondents until 
the very end of its investigation. Moreover, the USDOC reasoned backwards using an arbitrary  
definition of "same general category of products" in order to improperly discard other sources of 
constructed value ("CV") profit. Remarkably, the USDOC went so far as to define the "same 
general category of products" more narrowly than the product scope of the investigation.   
 
3. Article 2.1 of the Anti -Dumping Agreement provides that a product is "dumped" when it is 
"introduced into the commerce of another country at less than its normal value," that is, "if the 
export price of the product exported from  one country to another is less than the comparable 
price, in the ordinary course of trade, for the like product when destined for consu mption in the 
exporting country ". This definition of dumping is unrecognizable in the USDOC's final 
determination in thi s case. Rather than comparing prices in the United States to prices in Korea, 
the USDOC compared prices in the United States to the prices of Tenaris, a producer organized 
under the laws of Luxembourg, with no demonstrated production or sales of OCTG in Ko rea, and 
with ties to one of the U.S. petitioners. The determination made by the USDOC therefore is not a 
determination of "dumping" , at least as this concept is defined in the Anti -Dumping Agreement.   
 
II. THE U.S. VIABILITY TEST IS INCONSISTENT "AS SUCH " AND "AS APPLIED" WITH 
ARTICLE 2.2 OF THE ANTI -DUMPING AGREEMENT  
4. U.S. law -particularly, Title 19, section 1677b(a)(1)(B) of the United States Code -only 
permits the USDOC to use third -country sales to calculate normal value if the aggregate quantity 
or value of the foreign like product sold by the exporter or producer in the third country is 5% or 
more of the aggregate quantity (or value) of the subject merchandise sold in the United States or 
for export to the United States. This five percent threshold , which Korea has referred to as the 
"U.S. Viability Test" , is "as such" inconsistent with Article 2.2 of the Anti -Dumping Agreement, 
because no such rigid, quantitative threshold is contemplated for third -country sales in the Anti -
Dumping Agreement.  
5. The United States does not dispute that its statute imposes a strict five percent threshold for 
third party sales. Instead, the United States has argued that the use of the term "normally" in the 
regulations implementing the statute overrides the statute and  permits the USDOC to use third -
country sales that do not meet the five percent threshold.   
6. Under U.S. law, however, statutes are hierarchically superior to regulations adopted by 
administering agencies. Moreover, the term "normally" in the regulations  only pertain to the use of 
home market sales. In contrast, the regulations pertaining to the use of third -country sales 
reference the statute, confirming that the regulations are subject to the strict five percent 
threshold established by the statute.  
7. The United States also fails in its attempt to rely on the Statement of Administrative Action 
("SAA"). The SAA is an interpretive tool that cannot change the meaning of, or override, the 
statute. Moreover, the text of the SAA confirms that sales to the th ird country must not be less WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-15 - 
 
  than five percent  of sales to the United States, and it distinguishes the viability requirements for 
the home market from the viability requirement for third -country markets.  
8. Korea has further demonstrated that the USDOC's practice confirms its own understanding 
that third -country sales must meet a five percent threshold. The USDOC has never deviated from 
the five percent threshold in the past sixteen years, and the instructions contained in the USDOC's 
standard questionnair e template do not permit respondents to submit third -country sales data 
unless these sales meet the strict five percent threshold.  
9. The United States has also suggested that Article 2.2 does not prohibit Members from 
considering the volume of sales in as sessing the appropriateness of third -country sales. 
Nonetheless, the term "appropriate" in Article 2.2 qualifies the third country  to which a like 
product is exported, not the volume  of exports to that third country. Thus, the volume of sales to a 
third co untry does not determine whether the third country itself is an "appropriate" comparison 
market.   
10. Nor is the United States correct in that the U.S. Viability Test is justified by the fact that 
Article 2.2 does not require the use of third -country sales , but rather, presents the use of third -
country sales as one of two options. Under the United States' theory, statutes or regulations 
implementing alternative approaches set out in the Anti -Dumping Agreement could never be 
challenged "as such" regardless o f how far they deviate from a Member's obligations under the 
Anti-Dumping Agreement. Such a situation cannot be reconciled with the obligation in Article 18.4 
of the Anti -Dumping Agreement that "[e]ach Member shall take all necessary steps, of a general or  
particular character, to ensure … the conformity of its laws, regulations and administrative 
procedures" . Korea's "as such" claim in this case is no different than earlier challenges to the use 
of zeroing under Article 2.4.2 of the Anti -Dumping Agreement.  Like Article 2.2, Article 2.4.2 does 
not establish a hierarchy between the first two options. Despite the existence of a choice of 
methodologies and the absence of a hierarchy between the first two options, the use of zeroing 
has been found to be "as such " inconsistent with Article 2.4.2.1 
 
11. For these reasons, the U.S. Viability Test is "as such" inconsistent with Article 2.2 of the 
Anti-Dumping Agreement.  Korea has demonstrated that the U.S. Viability Test was applied in the 
investigation of OCTG from  Korea.  As a result, its application by the USDOC in the investigation of 
OCTG from Korea also violates Article 2.2  of the Anti -Dumping Agreement.  
 
III. THE USDOC'S FAILURE TO USE ACTUAL DATA IN THE CALCULATION OF 
CONSTRUCTED VALUE IS INCONSISTENT WITH TH E CHAPEAU OF ARTICLE 2.2.2  
12. The use of the term "shall" in the chapeau of Article 2.2.2 makes clear that, when 
constructing normal value, authorities must use the producer/exporter's actual data for SG&A and 
profit, whenever such data is available. The United States does not dispute that the USDOC did not 
use actual profit data, but it argues that the USDOC was not required to do so.    
13. First, the United States incorrectly argues that the chapeau only applies in situations where 
the home market is vi able but does not contain "like" products that are identical or similar to the 
exporter merchandise. However, the Appellate Body in EC – Tube or Pipe Fittings  confirmed that 
low-volume sales that are dismissed as a basis for calculating normal value under Article 2.2 
cannot be dismissed as a source of actual data for the purposes of calculating constructed value 
under the chapeau of Article 2.2.2. Moreover, the United States is not permitted to unilaterally 
limit the utility of the chapeau to an arbitrarily  defined subset of a "like product" that is neither 
identical nor similar to the product under consideration.  
14. Second , the United States erroneously argues that it did not have information on the record 
from which it could derive actual profit data for  the Korean respondents, because the home market 
profit data provided by both respondents derived from non -prime OCTG, which the United States 
argues is not a "like product" . The United States' position is undermined by the USDOC's 
determination in its par allel investigation of OCTG from Ukraine  that "rejects" , which are 
equivalent to "non -prime" OCTG, were "like" products as defined by the scope of the investigation. 
                                                
1 See Appellate Body Report, US – Zeroing (EC) , para. 222; Appellate Body Report, US – Zeroing (Japan) , 
paras. 137 -138. WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-16 - 
 
  As scope definitions apply equally to all investigations initiated based on the same petit ion 
(application), the USDOC's scope determination in the Ukraine case applies to the Korea case.  
15. Third, the United States mistakenly claims that the Article 2.2.2 chapeau does not 
contemplate the use of third -country profit data, as this would render  the "preferred" method 
under the chapeau broader than the "alternative" methods under Article 2.2.2(i) and (ii). However, 
the subparagraphs of Article 2.2.2 operate to encompass certain data sources in addition to  the 
data source available under the prefe rred method, not to substitute for  the chapeau's data scope. 
Therefore, the use of the alternative methods inevitably results in a broadening of the data in 
comparison to the preferred method of the chapeau.  
 
16. The United States' also grossly exaggerates  the administrative burden of using third -country 
data. In any event, the USDOC in the underlying investigation did not decline to use the chapeau 
because it would be too burdensome but because it found that no viable home or third -country 
market was avail able. Moreover, an investigating authority cannot be discharged of its duties 
under the Anti -Dumping Agreement simply because it is faced with certain practical difficulties.   
 
17. Fourth , the United States' claim that [[***]]  profit rates cannot be used as a source of CV 
profit under the Article 2.2.2 chapeau is incorrect. Constructed  value calculated under Article  2.2.2 
is intended to approximate sales of the like product in the domestic market or third country 
market under Article 2.2. There may be situ ations where actual sales data in a domestic market or 
third country market show that the exporter has sold products at a [[***]] . Article 2.2.1, on 
which the United States relies to support its argument, does not stand for the proposition that 
[[***]]  sales should be disregarded. Rather, Article 2.2.1 provides that [[***]]  sales may only 
be disregarded in limited instances where several other requirements are met.   
 
18. Fifth, the United States fails to explain the basis for using the Korean respondents' actual 
data for SG&A while declining to use actual data to calculate profit. Article 2.2.2 does not provide 
for differential treatment between SG&A and profit, but rather, requires that the investigating 
authority use actual data with respect to both. Furt hermore, even though certain aspects of SG&A 
may appear not to be specific to a particular product, such non -specific costs must eventually be 
allocated to a particular product for the purpose of calculating the amount of constructed value for 
that specifi c product. In this sense, all SG&A, as well as profit, are specific to particular products.  
IV. THE USDOC'S USE OF CV PROFIT IS INCONSISTENT WITH ARTICLE  2.2.2 
BECAUSE ITS DEFINITION OF THE "SAME GENERAL CATEGORY OF PRODUCTS" 
WAS IMPERMISSIBLY NARROW  
19. Korea has demonstrated that the USDOC's decision to use Tenaris's financial statements as 
a CV profit source was based on an impermissibly narrow interpretation of the "same general 
category of products" under Article 2.2.2. The United States tries to defe nd the USDOC's 
determination by interpreting the "same general category of products" to mean that products must 
have the same characteristics as those of the subject merchandise. However, the term "same" 
modifies "general category" and not "products," requ iring two products to both belong to a 
"general category," but not requiring these products to be the "same" . Thus, the USDOC applied 
an incorrect standard in defining the scope of the "same general category" of products.   
20. The USDOC's decision to excl ude line and standard pipe from OCTG's "same general 
category" also relies on its misplaced distinction between the purposes of OCTG pipes and non -
OCTG pipes. The USDOC improperly found that non -OCTG pipes such as line and standard pipes 
cannot fall within  the "same general category" as OCTG because line and standard pipes are 
"primarily intended for the conveyance of fluids and gases" , whereas OCTG is intended for "down 
hole application" . However, "conveyance of fluids and gases" is the purpose of not only  line pipe 
and standard pipe, but also of OCTG.   
21. The USDOC's determination is also flawed because the definition of the "same general 
category of products" in this case is even narrower than the definition of "like products" used in 
the scope language . In defining the "same general category of products" , the USDOC improperly 
focused on whether the products could be used for down hole applications. However, as described 
above, the "like product" also included "rejects," i.e., pipes that could not be use d for down hole 
applications.   WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-17 - 
 
  22. Furthermore, even under the United States' overly -narrow definition (which includes "limited 
service" OCTG that can be used in some down hole applications), line pipe should be included in 
the same general category of pr oducts as OCTG as it can be used for some down hole applications.  
23. Finally,  the United States refers to the panel report in Thailand – H-Beams , which allegedly 
relied on Article 3.6 of the Anti -Dumping Agreement for contextual support to conclude that use of 
a narrower rather than a broader category is permitted. Article 3.6 states that, when "like product" 
data is not available, the authority may assess the effects of the dumped imports by an 
examination of "the narrowest group or range of products, wh ich includes the like product, for 
which the necessary information can be provided ". Thus, even under the "narrowest group or 
range of products" standard, the database must still be broadened so that "the necessary 
information can be provided" . By expandin g the "same general category" to include only non -
subject OCTG and drill pipe, the USDOC did not expand the database at all.  
V. THE USDOC'S USE OF TENARIS'S FINANCIAL STATEMENTS TO CALCULATE CV 
PROFIT IS INCONSISTENT WITH ARTICLE 2.2.2(iii)  
24. Article 2 .2.2(iii) permits the investigating authority to calculate CV profit based on "any 
other reasonable method, provided that the amount for profit so established shall not exceed the 
profit normally realized by other exporters or producers on sales of product s of the same general 
category in the domestic market of the country of origin, i.e., "the profit cap" . The United States 
acted inconsistently with its obligations under Article 2.2.2(iii) because the USDOC did not 
calculate a profit cap and did not ensure  the reasonableness of its method of calculating CV profit.  
25. First, as confirmed by the panel in EU – Footwear , the calculation of a profit cap is 
mandatory. The USDOC acted inconsistently with Article 2.2.2(iii) in the underlying investigation 
by faili ng to calculate a profit cap.   
26. Second , in using Tenaris's financial statements, the USDOC failed to ensure that its method 
for calculating CV profit was reasonable under Article 2.2.2(iii). As the Korean respondents pointed 
out in the underlying inves tigation, there are various differences between Tenaris and the Korean 
respondents that render the profit rates incomparable, including differences in products and 
business model, scale of production, and position in the distribution chain. In addition, Te naris's 
profit rates reflected revenue generated from its sale of services , as opposed to goods , as well as 
Tenaris's sales of non -tubular products.  
27. Third, the USDOC's use of Tenaris's financial statements was not rationally directed at 
approximating w hat the Korean respondents' profit margin for the like product would have been in 
Korea, as required to constitute a "reasonable method" according to the panel in EU – Biodiesel . 
Rather, the USDOC chose to only satisfy the requirement to approximate the "l ike product" , while 
disregarding the requirement to approximate the profit margin as if the products had been sold in 
the ordinary course of trade in Korea.   
28. In addition, Korea requests that this Panel find that the remand redetermination issued by 
the USDOC in the underlying investigation is inconsistent with the United States' WTO obligations 
not only because it did not rectify the inconsistencies identified above by Korea, but also because it 
calculates and applies a profit cap that is in itself inc onsistent with Articles 2.2 and 2.2.2(iii) of the 
Anti-Dumping Agreement.  
VI. THE USDOC FAILED TO CONDUCT A FAIR COMPA RISON UNDER ARTICLE 2.4 
29. Korea has provided extensive explanations of the differences between Tenaris and the 
Korean respondents that a ffected price comparability between the normal value incorporating 
Tenaris's profit rate and the export price incorporating the Korean respondents' own data. The 
USDOC did not make due allowances for these differences, thus failing to conduct a "fair 
compa rison" under Article 2.4. The USDOC simply dismissed these differences once it determined 
that "the merchandise produced and sold by Tenaris is predominantly the same as the 
merchandise under consideration" . Thus, rather than examining price comparability in light of the 
differences raised by the Korean respondents, the USDOC found it unnecessary to do so  once it 
had reached its erroneous determination that approximating the "like product" was sufficient to 
fulfill its obligations in selecting a CV profit s ource.   WT/DS488/R/Add.1  
BCI deleted , as indicated  [[***]]  
- B-18 - 
 
  VII. THE USDOC'S FINDING OF ASSOCIATION UNDER ARTICLE 2.3 WAS IMPROPER  
30. The USDOC's determination that NEXTEEL and POSCO were affiliated was not in accordance 
with Article 2.3 because it was not based on a proper assessment of whether POSCO was  in a 
position to control, i.e., exercise restraint or direction over, NEXTEEL. Rather, the USDOC applied 
an incorrect, looser standard to determine whether NEXT EEL and POSCO were associated. 
Moreover, based on an erroneous finding that NEXTEEL was affilia ted with POSCO (and with the 
Customer through POSCO's relationship with the Customer), the USDOC automatically disregarded 
NEXTEEL's export price without conducting a separate assessment of the reliability of NEXTEEL's 
export price to the Customer.   
31. The United States incorrectly argues that Article 2.3 only requires a finding of association, 
and does not require a separate assessment as to the reliability of the export price in order for an 
authority to construct export price. The United States' interp retation reads out an explicit 
requirement in Article 2.3 that the "export price is unreliable because of association  … between the 
exporter and the importer or a third party" . The term "appear" in Article 2.3 does not leave the 
determination of unreliabil ity completely up to the subjective perception of the authority. Such 
unfettered discretion would be contrary to the requirement stemming from Article 17.6(i) of the 
Anti-Dumping Agreement that investigating authorities' determination be based on positive 
evidence and a reasoned and adequate explanation.   
32. Furthermore,  contrary to the United States' assertion that "NEXTEEL did not present 
evidence in support of an argument that NEXTEEL's export prices were reliable despite the 
existence of an association ", NEXTEEL submitted abundant evidence that its export prices to the 
Customer were, in fact reliable, and simply a continuation of a pre -existing business relationship 
between NEXTEEL and the Customer that pre -dated any affiliation be tween POSCO and the 
Customer.  
VIII.  THE USDOC DID NOT EXAMINE THE RELIABILITY OF NEXTEEL'S COST RECORDS 
AS REQUIRED UNDER ARTICLE 2.2.1.1  
33. Article 2.2.1.1 of the Anti -Dumping Agreement requires investigating authorities to calculate 
costs on the basis of records kept by the exporter or producer under investigation, where such 
records: (1) are in accordance with the generally accepted accounting principles of the exporting 
country; and (2) reasonably reflect the costs associated with the production and sale of the 
product unde r consideration. The two conditions set forth in Article 2.2.1.1 are modified by the 
term "such records," demonstrating that the purpose of the Article is to ensure the reliability of the 
cost records , and not the reliability of the cost data .  
34. The USD OC's decision to disregard NEXTEEL's cost data is inconsistent with Article 2.2.1.1 
because it is premised on an improper finding of affiliation between NEXTEEL and POSCO. 
Furthermore, even setting aside the USDOC's affiliation determination, the USDOC's d ecision to 
disregard NEXTEEL's actual cost data is impermissible under Article 2.2.1.1 because NEXTEEL kept 
its records in accordance with generally accepted accounting practices, and NEXTEEL provided the 
actual costs that it paid to POSCO for its purchase s of raw materials used in the production of 
OCTG, ensuring that its cost records reflected the costs associated with the production and sale of 
the product under consideration. While the United States argues that the use of the term 
"normally" in Article 2.2.1.1 permits the investigating authority to deviate from the use of actual 
costs under circumstances beyond those described in Article 2.2.1.1, the panel in EU – Biodiesel  
has already rejected the approach proposed by the United States.   
IX. THE USDOC' S LIMITED EXAMINATION OF MANDATORY AND VOLUNTARY 
RESPONDENTS IS INCONSISTENT WITH ARTICLE 6.10  
35. Article 6.10 requires the authority to examine all known exporters and producers of the 
merchandise under investigation and only permits the authority to li mit its investigation when the 
number of exporters/producers is "so large" that individual determination would be 
"impracticable" . Moreover, Article 6.10 affords the authority only two methods of limiting its 
examination: (1) a reasonable number  of interes ted parties or producers using statistically valid 
samples, or (2) the largest percentage  of the volume of exports from the country in question WT/DS488/R/Add.1  
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- B-19 - 
 
  which can reasonably be investigated. In the underlying investigation, the USDOC improperly 
limited its investig ation and improperly declined to examine voluntary responses.  
36. In defending the USDOC's determination to limit its investigation, the United States relies on 
the USDOC's Respondent Selection Memorandum, which simply concludes that the number of 
potenti al respondents (ten) is "large relative to the resources available" , but does not explain why 
the number is "so large" as to render individual examination impracticable. In particular, the 
USDOC's Respondent Selection Memorandum does not provide a reasonab le explanation for its 
decision that it could only examine two mandatory respondents.   
37. The USDOC's determination is flawed also because it applied an impermissible method in 
limiting its examination. While the United States claims that the USDOC limit ed its examination to 
the "largest percentage  of the volume of the exports from Korea" , the USDOC arbitrarily 
determined that it was only able to examine two respondents that accounted for the largest 
volume of imports of the subject merchandise. Thus, the  USDOC selected what it determined to be 
the appropriate number of respondents  that it was able to examine and selected these 
respondents in the order of import volume, rather than determining what the largest percentage  of 
volume of exports that can reaso nably be investigated would be.  
38. Even when it justifiably limits its examination of mandatory respondents, Article 6.10.2 
requires the investigating authority to calculate individual dumping margins for respondents not 
initially selected, as long as th e respondents provide the necessary information to do so in a timely 
manner. The USDOC acted inconsistently with Article 6.10.2 by failing to examine any of the 
voluntary responses .    
X. PROCEDURAL CLAIMS  
A. The USDOC's Failure to Render a Decision on the  Placement of Tenaris's Financial 
Statements on the Record Until the Final Determination Violated Articles 6.2, 6.4, 
and 6.9  
39. The USDOC failed to protect the Korean respondents' due process rights under Articles 6.2, 
6.4, and 6.9 because it did not ren der a decision on the placement of Tenaris's financial 
statements on the record until its final determination. The Korean respondents were not "on 
notice" that the USDOC could use Tenaris's financial data to calculate CV profit based on a 
separate student report about Tenaris submitted earlier by a petitioner. The Tenaris financial 
statements were submitted as a separate submission that petitioners did not claim had any 
relation to the student report, but rather, purported to rebut NEXTEEL's supplemental 
questionnaire response. Moreover, the financial statements were untimely, and therefore, not 
properly placed on the record.  
40. The USDOC's failure to render a decision regarding the placement of Tenaris's financial 
statements on the record denied the Korean  respondents an opportunity to submit information 
rebutting the contents of the Tenaris financial statements. The USDOC has strict deadlines for the 
submission of factual information, and absent an affirmative decision by the USDOC, the Korean 
respondents were not permitted to submit information upon which they could rely to defend their 
position.    
41. In addition, the Tenaris profit data constitutes "essential facts" that the USDOC failed to 
disclose under Article 6.9. The United States errs in suggesting  that it constitutes  "reasoning or 
conclusion" , because the acceptance of Tenaris's profit data defined the universe of sources that 
the USDOC was considering for i ts determination of CV profit.  
B. The USDOC Failed to Protect the Korean Respondents' Due P rocess Rights Under 
Article 6.4 and 6.9 by Withholding Various Ex Parte  Communications  
42. The USDOC also failed to protect Korean respondents' due process rights under Articles 6.4 
and 6.9 because it withheld numerous ex parte  phone calls and meeting mem os until long after 
the meetings and phone calls took place. The United States does not dispute that the memos were 
not disclosed in a timely manner, but questions why the letters were "relevant" to the presentation 
of the respondents' cases, and how they would have been "used" by the Department under WT/DS488/R/Add.1  
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- B-20 - 
 
  Article  6.4. The ex parte  letters reflect the political pressure that the USDOC faced after calculating 
negative margins for the Korean respondents in the Preliminary Determination, and they also 
constitute th e only factual element that has changed between the Preliminary Determination and 
the Final Determination that could explain the USDOC's about -face. The ex parte  communications 
urged the USDOC to reconsider its decision on CV profit, the single issue that could convert the 
negative preliminary margin into a positive margin. Therefore, the ex parte  memos constituted 
information that was relevant to the presentation of the respondents' cases and that would have 
been "used" by the USDOC under Article 6.4. The ex parte  memos also constituted "essential 
facts" that the USDOC failed to disclose under Article 6.9, because they constituted information on 
the record that the USDOC considered in its decision to reverse its Preliminary Determination and 
find high affir mative margins in the Final D etermination.  
C. The USDOC's Final Determination Failed to Include All Relevant Information As 
Required Under Article 12.2.2  
43. Article 12.2.2 of the Anti -Dumping Agreement requires an investigating authority to provide 
in a public notice all relevant information on the matters of fact and law and reasons which have 
led to the imposition of final measures, including the reasons why it accepted or rejected 
arguments and claims made by the exporters in the investigation. Korea has demonstrated that 
the USDOC failed to comply with Article 12.2.2 because it did not provide the reasons for rejecting 
the Korean respondents' arguments regarding the inappropriateness of using Tenaris's financial 
statements as a CV profit source, and N EXTEEL's arguments that it was not affiliated with POSCO 
or the Customer. The United States points to two documents to argue that the USDOC did provide 
reasons for rejecting these arguments – the USDOC's Issues and Decision Memorandum and 
Affiliation Memo.  However, the United States does not identify where in these documents it 
addressed the specific arguments advance d by the Korean respondents.  
XI. VIOLATIONS OF THE GATT 1994  
A. The USDOC Acted Inconsistently With Article I:1 of the GATT 1994  
44. The USDO C treated OCTG from Korea less favorably than OCTG products from the territory 
of other Members subject to its parallel investigations, contrary to Article I:1 of the GATT. The 
United States does not contest that Korean OCTG products were treated different ly by the USDOC. 
Rather, the United States attempts to relegate such differential treatment to simple "procedural 
differences between the parallel OCTG investigations" based on "different facts that arise in 
antidumping proceedings ...". The United States' response is insufficient to rebut the prima facie  
case established by Korea. Specifically, the United States has failed to point to a single factual 
difference that explains the different treatment. Instead, the United States merely speculates that 
"severa l factors may have contributed to the treatment accorded to Korean companies and other 
foreign companies, which resulted in their particular antidumping rates" . Such speculation is 
insufficient to meet the United States' burden to establish any "factual di fferences" that explained 
the differential treatment.  
B. The USDOC Administered its Laws, Regulations, Decisions, and Rulings In a 
Manner that was Inconsistent with Article X:3(a) of the GATT 1994  
45. The USDOC's conduct is also inconsistent with Article X:3(a) of the GATT 1994. 
Article  X:3(a) seeks to ensure transparency and procedural fairness by requiring WTO Members to 
"administer in a uniform, impartial, and reasonable manner all its laws, regulations, decisions and 
rulings of the kind described in pa ragraph 1 of this Article" . Article X:1, in turn, covers "[l]aws, 
regulations, judicial decisions and administrative rulings of general application ...". Korea has 
established a prima facie  case that the USDOC failed to meet the requirements of Article X:3( a).  
46. The United States does not rebut Korea's claim that the USDOC's application of its laws and 
regulations with respect to the Korean and Turkish respondents was not uni form, impartial or 
reasonable. Rather, the United States incorrectly argues that Korea's claim falls outside the scope 
of Article X:3(a) because Korea challenges the contents of the USDOC's determinations and 
because Korea allegedly did not identify the specific measures being administered. However, 
Korea's claim concerns the way that the USDOC has administered  its anti -dumping laws and 
regulations, which are of general application. Korea has also identified the specific laws and WT/DS488/R/Add.1  
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- B-21 - 
 
  regulations that were improperly administered by the USDOC including the regulations relating to 
the submiss ion and acceptance of new factual information, the laws and regulations governing the 
calculation of an anti -dumping duty margin, and the laws and regulations relating to the 
calculation of CV profit.   
XII. CONSEQUENTIAL CLAIMS  
47. The USDOC's failure to  comply with the substantive and procedural requirements of the 
Anti-Dumping Agreement discussed above gives rise to consequ ential violations of the 
United  States' obligations under Articles 1, 9.3, and 18.4 of the Anti -Dumping Agreement. The 
United States ' violations of the Anti -Dumping Agreement also result in a violation of Article VI of 
the GATT 1994 and Article XVI:4 of the WTO Agreement. The United States does not dispute that 
these consequential findings would flow directly from the Panel's findings of inconsistency with 
respect to Korea's other claims.  
XIII.  CONCLUSION  
48. For the reasons set out in this submission and in previous submissions, Korea respectfully 
requests that the Panel recommend that the United States bring its measures, including t he 
USDOC's remand redetermination, into compliance with the A nti-Dumping Agreement, the 
GATT  1994, and the WTO Agreement.   WT/DS488/R/Add.1  
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  ANNEX B -4 
EXECUTIVE SUMMARY OF  THE ORAL STATEMENTS OF  
KOREA AT THE SECOND  PANEL MEETING  
EXECUTIVE SUMMARY OF KOREA’S OPENING STATE MENT  
 
I. INTRODUCTION  
1. In its previous submissions, Korea demonstrated that the U.S. Viability Test and the 
USDOC 's imposition of anti -dumping duties with respect to OCTG from Korea are inconsistent with 
the United States ' WTO obligations . In its Second Written Submission, the United States repeats 
many of the same arguments that it presented in its previous submissions, but fails to rebut 
Korea 's arguments.  
II. THE U.S. VIABILITY T EST IS "AS SUCH " AND "AS APPLIED " INCONSISTENT WITH 
ARTICLE 2.2 OF THE A D AGREEMENT  
2. The U.S. Viability Test is inconsistent "as such " because it imposes a condition on the use of 
third-country sales as a basis for calculating normal value that is not allowed under Article 2.2 of 
the AD Agreement . It is also inconsistent "as applied " with Article 2.2 insofar as the USDOC 
applied the U.S. Viability Test in the underlying investigation .   
3. The term "appropriate " in Article 2.2 does not justify the rigid volume test, as the term 
directly qualifies the "third country ". Thus, Arti cle 2.2 requires that the third country market itself 
be appropriate, which is distinct from the reference in Article 2.2 to the "volume of sales " as the 
relevant factor for determining whether to use the "sales" in the home market to calculate normal 
value. Article 2.2.1 of the AD Agreement also does not support the United States ' argument 
because it does not relate to the appropriateness of a market, but addresses whether specific sales 
within a market may be excluded from the calculation of normal value . Similarly, any indices used 
to determine appropriateness of a market would have to relate to the market itself . In any event, 
the term "appropriate " implies a balancing test, and requires an assessment to be made on a case -
by-case basis, as opposed to a r igid bright line rule.  
4. The case at hand is analogous to Mexico – Anti-Dumping Duties on Rice and to previous 
challenges to the use of zeroing . Just as the authority imposed additional conditions on a 
respondent 's right to an administrative review in Mexico – Anti-Dumping Measures on Rice , the 
U.S. Viability Test infringes on a respondent 's right under Article 18.1 of the AD Agreement to be 
subject only to measures that are consistent with the AD Agreement . Also, as in the zeroing cases, 
the authority ha d a choice between two methodologies that were not subject to any hierarchy .   
5. The United States also argues that the U.S. Viability Test is not mandatory . However, the 
plain language of the U.S. statute forbids the use of third -country sales to calcula te normal value 
when these sales do not meet the five percent threshold . The USDOC 's regulations cross -reference 
the statute, and the requirements contained therein for using sales in the "exporting country " are 
distinct from the requirements for using sal es to the "third country ".  
6. Finally, the application of the U.S. Viability Test by the USDOC in the investigation of OCTG 
from Korea also violates Article 2.2 .  
III. THE USDOC 'S FAILURE TO USE ACTUAL DATA IN THE CALCULATION OF CV PROFIT 
IS INCONSISTENT WITH THE ARTICLE 2.2.2 CHAPEAU  
7. The USDOC 's failure to use actual data in the calculation of constructed value is inconsistent 
with the chapeau of Article 2.2.2 of the AD Agreement . The use of the term "shall" in the chapeau 
of Article 2.2.2 makes clear  that, when constructing normal value, authorities must use the 
producer or exporter 's actual data for SG&A and profit, whenever such data is available.   WT/DS488/R/Add.1  
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- B-23 - 
 
  8. The United States insists that Article 2.2.2 is primarily intended for situations where normal 
value is based on home market sales, but where a certain subset of those sales cannot be used 
because they are outside the ordinary course of trade or do not include sales of products that are 
identical or similar to those sold in the relevant export market . The United States provides no 
support for its assertion and fails to explain how products that are neither "identical " nor "similar " 
could constitute "like products " under Article 2.6 of the AD Agreement . In any case, these 
scenarios present at most only on e possible situation where Article 2.2.2 may apply . With respect 
to the situation at hand, the Appellate Body has confirmed that "low volume " sales rejected under 
Article 2.2 can be an appropriate source of CV profit.  
9. Furthermore, the Article 2.2.2 chap eau does not preclude the use of third country profit data 
to construct normal value . As a textual matter, the chapeau contains no prohibition on the use of 
actual data from third -country sales . As a practical matter, the USDOC had readily available to it 
actual profit data for each market, and did not even attempt to examine whether the respondents ' 
third country sales were made in the ordinary course of trade.  
10. The United States is incorrect that Article 2.2.2 prohibits the use of negative profit marg ins. 
The purpose of Article 2.2.2 is to approximate the profit rates that would have been achieved 
through the sale of like product in the home market . If evidence shows that the profit margin in 
the home market would have been negative, the CV profit must  reflect such profit experience 
unless the authorities specifically determine that the sales were outside the ordinary course of 
trade . Finally, the use of the term "plus" in Article 2.2.2 merely instructs the inclusion of SG&A and 
profit and does not indi cate the actual values of these factors.  
IV. THE USDOC 'S DEFINITION OF THE "SAME GENERAL CATEGORY OF PRODUCTS " 
WAS IMPERMISSIBLY NARROW UNDER ARTICLE 2.2.2  
11. The USDOC 's use of CV profit is inconsistent with Article 2.2.2 because its definition of the 
"same general category of products " was impermissibly narrow and, in many respects, even 
narrower than its definition of the "like product ". The "same general category " of products should 
be broader than the "like product ". While the USDOC concluded in the Korea investigation that 
products that fall within the "same general category of products " as OCTG must have the ability 
for use in down -hole applications, the USDOC itself confirmed in its concurrent investigation of 
OCTG from Ukraine that the like produc t includes products that cannot be used in such 
applications, including non -prime and "reject " pipes used for structural purposes or to transport 
water – the same purposes for which line pipe and standard pipe are used . The USDOC 's scope 
definitions apply equally in all investigations subject to the same petition, including its 
investigations of Ukraine and Korea.  
V. THE USDOC 'S CALCULATION OF CV PROFIT IS INCO NSISTENT WITH 
ARTICLE  2.2.2(iii ) 
12. The USDOC 's use of Tenaris 's profit data to calculate the CV  profit for the Korean 
respondents is inconsistent with Article 2.2.2(iii) of the AD Agreement . The purpose of Article 2.2.2 
is to approximate what the profit of a producer of the like product would have been if the like 
product had been sold in the ordina ry course of trade in the country of export . The use of Tenaris 's 
financial statements to calculate CV profit was not "reasonable " under Article 2.2.2(iii) because the 
USDOC did not even attempt to approximate the profit rate in the home market, finding it  
sufficient to only approximate the "like product ". Moreover, the USDOC even failed to properly 
approximate the like product  in calculating the CV profit because Tenaris 's profit rate included 
revenues generated from Tenaris 's sales of non -tubular products  and Tenaris 's sales of services.  
13. The USDOC also violated Article 2.2.2(iii) because it disregarded the requirement to 
calculate a profit cap . The plain text confirms that the application of a profit cap is mandatory, and 
several WTO panels have confi rmed the same . The USDOC 's failure to calculate a profit cap 
renders its use of Tenaris 's financial data to calculate CV profit per se  inconsistent with 
Article  2.2.2(iii) .  WT/DS488/R/Add.1  
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- B-24 - 
 
  VI. THE USDOC 'S REMAND REDETERMINA TION IS ALSO INCONSI STENT WITH THE 
ANTI -DUMPING AGREEMENT  
14. Korea reiterates its request that the Panel find that the USDOC 's Remand Redetermination is 
inconsistent with the United States ' WTO obligations because: (1) the USDOC failed to use the 
Korean respondents ' actual profit data as required under  Article 2.2.2; (2) the USDOC 's calculation 
of CV profit was unreasonable under Article 2.2.2(iii) because it continued to adhere to its 
impermissibly narrow definition of the "same general category of products " and  calculated  the 
CV profit as an average of profit rates of Tenaris and OAO TMK, a company that bears many of the 
same flaws as Tenaris as a CV profit source; and (3) the USDOC continued to find that it was not 
able to calculate a profit cap and that it was not required to calculate a profit cap based on the 
home market profit data, in contravention of Article 2.2.2(iii).  
VII. THE USDOC FAILED TO MAKE A FAIR COMPARISON BETWEEN EXPORT PRICE AND 
NORMAL VALUE UNDER ARTICLE 2.4  
15. The United States also violated Article 2.4 of the AD Agreement becau se the USDOC did not 
conduct a "fair comparison " between the export price and normal value by making due allowances 
for differences that affect price comparability, despite extensive evidence on the record regarding 
the differences between Tenaris and the Korean respondents . Furthermore, the USDOC continued 
to commit the same error in its Remand Redetermination by failing to make due allowances for 
differences that affected price comparability between the normal value based on Tenaris and TMK 's 
profit rates  and the Korean respondents ' export prices.  
VIII.  THE USDOC 'S FINDING OF ASSOCIATION UNDER ARTICLE 2.3 WAS IMPROPER  
16. The USDOC 's findings of association, or affiliation, between NEXTEEL and POSCO, and 
NEXTEEL and its customer, were inconsistent with Ar ticle 2.3 of the AD Agreement . The United 
States has incorporated footnote 11 of the AD Agreement into its own laws, requiring a finding of 
"control " among parties in order to find that affiliation, or association, exists . In the underlying 
investigation, however, the USDOC arbitrarily replaced its statutory requirement of "control " with a 
much less rigid standard . The USDOC also did not make a separate assessment as to the reliability 
of the export price as required under Article 2.3.  
IX. THE USDOC DID NOT  EXAMINE THE RELIABILITY OF NEXTEEL 'S COST RECORDS AS 
REQUIRED UNDER ARTICLE 2.2.1.1  
17. Article 2.2.1.1 of the AD Agreement requires investigating authorities to calculate costs on 
the basis of records kept by the exporter or producer under investigation when certain conditions 
are met . NEXTEEL kept its records in accordance with GAAP, and its cost records reasonably 
reflected its actual costs of purchases of hot -rolled coil, as required under Article 2.2.1.1 . 
However, after improperly finding that NEXTEEL  was affiliated with POSCO, the USDOC 
disregarded NEXTEEL 's actual cost records, and instead, relied on POSCO 's sales price of hot -rolled 
coil to its other  customers .   
X. THE USDOC 'S DECISION TO LIMIT ITS EXAMINATION WAS INCONSISTENT WITH 
ARTICLE 6.10  
18. The United States concedes that the USDOC 's examination was limited to a "certain number 
of respondents ". However, it did not use statistically valid samples as required under Article 6.10 
of the AD Agreement when limiting its examination by the number of  respondents . The 
United  States also claims that, in deciding it could not examine any voluntary respondents, the 
USDOC conducted a separate analysis of its available resources . However, the USDOC did not 
conduct a separate analysis, but instead relied on the same set of circumstances upon which it 
relied in order to limit its examination of mandatory respondents .  
XI. ADDITIONAL CLAIMS  
19. The United States failed to protect the due process rights of the Korean respondents as 
required under Article 6 of t he AD Agreement and failed to comply w ith the requirements of 
Article  12 of the AD Agreement . The USDOC also failed to administer its regulations in a uniform, WT/DS488/R/Add.1  
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- B-25 - 
 
  impartial, and reasonable manner in accordance with Article X:3(a) of the GATT 1994, and failed 
to provide non -discriminatory treatment to OCTG from Korea as required under Article I:1 of the 
GATT 1994 . Finally, the USDOC 's failure to comply with Articles 2, 6, and 12 of the AD Agreement 
results in consequential violations of Articles 1 and 18.4 of t he AD Agreement, as well as Article VI 
of the GATT 1994 and Article XVI:4 of the WTO Agreement .   
EXECUTIVE SUMMARY OF KOREA 'S CLOSING STATEMENT  
20. The administrative record in this case shows that the Korean respondents have not engaged 
in dumping . After making a negative dumping determination for both Korean respondents in the 
preliminary determination, the USDOC was bombarded with letters and communications from the 
U.S. Congress and industry representatives calling for a reconsideration of its calculat ion, and in 
particular, its decision on CV profit . Faced with political pressure, the USDOC accepted and used 
Tenaris 's financial statements to calculate CV profit even though the financial statements had been 
submitted two months past the deadline . This w as the only way for the USDOC to revise its 
analysis in a way that would increase the Korean respondents ' dumping margins . The results -
oriented approach adopted by the USDOC has led to inconsistencies and illogical results that go 
against United States ' WTO obligations.  
21. The USDOC ignored its obligations under the chapeau of Article 2.2.2 of the AD Agreement 
to use the Korean respondents ' actual profit data as a CV profit source, arguing that these profit 
data are derived from "low volume " sales. Howeve r, the Appellate Body has already confirmed that 
profit data derived from low volume sales are an appropriate CV profit source under the Article 
2.2.2 chapeau . With respect to the use of actual third country market profit data, the "doomsday " 
scenario pres ented by the United States in which the authority would have to collect and examine 
large amounts of data simply did not exist here .   
22. The USDOC adopted an overly narrow interpretation of "same general category of products " 
that is narrower than its de finition of "like product. "  The United States does not dispute that such 
narrow interpretation would be impermissible under Article 2.2.2 of the AD Agreement, but claims 
that the USDOC 's own scope definition, as clarified in the OCTG from Ukraine  investig ation, does 
not extend to the Korea investigation . Korea has shown that scope definitions apply to all 
concurrent investigations covered under the same petition .   
23. The United States agrees with Korea that the purpose of Article 2.2.2 is to approximate what 
the profit rate of the like product would have been had the product been sold in the domestic 
market of the exporter, but it argues that USDOC 's use of Tenaris 's financial data was "reasonable " 
under Article 2.2.2(iii) because the data approximated th e "like product ". Even setting aside the 
fact that the USDOC did not even attempt to approximate the home market, it even failed to 
properly approximate the "like product. "  
24. The United States also continues to ignore the plain text of Article 2.2.2(iii ) and argues that 
it was not required to calculate or apply a profit cap . However, this alleged inability to calculate a 
profit cap was brought about by the USDOC 's own impermissible interpretation of the "same 
general category of products".  Also, even acc epting the USDOC 's definition, this does not provide a 
valid justification for circumventing the explicit requirement of calculating a profit cap that the 
drafters included in Article 2.2.2(iii) .  
25. The United States concedes that there was substantial e vidence on the record addressing 
the differences between Tenaris and the Korean respondents that affected their profitability and, 
as a result, the price comparability between the constructed normal value using Tenaris 's profit 
and the export price . Noneth eless, the USDOC failed to fulfill its obligation to make due allowances 
for such differences, as required under Article 2.4 .  
26. The United States infringed on the Korean respondents ' due process rights and prevented 
the Korean respondents from defending  their interests under Article 6 by accepting the untimely 
submission of Tenaris 's financial statements and failing to inform interested parties of its decision 
to accept the submission until its final determination .   
27. The USDOC could have calculated n ormal value based on the Korean respondents ' sales to 
an appropriate third -country market under the alternative method of Article 2.2 . However, it was WT/DS488/R/Add.1  
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- B-26 - 
 
  precluded from doing so because the U.S. Viability Test imposes a strict quantitative threshold for 
the u se of third -country markets that is not contemplated under Article 2.2 . To be clear, Korea is 
not requesting that the Panel determine whether the U.S. regulation is in accordance with U.S. 
domestic law but rather that the U.S. law is inconsistent with Arti cle 2.2 .  
28. In disregarding NEXTEEL 's sales price to its customer, the United States reads out a key 
requirement of Article 2.3 by failing to determine or examine the reliability of the sales price . The 
USDOC also failed to properly determine the existen ce of an "association " between NEXTEEL and 
its customer. The USDOC did not find that NEXTEEL was affiliated with POSCO based on the 
absence of an arm 's-length relationship . It was only after the USDOC had concluded that the 
parties were affiliated that it even conducted the major input test . Based on this erroneous 
affiliation finding, the USDOC also disregarded NEXTEEL 's actual cost data for raw material input, 
despite the fact that NEXTEEL 's cost records were maintained in accordance with GAAP and 
reasona bly reflected its actual cost of production of the merchandise under investigation as 
required under Article 2.2.1.1 .   
29. Korea reiterates its request that the Panel find that the USDOC 's Remand Redetermination is 
also inconsistent with the United States ' obligations under A rticles 2.2.2 and 2.4 of the 
AD Agreement . The United States now claims that the Korea should have raised a claim under 
Article 6.8 with respect to its arguments relating to the calculation of CV profit in the Remand 
Redetermination . It is not for the United States to decide the provision under which Korea should 
bring a claim . Rather, Korea 's claim continues to be premised  on the requirements of 
Article  2.2.2(iii), which require that the method employed by the authority must be "reason able", 
and subject to a profit cap, however calculated . 
 
 
_______________  
 
 
 WT/DS488/ R/Add.1  
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- C-1 - 
 
  ANNEX  C 
ARGUMENTS OF THE UNITED STATES  
Contents  Page  
Annex  C-1 Executive Summary of the First Written Submission of the United  States  C-2 
Annex  C-2 Executive Summary of the Ora l Statements of the United States at the 
First Panel Meeting  C-10 
Annex  C-3 Executive Summary of the Second Written Submission of the United  States  C-14 
Annex  C-4 Executive Summary of the Oral Statements of the United States at the 
Second  Panel Meeting  C-22 
 
 
 
 
 WT/DS488/ R/Add.1  
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- C-2 - 
 
  ANNEX C -1 
EXECUTIVE SUMMARY OF  THE FIRST WRITTEN  
SUBMISSION OF  THE UNITED STATES  
1. The Republic of Korea challenges U.S. antidumping (AD) duties imposed on oil country 
tubular goods (OCTG) from Korea. Korea 's claims are without merit. As the record establishes and 
this submission explains, USDOC provided a reasoned and adequate explanation as to how the 
evidence on the record supported its factual findings and how those factual findings support its 
overall determination. And as this submission  demonstrates, the arguments advanced by Korea 
otherwise fail to provide plausible alternative explanations of the record evidence before USDOC.  
I. Korea 's "As Such " Claim Regarding the "Viability Test " is Without Merit  
A. Article 2.2 of the AD Agreement D oes Not Prohibit an Investigating Authority from 
Considering the Volume of Third -Country Market Sales  
2. Korea 's claim rests on a fundamental misunderstanding of the applicable obligations. First, 
as acknowledged by Korea, Article 2.2 does not state a pref erred alternative method to calculate 
normal value. Rather, the provision 's use of "or" makes clear that an authority may choose to use 
either of the two available methods.   
3. Second, the text of Article 2.2 does not impose an obligation on an authority to consider or 
analyze both of the two alternative methods before choosing one. Therefore, there is no basis for 
Korea to contend that application of a "viability test " could lead to an impermissible prohibition on 
consideration of third -country sales.   
4. Third, Article 2.2 uses the qualifier "appropriate " in regard to the potential "third country " 
sales. This term indicates that, even were an investigating authority to consider third country sales 
in a particular instance, the authority would not breach Article 2.2 if it disregards third -country 
sales found not to be appropriate.   
5. Based on the foregoing, Korea has failed to demonstrate that consideration of quantitative 
factors when analyzing the use of third -country sales is inconsistent with Article  2.2. On this basis 
alone, Korea 's claim that an alleged "viability test " guiding the use of third -country sales is "as 
such" inconsistent with Article 2.2 of the AD Agreement must be rejected.  
B. Korea 's Claim Must Fail Because U.S. Law Does Not Impose a "Viability Test " As 
Argued by Korea  
6. The focus of the examination in evaluating an "as such " challenge is to ascertain the 
meaning of the measure itself, and not whether any particular instance of application was 
inconsistent with the provision. To make such a demonstration, Korea therefore must present to 
the Panel evidence and legal argument sufficient to show that application of U.S. law necessarily 
results in an inconsistency with Article 2.2 of the AD Agreement – that is, that the measure 
necessarily  requires WTO -inconsistent action or precludes WTO -consistent action.   
7. The U.S. regulation at issue states that USDOC will consider the home market or third -
country to be a "viable market " if sales are of a "sufficient quantity ". The regulation 's use o f 
"normally " indicates that USDOC may define "sufficient quantity " based on the facts of a particular 
proceeding. The dictionary definition of "normally " is "under normal or ordinary conditions; as a 
rule, ordinarily ". This definition suggests a preference , not a requirement, as distinguished from 
the use of "shall" or "in all cases ".   
8. Korea has failed to demonstrate that the U.S. regulation requires USDOC to make its 
decision whether to use third -country sales on the basis of a "viability test ". Korea has therefore 
not shown that U.S. law necessarily results in a breach of Article 2.2, even on Korea 's 
understanding of Article 2.2.   WT/DS488/ R/Add.1  
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  II. Korea 's "As Applied " Claim Regarding the "Viability Test " is Also Without Merit  
9. Korea 's claim that USDOC 's final de termination in the OCTG investigation is inconsistent with 
Article 2.2 of the AD Agreement fails for the first reason its claim on the "viability test " "as such " 
fails: when the conditions are met for employing an alternative to home market sales for 
deter mining normal value, Article 2.2 does not require the use of third -country sales or limit the 
basis on which an investigating authority could choose to use constructed normal value. Therefore, 
USDOC 's decision in the investigation at issue to use third -country sales data only if a sufficient 
volume of sales existed does not breach Article 2.2.   
III. Korea 's Claim Regarding the Calculation of CV Profit is Without Merit  
A. Korea Has Failed to Establish that USDOC Acted Inconsistently with the Chapeau of 
Article 2.2.2  
10. Notwithstanding the obligations established by Article 2.2, Korea argues that the preferred 
method for calculating profit necessitates that an investigating authority always use actual data 
pertaining to sales of the like product in the ordi nary course of trade, regardless of the volume of 
sales represented by such data. Korea 's proposed interpretation does not reflect the text or 
context of Article 2.2.2.  
11. The chapeau of Article 2.2.2 does not require that an investigating authority "use" actual 
data from the production and sale of the like product. Rather, the chapeau requires that the 
amount for profits "shall be based on " actual data. An obligation that something be "based on " 
something else does not create an obligation to "use" someth ing else. Thus the obligation of 
Article  2.2.2 that "profit shall be based on actual data " cannot be read as a strict requirement to 
use actual data in every circumstance.  
12. The text of Article 2.2.2, understood in its context, does not require an invest igating 
authority to use data from low -volume domestic sales to calculate CV profit. Therefore, Korea has 
failed to show that the United States acted inconsistently with Article 2.2.2 of the AD Agreement 
when USDOC determined that CV profit could not be ca lculated based on the chapeau because 
neither HYSCO nor NEXTEEL had sufficient home market sales during the period of investigation.  
In addition, contrary to Korea 's assertion, USDOC did not have access to actual data pertaining to 
production and sales in the ordinary course of trade of the like product by HYSCO or by NEXTEEL 
in the home market during the period of investigation.  
B. USDOC 's Definition of the "Same General Category of Products " Is Consistent with 
Article 2.2.2(i) of the AD Agreement  
13. Article 2.2.2 uses both the terms the "same general category " of products and "like 
product ". The term "like product " is used with respect to the preferred method under Article 2.2.2 
and alternative (ii), which may be employed when the preferred method is una vailable. The term 
"same general category " is used with respect to alternatives (i) and (iii), albeit in the latter 
alternative the term is only used with respect to the profit cap, not the method itself. By their 
terms, and given their juxtaposition in th e same provision, "like product " and "same general 
category " of products are distinct terms.   
14. The term "category " is generally defined as "A class, a division ". The term "general " when 
used as an adjective is defined as "Including, involving, or affec ting a ll or nearly all the parts of 
a ... whole, " and the term "same " when used as an adjective is defined as "Identical with what is 
indicated in the following context ". The double adjective combination "same general " modifies the 
noun "category ", with ea ch adjective naming separate attributes for the products that fall within 
the category. In the context of alternative (i), which is looking for actual profit amounts realized in 
domestic sales of the "same general category of products, " and of alternative (iii), which is looking 
for a profit cap that does not exceed profit normally realized in domestic sales of "products of the 
same general category ", the category thus encompasses products that fall within the definition of 
the "like product " plus other pro ducts that share many of the "same " fundamental characteristics 
of the "like product " without, of course, being the "like product ". WT/DS488/ R/Add.1  
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  15. USDOC defined the "same general category of products " more broadly than it did "like 
product " as including "subject OCTG , non -scope OCTG such as stainless steel tubular products, 
and drill pipes ". USDOC 's definition of "same general category of products " includes the "like 
product " plus "other tubular products that go into the exploration and production of oil and gas. 
These would be products that would exhibit the same fundamental characteristics for down hole 
applications ". Therefore, in the Korea OCTG investigation, USDOC defined "same general category 
of products " more broadly than "like product ". 
16. USDOC set out in it s final determination a reasoned and adequate explanation as to why it 
decided to exclude line, structural and standard, and downgraded pipe products from the definition 
of "same general category of products ". USDOC found that "[t]he record shows that OCTG  and 
non-OCTG are sold to different end users for use in different applications, and that these different 
end users have distinct forces which drive prices, demand, and profitability ". The evidence in the 
record thus supports USDOC 's final determination th at "[t]he performance measures, production 
processes, alloys, and physical and mechanical characteristics of OCTG casing and tubing products 
differ in such significant ways from those of standard pipe and line pipe that these products should 
not be conside red to be of the same general category of products as OCTG. The United States thus 
provided a reasoned and adequate explanation for its findings on the definition of the "same 
general category of products " as it employed a "reasonable method " consistent wi th 
Article  2.2.2(iii).  
 
17. Because the record evidence contradicts Korea 's contentions, Korea finds itself in the 
tenuous position of advocating that calculations concerning normal value of OCTG should be based 
on profit from non -OCTG products instead of the OCTG -specific data that USDOC used. Korea has 
failed to show any support in the AD Agreement for its position. Most important, Korea has failed 
to show that USDOC 's interpretation and application in the OCTG investigation is inconsistent with 
Article 2 .2.2.  
18. In the instant case, the record and decision memoranda demonstrate that that USDOC 
engaged in an extensive analysis of the like product and general category of products. Korea, 
meanwhile, fails to engage the substantive issue, but instead implie s that USDOC must be held to 
the scope definitions for other AD proceedings, preliminary statements in initial questionnaires, or 
different decisions made in other AD proceedings pursuant to unrelated evidentiary records. The 
arguments advanced by Korea wi th respect to the definition of "same general category " of 
products as understood for the purpose of alternatives (i) and (iii) thus do not provide plausible 
alternative explanations of the record evidence before USDOC. Therefore, the United States 
respect fully requests that the Panel find USDOC 's definition of the "general category of products " 
in the Korea OCTG investigation was not inconsistent with Articles 2. 2.2(i) and 2.2.2(iii) of the 
AD Agreement.   
C. USDOC 's Calculation of CV Profit Was Consistent  with Article 2.2.2(iii) of the AD 
Agreement  
19. Korea argues that USDOC otherwise had "abundant data " to calculate a profit cap from 
allegedly dumped OCTG in the United States or sales of non -OCTG products in Korea, but this 
argument serves to further co nfirm the soundness of USDOC 's decision. First, there is no support 
in alternative (iii), or anywhere else in the AD Agreement, for the proposition that normal value 
should be determined on the basis of profit from the allegedly dumped sales.  Indeed, the u se of 
allegedly dumped sales in the export market to calculate normal value runs contrary to the 
concept of determining a dumping margin, which under Article 2.1 is a comparison of normal value 
with the export price.   
20. Korea 's other argument, that "the unavailability of data does not excuse a Member from 
complying with the requirements of the Anti -Dumping Agreement ", simply does not address the 
fact that its proffered information is not relevant to the calculation of a cap under alternative (iii).  
Korea  has failed to demonstrate that USDOC 's calculation of amounts of profit for constructed 
value is inconsistent with the positive obligation imposed by Articles 2.2 and 2.2.2 to determine 
amounts for profit on the basis of another "reasonable method ". The e vidence proffered by the 
Korean companies was not relevant to the profit cap calculation, and there was no other evidence 
in the record that would permit USDOC to calculate a profit cap. I n that circumstance, the 
United  States used a "reasonable method " as the basis to determine the amounts of profit and 
therefore did not act inconsistently with Articles 2.2 and 2.2.2.  WT/DS488/ R/Add.1  
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  D. USDOC 's Calculation of the CV Profit on the Basis of Audited Profit of an OCTG 
Producer is Consistent with Article 2.2.2(iii)  
21. USDOC 's use of Tenaris 's financial statement to calculate CV profit resulted from a reasoned 
consideration of the evidence before it, rationally directed at approximating what the Korean 
respondents ' profit margin for the like product would have been if the like  product had been sold in 
the ordinary course of trade in Korea. USDOC thus provided a reasoned and adequate explanation 
for why the use of Tenaris 's financial statement constitutes a reasonable method to calculate CV 
profit.  
22. Korea does not identify an y flaw, mistake, or inaccuracy in Tenaris 's audited financial 
statement. Nor does Korea explain why profit from sales of OCTG does not reasonably reflect 
constructed profit for the same product.   
23. Instead, according to Korea, Article 2.1 defines dumpin g in a manner that prohibits an 
investigating authority from calculating a dumping margin "by comparing an export price to a 
normal value that, for the most part, represents the international market (as opposed to the single 
domestic market of the exportin g country) ". Korea 's interpretation is flawed. As an initial matter, 
Article 2.1 is a definitional provision that, "read in isolation, do[es] not impose independent 
obligations ". Although the Article 2.1 provides when "a product is to be considered as bein g 
dumped ", it does not specify how the normal value is to be determined. The determination of 
normal value is governed by Article 2.2 instead.  
24. Also, in this investigation, USDOC had to select one of the two alternatives for determining 
normal value: (1 ) data that is specific to the product under consideration from global sales of a 
company that operates in many countries, including Korea, but not specific solely to Korea; or (2) 
data that is not specific to the product under consideration or the general  category of products, 
albeit specific to the exporting country. Korea has provided no basis in Article 2.2.2 to conclude 
that only home market sales and production data for products falling outside  the same general 
category of products would provide a rea sonable method for calculating CV profit, much less that 
global market (including Korea) profit data for a producer of the like product , OCTG, is not a 
reasonable method. Given the record evidence concerning the differences between OCTG and non -
OCTG produc ts, USDOC reasonably selected the data that it considered more accurately reflected 
the profit amount for the product under consideration.  
25. Korea asserts that "no reasonable basis exists to conclude that Tenaris 's profit rate is 
reflective of the profit  rate that the Korean producers would have achieved if they had sold OCTG 
in the country of export ", but Korea itself acknowledges that Tenaris produces and sells a broad 
range of OCTG products around the world. As such, Korea has not demonstrated any flaw  or 
inaccuracy in the audited financial statements of Tenaris, nor has it demonstrated that the global 
prices of OCTG are unrepresentative. Absent evidence to the contrary, there is nothing 
unreasonable about using the average profit from a broad range of OCTG products sold by a 
company that operates around the globe, including in Korea, as a reasonable proxy for the profit 
expected to be made from a sale of OCTG in a specific market.   
26. The arguments advanced by Korea do not provide plausible alternativ e explanations as to 
why the use of Tenaris 's financial statement does not constitute a reasonable method by which to 
calculate CV profit. Therefore, Korea has failed to establish that the United States acted 
inconsistently with Article 2.2.2 of the AD Agr eement in its determination of CV profit.  
E. USDOC 's Acted Consistently with Article 2.4 of the Antidumping Agreement  
27. Article 2.4 obligates an investigating authority to make a "fair comparison " between the 
export price and the normal value when deter mining the existence of dumping and calculating a 
dumping margin. The essential requirement for any adjustment under Article 2.4 is that a factor 
for which adjustment is requested must affect price comparability. The use of constructed normal 
value does no t preclude the need for due allowances or adjustments between  the export price and 
the normal value. However, the construction of normal value through the selection of costs 
pursuant to Article 2.2.1, or profit pursuant to Article 2.2.2, is not a relevant difference between  
the export value and the normal value, because these selections do not relate to a difference 
between the export and domestic transactions being compared.  WT/DS488/ R/Add.1  
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  28. Korea challenges the calculation of a component of constructed normal value, n amely CV 
profit. Korea 's Article 2.4 claim thus is entirely derivative of its claim under Article 2.2.2. If USDOC 
determined CV profit consistently with Article 2.2.2, the profit amount for purpose of normal value 
is reasonable. The profit component of nor mal value does not constitute a difference affecting price 
comparability between the export price and the normal value, and thus is not relevant to the fair 
comparison obligation between the export price and the normal value set forth under Article 2.4 of 
the AD Agreement.    
IV. USDOC 's Decision to Disregard NEXTEEL 's Export Price Was Not Inconsistent with 
Article 2.3 of the AD Agreement  
29. Article 2.3 permits an authority to disregard export prices based on "association ". The term 
"association " does not indicate a limitation to only those entities that may be "related " to the 
exporter. The nature of the relationship between the exporter and the importer, rather than actual 
pricing information, are what inform an authority 's consideration of whether prices  "appear " to be 
unreliable under Article 2.3.   
30. Korea attempts to equate the term "association " with the term "related ", as defined in 
footnote 11, and Korea devotes considerable discussion to interpreting footnote 11. However, 
footnote 11 defines a di fferent term in a different article of the AD Agreement. Because Korea 's 
claim is premised on its erroneous understanding of "association " in Article 2.3, its claim can be 
rejected on this basis alone.  
31. USDOC properly found NEXTEEL to be associated with  the Customer, and therefore did not 
act inconsistently with Article 2.3 in disregarding export price. USDOC 's analysis  considered 
two relationships: (1) POSCO and NEXTEEL and (2) NEXTEEL and Customer. USDOC 's finding of 
association between NEXTEEL and POS CO was based on the unique and remarkably close 
relationship in which POSCO was positioned to "affect[] the pricing, production, and sale of OCTG " 
by NEXTEEL. As USDOC concluded in its final determination, NEXTEEL and POSCO coordinated 
closely in the produ ction, marketing, and sale of OCTG.  
32. During the relevant period, USDOC found that POSCO supplied NEXTEEL HRC used for the 
production of OCTG. HRC accounts for an overwhelming percentage of the cost of producing OCTG. 
The volume of HRC purchased and cons umed by NEXTEEL from POSCO was a key basis of 
USDOC 's finding of association. USDOC concluded that the nature of this supplier relationship 
extended beyond that of an independent buyer -seller transaction.   
33. USDOC 's final determination referred to publi c acknowledgements by POSCO that it "took 
charge of NEXTEEL 's overseas {public relations} campaign for its global launch ". USDOC found 
that the two companies shared technology and market information pertaining to OCTG.   
34. USDOC concluded that NEXTEEL wo rked closely with POSCO at every step of the process: 
production, marketing, and sale of OCTG. USDOC explained that POSCO has a history of working 
closely with on -sight NEXTEEL departments and providing marketing assistance and other 
promotional activities  for the benefit of NEXTEEL. USDOC 's final determination demonstrates 
NEXTEEL 's close association with POSCO. Accordingly, so too must NEXTEEL be associated with 
Customer.   
35. USDOC concluded that NEXTEEL was associated with Customer, a relationship that , by its 
very nature, prevented an arm 's length transaction of OCTG. USDOC appropriately utilized the first 
sale to an independent buyer of OCTG in the United States. Accordingly, Korea 's claim fails 
because, in these circumstances, USDOC 's use of a constr ucted export price was not inconsistent 
with Article 2.3.    
V. USDOC 's Use of Calculated Costs Based on NEXTEEL 's Supplier 's Records Was Not 
Inconsistent with Article 2.2.1.1 of the AD Agreement  
36. Korea 's argument would appear to accept that a proper fi nding of association justifies 
deviation from a respondent 's books and records in the cost calculation. As demonstrated above, 
USDOC 's final determination properly found an association to exist between NEXTEEL and POSCO. 
Accordingly, Korea 's claim is witho ut merit.   WT/DS488/ R/Add.1  
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  37. Article 2.2.1.1 of the AD Agreement permits an authority to depart from a respondent 's 
books and records in calculating constructed value where the authority provides a rationale for 
doing so. Where an authority provides a reasoned explanat ion for why it was required to use 
market prices for a cost calculation – as here – the authority has not acted inconsistently with 
Article 2.2.1.1. The obligation of Article 2.2.1.1 to use the books and records of the exporter under 
investigation is quali fied by the use of "normally ". The term 'normally ' in conjunction with the two 
conditions ( 'provided that ') in Article 2.2.1.1 indicates that use of a producer 's or exporter 's books 
or records is not necessary in every case and the investigating authority has the ability to consider 
other available evidence in limited instances.  
38. USDOC 's final determination explained the reasons justifying deviation from NEXTEEL 's 
reported costs. This decision was based on the interconnected business relationship between  
NEXTEEL and POSCO. USDOC provided a thorough and reasoned explanation for its decision to 
deviate from NEXTEEL 's books and records. USDOC 's actions ar e not inconsistent with 
Article  2.2.1.1 of the AD Agreement.  
VI. Korea 's Claims Regarding Respondent Sele ction Are Without Merit  
39. As with several claims already discussed, Korea appears to acknowledge that the 
AD Agreement allows for the action taken by USDOC – that is, to limit the examination of 
respondents – but argues that the action was not appropriat e under the circumstances of the 
proceeding at issue. Korea 's argument is without merit. USDOC provided detailed explanations of 
its reasoning for limiting the number of respondents individually examined and for not individually 
examining voluntary respond ents, and those explanations comport w ith the obligations of 
Articles  6.10 and 6.10.2 of the AD Agreement.  
40. Article 6.10 of the AD Agreement allows Members to determine individual margins of 
dumping for a reasonable number of exporters and producers, an d does not require the 
determination of an individual margin of dumping for all exporters and producers where a large 
number of exporters and producers is involved. The authority may limit its examination where the 
number of exporters or producers is so la rge as to make a determination of individual margins of 
dumping for all exporters or producers "impracticable ". USDOC 's decision to limits its examination 
to two mandatory respondents fully complied with this requirement. Korea has presented no 
evidence to  argue that USDOC 's actions were unreasonable, and the Panel therefore should reject 
Korea 's claims that the United States breached Article 6.10.  
41. Korea claims that the United States breached Article 6.10.2 of the AD Agreement in failing 
to individually  examine voluntary responses submitted by three Korean companies. Korea has not 
reconciled how USDOC 's finding that resource constraints precluded investigation of the three 
companies is somehow inconsistent with the exception in Article 6.10.2 that an aut hority need not 
individually examine a voluntary response "where the number of exporters or producers is so large 
that individual examinations would be unduly burdensome to the authorities and prevent the 
timely completion of the investigation ". 
VII. The P rocedural and Due Process Safeguards of the Korea OCTG Investigation 
Complied with Articles 6.2, 6.4, 6.9, and 12.2.2 of the AD Agreement  
A. USDOC Provided Respondents with a Full Opportunity To Defend Their Interests  
42. Throughout the Korea OCTG investi gation, USDOC provided Korean respondents ample 
opportunity for the defense of their interests. Before the preliminary determination, respondents 
were on notice that USDOC might rely on Tenaris 's financial data for its dumping calculations. 
Respondents arg ued against the use of the Tenaris profit margin through several written 
submissions before the preliminary determination. Subsequently, after petitioners submitted 
comments arguing that USDOC should base its calculations on Tenaris 's profit information, 
respondents addressed the Tenaris profit margin extensively in their pre -preliminary de termination 
rebuttal comments.  
43. Following the preliminary determination, NEXTEEL and HYSCO had the opportunity to 
provide views on the Tenaris financial statements th at U.S. Steel placed on the record in response 
to NEXTEEL 's Section D Questionnaire. NEXTEEL did so at least three times in writing – once in its WT/DS488/ R/Add.1  
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  request that USDOC reject the document, and twice more in its brief and rebuttal brief. Similarly, 
HYSCO, AJU Besteel, and Husteel used the opportunity to challenge Tenaris 's profit data, including 
the data in the financial statements, by providing written arguments against the use of the 
underlying data.  
44. Korea 's submission fails to acknowledge that in their w ritten submissions made before and 
after the preliminary determination, as well as during oral arguments at USDOC 's hearing, Korean 
respondents extensively argued that the information in Tenaris 's financial data was not a proper 
CV profit source. Korea has  failed to establish that USDOC did not provide Korean respondents a 
full opportunity to defend their interests. Therefore, the panel should reject Korea 's claim under 
Article 6.2 of the AD Agreement.  
45. Korea also does not explain why the opportunities p rovided to respondents in the Korea 
OCTG investigation did not comply with Article 6.4. The Korean respondents were aware that the 
evidence had been submitted by petitioners, respondents did "see" that information which was 
evidently relevant to the presen tation of their case, and they not only had but utilized numerous 
opportunities to prepare presentations responding to the evidence. Therefore, Korea has failed to 
establish that USDOC did not provide Korean respondents timely opportunities to see the Tena ris 
financial statements and to provide presentations on the basis of information in those statements. 
Accordingly, Korea 's claims that the United States acted inconsistently with Article 6.4 of the AD 
Agreement must fail.  
46. Finally, Korea 's claim under Article 6.9 is without merit because Korea fails to correctly 
identify the "essential facts " that are subject to the disclosure obligation of that provision. As is 
clear from the record, all interested parties to the investigation had access to Tenaris 's financial 
data and were aware that USDOC was considering that data in its investigation. Korea has failed to 
establish otherwise. Therefore, Korea has failed to establish that the information contained in the 
Tenaris financial statements was not disclosed t o all interested parties in a manner consistent with 
Article 6.9 of the AD Agreement.  
B. Korea Fails to Establish that the U.S. Breached  Articles 6.4 and 6.9 of the 
AD Agreement with Respect to Ex Parte  Communications  
47. Korea argues that the United State s breached Articles 6.4 and 6.9 because USDOC 
"delay[ed] in disclosing " certain ex parte  communications, particularly several letters, to Korean 
respondents. Korea fails to explain why the communications referenced constituted information 
that was "relevan t" to the presentation of the respondents ' cases, or how the information would 
have been "used" by USDOC in its investigation. Korea also fails to demonstrate that the relevant 
correspondences were "essential facts " under consideration that formed the basi s for USDOC 's 
decision to apply definitive measures. Further, the record demonstrates that the Korean 
respondents had ample opportunity to respond to the relevant communications. Therefore, Korea 
has failed to make a prima facie  case under Articles 6.4 and  6.9 of the AD Agreement because 
USDOC was not required to disclose the referenced communications under Articles 6.4 and 6.9 and 
because USDOC made the letters available to Korean respondents in a timely manner.  
C. USDOC 's Public Notice Was Consistent with  Article 12.2.2 of the AD Agreement  
48. Korea asserts that USDOC 's public notice and explanation of its final determination did not 
satisfy the requirements of Article 12.2.2 of the AD Agreement. Once again, Korea fails to make 
out its claim. In its public  notice, USDOC set forth in sufficient detail all the relevant information 
and reasons underlying the final determination.   
49. USDOC 's Issues and Decision Memorandum set forth a detailed analysis of the reasoning 
behind USDOC 's determination to use the T enaris financial data in the final determination. As the 
public notice explains, after USDOC considered all arguments on the CV profit issue, it determined 
that it was not appropriate to use profit information derived from the Korean respondents because 
of the physical characteristics of the products sold by those respondents in the home market. 
USDOC determined that using information pertaining to the same product as that under 
consideration in the OCTG investigation was appropriate for purposes of its CV profit calculation. 
Based on these considerations, USDOC provided a thorough explanation as to why Tenaris ' profit WT/DS488/ R/Add.1  
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  data was the best available option, in light of Tenaris 's OCTG production, volume of sales, and 
customer base.  
50. USDOC 's final determinatio n explained the underlying facts and rationale that led USDOC to 
find the existence of an association between NEXTEEL, POSCO, and the Customer. Korea has failed 
to establish that USDOC did not provide all relevant information and reasons underlying its fin al 
determination, including relevant arguments presented by NEXTEEL. Therefore, the United States 
did not act inconsistently with the obligations of Article 12.2.2.  
VIII.  Korea's Claim Under Article I:1 of the GATT 1994 is Flawed  
51. Korea argues that pro cedural differences constitute an "advantage ". But Korea 's argument 
fails to take into account that differences do exist in antidumping proceedings – even 
investigations involving like products – including differences among the companies under 
investigatio n.   
52. USDOC made procedural decisions through the course of these proceedings that were based 
on the specific circumstances of the Korea OCTG investigation and the other OCTG investigations. 
Unlike in EU – Footwear , in which the measure at issue granted  an advantage based solely on the 
country of origin of the products, several factors may have contributed to the treatment accorded 
to Korean companies and other foreign companies, which resulted in their particular antidumping 
rates. Korea has failed to d emonstrate that any different treatment was not explained by the facts 
immediately before the investigating authority, here, including the characteristics of the companies 
participating in the investigation.  
IX. Korea Fails To Establish That the United Sta tes Administered Its Laws, 
Regulations, Decisions, and Rulings in a Manner Inconsistent With Article X:3(a)  
53. All of Korea 's claims under Article X:3(a) of the GATT 1994 must fail because Korea 
challenges the substance of USDOC 's final determination, rat her than the United States ' 
administration of relevant laws, regulations, rulings or decisions. Even aside from the fact that 
Korea has not identified any measure of general application for its claim to fall within the scope of 
Article X:3(a), Korea has fa iled to demonstrate that the United States did not administer any laws, 
regulations, decisions or rulings in a uniform, impartial, and reasonable manner, inconsistent with 
Article X:3(a).   
54. With respect to uniformity, Korea has not shown, nor could it,  that the factual circumstances 
underlying an investigation regarding imports of OCTG produced in Korea required the same 
procedures as an investigation regarding the imports of OCTG produced in Turkey. Therefore, 
Korea has failed to establish that the Uni ted States did not administer its anti -dumping laws and 
regulations in a uniform manner.   
55. With respect to impartiality, Korea merely concludes that "in the absence of any other 
reasonable explanation ", these letters and meetings "suggest " that "political pressure " impacted 
the final determination. However, as demonstrated at length, the USDOC provided a reasoned and 
adequate explanation for its calculation of CV profit, consis tent the requirements of the 
AD Agreement. Therefore, Korea cannot succeed in  its claim that USDOC failed to act in an 
impartial manner as required under Article X:3(a).   
56. Finally, with respect to reasonableness, the United States has already established that 
USDOC had a reasonable basis for its reliance on the Tenaris financia l statements in calculating CV 
profit. Therefore, Korea has not satisfied the high burden of establishing that the United States ' 
administration of its laws, regulations, decisions, and rulings with respect to the Tenaris financial 
statements was unreasona ble. 
X. CONCLUSION  
57. The United States respectfully requests that the Panel reject Korea 's claims that the 
United  States has acted inconsistently with the covered agreements.  WT/DS488/ R/Add.1  
BCI deleted , as indicated  [[***]]  
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  ANNEX C -2 
EXECUTIVE SUMMARY OF  THE ORAL STATEMENTS OF TH E UNITED STATES  
AT THE FIRST  PANEL  MEETING  
EXECUTIVE SUMMARY OF U.S. OPENING STATEMENT  
 
I. Korea 's Claims Regarding the So -Called "Viability Test " are Without Merit  
1. Korea 's challenges of what it refers to as a "viability test " are based on a flawed 
interpretation of Article 2.2 and a misunderstanding of U.S. law . Where the preferred home -
market sales cannot be used, Article 2.2 sets no hierarchy as between the secondary sources for 
calculating normal value: third -country sales or constructed normal valu e. Indeed, under 
Article  2.2, an authority is not required to consider an alternative it will not employ . Rather, 
because Article 2.2 permits an authority to choose between the alternative methodologies, an 
investigating authority could simply choose to us e constructed normal value to calculate normal 
value in a given investigation . In such a case, the authority need not even collect third -country 
sales data .  
2. Where an authority considers the use of third -country sales, Article 2.2 permits their use 
only where the sale is made "to an appropriate third country, provided that the price is 
representative ". An authority would not breach Article 2.2 if it disregards sales to a third country 
found not to be "appropriate ", and the text does not require an author ity to consider any one 
factor .  
3. Footnote 2 of the AD Agreement provides relevant context to the phrase "appropriate third 
country ". The general rule of footnote 2 is intended to ensure that sales prices used for normal 
value are representative, and not  an aberration . The reference in footnote 2 to volume thus 
provides useful guidance to an authority if it is evaluating what constitutes an "appropriate third 
country ". The arguments raised in Korea 's submission confuse the relevance of footnote 2 in 
interpreting Article 2.2 . Under Korea 's logic, under the general rule of Article 2, an authority would 
be required not to use the preferred home -market sales if those sales constitute less than 5 % of 
total sales, but the authority would be required to use third -country market sales of less than 5 %. 
Korea 's interpretation is supported by neither logic nor the AD Agreement . Just as the volume of 
sales may be considered pursuant to footnote 2 to determine whether to use the preferred data 
source of home -market sale s, volume can be considered when evaluating whether third -country 
sales are "appropriate " within the meaning of Article 2.2 .  
4. Even aside from Korea 's flawed interpretation of Article 2.2, its "as such " claim also fails 
because it is premised on a misint erpretation of U.S. law . Contrary to Korea 's argument, through 
the use of the term "normally ", the regulation does not require Commerce to disqualify third -
country sales that constitute less than five percent of sales to the United States . Commerce under 
its regulation is free to consider the complete factual record when determining whether a third 
country is appropriate for the calculation of normal value, even where third -country sales 
constitute less than 5 % of sales to the United States . Korea has not e stablished that U.S. law 
requires action that would, even under its theory, result in a breach of Article 2.2 .  
 
II. Korea 's Claim Regarding the Calculation of CV Profit is Without Merit  
5. Article 2.2.2 lists four methods for the calculation of constructe d value ( "CV") profit – a 
preferred method and three alternative methods . The preferred method is to calculate CV profit 
based on actual data pertaining to production and sales in the ordinary course of trade of the like 
product by a respondent . When CV pr ofit cannot be calculated using the preferred method, an 
investigating authority may use one of three alternative methods.  
6. In this investigation, Commerce found that, "absent a viable home or third -country market ", 
it could not calculate CV profit based  on the preferred method and had to determine CV profit 
based on an alternative method .  WT/DS488/ R/Add.1  
BCI deleted , as ind icated  [[***]]  
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  7. Commerce 's conclusion was consistent with the requirements of Article 2.2, including 
Article  2.2.2, because when sales data do not permit a proper comparison under Article 2.2 for 
purposes of calculating normal value, such data should not be considered under Article 2.2.2 for 
purposes of calculating profit for constructed normal value.  
8. For this reason, the United States did not act inconsistently w ith the obligati ons of 
Articles  2.2 and 2.2.2 when Commerce determined that CV profit could not be calculated based on 
the preferred method given neither HYSCO nor NEXTEEL had a viable domestic or third -country 
market during the period of investigation .  
9. When an invest igating authority cannot calculate CV profit based on the preferred method, 
the alternative method for CV profit provided for in Article 2.2.2, subparagraph (i), indicates that 
profit may be determined on the basis of the actual amounts incurred and realiz ed by respondents 
in respect of production and sales in the domestic market of the "same general category of 
products ".   
10. Commerce in its final determination provided an extensive explanation of the reasons why it 
defined the "same general category of products " in this manner as well as a reasoned and 
adequate explanation as to why it decided to exclude line pipe and standard pipe, the pipe that 
Korea believes should be included in this definition.  
11. Because Korea has failed to make out its claims, t he Panel should find that the United States 
did not act inconsistently with Article 2.2.2, subparagraph (i), with respect to Commerce 's 
definition of the "general category of products " in the Korea OCTG investigation.  
12. Since the information in this inve stigation did not otherwise permit Commerce to calculate 
CV profit on the basis of the preferred method, or the alternative methods  provided for in 
Article  2.2.2, subparagraphs (i) or (ii), Commerce had just one option left: It had to calculate CV 
profit o n the basis of an alternative method as provided for in Article 2.2.2, subparagraph (iii), or 
"any other reasonable method ".   
13. Korea argues that when an investigating authority opts to base CV profit on "any other 
reasonable method ", it must calculate and apply a profit cap . But there did not exist in the record 
of this investigation information that would allow Commerce to calculate and apply such a cap .  
14. Korea argues that the lack of necessary information does not matter; Commerce still has to 
cap any profit amounts it calculates pursuant to subparagraph (iii) . But Korea does not explain 
how Commerce should calculate this cap other than to assert that Commerce should have used 
profit data for products not included in the "products of the same gener al category ".   
15. In point of fact, the answer lies in the ordinary meaning of Article 2.2.2, subparagraph (iii), 
when read in context with the obligations in Article 2.2; namely, when an investigating authority 
constructs normal value, it shall include "a reasonable amount for ... profits ".  
16. When the only alternative method available is the "other reasonable method " provided for 
under subparagraph (iii), the inability to separately calculate a profit cap because of an absence of 
information does not,  as a consequence, lead to the conclusion that a reasonable method cannot 
be used . Where data exists to calculate the cap, the amount determined by a reasonable method 
is limited . But where data does not exist to calculate the cap, the proviso is simply no t operative; 
the investigating authority is still bound to use a reasonable method to calculate a reasonable 
amount for profits .  
17. In the underlying investigation, Commerce reviewed the information in the record and 
correctly concluded that it did not i nclude data that would allow the calculation of a profit cap . On 
that basis, Commerce correctly calculated the amounts for profit based on the information before 
it.  
18. After an extensive analysis of this information, Commerce chose to calculate CV profi t based 
on Tenaris 's financial statement . Commerce provided a reasoned and adequate explanation why 
the use of the profit margin from Tenaris 's financial statement constituted the most reasonable WT/DS488/ R/Add.1  
BCI deleted , as indicated  [[***]]  
- C-12 - 
 
  method for the calculation of CV profit, as well as the most  appropriate of the three options 
available.  
19. The arguments advanced by Korea simply do not provide plausible alternative explanations 
as to why the use of the Tenaris information does not constitute a reasonable method by which to 
calculate CV profit . Given Commerce provided a reasoned and adequate explanation for why the 
use of the Tenaris information constitutes a reasonable method to calculate CV profit, the Panel 
should find that Korea has failed to establish that the United States acted inconsisten tly with 
Article 2.2.2 in its determination of CV profit.  
III. Commerce 's Decision to Disregard NEXTEEL 's Export Price  
20. We turn next to Korea 's claim with respect to Article 2.3 . The meaning of "association " is 
"the action of joining or uniting for a co mmon purpose; the state of being so joined ", a definition 
that could include a broad range of commercial relationships . Article 2.3 permits an authority to 
disregard prices from a transaction that involves two companies that have joined together for a 
comm on purpose .  
21. Further interpretive guidance is provided by the term "independent buyer ". Under 
Article  2.3, where a price is unreliable "because of association, " an authority may construct an 
export price based on the price to an "independent buyer ". An associated buyer is thus informed 
by what it is not: an independent buyer . An independent buyer has an objective of maximizing 
profits, a fundamentally different objective than exists in a transaction between two associated 
entities working towards a "common purpose ".   
22. Korea 's interpretive arguments are unavailing . First, Korea 's interpretation of "association " 
relies heavily on the definition of the term "related " found in footnote 11 . Article 2.3 refers to an 
"association " between the exporter and i mporter, while footnote 11 defines the term "related ", 
which does not appear in Article 2.3 . Second, Article 2.3 does not require an independent 
assessment or determination of price reliability . Rather, the article requires only that such prices 
appear to be unreliable on the basis of the nature of the relationship . The phrase "unreliable 
because of association " draws a direct link between the relationship of the entities and the 
reliability of the prices . The authority can understand the prices to be unrel iable as a consequence 
of the relationship; under Article 2.3, it is the relationship that provides the appearance of the 
unreliable nature of the prices.  
IV. Commerce 's Use of Calculated Costs Based on NEXTEEL 's Supplier 's Records  
23. We turn next to Kor ea's claim that Commerce 's use of calculated costs was inconsistent with 
Article 2.2.1.1 . Article 2.2.1.1 contains a general rule that costs are to be calculated on the basis 
of the records kept by the producer, but the obligation is qualified by the use o f "normally ". The 
inclusion of "normally " allows an authority to depart from costs based on the producer 's records 
where the authority provides a reasoned explanation . The panel in China – Broiler Products  applied 
this interpretation to Article 2.2.1.1, pr operly recognizing that an authority may derogate from the 
general rule to use a respondent 's books and records if the authority justifies its decision on the 
record of the investigation .  
 
24. Commerce 's final determination satisfied the requirements of A rticle 2.2.1.1 . Commerce 's 
final determination and accompanying memos explained in great detail the interconnected 
relationship between NEXTEEL and its supplier POSCO . Having made a determination of affiliation, 
Commerce then undertook a comparison between  POSCO 's transfer prices to NEXTEEL and both 
POSCO 's cost of production and POSCO 's prices sold to unaffiliated customers . Based on that 
analysis, Commerce determined it was appropriate to utilize the weighted average market price of 
POSCO 's sales to unaff iliated customers . Korea has not demonstrated that Commerce 's decision to 
depart from the general rule, which is permissible under the plain language of Article 2.2.1.1, was 
inconsistent with that provision .  
V. Commerce Met All Disclosure and Participator y Requirements  
25. Korea argues that Commerce did not do enough to ensure that respondents had ample 
opportunity to defend their interests; that Commerce did not disclose all the essential facts WT/DS488/ R/Add.1  
BCI deleted , as ind icated  [[***]]  
- C-13 - 
 
  forming the basis for its decision to apply definitive measur es; or that Commerce 's notice did not 
contain all relevant information on matters of fact and law and the reasons that lead to the 
imposition of final measures.  
26. Contrary to Korea 's arguments, the respondents were on notice that Commerce might rely 
on Tenaris 's profit margin before  Commerce 's preliminary determination . Specifically, before 
Commerce published its preliminary determination, U.S. petitioners placed information concerning 
Tenaris 's profit margin on the record, and both HYSCO and NEXTEEL had the opportunity to, and 
did, argue against the use of this information .  
27. So every argument that the Korean respondents could have made about Tenaris after 
Commerce 's preliminary determination, they could have made before that determination.  
28. It is b eyond dispute that the Korean respondents had seen all information concerning 
Tenaris in a timely manner, made multiple presentations regarding it, and understood that 
Commerce was considering this information in its investigation .  
29. Korea 's claims unde r Articles 6.2, 6.4, 6.9, and 12.2.2 regarding the Tenaris information and 
Commerce 's public notice, which included the reasons for its acceptance of this information and its 
rejection of the Korean respondents ' arguments to the contrary, are without merit . 
30. The Panel should also dismiss Korea 's claims regarding certain communications received by 
Commerce during the investigation . The United States does not dispute that Commerce added 
letters it received from politicians, labor unions, and members of the  public to the record of the 
Korea OCTG investigation . Nor do we dispute that interested parties received some of these letters 
after a delay .  
31. But to suggest, as Korea does, that this delay means that the United States failed to comply 
with Articles 6 .4 and 6.9 does not reflect a proper interpretation of the requirements of these 
provisions, especially since the Korean respondents had an oppor tunity to address these 
letters  and did so by submitting new information and argument on 18  June 2014, and agai n on 
26 June 2014 .  
32. In sum, Korea fails to explain why the letters that it complains about in its First Written 
Submission constituted information that was "relevant " to the presentation of the respondents ' 
cases, or how the information would have been  "used" by Commerce in its investigation . Korea 
also fails to demonstrate that the letters it complains about were "essential facts " under 
consideration that formed the basis for Commerce 's decision to apply definitive measures . Korea 
thus has failed to es tablish that the actions of the United States with respect to the identified 
letters were inconsistent with Articles 6.4 and 6.9.  
EXECUTIVE  SUMMARY  OF U.S.  CLOSING  STATEMENT  
33. While a panel is required to "'undertake an in -depth examination of whether th e 
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 made and 
conclusions reached by it, '" the standard of review applicable t o a panel reviewing an antidumping 
duty determination "precludes a panel from engaging in a de novo  review of the facts of the case 
'or substitut[ing] its judgement for that of the competent authorities '".  
34. The arguments advanced by Korea with respect to these issues do not support a finding that 
Commerce failed to base its determinations on positive evidence or to provide a reasoned and 
adequate explanation for those determinations . Korea asks the Panel to draw different conclusions 
from those of Comme rce. For example, with respect to the identification of the "same general 
category of products ", Korea asks the Panel to second -guess Commerce 's findings with respect to 
the "performance requirements " and "use and testing requirements " as they relate to OC TG and 
non-OCTG products . It is not the task of a panel to second -guess the findings of an investigating 
authority, so this Panel should decline Korea 's invitation to engage in such de novo  review.  WT/DS488/ R/Add.1  
BCI deleted , as indicated  [[***]]  
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  ANNEX C -3 
EXECUTIVE SUMMARY OF  THE SECOND WRITTEN  
SUBMIS SION OF THE UNITED  STATES   
I. KOREA HAS FAILED TO ESTABLISH THAT THE U .S. VIABILITY REGULA TION IS "AS 
SUCH " OR "AS APPLIED " INCONSIS TENT WITH ARTICLE 2. 2 OF THE 
AD AGREEMENT  
A. Article 2.2 Does Not Preclude the Consideration of Volume When Determining an 
"Appropriate Third -Country " 
1. Korea 's Opening Statement and answers to questions highlight two additional arguments 
regarding the proper interpretation of Article 2.2: that Article 2.2 precludes an authority from 
imposing additional criteria when selecting  the normal value calculation methodology; and that the 
United States ' interpretation of "appropriate " is not consistent with the plain meaning read in the 
context of Article 2.2 . We address each argument below.  
2. First, Korea argues that a Member may not  impose "additional criteria " in selecting one of 
the listed methodologies for calculating normal value . But Korea 's assertion is premised on the 
fallacy that an authority is required to consider both methodologies and that an interested party is 
entitled  to a particular methodology, an error that is exposed by the plain text of Article 2.2 and, 
indeed, Korea 's own acknowledgment that Article 2.2 imposes no hierarchy . Under Korea 's 
interpretation, it is unclear how an authority would be expected to choose b etween two WTO -
consistent alternatives .  
3. Korea 's reference to the zeroing cases to support this interpretation is similarly misplaced . 
In the zeroing cases, the issue dealt with the application  of the price comparison methodologies 
specified in Article 2.4.2, and not with the  selection  of the price comparison methodology chosen, 
as can be seen in the Appellate Body reports cited by Korea in its Responses to Questions . In 
contrast, Article 2.2 concerns the selection of the methodology to be used to calcul ate normal 
value . This being the case, the absence of a hierarchy – or even an  obligation to consider the 
two methodologies – is critical to the analysis . The U.S. Department of Commerce ( "USDOC ") 
determined the appropriate methodology as between two WTO -consistent methodologies . 
4. Second, Korea also contests the U.S. interpretation of "appropriate " within the meaning of 
Article 2.2 . In doing so, Korea simply asserts without textual support that "the volume of sales to a 
third country does not determine wh ether the third country is 'appropriate ' for purposes of serving 
as a comparison market ". Korea provides no evidence or argumentation to support its 
interpretation, and its bald assertion does nothing to undermine the interpretation provided in the 
United States ' submissions . 
5. Perhaps recognizing the weakness of that interpretive argument, Korea also now argues 
that, even assuming that the volume of exports could be considered in determining whether a 
third country is appropriate, "the term 'appropriate ' inherently implies a flexible test ". But Korea 
misinterprets the meaning of "appropriate " and fails to consider the context in which the term 
appears in Article 2.2 . Under Article 2.2, in each distinct antidumping proceeding, the authority 
may be required to determine whether a particular third country is "appropriate " for the calculation 
of normal value . The relevant dictionary definition of "appropriate " is "specially suitable (for, to); 
proper, fitting ", and the Appellate Body has observed that the "dictionary definitions of the term 
'appropriate '… suggest that what is appropriate must be assessed by reference or in relation to 
something else ". As it is used in Article 2.2, the definition of "appropriate " suggests that the 
appropriateness of a third count ry may be assessed by reference to indices – such as volume of 
sales – that are considered with the aim of identifying a "suitable " or "fitting " comparison market . 
Thus, "appropriate " within the context of Article 2.2 confers on an authority the ability to  consider 
and determine what constitutes a suitable third country for the determination of normal value in a 
particular proceeding .  WT/DS488/ R/Add.1  
BCI deleted , as ind icated  [[***]]  
- C-15 - 
 
  B. Even Under Korea 's Interpretation of Article 2.2, Korea Has Not Demonstrated that 
the Challenged Measure Requires WTO -Inconsistent Action  
6. Even under Korea 's interpretation that Article 2.2 precludes an authority from rejecting 
third-country market sales below a specified volume, Korea nonetheless has failed to show that 
the U.S. regulation would necessarily lead to condu ct that is inconsistent with that obligation .  
7. First, Korea argues that the Panel should disregard the plain text of the U.S. regulation 
because it is allegedly in violation of U.S. law . That is, Korea suggests that the Panel may 
determine, in the conte xt of a WTO dispute, whether 19 CFR § 351.404(b)(2) is legal or illegal 
under U.S. law . However, it is not the role of a panel to review the legality of a Member 's law as 
within that legal system . Rather, a panel 's role is to determine, as a matter of fact , the content 
and meaning of municipal law and to evaluate its consistency with WTO – not municipal – law. As 
explained in the U.S. Responses to Questions, USDOC 's interpretation of the U.S. antidumping law 
in the form of an implementing regulation is the governing interpretation unless and until a U.S. 
court finds that USDOC 's interpretation is unreasonable or contrary to the plain text of the statute 
in a final and binding decision . The United States recalls the panel 's recognition in US – 
Countervailing and Anti -Dumping Measures that, in light of the fact that an administering agency is 
charged with interpreting law in order to administer it and the specific standard of review 
elaborated by the U.S. Supreme Court for review of agency interpretations of th e law they 
administer, "in the absence of a United States court decision that would govern the practice of 
USDOC, it is the USDOC 's own practice or interpretation that governs under United States law ". 
Therefore, there is neither a factual nor a legal basi s for the Panel to find otherwise in this dispute . 
8. Korea also seeks to sidestep the plain language of the regulation by citing to past 
antidumping proceedings, arguing that "this evidence further confirms that the U.S. viability test 
constitutes a rule or norm of general and prospective application that can be challenged 'as such '". 
Korea has not challenged U.S. practice separate from the U.S. statute and regulation as set out in 
its panel request . Therefore, to the extent that Korea argues that a USDOC practice itself breaches 
Article 2.2, the Panel should reject that claim as outside the terms of reference in this dispute .  
9. Korea has challenged 19 U.S.C. § 1677b(a)(1)(B)(ii) and 19  C.F.R.  § 351.404(b)(2), and as 
explained in this and prior U.S. submi ssions, the regulation provides a general rule that sales are 
not of a sufficient quantity to use for normal value if those sales constitute five percent or less of 
sales to the United States . The regulation 's use of "normally " then permits USDOC to depart  from 
the general rule of a five percent threshold where appropriate .  
10. Korea has failed to demonstrate that the U.S. regulation requires USDOC to make its 
decision whether to use third -country sales on the basis of a so -called "viability test ". 
II. KOREA'S CLAIMS REGARDING T HE CALCULATION OF CV  PROFIT CONTINUE TO B E 
WITHOUT MERIT  
A. Contrary to Korea 's Arguments, the Term "Profit " Means a Financial Gain, Not a 
Financial Loss  
11. In its responses to Panel Questions, Korea introduces the oxymoron "negativ e profit " in an 
effort to argue that a loss recorded in a company 's books should be considered acceptable for the 
determination of CV profit under the chapeau of Article 2.2.2 . In doing so, Korea argues that "the 
term 'profit ' in this context can encompass  situations in which a loss is recorded in the company 's 
books " because, according to the online Oxford Dictionaries, "[t]he ordinary meaning of profit 
includes 'the difference between the amount earned and the amount spent in buying, operating, or 
produci ng something '".   
12. In actuality, the online dictionary from which Korea quotes defines the term "profit " in full as 
"[a] financial gain , especially the difference between the amount earned and the amount spent in 
buying, operating, or producing somethin g". It is thus disingenuous for Korea to argue that the 
"difference between the amount earned and the amount spent " as provided for in this definition 
means anything other than a financial gain.  
13. Paragraphs 51 -57 of the U.S. Responses to Questions demon strate that the term "profit " as 
provided for in Articles 2.2 and 2.2.2 refers to a financial gain, not a financial loss . The dictionary WT/DS488/ R/Add.1  
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- C-16 - 
 
  definition of "profit " put forward by Korea confirms that the term "profit ", by definition, refers to a 
financial gain,  not a financial loss . Therefore, for the reasons provided for in the U.S. Responses to 
Questions, the Panel should find that the term "profit " for purposes of Articles 2.2 and 2.2.2 
encompasses just those situations in which there is a financial gain reco rded in a company 's 
books.  
B. The Chapeau of Article 2.2.2 Does Not Require the Use of Third -Country Sales Data  
14. In an attempt to explain why third -country market sales must be used under the preferred 
method, Korea argues in response to Panel Question s that "Article 2.2.2 only applies if the 
investigating authority has already found that sales in the domestic country of export do not 
permit a proper comparison for certain specified reasons, including 'low volume '". Korea is not only 
wrong in arguing th at third -country sales are required under the chapeau of Article  2.2.2, but 
Korea is wrong in arguing that Article 2.2.2 applies only when no domestic market sales are 
available under Article 2.2 .  
15. As explained in the U.S. Responses to Questions, Artic le 2.2.2 most commonly applies in the 
circumstance in which an investigating authority bases normal value on sales of the like product in 
the domestic market, but where certain of those sales cannot be used because they are outside 
the ordinary course of t rade, or because the group of domestic sales does not include sales of 
products identical or similar to those sold in the relevant export market . In that situation, an 
investigating authority would compare the specific export price of the product under con sideration 
to a constructed normal value based on the cost of production plus a reasonable amount for SG&A 
costs and for profits, which triggers the application of Article 2.2.2 .  
16. But again, in the situation just described, the information in the recor d nonetheless would 
include domestic sales for other like products, including data with respect to profit for those 
domestic sales . It thus would not make sense to interpret Article 2.2.2 as requiring an 
investigating authority to go out and collect, as Ko rea suggests, third -country sales data for 
purposes of a CV profit determination . As Korea acknowledges in its response to Panel Question 2, 
subparagraph 1 of Article 2.2 applies only "when the investigating authority has already decided to 
use the market in which those sales took place as the comparison market  ... Article 2.2.1 does not 
address whether a third -country market  is appropriate for the determination of normal value ". The 
same is true for the chapeau of subparagraph 2 of Article 2.2, which also applies only after an 
investigating authority has decided which market shall be used as the comparison market .  
17. In this way, Article 2.2.2 reflects the preference for domestic market sales set out in 
Article  2.2, and in fact assumes that the investigat ing authority may be using domestic market 
sales for normal value, constructing normal value only when domestic market sales do not exist 
for purposes of a comparison with specific export sales . Specifically, when an investigating 
authority has already dec ided under Article 2 to base normal value on domestic market sales, the 
chapeau of Article 2.2.2 directs that, if available, CV profit must be based on profit data from the 
remainder of domestic market sales (i.e., the preferred method), and if not availab le, may be 
based on an alternative method provided for under subparagraphs (i) -(iii). But when an 
investigating authority has already decided under Article 2 not to base normal value on domestic 
market sales,  Article 2.2.2 permits the investigating authori ty to base CV profit on an alternative 
method . The chapeau of Article 2.2.2 does not require an investigating authority to reconsider 
whether the domestic market is appropriate, nor does it require an investigating authority to 
consider whether CV profit s hould be based on third -country market sales .   
C. USDOC 's Decision to Exclude Line, Structural, Standard, and Downgraded Pipe 
Products from its Definition of the "Same General Category of Products " Was 
Supported By a Reasoned and Adequate Explanation  
18. In its responses to Panel questions, Korea raises several arguments regarding USDOC 's 
determination of the "same general category of products ". Specifically, Korea argues that the 
rebuttal briefs filed by HYSCO and NEXTEEL before USDOC demonstrate "the si milarities between 
OCTG and line pipe/standard pipe ". According to Korea, respondents demonstrated that "OCTG 
and non -OCTG products such as line and standard pipes are the same general category of 
products because they: (1) share the same general purpose o f 'conveying fluids and gases ' in WT/DS488/ R/Add.1  
BCI deleted , as ind icated  [[***]]  
- C-17 - 
 
  addition to all other similarities in terms of raw materials, production processes and facilities, 
outward appearances, and physical characteristics "; and (2) fall within the same tariff headings .  
19. USDOC in its final d etermination provided an extensive explanation of the reasons why it 
defined the "same general category of products " to include only those pipe products that exhibit 
the same fundamental characteristics for down hole applications, i.e., "subject OCTG, non -scope 
OCTG such as stainless steel tubular products, and drill pipes ", as well as a reasoned and adequate 
explanation as to why it decided to exclude line pipe and standard pipe . Korea counters that 
USDOC should have included line pipe or standard pipe pro ducts as part of the "same general 
category of products " as OCTG because non -OCTG pipes look like OCTG pipes, sometimes are 
manufactured in the same building, sometimes are handled by the same export department or 
marketed like every other steel pipe, and undergo "the same basic production processes ". But 
USDOC considered all of these points and still found "that line, structural and standard and 
downgraded pipe products are not in the same general category of products as OCTG " because 
OCTG differs signific antly from non -OCTG.  
20. Therefore, even if Korea 's statements are true, the Panel should reject Korea 's invitation to 
conduct a de novo  review because, as explained in the U.S. First Written Submission, USDOC 
provided a reasoned and adequate explanation o f how the information in the record supports its 
definition of the "same general category of products ".   
21. Korea 's reliance on the overlap in HTSUS subheadings applicable for OCTG and those 
applicable for certain line or standard pipe products is simila rly unavailing . The overlap in HTSUS 
subheadings is inconsequential because USDOC 's definition of the scope of the investigation 
stipulates that the HTSUS subheadings provided therein are "for convenience and customs 
purposes only . The written description of the scope of the investigation is dispositive ". Thus that 
the HTSUS subheadings for line or standard pipe products overlap with those for OCTG does not 
mean that these products fall within USDOC 's definition of the like product, nor does it mean that 
these products have the physical characteristics or functionality that require them to be 
incorporated into USDOC 's definition of the "same general category of products ".  
22. Finally, contrary to Korea 's claims, USDOC did not  define the "same general catego ry of 
products " more narrowly than the definition of the scope of the Korea OCTG investigation . As 
previously explained, the pipe products that were the subject of the USDOC determination in OCTG 
from Ukraine  were sold to the U.S. market as OCTG . The Ukrai ne pipe product, at the point of 
sale, fell squarely within the scope of the investigation, because the respondent sold these pipe 
products as OCTG, and thus USDOC 's determination in OCTG from Ukraine  did not expand the 
definition of the like product to in clude products sold as non -OCTG pipe . In contrast, the 
downgraded Korea pipe product, at the point of sale, fell squarely outside  the scope of the 
investigation, because the Korean respondents sold these pipe products in the Korean market as 
something othe r than OCTG, and thus USDOC excluded this downgraded pipe product from its 
definition of "same general category of merchandise ". Therefore, Korea 's reliance on OCTG from 
Ukraine  to argue that USDOC 's definition of the "same general category of products " is narrower 
than its definition of the like product is unavailing .  
23. Korea has failed to show that USDOC 's definition of "same general category of products " as 
including the "like product " plus other pipe products that share the same fundamental 
character istics for down hole applications is inconsistent with Article 2.2.2 .  
D. Article 2.2.2 Does Not Require an Investigating Authority to Restrict its Selection 
of "Any Other Reasonable Method " to Domestic Market Data  
24. Korea argues that the Panel should in terpret the text of Article 2.2.2, specifically the terms 
"any other reasonable method ", so that it is restricted to domestic market data, because "none of 
the options under the subparagraphs [of Article 2.2.2] allows the investigating authority to deviate  
from the domestic country of export ". According to Korea, "[t]he obligation that the 'any other 
reasonable method ' under Article 2.2.2(iii) must reflect the profit realized in the domestic market 
of the exporting country is embedded in the very structure of the subparagraphs of Article 2.2.2 ". 
Based on these statements, Korea concludes that since the information in the record does not 
indicate that Tenaris produced or sold OCTG pipe in Korea during the period of investigation, "[n]o WT/DS488/ R/Add.1  
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- C-18 - 
 
  reasonable basis exists  to conclude that Tenaris 's profit rate is reflective of the profit rate that the 
Korean producers would have achieved if they had sold OCTG in the country of export ". 
25. To the contrary, Article 2.2.2 specifically contemplates that there may not exist in formation 
in the record of an investigation that would allow an investigating authority to base CV profit on 
profits associated with sales in the domestic market of the exporting country and provides an 
alternative method on which to base CV profit when th is situation occurs .  
26. As discussed above, the chapeau of Article 2.2.2 sets out a  preferred method that calculates 
CV profit narrowly based on actual domestic market data in respect of the like product, sold in the 
ordinary course of trade, as manufact ured by the producer or exporter in question . If such data do 
not exist, subparagraphs (i) and (ii) of Article 2.2.2 provide for two alternatives that draw on 
broader domestic market data sets, either in respect of the same general category of products as 
manufactured by the producer or exporter in question, or in respect of the like product as 
manufactured by other producers or exporters subject to investigation . Subparagraph (iii) of 
Article 2.2.2 provides for a third alternative that is broader still, "any other reasonable method ". 
As the panel in EU – Biodiesel  noted, "[t]his context, together with absence of any additional 
guidance in Article 2.2.2(iii) on what the 'method ' chosen should entail in terms of either the 
source or scope of the  data or proce dures, suggests . .. a broad and non -prescriptive 
understanding of the term ".   
27.  It is not uncommon to find situations in which products are manufactured just for export . In 
such situations, it makes sense, both legally and factually under t he third alt ernative in 
Article  2.2.2, for an investigating authority to be able to calculate CV profit based on "any other 
reasonable method ". The Korea OCTG investigation is such a situation .  
28. Further, the information in the record of this investigation indicate s that the respondents did 
not sell OCTG in Korea during the period of investigation, not surprising since, as Korea notes in its 
First Written Submission, "there is limited oil and gas exploration in Korea ". Thus an absence of 
conclusive evidence as to wh ether Tenaris may have sold OCTG in Korea during the period of 
investigation also should not be surprising, nor a sufficient reason to dismiss USDOC 's reasoned 
and adequate explanation for why it decided to base CV profit on the Tenaris financial statement . 
29. If an investigating authority selects pursuant to Article 2.2.2(iii) a CV profit margin that is 
based on a reasoned consideration of the evidence before it, rationally directed at approximating 
what the profit of a producer of the like product would have been if the like product had been sold 
in the ordinary course of trade in the domestic market of the exporting country – as USDOC did 
here – the use of such a profit margin by an investigating authority is consistent with the 
obligations set out in Ar ticle 2.2.2 of the AD Agreement . Therefore, even though the record did not 
include information that Tenaris sold OCTG in Korea during the period of investigation, this fact 
does not render USDOC 's decision to base CV profit on the Tenaris financial stateme nt not 
"reasonable " within the meaning of Article 2.2.2 of the AD Agreement .   
E. Article 2.2.2 Does Not Require an Investigating Authority to Broaden its Definition 
of the "Same General Category of Products " When Information in the Record Does 
Not Otherwi se Allow for Calculation of a Profit Cap  
30. Korea also argues "that the investigating authorities are not permitted to deviate from 
Article 2.2.2(iii), which unequivocally requires the calculation and application of a profit cap ". 
According to Korea, "to the extent that an investigating authority is faced with practical difficulties 
in calculating a profit cap, it has flexibility to adjust the scope of products considered ". In other 
words, Article 2.2.2 should be interpreted to obligate an investigating au thority to disregard its 
reasoned and adequate explanation for the definition of "products of the same general category " 
and to artificially broaden that definition until it finds profit data for a dissimilar product .  
31. When an investigating authority c onstructs normal value, it is required by Article 2.2 to 
include "a reasonable amount for ... profits ". In this regard, the panel in Thailand – H-Beams  
understood that, under Article 2.2.2(i),  
[t]he broader the [same general] category [of products], the m ore products other 
than the like product will be included, and thus in our view the more potential there WT/DS488/ R/Add.1  
BCI deleted , as ind icated  [[***]]  
- C-19 - 
 
  will be for the constructed normal value to be unrepresentative of the price of the like 
product .  
Thus Korea 's suggestion that an investigating author ity should disregard its otherwise reasoned 
and adequate explanation for defining the "same general category of products " as it did, simply 
because there is no information in the record that would allow it to calculate a profit cap, inevitably 
will result in a contrived constructed normal value.  
32. For example, in paragraph 33 of its Responses to Questions, Korea argues that USDOC 
should have broadened its definition of the same general category of products because HYSCO 
marketed OCTG "as part of its gene ral 'Steel Pipes ' that include other carbon steel pipes for 
ordinary piping, boiler and heat exchange, pressure service, and structural purposes, as well as 
line pipe, other casing and tubing products, offshore structural pipe, conduits, fencing tubing, an d 
boiler tube ". A broadening of the definition of "same general category of products " in the Korea 
OCTG investigation to include pipes for ordinary piping or for boiler and heat exchange, or even 
fencing tubing, would necessarily result in a constructed no rmal value unrepresentative of the 
price of the subject merchandise.  
F. An Investigating Authority is Not Required to M ake an Adjustment Under 
Article  2.4 of the AD Agreement When an Interested Party Fails to Request such an 
Adjustment  
33. Korea argues tha t the Korean respondents should be excused for their failure to request 
USDOC to make an allowance within the meaning of Article 2.4 because they purportedly were 
limited in their ability to do so . Korea argues in the alternative that since the Korean resp ondents 
had pointed out differences between themselves and Tenaris for purposes of the CV profit 
determination, they had otherwise fulfilled their responsibilities regarding adjustments under 
Article 2.4.  
34. Korea 's argument distorts the record in the inv estigation . Information about Tenaris 's profit 
margin, and other company -specific information, was placed in the record before USDOC published 
its preliminary determination . USDOC decided not to calculate CV profit based on Tenaris 's profit 
rate for purpos es of its preliminary determination, but this decision did not mean that USDOC 
could not decide to calculate CV profit based on Tenaris 's profit rate for purposes of the final 
determination . Indeed, both HYSCO and NEXTEEL argued before the final determinat ion that 
USDOC should not base CV profit on the Tenaris data for multiple reasons, including the alleged 
differences in products and operating structure . Thus the fact that respondents knew to make 
arguments about the Tenaris data before USDOC 's final dete rmination shows that they understood 
that USDOC could base CV profit on this data . But again, neither respondent argued that due 
allowance should be made under Article 2.4.  
35. In addition, as HYSCO and NEXTEEL never asked USDOC to make due allowances unde r 
Article 2.4, the suggestion that they unwittingly fulfilled their responsibility for doing so, or that 
USDOC should have recognized that they had done so, does not follow . According to the Appellate 
Body, "exporters bear the burden of substantiating, 'as constructively as possible ', their requests  
for adjustments reflecting the 'due allowance ' within the meaning of Article  2.4". The additional 
arguments advanced by Korea in its responses to questions do not change the fact that Korea has 
not established t hat the United States acted inconsistently with the obligations provided for in 
Article 2.4 in failing to make an adjustment that was never requested . Therefore, the Panel should 
find that Korea 's claim with respect to Article 2.4 lacks merit.  
III. USDOC 'S USE OF CONSTRUCTED E XPORT PRICE WAS NOT INCONSISTENT WITH 
ARTICLE 2.3 OF THE A D AGREEMENT  
36. Korea has failed to establish that USDOC improperly relied on constructed export price 
("CEP") after making the factual determination that NEXTEEL is affiliated with the Customer . The 
United States recalls that Article 2.3 permits an authority to disregard a producer 's export price 
"where it appears to the authorities concerned that the export price is unreliable because of 
association or a compensatory arrangemen t between the exporter and the importer ". Korea argues 
that inclusion of the term "appears " in Article 2.3 does not affect the substantive obligation, and 
that an authority is to determine whether export prices are – in fact – unreliable . Korea now relies WT/DS488/ R/Add.1  
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- C-20 - 
 
  on Article 17.6(i) of the AD Agreement as additional support for this proposition, stating that 
Article 17.6(i) requires that "each of the USDOC 's findings and determinations must be based on 
an unbiased and objective assessment of facts that are properly established ". Korea 's argument 
conflates two distinct issues . Article 17.6(i) concerns a panel 's standard of review, and more 
specifically its "assessment of the facts, " and does not alter the sub stantive obligations of 
Article  2.3 or any other provision o f the AD Agreement.  
37. Korea also continues to assert that the legal interpretation of "association " within the 
meaning of Article 2.3 should be informed by the definition of "related " in footnote 11 of the 
AD Agreement because the United States "incorpor ated the definitions contained in footnote 11 in 
its domestic legislation corresponding to the application of Article 2.3 ". Despite Korea 's claims, 
however, USDOC 's definition of "affiliation " in U.S. domestic law does not alter the United States ' 
legal ob ligations under Article 2.3, such that a finding of "affiliation " and not "association " would be 
required . Under the customary rules of treaty interpretation, and consistent with the findings of 
WTO panels and the Appellate Body, the U.S. domestic legal pr ovisions are not relevant to the 
legal interpretation of Article 2.3.  
38. With respect to the facts underlying USDOC 's finding of affiliation, Korea highlighted two 
arguments in its answers to the Panel 's questions . First, Korea contends that "USDOC disreg arded 
the fact that  … a larger portion of [hot -rolled coil] actually used in producing OCTG during the 
period of investigation was purchased from other sources prior to the period of investigation ". 
Korea 's statement implies that a substantial percentage o f the HRC that NEXTEEL consumed to 
produce OCTG during the period was from a source other than NEXTEEL . However, Korea 's 
assertion does not demonstrate that USDOC 's finding was not based on positive evidence, and is, 
in any event, contradicted by the recor d.  
39. Second, Korea now argues that NEXTEEL 's relationship with both POSCO and Customer 
predated the relationship between POSCO and Customer, thus undermining USDOC 's conclusion 
that export prices appeared unreliable . As an initial matter, it is importan t to recognize that the 
information referenced in Korea 's response was not, as the Panel 's question asks, "provided by the 
interested parties to the USDOC in support of an argument that NEXTEEL 's export price was not 
unreliable despite the USDOC 's finding of affiliation ". Rather, the information was provided by 
NEXTEEL in response to a standard question from USDOC regarding corporate structure, and was 
not included as part of any argument to USDOC regarding affiliation or price reliability . 
Furthermore, the  information referenced by Korea does not undermine USDOC 's conclusion of 
affiliation .  
IV. USDOC 'S DECISION TO DEPART  FROM NEXTEEL 'S BOOKS AND RECORDS TO 
CALCULATE COSTS WAS NOT INCONSISTENT  WITH ARTICLE 2.2.1.1  OF THE 
AD AGREEMENT  
40. Korea has failed to  demonstrate that USDOC 's decision to depart from NEXTEEL 's books and 
records to calculate certain of NEXTEEL 's input costs was inconsistent with Article 2.2.1.1 . In this 
submission, the United States will address Korea 's argument in response to Panel ques tion 26 that 
"USDOC disregarded NEXTEEL 's own records  … without examining the accuracy or reliability of 
NEXTEEL 's records".  Korea 's argument is not supported by the text of Article 2.2.1.1 or the factual 
record of the Korea OCTG investigation . 
41. The Uni ted States recalls that, in the NEXTEEL CV Memo, USDOC analyzed NEXTEEL 's 
transaction prices for HRC from POSCO to evaluate whether the prices were reflective of market 
prices, or transactions made at an arms -length . For each grade of HRC – the input at is sue here – 
USDOC compared POSCO 's transfer prices to NEXTEEL with (1) POSCO 's cost of production and (2) 
POSCO 's arms -length transaction prices . If the transfer prices were lower than the cost of 
production or not consistent with an arms -length transaction  price, then USDOC departed from 
NEXTEEL 's books and records, and instead used POSCO 's sales prices to unaffiliated purchasers . 
Based on its analysis of the record data, USDOC properly concluded that certain transaction prices 
did not reasonably reflect th e costs associated with the production of OCTG.  
42. Korea also now cites to the panel report in EU – Biodiesel  to suggest that Article 2.2.1.1 is 
concerned only with whether the records reflect the actual costs  incurred by the producer under 
investigation . In that case, the panel considered the European Union 's treatment of certain WT/DS488/ R/Add.1  
BCI deleted , as ind icated  [[***]]  
- C-21 - 
 
  distortions it determined to exist in Argentina 's economy that had the effect of reducing the 
exporter 's costs of certain inputs . Under that circumstance, the pa nel concluded tha t the 
European  Union did not have a basis under Article 2.2.1.1 to depart from the producer 's books and 
records because the books and records did reflect the actual costs incurred by the producer . The 
circumstances of this investigation are not similar, an d these findings are thus of limited relevance.  
43. Moreover, the panel in EU – Biodiesel  went on to expressly recognize that transactions 
between companies that are not at arms -length would provide a basis to depart from the 
producer 's books and records . The panel observed that, where a producer and supplier are 
affiliated, "the actual costs of production of particular inputs is spread across different companies ' 
records, or [] transactions between such companies are not at arms -length or indicative of the  
actual costs involved in the production of the product under consideration ". It is this finding that is 
relevant to the circumstances of this case . Here, based on the record evidence, USDOC determined 
an affiliation relationship to exist between NEXTEEL a nd its supplier of HRC, POSCO . Having made 
that determination, USDOC then analyzed the prices charged by POSCO to NEXTEEL against the 
prices charged by POSCO to unaffiliated purchasers . Based on that analysis, USDOC determined 
the appropriate costs to use for the constructed normal value . Therefore, contrary to Korea 's 
argument, EU – Biodiesel  supports the U.S. argument that USDOC properly rejected respondents ' 
data under Article 2.2.1.1 . 
V. USDOC 'S DECISION TO LIMIT THE EXAMINATION WAS NOT INCONSISTENT WIT H 
ARTICLE 6.10 OF THE AD AGREEMENT  
44. Contrary to Korea 's statements, USDOC clearly indicated that it limited its examination to 
the largest percentage of the volume of exports that could reasonably be examined, and provided 
a reasoned explanation for its  decision to limit the number of respondents individually examined, 
consistent with the obligations of Article 6.10 of the AD Agreement . 
45. The authority may limit its examination where the number of exporters or producers is so 
large as to make a determi nation of individual margins of dumping for all exporters or producers 
"impracticable ". Once the authority determines that it would be "impracticable " to examine all 
exporters or producers, and determines to limit its examination under the second methodolo gy, 
the authority must determine "the largest percentage of the volume of the exports from the 
country in question which can reasonably be investigated ".  
46. USDOC 's determination that it "would not be practicable " to examine all possible 
respondents comp lied with Article 6.10 . Data indicated that more than ten Korean companies 
exported or produced OCTG that was imported into the United States during the period of 
investigation . USDOC carefully considered "its resources, including its current and anticipat ed 
workload and deadlines coinciding with the proceeding in question ".  
47. USDOC accordingly limited its examination to a certain number of respondents . Specifically, 
USDOC 's Respondent Selection Memorandum states that USDOC determined it "most appropriat e 
to select the exporters or producers accounting for the largest volume of the subject merchandise 
that can reasonably be examined ". In addition to USDOC 's consideration of its available resources, 
USDOC determined that HYSCO and NEXTEEL accounted for the  largest volume of U.S. imports of 
subject merchandise during the period of investigation . Korea has presented no evidence to argue 
that USDOC 's actions were unreasonable, and the Panel should therefore reject Korea 's claim . WT/DS488/ R/Add.1  
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- C-22 - 
 
  ANNEX C -4 
EXECUTIVE SUMMARY OF  THE ORAL STATEMENTS OF THE UNITED STATES   
AT THE SECOND  PANEL MEETING  
I. Korea 's "As Such " and "As Applied " Claims Regarding the So -Called "Viability Test " 
are Without Merit  
1. The customary rules of treaty interpretation support the U.S. understanding t hat Article 2.2 
permits an authority to consider the volume of sales when determining an "appropriate " third-
country . The parties agree that, where home -market sales cannot be used to calculate normal 
value, Article 2.2 imposes no hierarchy as between the two alternative methods . Under Article 2.2, 
an interested party is not entitled to direct the use of a particular method . Rather, the authority 
may determine to use constructed normal value or sales to "an appropriate third country, provided 
that this pric e is representative " to calculate normal value . The text of Article 2.2 does not 
prescribe how an authority is to identify an "appropriate third country ", nor does it preclude  the 
consideration of volume . Moreover, relevant context supports an understandin g that volume may 
be a relevant consideration .  
2. We turn next to Korea 's contention that the challenged measure is contrary to U.S. domestic 
law. It is not the role of a panel to review the legality of a Member 's law as within that municipal 
legal system . Rather, it is the role of the panel to determine, as a matter of fact, the content and 
meaning of municipal law, and to evaluate its consistency with WTO law . Despite Korea 's 
contentions, Commerce is required to adhere to its regulations . As reflected in  the plain language 
of Commerce 's current regulation, the United States has shown that Commerce has the flexibility 
to consider the use of third -country sales that are less than 5 percent of sales to the United States .  
II. Korea 's Claims Regarding the Cal culation of CV Profit are Without Merit  
3. Korea contends that "[t]he fundamental problem with the United States ' argument is that 
the chapeau of Article 2.2.2 is intended to apply precisely in circumstances in which there is no 
'viable ' home or third -country market under Article 2.2 ". Korea has it backwards . This is the 
fundamental problem with Korea 's argument because Article 2.2.2 does not just apply when there 
is no viable home or third -country market . Article 2.2.2 frequently applies when there is a viable 
home or third -country market and yet, for various reasons, an investigating authority must 
construct normal value for comparison purposes .  
4. For example, an authority using home market sales may nevertheless need to construct 
normal value for certai n sales where the home market data set does not contain contemporaneous 
sales, or does not contain sales of identical or similar like products . This also may occur where the 
identical or similar like products in the home market data set have to be rejected  because they fall 
below the cost of production or are outside the ordinary course of trade.  
5. Recently, the Appellate Body in EU – Biodiesel  discussed how the introductory phrase "[f]or 
the purpose of paragraph 2 " impacted the interpretation of Article 2 .2.1.1, finding  that 
Article  2.2.1.1 must be interpreted in a manner consistent with Article 2.2 . The phrase "[f]or the 
purpose of paragraph 2 " also appears at the beginning of Article 2.2.2 . The language of the 
chapeau of Article 2.2.2 thus should also be  interpreted in a manner consistent with Article 2.2.  
6. The context provided by Article 2.2 suggests that, where an investigating authority 
determines that sales in the home market are viable, the chapeau of Article 2.2.2 reflects a similar 
preference and  indicates that those same sales should be used for calculating profit amounts .  
7. But where an investigating authority determines under Article 2.2 that sales in the home 
market are not viable, and determines instead to construct normal value, nothing in  the chapeau 
of Article 2.2.2 suggests that an investigating authority must nevertheless collect home market 
sales that it purposely did not collect under Article 2.2 or third -country sales that it did not collect 
under Article 2.2 . In such a case, Article  2.2.2 provides three alternative methodologies that can 
be employed instead.  WT/DS488/ R/Add.1  
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- C-23 - 
 
  8. Korea persists with the notion that because HYSCO or NEXTEEL may have produced so -
called "non-prime " OCTG, sales of this product in Korea constituted sales of the like produc t. 
Korea 's argument ignores the key determinant in whether a product falls within the scope of the 
"like product " definition: whether the product in question was sold on the date of sale as "like 
product ". The record here is clear: NEXTEEL said the pipes i n question "were sold to customers as 
standard pipes ". HYSCO said the pipes in question were "not marketed to the customer as OCTG " 
but sold "for structural purposes ". Thus, as of the date of sale, the relevant pipes were not sold in 
Korea as "like product s".  
9. Finally, the so -called domestic market "profit " figures put forward by Korea do not satisfy 
the definition of profit . The definitions put forward in this dispute, including the one advocated by 
Korea, define profit as a "financial gain " or a "positive difference ". The "profit " figures in question 
do not correlate with these definitions of profit.  
10. Korea argues that the United States has offered no basis under the chapeau of Article 2.2.2 
to justify its differential treatment of SG&A and profit . At the outset, we note that the language in 
Article 2.2.2 does not require an investigating authority to base its calculation of SG&A and profit 
on the same methodology, or even the same database . SG&A and profit are completely different 
factors, so it is acceptable for an authority to base the calculation of SG&A on one method and the 
calculation of profit on another . Furthermore, contrary to Korea 's argument, the record indicates 
that Commerce did not base its calculation of SG&A on the preferred method p rovided for under 
the chapeau of Article 2.2.2 . It based its calculation of SG&A on an alternative method provided for 
under the subparagraphs of that article .  
11. Contrary to Korea 's argument, Article 2.2.2(iii) does not require an investigating authorit y to 
impose a profit cap whenever the authority calculates CV profit based on "any other reasonable 
method. "  By linking the profit cap to "profit normally realized ", Article 2.2.2(iii) foresees situations 
when there may be no information about the profits  in question, because there are no other 
exporters or producers of sales of products of the same general category in the domestic market, 
or because this information simply does not appear in the record of the proceeding.  
12. Article 2.2.2(iii) should be a pplied as the word "normally " suggests:  If information exists to 
calculate the profit cap, the proviso is operative . If such a calculation is not possible because 
information does not exist, then the proviso is not operative . In either case, an investigati ng 
authority remains bound under Article 2.2 to calculate "a reasonable amount ... for profits ".  
13. Korea argues that it was unreasonable for Commerce to base CV profit on the Tenaris 
financial statement because this profit figure ignores the "'domestic market ' requirement " of 
Article  2.2.2 . Consistent with the interpretation set out by the United States in this dispute, the 
panel in EU – Biodiesel  found that "the structure of Article 2.2.2 indicates a preference for the 
actual data of the exporter and li ke product in question, with an incremental progression away 
from these principles before reaching 'any other reasonable method ' in Article 2.2.2(iii) ". In this 
regard, the panel concluded that "[t]his context, together with absence of any additional guida nce 
in Article 2.2.2(iii) on what the 'method ' chosen should entail in terms of either the source or 
scope of the data or procedures, suggests ... a broad and non -prescriptive understanding of the 
term". So while the chapeau of Article 2.2.2 and subparagra phs (i) and (ii) have a "domestic 
market requirement ", Article 2.2.2(iii) clearly does not contain a similar requirement.  
14. Korea requests that the Panel expand the scope of its examination to include Commerce 's 
Final Redetermination Pursuant to Court Re mand, issued on February 22, 2016, and find those 
results inconsistent with the obligations of the United States under Articles 2.2 and 2.2.2 . 
Commerce 's redetermination was not the subject of consultations and did not exist at the time the 
Panel was estab lished . Commerce 's redetermination thus is not a measure before the Panel and 
falls outside its terms of reference . Furthermore, Korea failed to invoke Commerce 's 
redetermination in this dispute in a timely manner, prejudicing the U.S. ability to respond t o 
Korea 's claims regarding that redetermination .  WT/DS488/ R/Add.1  
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- C-24 - 
 
  III. Commerce 's Decision to Construct NEXTEEL 's Export Price Was Not Inconsistent 
with Article 2.3 of the AD Agreement  
15. We turn next to Korea 's claims regarding Commerce 's use of NEXTEEL 's constructed ex port 
price. The customary rules of treaty interpretation require that a treaty be interpreted based on 
the ordinary meaning of the terms in their context . Here, the relevant term is "association, " which 
is defined as "the action of joining or uniting for a  common purpose ", a definition that captures a 
broad range of commercial relationships . We recall that guidance on the meaning of this term can 
be drawn from the parallel treatment in Article 2.3 of "association " and "compensatory 
arrangement ". Neither an "association " nor a "compensatory arrangement " relationship conveys an 
aspect of control within the relationship . Instead, both terms concern relationships in which 
transactions may not be made on an arm 's length basis . It is the nature of these relationsh ips that 
gives the appearance of unreliable prices, and in turn permits an authority, under Article 2.3, to 
construct export price .   
16. Korea 's Second Written Submission asserts that Article 2.3 requires an authority to 
separately assess the reliability of prices before deciding to use constructed export price . Again, 
however, Korea has not explained how its interpretation gives meaning to the terms used in the 
text of Article 2.3, in this case, "appear ". As the United States has explained, the word "appear" is 
defined as "seem to the mind, be perceived as, be considered ". Thus, if the relationship between 
the exporter and the importer is "perceived [by the authority] as " resulting in a price that cannot 
be trusted, the authority can resort to the use of a  constructed export price . The United States has 
acknowledged that there may be circumstances in which two companies may meet the broad 
definition of association, yet the nature of the relationship does not give rise to the perception that 
the prices canno t be trusted . In such cases, there may not be a basis for the authority to reject 
actual sales prices.  
17. That is not the situation here . As we have explained, the nature of the relationship between 
NEXTEEL and POSCO, in which POSCO was involved in both t he production and sale of NEXTEEL 's 
OCTG, called into question the reliability of NEXTEEL 's prices . We refer the Panel to the final 
affiliation memorandum, which demonstrates that Commerce 's inquiry considered the nature of 
the relationship and its potenti al effect on the pricing, production, and sale of OCTG .  
IV. Commerce 's Use of Calculated Costs Based on NEXTEEL 's Supplier 's Records Was 
Not Inconsistent with Article 2.2.1.1 of the AD Agreement  
18. Korea has failed to establish that the decision to depar t from NEXTEEL 's books and records 
to calculate costs was inconsistent with Article 2.2.1.1 . In the recently issued Appellate Body 
report in EU – Biodiesel , the Appellate Body  recognized that Article 2.2.1.1 permits an authority to 
depart from a producer 's books and records where transactions were not made on an arm 's length 
basis. The Appellate Body observed that records may "not be found to reasonably reflect the costs 
associated with the production and sale of the product under consideration " under Artic le 2.2.1.1 
"where transactions involving such inputs are not at arm 's length ".  
19. Here, after concluding that an affiliation existed between the producer and supplier, 
Commerce undertook a line -by-line comparison of prices charged by POSCO to NEXTEEL wit h 
prices charged by POSCO to unaffiliated purchasers . This analysis established that the costs 
recorded in NEXTEEL 's books and records for certain grades of hot -rolled coil did not reflect the full 
"costs associated with the production of " OCTG.  
V. Commer ce in the Korea OCTG Investigation Met All Disclosure and Participatory 
Requirements under the AD Agreement  
20. Korea argues under Articles 6.2 and 6.4 that once Commerce decided in its preliminary 
determination not to base CV profit on the Tenaris data, "there was no reason for the Korean 
respondents to concern themselves " that Commerce may subsequently change its mind in its final 
determination . Korea also argues that Commerce denied the Korean respondents an opportunity to 
submit information rebutting th e Tenaris data and that the United States failed to protect 
respondents ' procedural rights.  WT/DS488/ R/Add.1  
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  21. As we have said before, a preliminary determination is just that: preliminary . It is not 
credible for any interested party to suggest they need not concern them selves with the fact that a 
final determination might differ from a preliminary determination, especially in this matter given 
that Commerce specifically indicated in its preliminary determination that it "intend[ed] to continue 
to explore other possible o ptions for CV profit for both respondents ". 
22. The Korean respondents were informed of the additional Tenaris financial data at the same 
time as Commerce – when the data was placed on the record . As the United States has explained 
in its prior submissions , respondents had an opportunity to submit factual information rebutting 
the Tenaris data but declined to do so . The respondents also made multiple arguments before and 
after Commerce 's preliminary determination, through written submissions and at the hear ing, 
regarding whether and how Commerce should use the Tenaris financial data . It is thus clear from 
the record that the Korean respondents had ample opportunity to defend their interests and to see 
all information that was used in Commerce 's final determi nation .  
VI.  Korea Has Failed to Establish that the Korea OCTG Investigation was Inconsistent 
with Article I:1 and Article X:3(a) of the GATT 1994  
23. We turn now to address claims raised by Korea under Article I:1 and Article  X:3(a) of the 
GATT 1994 . First, Korea 's claim under Article I:1 must fail because the measure does not fall 
within the scope of Article I:1 . In Korea 's Second Written Submission, for the first time, Korea 
asserts that the challenged measure is within the scope of Article I:1 because "'the method of 
levying such duties and charges ' must cover antidumping investigations ". But contrary to Korea 's 
argument, "method of levying " duties relates to the administration of duty collection, not the 
conduct of a single antidumping investigation . Indeed, an investigating authority necessarily must 
conduct investigations based on the particular circumstances of eac h case, as reflected in 
Article  VI:1 of the GATT 1994.  
24. Second, Korea 's Article X:3(a) argument does not state a claim within the scope  of that 
provision . To establish a breach of Article X:3(a), the complainant must: (1) identify a law, 
regulation, decision or ruling of general application of the responding Member, and (2) 
demonstrate that the respondent does not administer that law, reg ulation, decision or ruling in a 
uniform, impartial, and reasonable manner . Korea has failed to sufficiently identify either the 
specific measure at issue, or the nature and scope of its claim regarding the administration of that 
measure .  
EXECUTIVE  SUMMAR Y OF U.S.  CLOSING  STATEMENT  
25. Under Article 7.1 of the DSU, the DSB gives a panel authority to examine a matter through 
the panel 's terms of reference . The "matter " is comprised of the measure and claims (i.e., the 
legal basis of the complaint) identifie d in the complainant 's panel request . As such, a panel can 
only consider those measures and claims identified in the complainant 's request for the 
establishment of a panel, consistent with Article 6.2 of the DSU . Korea has argued that the Panel 's 
terms of reference include Commerce 's remand redetermination . The redetermination, however, is 
not identified in Korea 's Panel Request, and the redetermination therefore falls outside the Panel 's 
terms of reference . Moreover, Korea has failed to claim in its Panel Request that the United States 
acted inconsistently with Article 6.8 or Annex II . Therefore, the correct basis for the claim Korea 
now raises with respect to Commerce 's calculation of a profit cap in its redetermination would also 
fall outside the Panel 's terms of reference.  
26. As noted in Question 16 of the Panel, Korea also failed to include in its Panel Request a claim 
that Commerce 's determination to base CV profit on the Tenaris financial statement did not 
constitute an "other reasonable method " within the meaning of Article 2.2.2(iii) . Therefore, the 
Panel should find that its terms of reference do not extend to Korea 's claim regarding Commerce 's 
determination to base CV profit on the Tenaris financial statement under Article 2.2.2(iii) .  
 
___________ ____  
 
 
 WT/DS488/R/Add.1  
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- D-1 - 
 
  ANNEX D  
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex D -1 Executive Summary of the Arguments of China  D-2 
Annex D -2 Integrated  Executive Summary of the Arguments of the European Union  D-4 
Annex D -3 Executive Summary of the Arguments of Tur key D-8 
 
 
 
 
 WT/DS488/R/Add.1  
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- D-2 - 
 
  ANNEX D -1 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF CHI NA 
I. INTRODUCTION  
1. Mr. Chair, Members of the Panel . China welcomes the opportunity to address you today .  
2. China wishes to highlight some of the critical issues that arise in relation t o the claims made 
by Korea regarding USDOC 's use of the "viability test " and use of constructed normal value in anti -
dumping proceedings . China believes that these issues are of systemic importance and should be 
underscored.  
II. ISSUES  ARISING  IN CONNECTI ON WITH  KOREA 'S CLAIMS  AGAINST  USDOC 'S USE  
OF THE  "VIABILITY  TEST " 
3. Article 2 .2 of the Anti-Dumping Agreement  is the provision governing how an investigating 
authority may depart from the domestic sales to determine the normal value for fair price 
compar isons. The departure may arise from three circumstances: when there are no sales in the 
ordinary course of trade in the domestic market  of the exporting country, or particular market 
situation, or the low volume of the sales in the domestic market of the e xporting country, under 
which the normal value could be determined by either based on third country sales (like product 
exported to an appropriate third country) or constructed normal value.  
4. The only condition provided explicitly in Article 2. 2 of the  AD Agreement when the normal 
value is determined on the basis of the third country sales is "the price is representative ", while 
one of the three criteria to pass the "viability test " that United States uses third country sales to 
calculate normal value i s the quantity or value of the sales to the third country shall meet 5% or 
more of the company 's sales to the Unites States.  
5. China  is of the view that Article 2.2 does not set up or implies any minimum threshold as 
applied by the United States in the "viability test ". There  is no text or context basis to support this 
"5% or more " criteria in "viability test" and this additional quantitative threshold, besides 
"representative " requirement, shall not be permitted and its application is per se  inconsistent  with 
Article 2.2 of Anti -Dumping Agreement.  
III. ARTICLE  2.2.2  (III)  REQUIRES  THE  PROFIT  CONSTRUCTION  BASED  ON A 
REASONABLE  METHOD  
6. The foundational concept of "dumping ", as embodied  in the d efinition of dumping in 
Article  VI:1 of the GATT 1994 and Arti cle 2.1 of the Anti -Dumping Agreement and reflected 
throughout the Anti -Dumping Agreement, is endowed with producer or exporter -specific character . 
This foundational concept of dumping requires the normal value to be calculated on the basis of 
the sources can reasonably reflect  the pricing behavior of an individual exporter or producer in the 
domestic market of exporting country.  
7. Article 2.2.2 (iii) of Anti-Dumping Agreement  requires that any alternative calculation 
method used must be "reasonable " that could represent domestic market of the exporting country . 
The general rules provided in the chapeau of Article 2.2.2 and its paragraphs (i) -(iii) guarantee  the 
normal value reflects the actual SG&A and profit in a reasonable way, especially if the investi gating  
authority chooses to depart from the relevant data provided by the exporter or producer under 
investigation .  
8. With respect to the calculation of profit as one of the important elements for the constructed 
normal value, the structure and content o f Article 2.2.2 clearly shows its preference for a profit 
source representing the domestic market of the exporting country  WT/DS488/R/Add.1  
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  IV. ARTICLE  2.4 REQUESTS  DUE  ALLOWANCE  BE MADE  FOR  ANY  OTHER  DIFFERENCES  
AFFECTING  PRICE  COMPARABILITY  
9. China now goes to the issue  of due allowance needed for the differences affecting price 
comparability . Article 2.4 requires that a fair comparison shall be made between the export prices 
and the normal value, and provides that due allowance shall be made in each case, on its merits,  
for differences which affect price comparability . The "fair comparison " requirement in Article 2.4 
obliges the investigating authority to take into account substantial  differences that may affect the 
price comparability .  
10. Appellate Body in EC -Fastener s states that when differences  affecting price comparability 
between the normal value and export price exist, the authorities must make an adjustment.1 China 
believes that the interpretation developed and continuously affirmed by the Appellate Body has 
clarified the obligation that the investigating authorities shall make due allowance accordingly.  
11. In the underlying investigation, the factors cause differences presented by Korean 
enterprises include the types of products sole, scale of business operati ons, and position in the 
distribution chain, may substantially affect the proper calculation of profit rate and thus eventually 
affect the price comparison, and should be adjusted according  to Article 2.4 of Anti -
Dumping  Agreement .  
12. Thus, China shares the same view with Korea that USDOC is obliged to take into account the 
differences that may affect price comparability and make adjustment  for the profit rate. Refusing 
to do so would amount to denying a fair comparison between the normal value and the ex port 
price and ultimately  is inconsistent with Article 2.4 of the Anti-Dumping  Agreement . 
V. CONCLUSION  
13. This concludes China 's remarks . China wishes to thank you, and the Secretariat team 
supporting you, for the work that has been undertaken to date.   
                                                
1 Appellate Body Report,  EC – Fasteners (Article 2 1.5), para. 5.163.  WT/DS488/R/Add.1  
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  ANNEX  D-2 
INTEGRATED EXECUTIVE  SUMMARY OF THE ARGUM ENTS  
OF THE EUROPEAN UNIO N  
1. THE  U.S.  VIABILITY  TEST  FOR  THIRD -COUNTRY  MARKET  SALES  UNDER  ARTICLE  2.2 
OF THE  ANTI -DUMPING  AGREEMENT   
1. Where the domestic price in the exporting country market may not represent an appropriate 
normal value for the purposes of comparison with the exporting price, the second part of 
Article  2.2 of the Anti-Dumping Agreement provides that an importing Member may select one of 
two alternative methods: "third-country sales" and "constructed normal value ". No preference or 
hierarchy between these alternatives is expressed in the Agreement. Article 2.2 allows 
investigating authorities to opt for one of the two alternatives. The scope of this discretion is 
contextually informed b y footnote 2. Thus, investigating authorities should meet the requirements 
laid down for the use of each alternative: (1) third -country sales may be used provided that their 
price is "representative " (taking into account the context of footnote 2); and (2)  constructed 
normal value is based on the cost of production in the country of origin plus a reasonable amount 
for administrative, selling and general costs and for profits, calculated in accordance with the 
relevant provisions of Articles 2.2.1.1 and 2.2. 2. 
 
2. Accordingly, the European Union considers that  the absence of a sufficient volume of exports 
of the like product to an appropriate third country could justify a finding that the price of those 
exports was not representative in the circumstances of t he specific proceedings, particularly, as 
the United States points out, in circumstances where the evidence does not "demonstrate 
otherwise ". Article 2.2 states that it may be "because of … the low volume of sales " that "such 
sales do not permit a proper c omparison ". Thus, conceptually, a link is established between the 
notion of comparability and relatively low volume. Article 2.2 also uses the term "comparable " in 
connection with the price of the like product when exported to an appropriate third country.  The 
existence of the low volume test reflects the overarching requirement that the export price is to be 
compared with a proxy or benchmark that is a value that is normal. The Anti -Dumping Agreement 
expresses that metric in relative terms, by reference to  the volume of export sales.  
2. THE  USDOC 'S USE  OF CONSTRUCTED  VALUE  IN THE  OCTG  INVESTIGATION  UNDER  
ARTICLES  2.2.2  AND  2.4 OF THE  ANTI -DUMPING  AGREEMENT  
3. The European Union recalls that the Appellate Body in EC — Tube or Pipe Fittings  has 
clarified that  Article 2.2.2 imposes a general obligation on an investigating authority to use "actual 
data pertaining to production and sales in the ordinary course of trade when determining amounts 
for administrative, selling and general costs ( "SG&A ") and profits ". The European Union considers 
that, to the extent that USDOC first ascertained that actual SG&A and profit data for sales in the 
ordinary course of trade did not exist for the exporters and the like product under investigation, it 
was entitled to employ one of the other three methods provided in sub -paragraphs (i) -(iii) of 
Article 2.2.2 of the Anti -Dumping Agreement.  
 
4. In a situation where domestic sales are rejected as a basis for normal value because they 
are not in the ordinary course of trade by reason  of price, it seems that, by definition, there will be 
no "actual " profit margin that could be used in the construction of normal value. Furthermore, the 
European Union agrees with the United States that the first sen tence of the chapeau of 
Article  2.2.2 r efers to data that pertains, in principle, to the domestic market of the investigated 
firm. These words do not appear in the first sentence of the chapeau of Article 2.2.2. However, 
Article 2.2.2 begins with the phrase "For the purpose of paragraph 2 ". That purpose is to elaborate 
rules for the determination of a value that is normal, in principle, in the domestic market or in the 
country of origin. Furthermore, we would point out that the first and second sentences of the 
chapeau of Article 2.2.2 are close ly related. In short, for the purposes of resolving this dispute, the 
relevant terms of the treaty (as opposed to the context) actually co nsist of the whole of 
paragraph  2 and the whole of Article 2.2.2. This is significant because sub -paragraphs (i) -(iii) each 
also refer to the domestic market of the country of origin.  
 WT/DS488/R/Add.1  
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- D-5 - 
 
  5. The European Union notes that, while the text of Article 2.2.2 does not provide any 
elaboration as to the definition of "the same general category of products, " its chapeau and overall 
structure provide certain guidance about "the same general category of products ". We agree with 
both parties that this refers to something broader than "like product ". On the other hand, we do 
not think that the phrase refers to all products capable of bein g covered by the Anti -Dumping 
Agreement. Rather, in order to give some reasonable meaning to the phrase, we would tend to 
think of products where there may be some substitutability on the supply side.  
 
6. While taking no position on the merits, the Europea n Union considers that the application of 
"profit cap " is a mandatory requirement whenever an investigation authority determines to use 
"any other reasonable method " under subparagraph (iii) of Article 2.2.2. The presence of the profit 
cap in subparagraph (iii) and the absence of any cap in subparagraphs (i) and (ii) demonstrate 
that there is an additional element in subparagraph (iii) that needs to be satisfied.  
 
7. The European Union notes that the Anti -Dumping Agreement does not define the exact 
scope o f what constitutes a "reasonable method " for the purposes of Article 2.2.2 (iii) . The panel in 
Thailand — H-Beams  held that the intention of subparagraphs under Article 2.2.2 is to obtain 
results that approximate as closely as possible the price of the lik e product in the ordinary course 
of trade in the domestic market of the exporting country. We do not find it easy to envisage a 
situation in which it is impossible  to obtain data about the profit normally realised by producers of 
products of the same gener al category in the domestic market of the country of origin. It would 
only be in a truly exceptional situation, in which, despite its best efforts, the investigating 
authority had been unable to obtain the necessary data, that it would appear justified to fall back 
on the use of another reasonable method, without the determination or application of the profit 
cap. 
 
8. The European Union notes that Article 2.4 requires due allowances to be made not only for 
the differences explicitly mentioned in that Articl e (i.e. differences in conditions and terms of sale, 
taxation, levels of trade, etc.) but for any other differences which are also demonstrated to affect 
price comparability.  
 
9. While taking no position on the merits, the European Union is of the view th at, if there were 
differences between the Korean respondents and Tenaris (i.e. the types of products sold, scale of 
business operations and position in the distribution chain) that affected price comparability, the 
failure to make due allowance for these e lements is inconsistent with the "fair comparison " 
requirement under Article 2.4 of the Anti -Dumping Agreement. We agree with the parties that the 
rules in Article 2.4 of the Anti -Dumping Agreement apply also in the situation in which normal 
value has been  constructed on the basis of costs. However, we would point out that Korea is not 
comparing a cost item taken from a third country with a cost item pertaining in Korea (and also 
reflected in the export price). Rather, Korea 's complaint is about the amount for profit used in the 
constructed normal value.  
3. CONSTRUCTED  EXPORT  PRICES  IN CASES  OF ASSOCIATION  UNDER  ARTICLE  2.3 OF 
THE  ANTI -DUMPING  AGREEMENT  
10. Association, for purposes of Article 2.3, may be established directly (that is, between the 
exporter a nd the importer) or indirectly, via a third party. Unlike Article 4.1, which permits 
investigating authorities to entirely exclude a "related " producer from the definition of the 
domestic industry, Article 2.3 merely permits investigating authorities to co nstruct a reliable 
export price. Therefore, it appears that the requirement of "association " need not be limited to 
cases of direct or indirect control. Association between the exporter and importer does not 
necessarily make the export price unreliable. Th ere could, for example, be cases where the price 
charged to an associated importer is the same as the price charged to independent importers. In 
such cases, it should be open to the investigating authority to find that the export price is reliable 
despite the association. Nevertheless, Article 2.3 allows the investigating authority to construct the 
export price where the actual export price appears to be unreliable because of  association, i.e. 
relying solely on the nature of the association.  
 
11. The factu al assessment underlying the investigating authority 's decision to construct the 
export price is subject to Article 17.6: it must be unbiased and objective, and the establishment of 
facts must be proper. The investigating authority should, for example, pro perly take into account WT/DS488/R/Add.1  
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- D-6 - 
 
  any evidence on the record that speaks against a finding of association or shows the export price 
to be reliable despite association.  
4. DETERMINATION  OF COSTS  UNDER  ARTIC LE 2.2.1.1.  OF THE  ANTI -
DUMPING  AGREEMENT  
12. Under Article 2.2.1.1, when the records kept by an investigated party (i) are consistent with 
the generally accepted accounting principles of the exporting country; and (ii) reasonably reflect 
the costs associated with the production and sale of the product under consid eration, an 
investigating authority will "normally " be required to use them in the calculation of cost of 
production. The investigating authority may depart from the norm, but is bound to explain why it 
did so. The calculation of costs in any given investi gation must be determined based on the merits, 
in the light of the particular facts. Assuming that the USDOC departed from the "norm" of using 
NEXTEEL 's own records because of its association with POSCO, the European Union considers that 
it could have done  so as long as it properly and objectively explained and justified this departure 
from the norm. Naturally, if the finding of association between NEXTEEL and POSCO was itself 
improper, then there would also be no basis for the USDOC to decline to consider the records of 
transactions between those enterprises.  
5. PROCEDURAL  CLAIMS  UNDER  ARTICLES  6.2,  6.4,  6.9 AND  12.2.2  OF THE  ANTI -
DUMPING  AGREEMENT  
5.1. THE PLACEMENT OF TENARIS ' ANNUAL REPORT ON THE  RECORD  
13. Article 6.2 requires liberal opportunities for  respondents to defend their interests, but it does 
not enable respondents to submit relevant evidence or participate in the inquiry as and when they 
choose, nor does it require the investigating authority to warn an interested party that it intends to 
use a submission of another interested party in a certain way. A violation of Article 6.2 would take 
place if an interested party was prevented from commenting on requests made by other interested 
parties. The right of interested parties to "defend their inte rests" would not be sufficiently 
protected if they were only able to procedurally  object to the acceptance of other parties ' 
submissions, and unable to substantively  comment on or rebut the newly submitted information.  
 
14. A submission by an interested pa rty could constitute relevant information under Article 6.4, 
but it is questionable whether an investigating authority 's decision to accept that submission into 
the record could, in itself, be considered as "information " under Article 6.4. The fact that th e 
respondents were able to "see" certain information does not yet necessarily show that Article 6.4 
was complied with. Whether the investigating authority provided timely opportunities for the 
interested parties to prepare presentations on the basis of the  information depends on whether, on 
the facts, the opportunities to respond to the substance of newly submitted information were 
sufficient.  
 
15. With respect to Article 6.9, it is questionable whether an investigating authority 's decisions 
pertaining to the formation of the record could, in themselves, be considered as "essential facts ". 
On the other hand, it seems clear that a document which served as a basis for the calculation of 
the profit rate sets out "essential facts ". The pertinent question under Article 6.9 therefore appears 
to be whether the USDOC should have not only made the Tenaris Annual Report available, but also 
separately, prior to the final determination, disclosed its decision to rely on it in the calculation of 
normal value. The Appella te Body in China – GOES  found that Article 6.9 requires that "before a 
final determination is made, the authority explains, in the light of the substantive obligations of the 
Anti-Dumping Agreement […] how the essential facts serve as the basis  for the dec ision whether to 
apply definitive measures ". On the other hand, Article 6.9 may be complied with in a number of 
ways, not necessarily by providing all essential facts in a single document entitled "preliminary 
determination ".  
 
16. All essential facts must  be disclosed in good time for the interested parties to properly 
defend their interests. In some circumstances, it may not suffice that an essential fact is on the 
record of the investigation, but the investigating authority 's reliance on that fact may ne ed to be 
additionally disclosed.  WT/DS488/R/Add.1  
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  5.2. EX PARTE COMMUNICATIO NS 
17. The European Union considers that the Panel should tackle Korea 's claim by first considering 
whether the letters at issue fall within the scope of Article 6.4: notably, whether they contain  
"relevant information  … used by the authorities ". Information is relevant if it would in fact have 
been relevant for the presentation of an interested party 's case. Whether it has been "used" by the 
authority should, in turn, be examined by assessing whet her it is of a nature and type that relates 
to a required step in the investigation, such as to the determination of normal value. The next 
issue is whether the investigating authority allowed "timely opportunities " for the respondents to 
see the informati on and prepare presentations.  
 
18. Regarding Korea 's parallel claim under Article 6.9, the threshold issue is whether or not the 
information contained in the letters constitutes "essential facts under consideration which form the 
basis for the decision to  apply definitive measures ". In the European Union 's view, Article 6.9 could 
only be relevant if such a letter provided new essential facts which formed the basis of the final 
determination, but were not disclosed to interested parties in sufficient time.  
5.3. THE ADEQUACY OF THE P UBLIC NOTICE  
19. The main thrust of Korea 's challenge to the use of Tenaris ' profit rate and to the finding of 
association concerns the obligations in Article 2 of the AD Agreement. Both the information used to 
establish a profit rate, and the determinations on affiliation, seem to be "relevant information " and 
"material " in the meaning of Article 12.2.2. The crux of the issue is whether the USDOC 's reasons 
for rejecting or accepting the arguments Korea mentions were "set forth in sufficient detail " to 
allow the Korean respondents to understand why their arguments or claims were treated as they 
were, and to assess whether or not the investigating authority 's treatment of the relevant issue 
was consistent with domestic law and/or the  WTO Agreement. " 
6. SAMPLING  AND  INDIVIDUAL  DUMPING  MARGINS  UNDER  ARTICLES  6.10  AND  6.10.2  
OF THE  ANTI -DUMPING  AGREEMENT  
20. The second sentence of Article 6.10 provides for an exception to the rule that individual 
dumping margins must be determined. The i ssue raised by Korea is whether two producers 
constitute a "reasonable number ", i.e. whether USDOC 's sample was too small. Whether the 
number of selected producers is "reasonable " is, in the European Union 's view, closely connected 
to whether samples are "statistically valid ". The term "largest percentage of the volume of the 
exports from the country in question which can reasonably be investigated ", is also relevant 
context. In that context, the EC – Salmon (Norway)  panel found that "the volume of export s ales 
that may be reasonable for an investigating authority to investigate is a question that must be 
assessed on a case -by-case basis, taking into account all relevant facts that are before the 
investigating authority, including the nature and type of inte rested parties, the products involved 
and the investigating authority 's own inves tigating capacity and resources".  In addition, the 
Article  17.6 requirement of an unbiased and objective evaluation of the facts would require the 
investigating authority to p rovide reasons for its decision to limit the analysis, and for its 
methodology in doing so.  
 
21. With regard to Article 6.10.2, the European Union considers that the decision not to 
determine individual dumping margins for voluntary respondents cannot be a rbitrary; the authority 
must explain why the number of voluntary respondents would make it unduly burdensome and 
prevent the timely completion of the investigation.  
7. ARTICLES I AND ARTICLE X:3( A) OF THE GATT  1994  
22. Korea appears to claim that a breach  of Article I of the GATT 1994 must be preceded by a 
finding of a breach of Article VI of the GATT 1994, which it argues to have demonstrated. The 
European Union anticipates that the matters raised by Korea will be resolved, first and foremost, 
under the p rovisions of Article VI of the GATT 1994 and the Anti -Dumping Agreement. Similarly, 
the European Union considers that the position with respect to Tenaris ' financial statements will be 
resolved in the light of the specific provisions of the Anti -Dumping Ag reement cited by Korea, and 
not determinatively on the basis of Article X:3(a) of the GATT 1994.  
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  ANNEX  D-3 
EXECUTIVE SUMMARY OF  THE ARGUMENTS OF TUR KEY 
I. INTRODUCTION  
 
1. The Republic of Turkey (hereinafter referred to as "Turkey ") welcomes the opportun ity to 
present its views as a third party in this case. Turkey is participating in this case because of its 
systemic interest in correct and consistent interpretation and implementation of the Agreement on 
the Implementation of Article VI of GATT 1994 (her einafter referred to as "Anti-Dumping 
Agreement " or "AD Agreement ").  
 
2. Turkey will not elaborate on the particular facts presented by the Parties, rather, underlining 
its interest, Turkey will share its views on issues addressed by the United States of America 
(hereinafter referred to as US) and the Republic of Korea (hereinafter referred to as Korea) in their 
first written submissions pertaining to Article 2.2.2 and Article 2.3 of the AD Agreement.  
 
II. CLAIMS UNDER ARTICLE 2.2.2 OF THE ANTI -DUMPING AG REEMENT  
 
3. The definitive anti -dumping duty on Oil Country Tubular Goods (hereinafter referred to 
"OCTG ") originating in Korea was imposed on July 18, 2014, following the final determination of 
the U.S. Department of Commerce (hereinafter referred to as "USDOC ").1  
 
4. Regarding the assessment on the level of profit under the provi sion of Article 2.2.2 of the 
AD Agreement, the USDOC determined that the profit calculation is subject to one of the three 
alternative methods stipulated in Article 2.2.2 of the AD Agreement.  
 
5. USDOC concluded that Article 2.2.2(i) of the AD Agreement was not applicable since the 
non-OCTG pipe products were not in the "same general category of products " with the OCTG 
products and that profit rate incurred by the producers in qu estion for the production and sale of 
the same general category of merchandise cannot be used .  
 
6. The USDOC was equally unable to use profit for other exporters or producers subject to the 
investigation in line with the Article 2.2.2 (ii) of the AD Agree ment, due to the absence of any 
other respondent subject to the investigation in respect of production and sales of the like product 
in ordinary course of trade in the domestic market of the country of origin.  
 
7. Consequently, USDOC resorted to any "other reasonable method " under Article 2.2.2(iii) to 
calculate the level of profit of the product under consideration. Since USDOC determined that 
Korea does not have a domestic market for merchandise that is in the same general category of 
products as the sub ject merchandise, it was not possible for the USDOC to calculate the profit 
normally realized by Korean OCTG producers.2 Accordingly, the USDOC reached the decision to use 
the profit rate of Tenaris, a non -Korean corporation that had neither production nor  sales in the 
Korean market.  
 
8. Considering the facts of the case, Turkey understands that, even though there is no explicit 
definition of the word "reasonable ", Article 2.2.2, nevertheless, expects the investigating 
authorities to determine the "reasona ble amount " for profit in light o f the rules stressed in 
Article  2.2 of the AD Agreement which can be considered as a "chapeau " to be used in 
interpretation of Article 2.2.2 of the AD Agreement . 
 
9. The drafters highlighted the importance of "reasonability " while evaluating the profit of the 
product under consideration pursuant to Article 2.2.2(iii) by explicitly including phrase "any other 
reasonable method " in the text of Article 2.2.2(iii). In this context, the "profit cap " is deemed as 
one of the import ant instruments to test reasonability of the method.  
                                                
1 79 Federal Register 41983, Certain Oil Country Tubular Goods From the Republic of Korea: Final 
Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances . 
2 Final Issues and Decision Memor andum for the Final Affirmative Determination in the Less than Fair 
Value Investigation of Certain Oil Country Tubular Goods From the Republic of Korea, page 21.  WT/DS488/R/Add.1  
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  10. In Turkey 's view, setting a profit cap based on the actual experience of other exporters or 
producers under Article 2.2.2(iii) intends to prevent the investigating authorities to calculate the 
profit  subjectively which would have reflections on the normal value and an impact on the fair 
comparison requirement of Article 2.4 of the AD Agreement.  
 
11. Turkey understands that, by stipulating this legal discipline, the drafters of the 
AD Agreement have a imed to keep the calculation basis of the profit of the merchandise in 
question as close as possible to the home market experience of exporters or producers subject to 
investigation. Thus, the context of the adjective "reasonable " as used Article 2.2.2 of the 
AD Agreement displays this very rationale.   
 
12. In light of these explanations Turkey doubts whether the use of a non -Korean corporation 's 
profit amount, that had neither production nor sales in the Korean market, satisfies the primary 
legal expectati on of Article 2.2.2(iii) of the AD Agreement which requires the presence of a profit 
cap based initially on the home market experience of exporters or producers subject to 
investigation.  
 
III. CONCLUSION  
 
13. With these comments, Turkey expects to contrib ute to the legal debate in this case, and 
would like to express again its appreciation for this opportunity to share its points of views .  
 
 
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  ANNEX E  
PROCEDURAL RULING  
Contents  Page  
Annex  E-1 Procedural Ruling on the United States' Requ est to partially open the 
substantive meetings for public observation  E-2 
 
 
 
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  ANNEX E -1 
PROCEDURAL RULING ON  THE UNITED STATES' R EQUEST TO PARTIALLY OPEN THE  
SUBSTANTIVE MEETINGS  FOR PUBLIC OBSERVATI ON 
1  INTRODUCTION  
1.1.  In our communication of 30 Oc tober 2015 to the parties we noted that Korea and the 
United  States were not in agreement on whether to make the substantive meetings in this dispute 
open to public observation. We stated that in no case would we require a party or a third party to 
make it s statements in public should it choose not to do so. However, we said that we would 
consider adopting procedures that would allow a party or third party that wished to make its 
statements in public to do so, without impinging on the rights of a party or t hird party that wished 
to make its statements in closed session.  
1.2.  On 14 July 2016, we received a letter from the United States requesting that we adopt such 
additional procedures before the first substantive meeting scheduled for 21 -22 July 2016, so t hat 
the United States and third parties who chose to do so could make their statements in public. 
Korea opposed this request.  
1.3.  Among the third parties, the European Union agreed to make its statements in public at the 
third party session while Canada indicated that if it did decide t o make a statement at the 
third party session, it would make it in public. India, China, the Russian Federation, and Mexico did 
not wish to make their statements in this dispute in public. In addition, India and Mexico subm itted 
comments opposing the United States' request.  
1.4.  After considering the parties' and third parties' submissions on this matter, we informed them 
on 19 July 2016 that we were denying the United States' request, and would not make the 
substantive mee tings open to public observation. We provide, through this ruling, our reasons for 
denying this request.  
2  MAIN SUBMISSIONS OF THE PARTIES AND THIR D PARTIES  
2.1.  The United States argues that it has a right under Article 18.2 of the DSU to disclose its 
statements to the public, and Korea's choice to maintain the confidentiality of its own statements 
should not be a basis for denying the United States its right under this provision. In terms of 
modalities, the United States submits that the Panel could arr ange for the public viewing of the 
meeting through closed -circuit television (CCTV). This would allow the Panel to switch off the CCTV 
signal when statements are made by Korea or third parties who choose not to make their 
statements in public, thereby prot ecting their wish not to make their statements in public while at 
the same time, allowing the United States and third parties willing to make their statements in 
public to do so. The United States also suggests that if this is not feasible, the Panel could  record 
the statements and play them back at a later date to the public.   
2.2.  Korea insists that the Panel does not have the authority to open the meeting to the public in 
the absence of agreement between the parties to do so, arguing tha t Articles 14.1  and 18.2 of 
the DSU require confidentiality of the panel proceedings. Korea note s that when open panel 
meetings  have been held in the past, it has been with the consent of all parties to the dispute. 
Korea asserts that allowing public observation of the p anel meeting without Korea's consent 
creates a substantial risk that information considered to be confidential by Korea, including 
business confidential information, will be publicly disclosed. Korea argues that opening of panel 
meetings without the consen t of the disputing parties raises serious systemic issues, and notes 
that the issue of open hearings is a matter of debate and di sagreement among Members in 
the DSU reform negotiations. In Korea's opinion, the Panel cannot make a decision that modifies 
the DSU.   WT/DS48 8/R/Add.1  
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  2.3.  India submits that considering one of the parties, namely, Korea opposes the request to 
make the substantive meetings open to public observation, it would be inconsistent with the DSU 
to do so. Noting that opening substantive meetings to the public is a matter of systemic concern 
for the WTO Members, Mexico submits that the United States has the right to disclose its own 
positions and statements to the public but that right does not have to be exercised through a 
public hearing.  
3  RULING  
3.1.  In this dispute, we have decided not to partially open the substantive meetings to the public, 
as requested by the United States. We have reached this decision based on a number of 
considerations.  
3.2.  We note first that the United States made its reque st only one week before the scheduled 
dates of the first substantive meeting. Thus, there was very limited time available to address the 
request, and make necessary logistical arrangements. We were informed that there was limited 
experience and in -house ca pacity for recording partially open panel meetings for later public 
observation.1 
3.3.  In addition, we share Korea's concern that making the substantive meetings partially open to 
public observation creates a substantial risk that information that is conf idential, whether because 
it is business confidential, or because it is considered confidential to the dispute by a party, may 
be publicly disclosed. We consider that this concern is even greater in this particular case in view 
of the large amount of recor d evidence that has been designated as business confidential by the 
parties. In order to ensure that business confidential information or arguments or statements of 
Korea and the third parties who choose not to make their statements in public are not 
inadv ertently disclosed, either by the Panel, or by the United States or third parties who make 
their statements in public, extreme vigilance would be needed. Adequate time was not available to 
make the necessary logistical arrangements for cutting the video fe ed in real time, or arranging for 
video -recording and review by the parties, to ensure that no information was wrongly disclosed.  
3.4.  Moreover, we are concerned in principle with the prospect of public observation of the 
statements and responses of the U nited States and certain third parties to Panel questions in a 
case where the statements and responses of Korea and other third parties are not made in public. 
In our view, such partially public proceedings affect the ability of the viewing public to under stand 
the substance being discussed by the Panel, parties and third parties, given that some statements, 
as well as some questions and answers, would not be public, while others would. In addition, the 
very fact that some statements and responses were not made in public might raise unwarranted 
implications as to reasons why some parties or third parties did not make statements or responses 
in public, as well as regarding the merits of their positions.2 We recall that no third party to this 
dispute expressly  supported the United States' position that the substantive meetings may be 
partially opened to public observation when one party objects to it. Further, as Korea and some 
third parties observed, Article 18.2 of the DSU provides that nothing in that agreem ent precludes a 
party to a dispute from disclosing statements of its own positions to the public. Thus, the 
United  States, and any third party who so wishes, may disclose their oral statements and 
responses to Panel questions to the public should they choo se to do so. Indeed, we understand 
that is routinely done by the United States.  
                                                
1 WTO panels, with one exception at the time of our decision, had conducted open hearings only  with 
the consent of all the parties. The exception is the simultaneous compliance panels in DS381 – US – Tuna II 
(Mexico) (Article 21.5 – Mexico II) and US – Tuna II (Mexico) (Article 21.5 – US), which decided to partially 
open their substantive meetings to the public. As we understand it, the procedures adopted allowed  the 
United  States and third parties who chose to make their statements in public to do so by video -recording their 
statements and screening the recording at a later date, after ensuring tha t the statements did not disclose the 
statements of Mexico and third parties, who chose not to make their statements in public. We understand that 
an outside contractor was used for the recording. As the proceedings in this dispute are still on -going, the 
reasons for the panels' decision in this regard are not available to us.  
2 One panelist does not share the views expressed in the first tw o sentences of this paragraph. 
However, he considers that the Panel's conclusion is fully supported and adequately exp lained by the views set 
forth in paragraphs 3.2 and 3.3, and therefore joins in that conclusion.  WT/DS488/R/Add.1  
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  3.5.  Based on the foregoing, we denied the United States' request to allow the United States, and 
the third parties who  choose to make their statements in public , to do so at the substantive 
meetings in this dispute .   
 
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  ANNEX F  
INTERIM REVIEW  
Contents  Page  
Annex F-1 Interim Review  F-2 
 
 
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  ANNEX F-1 
INTERIM REVIEW  
1  INTRODUCTION  
1.1.  In accordance with Article 15.3 of the DSU, this Annex  sets out the Pan el's discussion of the 
arguments made at the interim review stage. We have revised certain aspects of the Report in 
light of the parties' comments, where we found it appropriate. We have also made a number of 
changes of an editorial nature to improve the c larity and accuracy of this Report, or to correct 
typographical and non -substantive errors, including those suggested by the parties. Due to 
changes made in the Report, the numbering of footnotes in the Final Report has changed from the 
Interim Report. Ref erences to footnotes pertain to that in the Final Report.  
2  SPECIFIC REQUESTS FO R REVIEW SUBMITTED B Y THE PARTIES  
2.1  Paragraph 1.8  
2.1.  Korea requests the Panel to make certain modifications to reflect the summary of events 
leading to the adoption of the timetable, as well as the parties' correspondence on this matter.1 
Opposing this request, the United States submits that the modifications proposed are not an 
accurate reflection of the events, and other panel reports it is aware of do not provide such  a 
summary.2 
2.2.  Korea presents no reasons in support of its request to modify this descriptive section of the 
Report, and we find no rationale for making them. Therefore, we deny Korea's request. We also 
observe that this descriptive section was issued to the parties prior to the issuance of the Interim 
Report, and Korea did not provide these comments at that stage.  
2.2  Paragraph 7.8  
2.3.  Korea asks the Panel to revise this paragraph to more closely reflect its arguments.3 The 
United States does not co mment on Korea's request.  
2.4.  We consider that the language used in this paragraph represents Korea's position accurately. 
We therefore decline Korea's request.  
2.3  Paragraph 7.11  
2.5.  Korea makes two requests in regard to this paragraph. First, Korea  asks the Panel to revise 
this paragraph to more fully reflect its arguments. Second, Korea asks the Panel to include certain 
additional arguments it has made.4 The United States objects to Korea's request, noting the 
Panel's express focus on the "main" ar guments of the parties and suggesting that to the extent 
these ancillary arguments are not pertinent to the Panel's analysis, they are better made in the 
sections of the Report summarizing Korea's arguments. The United States also maintains that the 
final sentence of Korea's proposed addition to paragraph 7.11 is already summarized in the first 
sentence of that paragraph.5  
2.6.  As regards Korea's first request, we consider that this paragraph already references the 
arguments that Korea asks us to include.6 We therefore decline Korea's request. We also decline 
Korea's second request, because the additional arguments that Korea asks us to include are not 
integral to our evaluation and findings.  
                                                
1 Korea's request for interim review, para. 3.  
2 United States' comments on Korea's request for inter im review, para. 4.  
3 Korea's request for interim review, para. 4.  
4 Korea's request for interim review, para. 5.  
5 United States' comments on Korea's request for interim review, para. 6.  
6 See para. 7.11 and fn 35.  WT/DS488/R/Add.1  
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  2.4  Paragraph 7.14  
2.7.  Korea asks the Panel to add certain l anguage to this paragraph to improve clarity.7 The 
United States objects to Korea's request arguing that the additional language proposed by Korea 
would inappropriately insert an interpretive argument made by Korea into the paragraph.8  
2.8.  Korea's reque st is, in our view, unwarranted, as the change it asks us to make to this 
paragraph is itself contested in this dispute. We therefore decline Korea's request.  
2.5  Paragraph 7.17  
2.9.  Korea asks the Panel to revise this paragraph to more accurately refle ct its arguments.9 The 
United States objects to Korea's request, arguing that Korea's proposed modification does not 
accurately reflect the interpretive arguments made by Korea in these proceedings. Further the 
United States contends that the argument that  Korea asks the Panel to add to this paragraph is 
unrelated to the issues of treaty interpretation that are relevant to the Panel's discussion in this 
section.10  
2.10.   We consider that Korea's arguments have been accurately reflected in this paragraph.11 We 
therefore, decline Korea's request.  
2.11.   Korea also asks the Panel to delete certain language from a footnote to this paragraph, 
contending that it did make the arguments which the footnote states it did not.12 The 
United  States opposes Korea's request  arguing that Korea's request has no basis as it does not 
offer any citations to such arguments.13  
2.12.   We have decided to accommodate Korea's request.  
2.6  Paragraph 7.27  
2.13.   Korea requests the Panel to make certain additions and revisions to more ac curately 
describe the USDOC's remand determination.14 The United States agrees to Korea's request to 
specify the date on which this determination was affirmed by the USCIT, but suggests editing the 
language proposed by Korea.15 The United States opposes othe r additions and revisions requested 
by Korea.16 
2.14.   We have clarified that the remand determination was affirmed in August 2016, albeit not in 
the language proposed by Korea. We reject Korea's request that we not use the term 
"methodology" for the reason s set out in paragraph 2.40 below. We also reject Korea's request to 
add a description of how the USDOC calculated CV profit in the remand determination because it is 
already reflected in other parts of the Report.   
2.7  Paragraph 7.32  
2.15.   The United S tates requests the Panel to replace "s urrogate company" in the 
second  sentence of paragraph 7.32 with "an OCTG producer" as "surrogate company" could be 
confused with the term "surrogate values".17 Korea objects to the United States' request, 
contending tha t there is no basis to believe that the Panel's use of the term "surrogate company" 
                                                
7 Korea's request for interim review,  para. 6.  
8 United States' comments on Korea's request for interim review, para. 7.  
9 Korea's request for interim review, para. 7.  
10 United States' comments on Korea's request for interim review, paras. 8 -10. 
11 Para. 7.17 and fn 43.  
12 Korea's request for i nterim review, para. 8.  
13 United States' comments on Korea's request for interim review, para. 11.  
14 Korea's request for interim review, para. 9.  
15 United States' comments on Korea's request for interim review, para. 9.  
16 United States' comments on Korea's  request for interim review, para. 9.  
17 United States' request for interim review, para. 4.  WT/DS488/R/Add.1  
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  could be confused with the term "surrogate values" and the United States provides no reasons why 
such confusion should arise.18 
2.16.   We agree with Korea, and therefore dec line the United States' request.  
2.8  Paragraph 7.34  
2.17.   Korea asks the Panel to revise this paragraph to more fully reflect its arguments, and to add 
a footnote to this paragraph referencing certain exhibits.19 The United States does not comment on 
Korea's request.  
2.18.   We have decided to accommodate Korea's request. However, the exhibits that Korea asks 
us to reference are already cited in the footnote to this paragraph. We therefore decline this aspect 
of Korea's request.  
2.9  Paragraph 7.55  
2.19.   Korea asks the Panel to add a footnote to this paragraph, setting out certain additional 
arguments it had made.20 The United States does not comment on Korea's request.  
2.20.   We consider that the arguments that Korea asks us to include are not relevant to  our 
evaluation and findings and therefore, decline Korea's request.  
2.10  Paragraph 7.65  
2.21.   Korea asks the Panel to revise this paragraph to more accurately reflect its arguments.21 
The United States does not comment on Korea's request.  
2.22.   We have  decided to accommodate Korea's request.  
2.11  Paragraphs 7.69, 7.72, 7.74, 7.75  
2.23.   The United States submits that the Panel's statement in paragraph 7.72 that " pipe products  
not used for down hole application … fell within the definition of the like p roduct" incorrectly 
includes non -OCTG pipe products within the definition of the like product.22 Korea does not 
comment on this aspect of the United States' request.  
2.24.   While we disagree with the United States' reading of the last sentence of paragraph  7.72, 
we have modified that sentence to more clearly express our conclusion.  
2.25.   The United States further requests that the Panel make two changes to paragraph 7.69. 
First, it requests that the Panel replace "pipe products" with "OCTG" in the second sentence of 
paragraph 7.69. Second, it requests that instead of concluding that the same general category of 
products was subject to the limitation that such products be used for down hole applications, the 
Panel change its conclusion to state that the sam e general category of products, as defined by the 
USDOC, was expanded to incorporate only drill pipe and those non -scope OCTG pipe products that 
exhibit such a limitation.23 Korea objects to the United States' req uest, contending that 
paragraph  7.69 accurat ely describes the USDOC's definition of the like product.24  
2.26.   We decline the United States' request to replace "pipe products" with "OCTG" because we 
consider that it follows from the use of the term "pipe products in question" in paragraph 7.69 that 
the reference to pipe products in that paragraph does not include all pipe products but only the 
pipe products covered under the product scope of the underlying investigation. We also decline the 
                                                
18 Korea's comments on the United States' request for interim review, para. 2.  
19 Korea's request for interim review, para. 10.  
20 Korea's request for interim review,  para. 11.  
21 Korea's request for interim review, para. 12.  
22 United States' request for interim review, para. 6. (emphasis original)  
23 United States' request for interim review, paras. 5 -8. 
24 Korea's comments on the United States' request for interim revi ew, paras. 4 -10. WT/DS488/R/Add.1  
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  United States' second request because it is not consistent w ith arguments that the United States 
has made in these proceedings.25  
2.27.   The United States requests that the Panel reconsider the co nclusions reached in 
paragraphs  7.72, 7.74, and 7.75 that the same general category of products identified by the 
USDOC was narrower than the like product. It requests that, based on this reconsideration, the 
Panel find that Korea has failed to demonstrate that the USDOC's definition of the "general 
category of products" in the underlying investigation was inconsis tent with  Articles 2.2.2(i) 
and 2.2.2(iii) of the Anti -Dumping Agreement.26 Korea agrees with the Panel's conclusions and 
therefore objects to the United States' request.27  
2.28.   We decline the United States' request because the reasons the United States presents f or 
this request are not consistent with its arguments in these proceedings.28 We have, however, 
added a citation to paragraph 7.69 to further clarify the basis for the Panel's conclusions.  
2.12  Paragraph 7.76  
2.29.   Korea makes two requests in regard to t his paragraph. First, Korea asks the Panel to revise 
paragraph 7.76(d) to more fully reflect its arguments. Second, it asks the Panel to add a 
sub-paragraph "e" to this paragraph to reflect certain additional arguments.29 The United States 
considers that Ko rea has a basis for its request to add a new sub -paragraph 'e' but not for its 
request to modify paragraph 7.76(d).30 
2.30.   We consider that paragraph 7.76(d) and its footnote already cites the arguments that Korea 
asks us to include. We also note that par agraph 7.76(a) already reflects the argument that Korea 
asks us to include in a new sub -paragraph "e". We therefore decline both requests.  
2.13  Paragraphs 7.101, 7.102, and 7.108(a)  
2.31.   The United States requests the Panel to revise the first sentence  of paragraph 7.101 of the 
Report to state that the text of Article 2.2.2(iii) makes it clear that the determination of the profit 
cap is mandatory when data pertaining to sales of products of the same general category in the 
domestic market exist in the r ecord of the proceeding. The United States further requests that 
paragraphs 7.102 and 7.108(a) be deleted in their entirety.31 Korea objects to the 
United  States'  requests, contending that the Panel's reasoning does not provide any basis to 
conclude that th e mandatory requirement to calculate a profit cap would be removed if data is 
lacking.32 
2.32.   We agree with Korea and decline the United States' requests.  
2.14  Paragraphs 7.104, 7.107, 7.108(b), and 7.109  
2.33.   The United States makes two requests: Fir st, the Panel should reconsider its findings in 
paragraphs 7.104, 7.107, and 7.108(b) regarding the USDOC's ability to calculate a profit cap to 
the extent they rely on the Panel's conclusions with respect to the same general category of 
products. Second, the Panel should reconsider its finding under paragraph 7.109 regarding 
whether the USDOC's inability to calculate a profit cap was inconsistent with its obligations under 
Article 2.2 of the Anti -Dumping Agreement.33 Korea opposes the United States' first r equest, 
contending that it is premised on the erroneous view that the Panel incorrectly found that the 
USDOC's definition of the "same general category of products" is improper.34 Korea also objects to 
the United States' second request, arguing that the USD OC had before it ample information with 
                                                
25 United States' response to Panel question No. 49, para. 22.  
26 United States' request for interim review, para. 9.  
27 Korea's comments on the United States' request for interim review, para. 11.  
28 United States' response to Panel question No. 49, para. 22.  
29 Korea's request for interim review, para. 13.  
30 United States' comments on Korea's request for interim review, para. 15.  
31 United States' request for interim review, para. 10.  
32 Korea's comments on the United States' request for interi m review, paras. 13 and 14.  
33 United States' request for interim review, para. 11.  
34 Korea's comments on the United States' request for interim review, para. 17.  WT/DS488/R/Add.1  
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  which it could have calculated a profit cap as required under Article 2.2.2(iii) and that, in any case, 
the Panel recognized the mandatory nature of the obligation to calculate a profit cap under that 
provision.35  
2.34.  As we have decided to decline the United States' request to reconsider our conclusions with 
respect to the same general category of products, we have no reason to reconsider our findings in 
paragraphs 7.104, 7.107, and 7.108(b), which are premised on those conclusions. We therefore 
decline the United States' first request. Given that we have decided not to modify our conclusions 
with respect to the USDOC's failure to calculate and apply a profit cap, we have no reason to 
reconsider our finding in parag raph 7.109. We therefore reject the United States' second request.  
2.15  Paragraph 7.121  
2.35.   Korea requests certain revisions as well as additions to more accurately and fully reflect its 
arguments with respect to the USDOC's remand determination.36 The United States opposes this 
request.37 
2.36.   We have made the revisions requested by Korea to more accurately reflect its arguments, 
and made changes in paragraph 7.133 to ensure consistency with this paragraph. We decline to 
make the additions proposed by Korea, because they affect the clarity of the Report. The parties 
are free to reflect their arguments in their executive summaries, annexed to the Final Report, as 
they deem fit. We see no need to specify these particular arguments in the Report itself.  
2.16  Paragraph 7.122  
2.37.   The United States requests certain revisions to more  accurately characterize the 
US proceedings at issue.38 Korea does not oppose this request.39 We have made the revisions 
requested by the United States but for consistency purpose s, replaced the reference to 
"underlying" investigation with "final determination".  
2.17  Footnote 161 to paragraph 7.125  
2.38.   Korea requests the Panel to add certain references to its submissions.40 The United States 
opposes this request.41 In the sentenc e referred to by Korea, we were setting out the issues that 
we considered in our analysis, and not reflecting the parties' arguments. The additions requested 
may create confusion between our understanding of the issues and the parties' arguments, and we 
decline to make them.  
2.18  Paragraph 7.130(a)  
2.39.   Noting the panel's comment that the USDOC used a different "methodology" to determine 
the CV profit in the remand determination, Korea states that neither the remand determination, 
nor the United States, uses the term "methodology" and argues that the USDOC did not, in fact, 
use a different methodology in this determination.42 Thus, Korea opposes the use of this term, and 
asks the Panel to revise this paragraph. The United States opposes this request, comme nting that 
the USDOC did use a different method to determine CV profit in the remand determination.43 
2.40.   The Report makes it clear that we used the term "methodology" here to describe the 
manner in which the USDOC determined the CV profit in the final d etermination, and in the 
remand determination. Thus, we reject Korea's request, and do not revise this paragraph.  
                                                
35 Korea's comments on the United States' request for interim review, para. 18.  
36 Korea's requ est for interim review, para. 14.  
37 United States' comments on Korea's request for interim review, para. 16.  
38 United States' request for interim review, para. 12.  
39 Korea's comments on the United States' request for interim review, para. 19.  
40 Korea's req uest for interim review, para. 16  
41 United States' comments on Korea's request for interim review, para. 17.  
42 Korea's request for interim review, paras. 17 and 17(a).  
43 United States' comments on Korea's request for interim review, para. 18.  WT/DS488/R/Add.1  
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  2.19  Paragraph 7.130(b)  
2.41.   Korea asks the Panel to provide additional explanation on the USDOC's alleged application 
of a profit cap.44 The United States opposes this request.45 
2.42.   We reject Korea's request, as we consider the requested additions affect the clarity of the 
Report, and are unnecessary.  
2.20  Paragraph 7.130(c)  
2.43.   Korea asks the Panel to make certain changes to precise ly reflect what was done by 
the USDOC in the remand determination.46 The United States does not comment on this request. 
We have made the changes requested by Korea.  
2.21  Paragraph s 7.131(b) and (c)  
2.44.   Korea asks the Panel to make certain revisions in th is paragraph consistent with the 
changes it proposes in paragraphs 7.130(b) and (c).47 The United States takes no position on 
Korea's request.48 
2.45.   We have modified paragraph 7.131(c) to reflect the changes made in paragraph 7.130(c). 
Since we rejected K orea's request with respect to paragraph 7.130(b), we do not make changes in 
paragraph 7.131(b).  
2.22  Footnote 178 to paragraph 7.134  
2.46.   Korea requests several revisions and additions in this footnote, which the United States 
opposes.49 
2.47.   Korea a sks the Panel to specify the claims that it presented in its second written submission. 
Considering that these are already set out in paragraph 7.119, we decline Korea's request. Korea 
also asks us to modify this footnote to state that the opening statemen t at the second substantive 
meeting was the "first opportunity" Korea had to make specific claims challenging the remand 
determination, as this determination was affirmed by the USCIT in August 2016. Korea raised 
some of these specific claims in its second  written submission that was filed before Korea made its 
opening statement. We do not understand how this opening statement could be considered the 
"first opportunity" to present these claims when Korea did avail itself of an opportunity to make 
such claim s prior to this statement. Hence, we deny Korea's request. Korea asks us to delete 
certain observations. Considering this request is based on Korea's view, with which we disagree, 
that the opening statement was the first opportunity to present specific cla ims, we reject this 
request.  
2.23  Paragraph 7.136  
2.48.   Korea disagrees that it accepted that through its conclusion o f affiliation under US law, 
the USDOC in effect found "association" within the meaning of Article 2.3 of the Anti -Dumping 
Agreement.50 Rather, it agreed that the USDOC "sought to find" association on this basis. The 
United States does not comment on Korea's statement. We have modified this paragraph to more 
accurately reflect Korea's position.  
                                                
44 Korea's req uest for interim review, paras. 17 and 17(b).  
45 United States' comments on Korea's request for interim review, para. 19.  
46 Korea's request for interim review, paras. 17 and 17(c).  
47 Korea's request for interim review, para. 18.  
48 United States' comments on  Korea's request for interim review, para. 21.  
49 Korea's request for interim review, para. 19; and United States' comments on Korea's request for 
interim review, para. 22.  
50 Korea's request for interim review, para. 20.  WT/DS488/R/Add.1  
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  2.24  Paragraph 7.137  
2.49.   Korea requests sev eral revisions in this paragraph to more accurately reflect its arguments 
under Article 2.3 of the Anti -Dumping Agreement.51 The United States does not comment on this 
request.  
2.50.   In our view, this paragraph accurately and adequately reflects Korea's ar guments in these 
proceedings. However, we have added an additional citation to this paragraph.  
2.25  Paragraph 7.150  
2.51.   Korea asks the Panel to add a citation to a sentence setting out our understanding of 
"association", based on the dictionary definit ions.52 The United States does not comment on this 
request. Considering that the sentence at issue sets out our own understanding, we do not add a 
citation in this regard.  
2.26  Paragraph 7.158  
2.52.   The United States requests certain modifications to avoi d conveying the impression that the 
Panel reviewed the USDOC's actions under US law, rather than under the Anti -Dumping 
Agreement, including replacing the reference to "decisions of" the USDOC, with "factual 
determinations made by" the USDOC.53 Korea oppose s the use of the word "factual" here to 
modify "determinations", but does not object to other aspects of the United States' request.54 
Considering the United States has not explained why the use of the word "factual" is necessary in 
this context, while acco mmodating other aspects of its request in order to clarify that the Panel did 
not review the USDOC's actions under US law, we have not added the word "factual".  
2.27  Footnote 219 to paragraph 7.159  
2.53.   Korea asks the Panel to make certain additions to more accurately reflect its arguments.55 
The United States does not comment on this request. The additions requested by Korea are 
already reflected in paragraph 7.157. Hence, we deny its request.  
2.28  Paragraph 7.165  
2.54.   Korea states that the Panel misc haracterizes its argument that evidence of marketing and 
technology collaboration between NEXTEEL and POSCO had little probative value considering 
POSCO engaged in the same types of activities with hundreds of companies, by stating that Korea 
essentially a rgues that evidence of such types of collaboration would have probative value only if 
they were exclusive between NEXTEEL and POSCO.56 Korea asks the Panel to make changes to 
correctly reflect its argument. The United States does not comment on this request . 
2.55.   We note that contrary to its comment here, Korea did repeatedly emphasize the lack of an 
exclusive relationship between NEXTEEL and POSCO.57 Therefore, we disagree that we 
mischaracterized its arguments in this regard. In any case, the first senten ce of this paragraph 
reflects the Panel's understanding of Korea's argument, and we do not consider any revisions to be 
necessary in this regard.  
2.29  Paragraph 7.175  
2.56.   Noting the Panel's statement that "the USDOC's conclusions of affiliation based on control 
under US law were supported by evidence", the United States asks us to modify this statement so 
                                                
51 Korea's request for interim review , para. 21.  
52 Korea's request for interim review, para. 22.  
53 United States' request for interim review, para. 13 . 
54 Korea's comments on the United States' request for interim review, para. 20.  
55 Korea's request for interim review, para. 23.  
56 Korea's requ est for interim review, para. 24.  
57 Korea's first written submission, para. 180; response to Panel question No. 64, para. 71.  WT/DS488/R/Add.1  
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  as to not convey the impression that the Panel was making substantive findings under US law.58 
Korea opposes this request.59 
2.57.   The Interim Report,  including paragraphs 7.158 and 7.159, makes it clear that the Panel 
was reviewing the USDOC's overall conclusion regarding affiliation under Article 2.3 of the Anti -
Dumping Agreement, and not US law. Nonetheless, to avoid confusion, we have decided to 
accommodate the United States' request.  
2.30  Footnote 244 to paragraph 7.179  
2.58.   Korea requests the Panel to make certain revisions to more accurately reflect Korea's 
arguments under Article 2.3 of the Anti -Dumping Agreement.60 The United States does not 
comment on this request. We have made the revisions requested by Korea.  
2.31  Paragraph 7.191  
2.59.   Korea requests certain modifications to better reflect Korea's arguments under 
Article  2.2.1.1 of the Anti -Dumping Agreement.61 The United States does not co mment on this 
request. We have made the revisions requested by Korea, albeit not in the precise language 
suggested.  
2.32  Paragraph 7.192  
2.60.   Korea requests certain modifications to better reflect Korea's arguments u nder 
Article  2.2.1.1 of the Anti -Dump ing Agreement.62 The United States does not comment on this 
request. We have made the modifications requested by Korea.  
2.33  Paragraph 7.198  
2.61.   Korea requests the Panel to make certain additions to better reflect Korea's overall 
argumentation under Art icle 2.2.1.1 of the Anti -Dumping Agreement.63 The United States opposes 
this request.64 
2.62.   The additions requested by Korea pertain to our analysis rather than the main arguments of 
the parties, and Korea does not explain how inclusion of this argument e nhances the analysis. In 
our view, the additions requested would affect the clarity of the analysis presented in this 
paragraph, and hence, we deny Korea's request.  
2.34  Paragraph 7.207  
2.63.   Korea asks the Panel to revise paragraph 7.207(a) to more full y reflect its arguments. The 
United States opposes this request, arguing that Korea fails to identify which of its written or oral 
submissions support its contention that the changes it requests reflect the arguments it made 
during this dispute. Korea also  asks the Panel to delete Korea's argument in the last sentence of 
paragraph 7.207(c).65 The United States does not comment on this request.  
2.64.   We have decided to accommodate Korea's request wi th regard to revising 
paragraph  7.207(a), albeit with certa in modifications. As regards Korea's request to delete its 
argument in the last sentence of paragraph 7.207(c), considering that Korea made this argument 
in its first written submission, and that the Panel has addressed it in its evaluation, we decline thi s 
request.66  
                                                
58 United States' request for interim review, para. 14.  
59 Korea's comments on the United States' request for interim review, paras.  21-23. 
60 Korea's request for interim review, para. 24.  
61 Korea's request for interim review, para. 26.  
62 Korea's request for interim review, para. 27.  
63 Korea's request for interim review, para. 28.  
64 United States' comments on Korea's request for interim  review, para. 23.  
65 Korea's request for interim review, para. 29.  
66 Korea's first written submission, para. 212.  WT/DS488/R/Add.1  
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  2.35  Paragraph 7.213  
2.65.   Korea asks the Panel to revise this paragraph to more accurately reflect its arguments.67 In 
particular, Korea asks us to replace the reference in this paragraph to the USDOC's failure to 
"notify its acceptance" of the Tenaris financial statements on the record with a reference to the 
USDOC's failure to "resolve the question of whether" the Tenaris financial statements "were 
properly" on the record. The United States opposes this request, arguing that Korea fails to 
identify which of its written or oral submissions support its contention that the changes it requests 
reflect the arguments it made during this dispute. The United States further contends that Korea's 
request misrepresents its arguments during these procee dings because it did make the arguments 
that it asks the Panel to modify.68  
2.66.   We note that Korea argues in these proceedings that the USDOC violated several 
requirements under the Anti -Dumping Agreement by failing to resolve the question of whether the 
Tenaris financial statements were properly on the record until its final determination.69 Korea also 
argues that by failing to render a decision regarding the placement of the Tenaris financial 
statements on the record until its final determination, the U SDOC denied the Korean respondents 
an opportunity to submit information rebutting the contents of the Tenaris financial statements.70 
However, Korea also argues that "without knowing that the USDOC had actually accepted the 
Tenaris financial statements, the  respondents could not reasonably launch a full -scale argument 
against the use of Tenaris's financial statements, including the submission of rebuttal or 
clarification information against the information contained in the financial statements submitted by 
the petitioner".71 We therefore understand Korea to argue that the Korean respondents were 
prevented from making rebuttal submissions because they did not know , until the final 
determination, that the USDOC had actually accepted those statements on the recor d. Considering 
that the Korean respondents could not formally know about the USDOC's decision to accept the 
Tenaris financial statements on the record unless the USDOC notified them of it, we understand 
Korea to effectively argue that it was the USDOC's fa ilure to notify them of its acceptance of the 
Tenaris financial statements on the record that prevented them from making rebuttal submissions. 
This understanding is in keeping with the formulation of Korea's claim in its panel request which, in 
relevant pa rt, states that the USDOC acted inconsistently with Articles 6.2, 6.4, and 6.9 because it 
did not inform  interested parties of its decision to accept the petitioners' submission of the Tenaris 
financial statements on the record. This understanding is also consistent with Korea's argument 
that "without any guidance from the USDOC, the Korean respondents were unable to protect their 
interests as there was no reason to believe that information submitted by petitioners two months 
past the statutory deadline was  properly on the record".72 We th erefore consider that 
paragraph  7.213 accurately reflects Korea's arguments and decline Korea's request to modify this 
paragraph. We have, however, included additional references in this paragraph to more fully 
reflect Korea 's arguments.  
2.36  Paragraph 7.221  
2.67.   Korea asks the Panel to revise this paragraph to more fully reflect its arguments.73 The 
United States does not comment on Korea's request.  
2.68.   We have decided to accommodate Korea's request.  
2.37  Paragraph 7 .222 
2.69.   Korea asks the Panel to revise this paragraph to more closely reflect its arguments.74 The 
United States opposes this request, arguing that Korea fails to identify which of its written or oral 
submissions support its contention that the changes it requests reflect the arguments it made 
                                                
67 Korea's request for interim review, para. 30.  
68 United States' comments on Korea's request for interim review, para. 24.  
69 Korea's opening s tatement at the first meeting of the Panel, para. 115.  
70 Korea's second written submission, para. 293.  
71 Korea's second written submission, para. 285; opening statement at the first meeting of the Panel, 
para. 115.  
72 Korea's first written submission, para.  204. 
73 Korea's request for interim review, para. 31.  
74 Korea's request for interim review, para. 32.  WT/DS488/R/Add.1  
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  during this dispute. The United States further notes that Korea's request misrepresents its 
arguments during these proceedings.75  
2.70.   We decline Korea's request to modify this paragraph for the same reason that we rejected 
its request to amend paragraph 7.213.  
2.38  Paragraph 7.227  
2.71.   Korea asks the Panel to revise this paragraph to more closely reflect its arguments.76 The 
United States opposes this request, arguing that Korea fails to identify which of its written or oral 
submissions support its contention that the changes it requests reflect the arguments it made 
during this dispute. The United States further notes that Korea's request misrepresents its 
arguments during these proceedings.77  
2.72.   We declin e Korea's request to modify this paragraph for the same reason that we rejected 
its request to amend paragraph 7.213.  
2.39  Paragraph 7.236  
2.73.   Korea asks the Panel to revise this paragraph to more closely reflect its arguments.78 The 
United States oppo ses this request, arguing that Korea fails to identify which of its written or oral 
submissions support its contention that the changes it requests reflect the arguments it made 
during this dispute.79  
2.74.   We have decided to accommodate Korea's request, albeit with certain modifications.  
2.40  Paragraph 7.253  
2.75.   Korea asks the Panel to revise this paragraph to more closely reflect its arguments.80 The 
United States opposes this request, arguing that Korea fails to identify which of its written or oral 
submissions support its contention that the changes it requests reflect the arguments it made 
during these proceedings.81  
2.76.   We have decided to accommodate Korea's request.  
2.41  Paragraph 7.259  
2.77.   Korea requests certain revisions to provide a more  comprehensive summary of the relevant 
facts at issue under Article 6.10.2 of the Anti -Dumping Agreement.82 The United States does not 
comment on this request.  
2.78.   The factual background section of the Interim Report presents the necessary facts, and the  
additions proposed by Korea are more detailed than is necessary in this regard. Hence, we reject 
Korea's request.  
2.42  Paragraph 7.268  
2.79.   Korea requests certain revisions to more accurately reflect its arguments.83 The 
United  States opposes Korea's re quest.84 The revisions requested pertain to the section containing 
the Panel's analysis rather than the parties' arguments, would affect the clarity of our analysis, 
and delete some of our conclusions. Hence, we deny Korea's request.  
                                                
75 United States' comments on Korea's request for interim review, para. 24.  
76 Korea's request for interim review, para. 33.  
77 United States' comments on Ko rea's request for interim review, para. 24.  
78 Korea's request for interim review, para. 34.  
79 United States' comments on Korea's request for interim review, para. 24.  
80 Korea's request for interim review, para. 35.  
81 United States' comments on Korea's requ est for interim review, para. 24.  
82 Korea's request for interim review, para. 36 . 
83 Korea's request for interim review, para. 37 . 
84 United States' comments on Korea's request for interim review, para. 25.  WT/DS488/R/Add.1  
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  2.43   Paragraph 7.283  
2.80.   Korea requests that the Panel reflect two of its arguments in this paragraph.85 The 
United  States does not comment on this request.  
2.81.   We have modified this paragraph to reflect the first argument made by Korea, albeit in 
different language from that proposed by Korea. We have also ma de certain changes in 
paragraph  7.284. The second argument is already reflected in paragraph 7.284 of our Report, and 
thus we do not find it necessary to reflect it in this paragraph as well.  
2.44  Paragraph 7.293(b)  
2.82.   Korea requests the Panel to make a revision to more accurately reflect the facts of the 
underlying investigation.86 The United States does not comment on Korea's request. We have 
made the revision requested by Korea.  
2.45  Paragraph 7.313(a)  
2.83.   Korea requests the Panel to make certain additions to more accurately reflect Korea's 
arguments under Article X:3(a) of the GATT 1994.87 The United States opposes this request.88 The 
additions requested by Korea are set out in paragraph 260 of its first writt en submission, and do 
add clarity on Korea's position on this issue. Hence, we have made the additions requested by 
Korea, citing this paragraph of its first written submission.  
2.46  Paragraph 7.326  
2.84.   Korea requests certain additions in the first sen tence of this paragraph to more accurately 
reflect Korea's arguments under Article X:3(a) of the GATT 1994.89 The United States opposes this 
request.90 
2.85.   The first sentence accurately reflects Korea's view that since Tenaris's financial statements 
were not on the record of the underlying investigation, the Korean respondents could not avail 
themselves of the opportunity to submit rebuttal facts.91 The second and third sentences of this 
paragraph already reflect the additions requested by Korea where we no te its view that the Korean 
respondents were prohibited from submitting rebuttal facts until the USDOC "conveyed a formal 
decision" placing the Tenaris's financial statement on the record of the underlying investigation, 
and that the USDOC denied these res pondents an opportunity to submit such facts. The additions 
requested would be repetitive, and hence, we reject Korea's request.  
2.47  Paragraph 7.330  
2.86.   Korea requests the Panel to add a summary of Korea's argument under Article X:3(a) of the 
GATT 199 4 in a footnote to paragraph 7.330.92 The United States opposes this request.93 We have 
added a sentence in paragraph 7.331 to reflect Korea's submission in this regard, along with our 
views regarding this submission.  
2.48   USDOC's remand determination  
2.87.  Korea requests the Panel to reconsider its conclusion that the USDOC's remand 
determination is outside the terms of reference. In support of its view, Korea presents new 
evidence (Exhibits KOR -98 and KOR -99), relating to the first administrative review initiated by the 
USDOC on imports of OCTG from Korea, which allegedly shows the high degree of political 
                                                
85 Korea's request for interim review, para. 38.  
86 Korea's request for interim review, para. 39 . 
87 Korea's request for interim review, para. 40 . 
88 United States' comments on Korea's request for interim review, para. 26 . 
89 Korea's request for interim review, para. 41 . 
90 United States' comments on Korea's req uest for interim review, para. 26.  
91 Korea's comments on United States' response to Panel question No. 70(a), para. 102.  
92 Korea's request for interim review, para. 31.  
93 United States' comments on Korea's request for interim review, para. 27.  WT/DS488/R/Add.1  
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  intervention in this domestic proceeding.94 These allegedly show how the USDOC can circumvent 
its implementation obligations in the future.95 The United States opposes Korea's request, noting in 
particular that Korea's submission of new evidence is untimely and must be rejected.96 
2.88.   Article 15.2 of the DSU permits parties to submit a written request for the panel to review 
"precise aspects of the inter im report" before issuance of the Final Report. The Appellate Body and 
past panels have held that Article 15.2 does not permit parties to introduce new evidence during 
this review process.97 Consistent with these findings, we decline to accept the new evide nce filed 
by Korea, and do not consider it in our interim review. Insofar as Korea raises due process 
concerns regarding our conclusion on our terms of reference, the Report already addresses those 
concerns. Thus, we have not changed our conclusion that th e USDOC's remand determination falls 
outside our terms of reference.  
 
__________  
 
 
 
 
 
                                                
94 Korea's re quest for interim review, para. 43.  
95 Korea's request for interim review, para. 45.  
96 United States' comments on Korea's request for interim review, para. 28.  
97 Appellate Body Reports, EC – Sardines , para. 301; and EC – Selected Customs Matters , para. 259;  
and Panel Report, EC – IT Products , para. 6.48.