WT/DS471/8  
 
28 November 2016  
(16-6525) Page: 1/5 
  Original: English  
 
 UNITED  STATES – CERTAIN METHODOLOGIE S AND THEIR APPLICAT ION  
TO ANTI -DUMPING PROCEEDINGS INVOLVING CHINA  
NOTIFICATION OF AN A PPEAL BY THE PEOPLE'S REPUBLI C OF CHINA  
UNDER ARTICLE 16.4 A ND ARTICLE 17 OF THE  UNDERSTANDING ON RUL ES 
AND PROCEDURES GOVER NING TH E SETTLEMENT OF DISP UTES (DSU),  
AND UNDER RULE 20(1)  OF THE WORKING PROCE DURES FOR APPELLATE REVIEW  
The following communication, dated 18 November  2016, from the Delegation of China , is being 
circulated to Members.  
 
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1. Pursuant to Article 1 6.4 and Article 17.1 of the Understanding on Rules and Procedures 
Governing the Settlement of Disputes  ("DSU"), China hereby notifies to the Dispute Settlement 
Body its decision to appeal to the Appellate Body certain issues of law and legal interpretation s in 
the Panel Report in United States – Certain Methodologies and their Application to Anti -Dumping 
Proceedings involving China  (WT/DS471) ( "Panel Report ").  
2. Pursuant to Rule 20(1) of the Working Procedures for Appellate Review (WT/AB/WP/6, 
16 August 2010 ) ("Working Procedures "), China simultaneously files this Notice of Appeal with the 
Appellate Body Secretariat.  
3. For the reasons further elaborated in its submissions to the Appellate Body, China appeals, 
and requests  the Appellate Body to reverse, certain issues of law and legal interpretations 
developed by the Panel in this dispute.  China also requests the Appellate Body to modify certain 
issues of law and legal interpretations developed by the Panel.  China also requests the 
Appellate  Body to complete cert ain aspects of the analysis and make certain findings.1 
I Appeal of the Panel 's error in interpreting and applying the legal standard under 
Article 2.4.2, second sentence, of the Anti-Dumping Agreement for identifying a 
relevant pricing pattern and in appl ying the s tandard of review under 
Article  17.6(i) of the Anti-Dumping Agreement  
4. China appeals the Panel 's error in interpreting and ap plying the first of the 
two pre-conditions under Article 2.4.2, second sentence, of the Anti-Dumping Agreement  for 
having recourse to the exceptional weighted average -to-transaction ( "W-T") comparison 
methodology (the "pattern clause "). The pattern clause requires that there be "a pattern of export 
prices which differ significantly among different purchasers, regions or time periods " (a "relevant 
pricing pattern "). Specifically, China appeals errors in the manner in which the Panel interpreted 
and applied the pattern clause in addressing USDOC 's use of statistical concepts in determining the 
existence of a relevant pricing pat tern. Because USDOC used statistical tools disconnected from 
their underlying assumptions and analytical framework for which they were developed, those tools 
could not satisfy the requirements of the pattern clause.  
                                                
1 Pursuant to Rule 20(2)(d)(iii) of the Working Procedures for Appellate Review this Notice of Appeal 
lists paragraphs of the Panel Report containing the alleged errors, without prejudice to the ability of China to 
refer to other paragraphs of the Panel Report in the context of its appeal.  WT/DS471/8  
 
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  5. In this regard, China appeals the Panel 's rejection of China 's arguments regarding two of the 
four quantitative  flaws identified by China in the so -called "Nails Test " (namely, the first and the 
third flaws), which was applied in three challenged determinations.2 
6. As regards the first quantitativ e flaw identified by China, the Panel erroneously found, in 
Paragraph 7.67 of the Panel Report, that China had failed to demonstrate that USDOC 's application 
of the so -called "one-standard -deviation " threshold does not succeed in identifying a relevant 
pricing pattern in those situations in which the export price data are not distributed in a manner 
that permits the standard deviation tool to render valid conclusions.  Consequently, the Panel 
erroneously found it irrelevant that USDOC did not examine the und erlying price distributions.  
7. As regards the third quantitative flaw identified by China,  the Panel erred, in Paragraph 7.84 
of the Panel Report, in dismissing China 's argument that USDOC 's attribution of "significance " to 
wider price gaps in the "tail" of price distributions compared to price gaps closer to the "mean " 
amounted to nothing more than confirmation of an inherent characteristic as to the shape of 
distributions whose existence is implicitly assumed by the test itself, without this ever being 
confirmed by USDOC.  
8. In dismissing China 's arguments regarding the first and third quantitative flaws, the Panel 
also failed to ensure that USDOC 's establishment of the facts was proper, and it accepted an 
evaluation by USDOC of the relevant facts that fell sho rt of being objective and unbiased, contrary 
to the requirements set out in the standard of review under Article 17.6(i) of the Anti-Dumping 
Agreement . 
9. Accordingly, China requests that the Appellate Body reverse  the Panel 's rejection of 
China 's claim under  the pattern clause of Article 2.4.2, second sentence, in respect of the 
first quantitative flaw of the Nails Test applied in the three challeng ed determinations in 
Paragraphs  7.56-7.67 and 8.1.a.vi of the Panel Report, and in respect of the third quantita tive flaw 
of the Nails Test applied in the three challenged determinations in Paragraphs 7.75 -7.84 and 
8.1.a.vi of the Panel Report.  
10. Having reversed the Panel, the Appellate Body should complete the analysis  and find that 
USDOC acted inconsistently with th e pattern clause of Article 2.4.2, second sentence of the 
Anti-Dumping Agreement  in OCTG OI, Coated Paper OI, and Steel Cylinders OI, by failing to find 
through an objective and unbiased evaluation of the facts, a pattern of export prices that differ 
significantly, within the meaning of the pattern clause of Article 2.4.2, second sentence.  
II Appeal of the Panel 's error in interpreting and  applying Article 2.4.2, 
second  sentence, and in applying the standard of review under Article 17.6(i) of 
the Anti-Dumpi ng Agreement as permitting authorities to find relevant pricing 
patterns on the basis of average  export prices to purchasers or time periods, 
instead of individual  export transaction prices  
11. The Panel erred in interpreting the pattern clause in Article 2.4. 2, second sentence, when it 
found that investigating authorities are permitted to find a relevant pricing pattern on the basis of 
average  export prices to purchasers or time periods, instead of individual  export transaction 
prices.  The Panel also erred in its application of this same provision by applying its erroneous 
interpretation to the facts of the three challenged determinations.  
12. The Panel further erred in approving as WTO -consiste nt a test (applied in the 
three  challenged determinations) that biased the outcome by systematically increasing the 
likelihood of finding a relevant pricing pattern, contrary to the s tandard of review under 
Article  17.6(i) of the Anti-Dumping Agreement.  
13. Accordingly, China requests that the Appellate Body reverse  the Panel 's finding in 
Paragraphs 7.115 -7.128 and 8.1.a.ix of the Panel Report that USDOC did not act inconsistently 
with the pattern clause of Article  2.4.2, second sentence, in the three challenged determinations, 
                                                
2 The findings of the Panel in relation to the three original investigations in which USDOC appli ed the 
Nails Test are contained in para. 8.1.a of the Panel Report.  The three challenged determinations relate to the 
original investigations in Coated Paper , OCTG and Steel Cylinders . WT/DS471/8  
 
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  by finding a relevant pricing pattern on the basis of  average export prices to purchasers or time 
periods, as opposed to individual export prices.  
14. Having reversed the Panel, the Appellate Body should complete the analysis  and find that 
USDOC acted inconsistently with Article 2.4.2, second sentence, by findin g a relevant pricing 
pattern on the basis of purchaser or time period averages, as opposed to individual export 
transaction prices.  
III Appeal of the Panel 's error in interpreting and  applying Article 2.4.2, 
second  sentence, of the Anti-Dumping Agreement as not requiring investigating 
authorities to consider objective market factors in determining whether relevant 
pricing differences are "significant " 
15. China appeals the Panel 's interpretation underlying its finding that USDOC has not acted 
inconsistently wit h Article 2.4.2, second sentence, in the three challenged determinations because 
USDOC wrongly concluded, on the sole basis of numerical (quantitative) differences, that the 
observed export prices formed relevant pricing patterns.  
16. Investigating authorities  must consider qualitative factor s when examining, under 
Article  2.4.2, second sentence, whether export prices "differ significantly " among customers, 
regions or time periods.  The Panel failed to recognize that qualitative factors are objective market 
factors, such as seasonality or market -driven fluctuations in the costs of production.  The Panel 
further failed to recognize that investigating authorities have an obligation to examine these 
qualitative factors on their own initiative as part of the applicabl e legal standard under 
Article  2.4.2, i.e., regardless whether evidence has been provided by interested parties.  
17. China therefore requests that the Appellate Body modify  the Pa nel's interpretation of 
Article  2.4.2, second sentence, spelt out in Paragraphs 7 .105-7.114 of the Panel Report, and 
find that, although investigating authorities are not required to consider the subjective  cause of (or 
the subjective  reasons for) the observed export price differences, they must consider relevant 
objective  market facto rs (i.e., the relevant objective  causes of the observed export price 
differences) when examining, under Article 2.4.2, second sentence, whether export prices "differ 
significantly " among customers, regions or time periods.  
18. China also requests that the Appe llate Body find that the qualitative factors thus to be 
considered are objective market factors, including, inter alia , objective factors such as seasonality 
or market -driven fluctuations in the costs of production.  
19. Finally, China requests that the Appella te Body find that an investigating authority has an 
obligation to examine these qualitative factors on its own initiative as part of the applicable legal 
standard under Article 2.4.2, i.e., regardless whether evidence has been provided to the authority 
by interested parties.  
20. Accordingly, China requests that the Appellate Body reverse  the Panel 's rejection in 
Paragraphs 7.105 -7.114 and 8.1.a.viii of the Panel Report of China 's claim under Article 2.4.2, 
second sentence, as regards USDOC 's failure to consider  relevant qualitative factors prior to 
finding the existence of a relevant pricing pattern in the three challenged determinations.  
IV Appeal of the Panel 's interpretation of Article 2.4.2 of the Anti-Dumping 
Agreement  as permitting the combination of diffe rent comparison methodologies  
21. China appeals the Panel 's interpretation in the statement in footnote 385 of the Panel Report 
that "it may be necessary, in order to give full meaning to the second sentence of Article 2.4.2, not 
to let {…} negative dumping {f ound outside of a pattern} offset the dumping found within the 
pattern ". This interpretation is erroneous because it is premised on the understanding that an 
investigating authority may conduct separate comparisons for "pattern transactions " under the 
W-T comparison methodology and for "non-pattern transaction " under the W -W or T -T comparison 
methodology, and then combine the two into a single margin of dumping for the exporter and the WT/DS471/8  
 
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  product as a whole.  In US – Washing Machines , the Appellate Body recentl y concluded that 
Article  2.4.2 does not permit the combining of different comparison methodologies.3 
22. Accordingly, China requests that the Appellate Body declare  the statement made in 
footnote  385 of the Panel Report to be moot and of no legal effect . 
V Appeal of the Panel 's finding that the AFA Norm is a measure without prospective 
application and requests to complete the analysis  
23. The Panel found that China had not demonstrated the prospective application of the 
measure defined in paragraph 2.4 of its Repor t as the "AFA Norm ", and therefore concluded that 
China had not demonstrated that the AFA Norm constitutes a "measure " in the form of a rule or 
norm of general and prospective application that could be challenged in WTO dispute settlement.   
24. In so finding, the Panel erred in its interpretation and application of the term "measure " 
under Articles 3.3 and 6.2 of the DSU . The Panel erred in articulating the legal standard for 
establishing that an alleged rule or norm is a "measure " under these provisions, in pa rticular that 
the alleged rule or norm has prospective application.  The Panel also erred in applying the relevant 
legal standard in concluding that the AFA Norm is not a "measure " in the form of a rule or norm 
with general and prospective application.  
25. Accordingly, China requests that the Appellate Body reverse  the Panel 's findings in 
paragraphs 7.457 -7.479 and 8.1.d.ii of the Panel Report in this regard.  If, as requested, the 
Appellate Body reverses the Panel 's findings that the AFA Norm does not have prosp ective 
application, then China requests the Appellate Body to complete the analysis  and find that: 
 the AFA Norm has general and prospective application, and, therefore, is a rule or norm 
of general and prospective application that may be challenged by Chin a as a "measure " 
under Articles 3.3 and 6.2 of the DSU ; and ,  
 the AFA Norm is inconsistent with Article 6.8 and Annex II(7) of the Anti-Dumping 
Agreement . 
VI Conditional appeals in relation to the Panel 's exercise of judicial economy with 
respect to certai n claims and conditional requests to complete the analysis  
26. The Panel exercised judicial economy with respect to China 's claims under Article 6.1, 
Article  6.8 and Annex II(1), and Article 6.8 and Annex II(7) of the Anti-Dumping Agreement in 
relation to 30 c hallenged determinations.4  
27. If the Appellate Body reverses the Panel 's findings under Article 6.10 and/or Article 9.2 in 
relation to one or more of the 30 challenged determinations in which USDOC determined a margin 
for the PRC -wide entity,5 China requests  that the Appellate Body take the following action in 
relation to each challenged determination for which the Panel 's findings under Article 6.10 and/or 
Article 9.2 have been reversed.  
28. If the condition described in paragraph 27 above is met, the Panel 's exercise of judicial 
economy:  
 is inconsistent with the requirement to make an objective assessment of the matter 
under Article 11 of the DSU;  
                                                
3 See Appellate Body Report, US – Washing Machines , para. 5.124.  
4 The relevant analysis and conclusions of the Panel are contained in paras. 7.480 -7.508 and 8.1.d.iii of 
the Panel Report.  
5 The findings of the Panel in relation to the application of the Single Rate Presumption in certain USDOC 
determinations are contained i n paras. 7.369 -7.382, 7.388, and 8.1.c.iii of the Panel Report.  These findings 
pertain to 38 challenged determinations, including eight determinations in which USDOC did not determine a 
rate for the PRC -wide entity.  A list of the 38 determinations subjec t to findings in relation to the application of 
the Single Rate Presumption, as well as a list of the 30 challenged determination in which USDOC determined a 
margin for the PRC -wide entity, are set forth in footnote 956 to para. 7.480 of the Panel Report.   WT/DS471/8  
 
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   fails to contribute to prompt settlement of the dispute under Article 3.3 of the DSU; 
and  
 frustrates the ability of the parties to find a positive solution to the dispute, contrary 
to Article 3.7 of the DSU.  
29. Accordingly, if the condition is met, the Appellate Body should, for each such determination:  
 reverse  the Panel 's exe rcise of judicial economy, reflected in paragraphs 7.486, 7.499 
and 8.1.d.iii of the Panel Report, with respect to China 's claims under Article 6.1, 
Article 6.8 and Annex II(1), and Article 6.8 and Annex II(7); and,  
 complete the analysis  of China 's claims  under Article 6.1, Article 6.8 and Annex II(1), 
and Article 6.8 and Annex II(7) of the Anti-Dumping Agreement . 
 
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