WT/DS471/R  
 
19 October  2016 
(16-5669) Page: 1/165 
  Original: English  
 
  UNITED STATES – CERTAIN  METHODOLOGIES AND TH EIR APPLICATION 
TO ANTI -DUMPING PROCEEDINGS INVOLVING CHINA  
REPORT OF THE PANEL  
BCI DELETED, AS INDIC ATED [[BCI]] 
 
 
 WT/DS471/R  
 
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  TABLE OF CONTENTS  
1  INTRODUCTION  ................................ ................................ ................................  12 
1.1  Complaint by China  ................................ ................................ ............................... 12 
1.2  Panel establishment and composition  ................................ ................................ ......12 
1.3  Panel proceedings  ................................ ................................ ................................ .12 
1.3.1   General  ................................ ................................ ................................ ............... 12 
1.3.2  Additional Working Procedures on Business Confidential Information (BCI)  .................. 13 
2  FACTUAL ASPECTS  ................................ ................................ ............................  13 
3  PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  ........................  14 
4  ARGU MENTS OF THE PARTIES  ................................ ................................ ...........  17 
5  ARGUMENTS OF THE THI RD PARTIES  ................................ ................................  17 
6  INTERIM REVIEW ................................ ................................ ..............................  17 
6.1  China's claims concerning the USDOC's use of the WA -T methodology under 
Article  2.4.2 of the Anti -Dumping Agreement  ................................ ........................... 17 
6.2  Whether the six administrative review determinations introduced at the Panel's 
first substantive meeting with the parties are within the Panel's terms of 
reference  ................................ ................................ ................................ ............. 20 
6.3  Whether the Single Rate Presumption is, as such and as applied in 38 
determinations, inconsistent with Articles 6.10, 9.2, and the second sentence of 
Article  9.4 of the Anti -Dumping Agreement  ................................ .............................. 21 
6.4  China 's claims under Articles 6.1 and 6.8, paragraphs 1 and 7 of Annex II, and 
the first sentence of Article 9.4 of the Anti -Dumping Agreement  ................................ .23 
7  FINDINGS  ................................ ................................ ................................ .........  25 
7.1  China's claims concerning the USDOC 'S use of the WA -T methodology under 
Article  2.4.2 of the Anti -Dumping Agreement  ................................ ........................... 25 
7.1.1   Provisions at issue  ................................ ................................ ................................ 25 
7.1.2   Factual background  ................................ ................................ ............................... 25 
7.1.3   China's claim un der the pattern clause of Article  2.4.2 of the Anti -Dumping 
Agreement  ................................ ................................ ................................ ........... 27 
7.1.3.1   Main arguments of the parties  ................................ ................................ ................ 28 
7.1.3.2   Main arguments of the third parties ................................ ................................ ......... 32 
7.1.3.3  Evaluation by the Panel  ................................ ................................ ......................... 34 
7.1.4   China's claim under the explanation clause of Article  2.4.2 of the Anti -Dumping 
Agreement  ................................ ................................ ................................ ........... 59 
7.1.4.1   Main arguments of the parties  ................................ ................................ ................ 59 
7.1.4.2   Main arguments of the third parties ................................ ................................ ......... 60 
7.1.4.3   Evaluation by the Panel  ................................ ................................ ......................... 61 
7.1.5   China's claim under the second sentence of Article  2.4.2 of the Anti -Dumping 
Agreement with resp ect to the USDOC's application of the WA -T methodology to 
all export transactions in the three challenged investigations  ................................ ......66 
7.1.5.1   Main arguments of the parties  ................................ ................................ ................ 66 
7.1.5.2   Main arguments of the  third parties ................................ ................................ ......... 68 
7.1.5.3   Evaluation by the Panel  ................................ ................................ ......................... 68 WT/DS471/R  
 
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  7.1.6   China's claim under Article  2.4.2 of the Anti -Dumping Agreement concerning the 
USDOC's use of zeroing in the application of the WA -T methodology  ........................... 72 
7.1.6.1   Main arguments of the parties  ................................ ................................ ................ 73 
7.1.6.2   Main arguments of the third parties ................................ ................................ ......... 74 
7.1.6.3   Evaluation by the Panel  ................................ ................................ ......................... 75 
7.2  Use of the WA -T methodology in the third administrative review in PET Film : 
Alleged violation of Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 
of the GATT 1994  ................................ ................................ ................................ ..82 
7.2.1   Provisions at issue  ................................ ................................ ................................ 82 
7.2.2   Factual background  ................................ ................................ ............................... 82 
7.2.3   Main arguments of the parties  ................................ ................................ ................ 83 
7.2.3.1   China  ................................ ................................ ................................ .................. 83 
7.2.3.2   United States  ................................ ................................ ................................ .......84 
7.2.4   Main arguments of the third parties ................................ ................................ ......... 84 
7.2.4.1   European Union  ................................ ................................ ................................ ....84 
7.2.4.2   Japan  ................................ ................................ ................................ .................. 84 
7.2.5   Evaluation by the Panel  ................................ ................................ ......................... 84 
7.3  Whether the  six administrative review determinations introduced at the Panel's 
first substantive meeting with the parties are within the Panel's terms of 
reference  ................................ ................................ ................................ ............. 86 
7.3.1   Introduction  ................................ ................................ ................................ ......... 86 
7.3.2   Whether Ch ina's panel request covers the six determinations  ................................ .....87 
7.3.3   Whether the six determinations should have been subject to consultations  .................. 92 
7.3.4   Conclusion  ................................ ................................ ................................ ........... 93 
7.4  Whether the Single Rate Presumption is, as such and as applied in 38 
determinations, inconsistent with Articles  6.10, 9.2, and the second sentence of 
Article  9.4 of the Anti -Dumping Agreement  ................................ .............................. 93 
7.4.1   Introduction  ................................ ................................ ................................ ......... 93 
7.4.2   Provisions at issue  ................................ ................................ ................................ 93 
7.4.3   Main arguments of the parties  ................................ ................................ ................ 94 
7.4.3.1   China  ................................ ................................ ................................ .................. 94 
7.4.3.2   United States  ................................ ................................ ................................ .......96 
7.4.4  Main arguments of the third parties ................................ ................................ ......... 99 
7.4.4.1   European Union  ................................ ................................ ................................ ....99 
7.4.4.2   Viet Nam  ................................ ................................ ................................ ............. 99 
7.4.5   Evaluation by the Panel  ................................ ................................ .......................  100 
7.4.5.1   Whether the Single Rate Presumption constitutes a measure that can be 
challenged as such in WTO dispute settlement  ................................ ........................  100 
7.4.5.2   Whether the Single Rate Presumption is, as such and as applied in 38 
determinations, inconsistent wi th Articles  6.10 and 9.2 of the Anti -Dumping 
Agreement  ................................ ................................ ................................ .........  113 
7.4.5.3   China's as such and as applied claims under the second sentence of Article  9.4 
of the Anti -Dumping Agreement  ................................ ................................ ...........  126 
7.4.5.4   Overal l conclusion  ................................ ................................ ...............................  127 WT/DS471/R  
 
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  7.5  China's claims under Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, and 
the first sentence of Article  9.4 of the Anti -Dumping Agreement  ...............................  127 
7.5.1   Introduction  ................................ ................................ ................................ ....... 127 
7.5.2   Provisions at issue  ................................ ................................ ..............................  127 
7.5.3   Main arguments of the parties  ................................ ................................ ..............  129 
7.5.3.1   China  ................................ ................................ ................................ ................  129 
7.5.3.2   United States  ................................ ................................ ................................ ..... 132 
7.5.4   Main arguments of the third parties ................................ ................................ ....... 134 
7.5.4.1   European Union  ................................ ................................ ................................ .. 134 
7.5.4.2   Brazil  ................................ ................................ ................................ ................  135 
7.5.4.3   Viet Nam  ................................ ................................ ................................ ...........  135 
7.5.5   Evaluation by the Panel  ................................ ................................ .......................  135 
7.5.5.1   Whether the AFA Norm is inconsistent, as such, with Article  6.8 and paragraph  7 
of Annex  II to the Anti -Dumping Agreement  ................................ ...........................  135 
7.5.5.2   China's as applied claims u nder Articles  6.1 and 6.8, paragraphs 1 and 7 of 
Annex  II, and the first sentence of Article  9.4 of the Anti -Dumping Agreement 
concerning 30 determinations  ................................ ................................ ...............  153 
8  CONCLUSIONS AND RECO MMENDATIONS  ................................ .......................  163 
 
 WT/DS471/R  
 
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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 THE PA RTIES  
CHINA  
Contents  Page  
Annex  B-1 First part of the executive summary of the arguments of China  B-2 
Annex  B-2 Second part of the executive summary of the arguments of China  B-11 
 
UNITED STATES  
Contents  Page  
Annex  B-3 First part of the executive summa ry of the arguments of the United  States  B-20 
Annex  B-4 Second part of the executive summary of the arguments of the United  States  B-33 
 
ANNEX  C 
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex  C-1 Executive summary of the arguments of Brazil  C-2 
Annex C-2 Executive summary of the arguments of Canada  C-6 
Annex  C-3 Executive summary of the arguments of the European Union  C-8 
Annex  C-4 Executive summary of the arguments of Japan C-12 
Annex  C-5 Executive summary of the arguments of Korea C-17 
Annex  C-6 Executive summary of the arguments of Norway  C-22 
Annex  C-7 Executive summary of the written  submission of  Turkey  C-25 
Annex  C-8 Executive summary of the arguments of Viet Nam  C-28 
 
 WT/DS471/R  
 
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  CASES CITED IN THIS REPORT  
  
Short title  Full case title and cita tion 
Argentina – Ceramic Tiles  Panel Report, Argentina – Definitive Anti -Dumping Measures on Imports of 
Ceramic Floor Tiles from Italy , WT/DS189/R , adopted 5 November 2001, 
DSR 2001:XII, p.  6241 
Argentina – Footwear (EC)  Appellate Body Report, Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/AB/R , adopted 12 January 2000, DSR 2000:I, p.  515 
Argentina – Import Measures  Appellate Body  Reports, Argentina – Measures Affecting the Importation of 
Goods , WT/DS438/AB/R  / WT/DS444/AB/R  / WT/DS445/AB/R , adopted 26 
January 2015  
Argentina – Import Measures  Panel Reports, Argentina – Measures Affecti ng the Importation of Goods , 
WT/DS438/R  and Add.1 / WT/DS444/R  and Add.1 / WT/DS445/R  and Add.1, 
adopted 26 January 2015, as modified (WT/DS438/R) and upheld 
(WT/DS444/R / WT/DS445/R) by Appellate Body Reports WT/DS438/AB/ R / 
WT/DS444/AB/R / WT/DS445/AB/R  
Australia – Apples  Appellate Body Report, Australia – Measures Affecting the Importation of 
Apples from New Zealand , WT/DS367/AB/R , adopted 17 December 2010, 
DSR 2010:V, p.  2175 
Australia – Salmon  Appellate Body Report, Australia – Measures Affecting Importation of 
Salmon , WT/DS18/AB/R , adopted 6 November 1998, DSR 1998:VIII, 
p. 3327 
Australia – Salmon  
(Articl e 21.5 – Canada)  Panel Report, Australia – Measures Affecting Importation of Salmon – 
Recourse to Article  21.5 of the DSU by Canada , WT/DS18/RW , adopted 20 
March 2000, DSR 2000:IV, p.  2031 
Canada – Renewable Energy / 
Canada – Feed-in Tariff 
Program  Appel late Body Reports, Canada – Certain Measures Affecting the Renewable 
Energy Generation Sector / Canada – Measures Relating to the Feed -in Tariff 
Program , WT/DS412/AB/R  / WT/DS426/AB/R , adopted 24 May 2013, DSR 
2013:I, p.  7 
Canada – Wheat Exports and 
Grain Imports  Appellate Body Report, Canada – Measures Relating to Exports of Wheat and 
Treatment of Imported Grain , WT/DS276/AB/R , adopted 27 September 
2004, DSR 2004:VI, p.  2739 
Chile – Price Band System  Appellate B ody Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products , WT/DS207/AB/R , adopted 23 
October 2002, DSR 2002:VIII, p.  3045 (Corr.1, DSR 2006:XII, p.  5473)  
China – Auto Parts  Appellate Body Reports, China – Measures Affecting Imports of Automobile 
Parts, WT/DS339/AB/R  / WT/DS340/AB/R  / WT/DS342/AB/R , adopted 12 
January 2009, DSR 2009:I, p.  3 
China – Autos (US)  Panel Report, China – Anti-Dumping and Countervailing Duties on Certain 
Automobiles from the United States , WT/DS440/R  and Add.1, adopted 18 
June 2014  
China – Broiler Products  Panel Report, China  Anti-Dumping and Countervailing Duty Measures on 
Broiler Products from the United States , WT/DS427/R  and Add.1, adopted 25 
September 2013, DSR 2013:IV, p.  1041 
Dominican Republic – Import 
and Sale of Cigarettes  Appellate Body Report, Dominican Republic – Measures Affecting the 
Importation and Internal Sale of Cigarettes , WT/DS302/AB/R , adopted 19 
May 2005, DSR 2005:XV, p.  7367 
EC – Bed Linen  Appellate  Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton -Type Bed Linen from India , WT/DS141/AB/R , adopted 12 
March 2001, DSR 2001:V, p.  2049 
EC – Bed Linen  
(Article  21.5 – India)  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Imports of Cotton -Type Bed Linen from India – Recourse t o Article  21.5 of 
the DSU  by India , WT/DS141/AB/RW , adopted 24 April 20 03, DSR 2003:III, 
p. 965 
EC – Chicken Cuts  Appellate Body Report, European  Communities – Customs Classification of 
Frozen Boneless Chicken Cuts , WT/DS269/AB/R , WT/DS286/AB/R , adopted 
27 September 2005, and Corr.1, DSR 2005:XIX, p.  9157 WT/DS471/R  
 
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  Short title  Full case title and cita tion 
EC – Fasteners (China)  Appellate Body Report, European Communities – Definitive Anti -Dumping 
Measures on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R , 
adopted 28 July 2011, DSR 2011:VII, p.  3995 
EC – IT Products  Panel Reports, European Communities and its member States – Tariff 
Treatment of Certain Information Technology Products , WT/DS375/R  / 
WT/DS376/R  / WT/DS377/R , adopted 21 September 2010, DSR 2010:III, 
p. 933 
EC – Poultry  Appellate Body Report, European Communities – Measures Affecting the 
Importation of Certain Poultry Products , WT/DS69/AB/R , adopted 23 July 
1998, DSR 1998:V, p. 2031  
EC – Salmon (Norway)  Panel Report, European Communities – Anti-Dumping Measure on Farmed 
Salmon from Norway , WT/DS337/R , adopted 15 January 2008, and Corr.1, 
DSR 2008:I, p.  3 
EC and certain member States 
– Large Civil Aircraft  Appellate Bo dy Report, European Communities and Certain Member States – 
Measures Affecting Trade in Large Civil Aircraft , WT/DS316/AB/R , adopted 1 
June 2011, DSR 2011:I, p.  7 
EU – Footwear (China)  Panel Report, European Union – Anti-Dumping Measures on Certain Footwear 
from China , WT/DS405/R , adopted 22 February 2012, DSR 2012:IX, p.  4585 
Guatemala – Cement I  Appellate Body Report, Guatemala – Anti-Dumping Inv estigation Regarding 
Portland Cement from Mexico , WT/DS60/AB/R , adopted 2 5 November 1998, 
DSR 1998:IX, p.  3767 
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and 
Paper , WT/DS44/R , adopted 22 April 1998, DSR 1998:IV, p.  1179 
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R , adopted 12 January 2000, DSR 
2000:I, p.  3 
Mexico – Anti-Dumping 
Measures on Rice  Appellate Body Report, Mexico – Definitive Anti -Dumping Measures on Beef 
and Rice, Complaint with Respect to Rice , WT/DS295/AB/R , adopted 20 
December 2005, DSR 2005:XXII, p.  10853  
Mexico – Anti-Dumping 
Measures on Rice  Panel Report, Mexico – Definitive Anti -Dumping Measures on Beef and Rice, 
Complaint with Respect to Rice , WT/DS295/R , adopted 20 December 2005, 
as modified by Appellate Body Report WT/DS295/AB/ R, DSR 2005:XXIII, 
p. 11007  
Thailand – Cigarettes 
(Philippines)  Appellate Body Report, Thailand – Customs and Fiscal Measures on 
Cigarettes from the Philippines , WT/DS371/AB/R , adopted 15 July 2011 , DSR 
2011:IV, p.  2203 
US – Anti-Dumping Measures 
on Oil Country Tubular Goods  Appellate Body Report, United States – Anti-Dumpin g Measures on Oil 
Country Tubular Goods (OCTG) from Mexico , WT/DS282/AB/R , adopted 28 
November 2005, DSR 2005:XX, p.  10127  
US – Carbon Steel  Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion -Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R  and Corr.1, adopted 19 December 2002, DSR 2002:IX, 
p. 3779 
US – Carbon Steel (India)  Appellate Body Report, United States – Countervailing Measures on Certain 
Hot-Rolled Carbon Steel Flat Products from India , WT/DS436/AB/R , adopted 
19 December 2014  
US – Continued Zeroing  Appellate Body Report, United States – Continued Existence and Application 
of Zeroing Methodology , WT/DS350/AB/R , adopted 19 February 2009, DSR 
2009:III, p.  1291 
US – Corrosion -Resistant Steel 
Sunset Review  Appellate Body Report, United States – Sunset Review of Anti -Dumping 
Duties on Corrosion -Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R , adopted 9 January 2004, DSR 2004:I, p.  3 
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" , WT/DS108/AB/R , adopted 20 March 2000, DSR 2000:III, 
p. 1619 
US – Gambling  Appellate Body Report, United States – Measures Affecting the  Cross -Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R , adopted 20 April 
2005, DSR 2005:XII, p.  5663 (and Corr.1, DSR 2006:XII, p.  5475)  WT/DS471/R  
 
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  Short title  Full case title and cita tion 
US – Hot-Rolled Steel  Appellate Body Report, United States – Anti-Dumping Measures on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R , adopted 23 August 
2001, DSR 2001:X, p.  4697 
US – Hot-Rolled Steel  Panel Report, United States – Anti-Dumping Measures on Certain Hot -Rolled 
Steel Products from Japan , WT/DS184 /R, adopted 23 August 2001 modified 
by Appellate Body Report WT/DS184/AB/R, DSR 2001:X, p.  4769 
US – Lamb  Appellate Body Report, United States – Safeguard Measures on Imports of 
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia , 
WT/DS177/AB/R , WT/DS178/AB/R , adopted 16 May 2001, DSR 2001:IX, 
p. 4051 
US – Large Civil Aircraft 
(2nd complaint)  Appellate Body Report, United States – Measures Affecting Trade in Large 
Civil Aircraft (Second Complaint) , WT/DS353/AB/R , adopted 23 March 2012, 
DSR 2012:I, p.  7 
US – Lead and Bismuth II  Appellate Body Report, United States – Imposition of Countervailing Duties 
on Certain Hot -Rolled Lead and Bismuth Carbon Steel Products Originating in 
the United Kingdom , WT/DS138/AB/R , adopted 7 June 2000, DSR 2000:V, 
p. 2595 
US – Oil Country Tubu lar 
Goods Sunset Reviews  Appellate Body Report, United States – Sunset Reviews of Anti -Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R , 
adopted 17 December 2004, DSR 2004:VII, p.  3257 
US – Orange Juice (Brazil)  Panel Report, United States – Anti-Dumping Administrative Reviews and 
Other Measures Rel ated to Imports of Certain Orange Juice from Brazil , 
WT/DS382/R , adopted 17  June 2011, DSR 2011:VII, p.  3753 
US – Shrimp (Thailand) /  
US – Customs Bond Directive  Appellate Body Report, United States – Measures Relating to Shrimp from 
Thailand / United States – Customs Bond Directive for Merchandise Subject 
to Anti -Dumping/Count ervailing Duties , WT/DS343/AB/R  / WT/DS345/AB/R , 
adopted 1 August 2008, DSR 2008:VII, p.  2385 / DSR 2008:VIII, p.  2773 
US – Shrimp (Viet Nam ) Panel Report, United States – Anti-Dumping Measures on Certain Shrimp 
from Viet Nam , WT/DS404/R , adopted 2 September 2011, DSR 2011:X, 
p. 5301 
US – Shrimp II (Viet Nam)  Panel Report, United States – Anti-Dumping Measures on Certain Shrimp 
from Viet Nam , WT/DS429/R  and Add.1, adopted 22 April 2015, upheld by 
Appellate Body Report WT/DS429/AB/R  
US – Softwood Lumber IV  Appellate Body Report, United St ates – Final Countervailing Duty 
Determination with Respect to Certain Softwood Lumber from Canada , 
WT/DS257/AB/R , adopted 17 February 2004, DSR 2004:II, p.  571 
US – Softwood Lumber V  Appellate Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada , WT/DS264/AB/R , adopted 31 August 2004, 
DSR 2004:V, p.  1875 
US – Softwood Lumber V  
(Article  21.5 – Canada)  Appellat e Body Report, United States – Final Dumping Determination on 
Softwood Lumber from Canada – Recourse to Article  21.5 of the DSU by 
Canada , WT/DS264/AB/RW , adopted 1 September 2006, DSR 2006:XII, 
p. 5087 
US – Softwood Lumber VI  
(Article  21.5 – Canada)  Appellate Body Report, United States – Investigation of the International 
Trade Commission in Softwood Lumber from Canada – Recourse to 
Article  21.5 of the DSU by Canada , WT/DS277/AB/RW , adopted 9 May 2006, 
and Corr.1, DSR 2006:XI, p.  4865 
US – Stainless Steel (Mexico)  Appellate Body Report, United States – Final Anti -Dumping Measures on 
Stainless Steel from Mexico , WT/DS344/AB/R , adopted 20 May 2008, DSR 
2008:II, p.  513 
US – Steel Plate  Panel Report, United States – Anti-Dumping and Countervailing Measures on 
Steel Plate from India , WT/DS 206/R  and Corr.1, adopted 29 July 2002, DSR 
2002:VI, p.  2073 
US – Tuna II (Mexico)  Appellate Body Report, United States – Measures Concerning the 
Importation, Marketing and Sale of Tuna and Tuna Products , 
WT/DS381/AB/R , adopted 13 June 2012, DSR 2012:IV, p.  1837 
US – Underwear  Appellate Body Report, United States – Restrict ions on Imports of Cotton and 
Man-made Fibre Underwear , WT/DS24/AB/R , adopted 25 February 1997, 
DSR 1997:I, p.  11 
US – Underwear  Panel Report, United States – Restrictions on Imports of Cotton and Man -
made Fibre Underwear , WT/DS24/R , adopted 25 February 1997, as modified WT/DS471/R  
 
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  Short title  Full case title and cita tion 
by Appellate Body Report WT/DS24/AB/R, DSR 1997:I, p.  31 
US – Upland Cotton  Appellate Body Report, United States – Subsidies on Upl and Cotton , 
WT/DS267/AB/R , adopted 21 March 2005, DSR 2005:I, p.  3 
US – Upland Cotton  Panel Report, United States – Subsidies on Upland Cotton , WT/DS267/R , 
Add.1 to Add.3 and Corr.1, adopted 21 March 2005, as modified by Appellate 
Body Report WT/DS267/AB/R, DSR 2005:II, p.  299 
US – Washing Machines  Panel Report, United States – Anti-Dumping and Countervailing Measures on 
Large Residential Washers from Korea , WT/DS464/R , circulated to WTO 
Members 11 March 2016  
[adoption/ appeal pending]  
US – Wheat Gluten  Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Wheat Gluten from the European Communities , WT/DS166/AB/R , 
adopted 19 January 2001, DSR 2001:II, p.  717 
US – Wool Shirts and Blouses  Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R , adopted 23 May 1997, 
and Corr.1, DSR 1997:I, p.  323 
US – Zeroing (EC)  Appellate Body Report, United States – Laws, Regulations and Methodology 
for Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R , adopted 9 
May 2006, and Corr.1, DSR 2006:II, p.  417 
US – Zeroing (EC)  
(Article  21.5 – EC) Appellate Body Report, United States – Laws, Regulation s and Methodology 
for Calculating Dumping Margins ("Zeroing") – Recourse to Article  21.5 of 
the DSU by the European Communities , WT/DS294/AB/RW  and Corr.1, 
adopted 11 June 2009, DSR 2009:VII, p.  2911 
US – Zeroing (EC)  
(Article  21.5 – EC) Panel Report, United States – Laws, Regulations and Methodology for 
Calculating Dumpin g Margins ("Zeroing") – Recourse to Article  21.5 of the 
DSU by the European Communities , WT/DS294/RW , adopted 11 June 2009, 
as modified by Appellate Body Report WT/DS294/AB/RW, DSR 2009:VII, 
p. 3117 
US – Zeroing (Japan)  Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews , WT/DS322/AB/R , adopted 23 January 2007, DSR 2007:I, 
p. 3 
US – Zeroing (Japan)  
(Article  21.5 – Japan)  Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews – Recourse to Article  21.5 of the DSU by Japan , 
WT/DS322/AB/RW , adopted 31 August 2009, DSR 2009:VIII, p.  3441 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 WT/DS471/R  
 
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  ABBREVIATIONS USED I N THIS REPORT  
 
Abbreviation  Description  
AFA Adverse Facts Available  
AFA Norm Use of Adverse Facts Available Norm  
Aluminum  Aluminum Extrusions f rom the People's Republic of China  
Anti-Dumping Agreement  Agreement on Implementation of Article VI of the General Agreement on Tariffs 
and Trade 1994  
Antidumping Manual  United States  Department of Commerce's Enforcement and Compliance 
Antidumping Manual  
APP-China  Gold East Paper (Jiangsu) Co., Ltd., Gold Huasheng Paper Co., Ltd., Gold East 
(Hong Kong) Trading Co., Ltd., Ningbo Zhonghua Paper Co., Ltd., Ningbo Asia 
Pulp and Paper Co.,  Ltd. 
AR Administrative Review  
AT Alleged target  
AT&M  Advanced Technology & Materials Co., Ltd.  
BTIC Beijing Tianhai Industry Co. Ltd  
Bags Polyethylene Retail Carrier Bags from the People's Republic of China  
China's Accession Protocol  Protocol on the  Accession of the People's Republic of China to the WTO , 
WT/L/432  
China's Accession Working 
Party Report  Report of the Working Party on the Accession of China, WT/ACC/CHN/49 and  
Corr.1  
Coated Paper  Certain Coated Paper Suitable for High -Quality Print Gra phics Using Sheet -Fed 
Presses From the People's Republic of China  
CONNUM  Control numbers  
Diamond Sawblades  Diamond Sawblades and Parts Thereof from the People's Republic of China  
Double Coin  Double Coin Group Shanghai Donghai Tyre Co., Ltd.  
DPM Differe ntial Pricing Methodology  
DSB Dispute Settlement Body  
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes  
DuPont Group  DuPont Teijin Films China Limited, DuPont Hongji Films Foshan Co., Ltd., and 
DuPont Teijin Hongji Films Nin gbo Co., Ltd  
Furniture  Wooden Bedroom Furniture from the People's Republic of China  
GATT 1994  General Agreement on Tariffs and Trade 1994  
IA Import Administration  
JJ New Material  Jiangyin Jinzhongda New Material Co., Ltd.  
NME Non-market economy  
NME-wide entity  Non-market economy -wide entity  
NT Non-target  
OCTG  Certain Oil Country Tubular Goods from the People's Republic of China  
OI Original investigation  
OTR Tires  Certain New Pneumatic Off -The-Road Tires from the People' s Republic of China  
PET Fil m Polyethylene Terephthalate Film, Sheet, and Strip from the People's Republic of 
China  
POI Period of Investigation  
Policy Bulletin No. 05.1  United States Department of Commerce's Import Administration Policy Bulletin 
No. 05.1  
PRC People's Republic of C hina 
PRC-wide entity  People's Republic of China -wide entity  
Q&V Quantity and value  
Ribbons  Narrow Woven Ribbons with Woven Selvedge from the People's Republic of 
China  WT/DS471/R  
 
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  Abbreviation  Description  
SCM Agreement  Agreement on Subsidies and Countervailing Measures  
Shrimp  Certain Fro zen and Canned Warmwater Shrimp from the People's Republic of 
China  
Solar Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, 
from the People's Republic of China  
SRP Single Rate Presumption  
Steel Cylinders  High Pressure Steel Cylinders From the People's Republic of China  
TPCO  Tianjin Pipe (Group) Co . 
TRRs Trade -related requirements  
T-T Transaction -to-transaction  
USCAFC  United States Court of Appeals for the Federal Circuit  
USCIT  United States Court of International Trade  
USD United States dollar 
USDOC  United States Department of Commerce  
VCLT Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 1155 
UNTS 331; 8 International Legal Materials 679  
WA-T Weighted average -to-transaction  
WA-WA Weighted avera ge-to-weighted average  
Wood Flooring  Multilayered Wood Flooring from the People's Republic of China  
WTO World Trade Organization  
 WT/DS471/R  
 
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  1  INTRODUCTION  
1.1  Complaint by China  
1.1.  On 3 December 2013, China  requested consultations with the United States  pursuant to 
Article 4 of the  Understanding on Rules and Procedures Governing the Settlement of Disputes  
(DSU), Article  XXII of the  General Agreement on Tariffs and Trade 1994  (GATT 1994 ) and 
Article  17 of the Agreement on Implementation of Article  VI of the General Agreeme nt on Tariffs 
and Trade 1994 (Anti-Dumping Agreement)  with respect to the measures and claims set out 
below.1 
1.2.  Consultations were held on 23 January 2014  but failed to resolve the dispute.  
1.2  Panel establishment and composition  
1.3.  On 13 February 2014 , China  reque sted the establishment of a panel.2 At its meeting on 
26 March 2014 , the Dispute Settlement Body ( DSB) established a panel pursuant to the request of 
China  in document WT/DS471/5 & Corr.1 , in accordance with Article  6 of the DSU.3 
1.4.  The Panel's terms of refe rence are the following:  
To examine, in the light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred to the DSB by China  in document 
WT/DS471/5 & Corr.1  and to make such findings as will assist the  DSB in making the 
recommendations or in giving the rulings provided for in those agreements.4 
1.5.  On 18 August 2014 , China  requested the Director -General to determine the composition of 
the panel, pursuant to Article  8.7 of the DSU. On 28 August 2014 , the Dir ector-General 
accordingly composed the Panel as follows:  
Chairperson:  Mr José Pérez Gabilondo  
 
Members:   Ms Beatriz Leycegui Gardoqui  
   Ms Enie Neri de Ross  
 
1.6.  Brazil, Canada, the European Union, India, Japan, the Republic of Korea (Korea) , Norway, the 
Russian Federation  (Russia) , the Kingdom of Saudi Arabia , the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei ), Turkey, Ukraine,  and Viet  Nam notified their 
interest in participating in the Panel proceedings as third parties.  
1.3  Panel proceedings  
1.3.1   General  
1.7.  After consultation s with the parties, the Panel adopted its Working Procedures5 and timetable 
on 11 February 2015 . Following the parties' requests , the Panel mo dified its timetable on 
1 April 2015 and again on  28 July 2015 .6 
                                                
1 See WT/DS471/1.  
2 WT/DS471/5 and WT/DS471/5/Corr.1 . 
3 See WT/DSB/M/343.  
4 WT/DS471/6 . 
5 See the Panel's Working Procedures in Annex  A-1. 
6 In this regard, based on the United States' request for an extension, dated 26 March 2015, of the 
deadline for the United States' first written submission, and after taking into consideration Ch ina's comments 
on the United States' request, the Panel, through its communication dated 1 April 2015, extended the deadline 
for the United States' first written submission and the third parties' written submissions. On the basis of a joint 
request receive d from China and the United States, on 27 July 2015, requesting an extension of the deadline 
for the parties' responses to written questions posed by the Panel following the first substantive meeting as 
well as the second written submission of the parties,  the Panel, through its communication dated 28 July 2015, 
extended the deadlines for these submissions by the parties. Due to the extension of the deadline for written WT/DS471/R  
 
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  1.8.  The Pane l held its first substantive meeting with the parties on 14, 15 , and 16 July 2015 . The 
session with the third parties took place on 15 July 2015 . The Panel held its second substantive 
meeting with the parties on  17 and 18 November 2015 . On 26 January 2016 , the Panel issued the 
descriptive part of its Report to the parties. The Panel issued its Interim Report to the parties on 
15 April 2016 . The Panel issued its Final Report to the parties on 6 June 2016 . 
1.3.2    Additional Working Procedures on Business Confidenti al Information (BCI)  
1.9.  After consultations with the parties, the Panel adopted, on 16 February 2015 , additional 
procedures for the protection of BCI.7 
2  FACTUAL ASPECTS  
2.1.  In this dispute, China presents  claims with respect to three issues concerning certain anti -
dumping measures imposed by the  United States Department of Commerce  (USDOC ), namely, the 
use of the weighted average -to-transaction (WA -T) methodology in dumping margin calculations, 
the treatment of multiple companies as a non-market economy -wide entity  (NME -wide entity) , and 
the manner in which the USDOC determines anti -dumping duty rates for such an entity as well as 
the level of such duty rates .8 
2.2.  In relation to the first issue, China's as applied claims challenge the USDOC 's determin ation 
that, in three anti-dumping investigations  involving exports from China, the conditions for use of 
the WA -T methodology provided in the second sentence of Article  2.4.2 of the Anti-Dumping 
Agreement  were met , as well as the manner in which the USDOC  applied the  WA-T methodology  in 
these investigations . Regarding  the first issue, China also brings a claim against the USDOC's use 
of zeroing in calculating  the margin of dumping for a Chinese exporter in one administrative review  
involving exports from China .9 
2.3.  With respect  to the second issue, China raises both as such and as applied claims. The as 
such claims concern what China calls the Single Rate Presumption, that is, the USDOC's alleged 
presumption that all exporters from a non-market economy  (NME) country comprise a s ingle entity 
under common government control and the assignment of a single margin of dumping, or anti -
dumping duty rate, to that entity.10 To rebut this presumption, and obtain an individually 
determined margin of dumping, China submits that an exporter mu st prove, through the Separate 
Rate Test, an absence of government control, both in law and in fact, over its export activities.11 
China's as applied claims regarding the second issue relate to the application of the alleged Single 
Rate Presumption in 13 an ti-dumping investigations and 25 administrative reviews involving 
Chinese exporters.12 
2.4.  Regarding the third issue, China also raises both as such and as applied claims. The as 
applied claims concern the manner in which the USDOC determined  the anti-dumping d uty rates 
for the P eople's Republic of China -wide entity  (PRC-wide entity)  in 13 anti-dumping investigations 
and 17 administrative reviews involving Chinese exporters .13 Specifically , these claims challenge 
                                                                                                                                                  
questions posed by the Panel following the first substantive meeting, the Panel also ext ended the deadline for 
submission of the first executive summaries of the parties.  
7 See Additional Working Procedures on BCI in Annex  A-2. 
8 Whether China's claims challenging the manner in which the USDOC determines anti -dumping duty 
rates for NME -wide e ntities and the level of such duty rates also take issue with the treatment of the individual 
exporters included in such entities is discussed in paragraphs  ‎7.493 -‎7.496  below.  
9 In this regard, we use the words  "producers" and "exporter s" interchangeably  in our report , with both 
referring to companies  subject to an anti -dumping investigation or administrative review initiated by the 
USDOC.  
10 China's first written submission, para. 317.  
11 China's fi rst written submission, para. 318.  
12 Of the 25 administrative reviews challenged by China, 19 were identified in China's panel request, 
while six additional administrative reviews were introduced at the first substantive meeting of the Panel with 
the parti es. See paragraphs ‎7.240 -‎7.270  below for our assessment of the objection raised by the United States 
concerning the Panel's terms of reference with respect to the six additional administrative rev iews. 
13 Of the 17 administrative reviews challenged by China, 13 were identified in China's panel request, 
while four additional administrative reviews were introduced at the first substantive meeting of the Panel with 
the parties. See paragraphs ‎7.240 -‎7.270   below for our assessment of the objection raised by the United 
States concerning the Panel's terms of reference with respect to the four additional administrative reviews.  WT/DS471/R  
 
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  the USDOC's alleged failure to give noti ce of the information required , its recourse to and use of 
facts available, as well as the level of the anti -dumping duty rates assigned to the PRC -wide entity 
in these determinations. China's as such claims concern the manner in which the USDOC uses 
facts available  when determining the anti -dumping duty rates for NME -wide entities under the 
alleged "Use of Adverse Facts Available  Norm" (AFA Norm). 
3  PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  
3.1.  China requests the Panel to find as follow s14: 
a. The United States acted  inconsistently with Article  2.4.2 of the Anti-Dumping Agreement 
in three  challenged determinations15 of the USDOC , because in each of these 
determinations16: 
i. The USDOC used the WA -T methodology without having properly met the first 
condition of Article  2.4.2, second sentence . Specifically:  
 the USDOC used the statistical tools of its own choice in an arbitrary and 
biased manner;  
 the USDOC 's reliance, in the Nails test, on weighted -average prices instead 
of individual export transactions was inconsistent with the treaty text and 
biased the Nails test, as applied, towards finding a pattern; and  
 the USDOC failed to assess whether the observed export prices differed 
significantly in a qualitative sense . 
 
ii. The USDOC used the WA -T methodology without having properly met the second 
condition of Article  2.4.2, second sentence. Specifically, the USDOC 's explanation as 
to why it could not use the weighted average -to-weighted average ( WA-WA) 
comparison methodology was inadequate, and the USDOC did not address whether 
the transaction -to-transaction  (T-T) comparison methodology could appropriately 
take account of the relevant pricing pattern . 
iii. The USDOC applied the WA -T methodology to all reported US sales by the Chinese 
exporters APP -China (in  the Coated Paper  investigation ), BTIC (in  the Steel Cylinders  
investigation ) and TPCO (in the OCTG  investigation ) despite the fact that it had 
identified a relevant pricing pattern only amongst a subset of US sales. 
iv. The USDOC impermissibly applied zeroing procedures when aggregating the 
transaction -specific WA -T intermediate comparison results, thereby failing properly 
to determine a margin of dumping for the product as a whole.  
b. The United States acted inconsistently with Article  9.3 of the Anti-Dumping Agreement 
and Article  VI:2 of the G ATT 1994, in  the third administrative review in  PET Film , 
because through the application of zeroing procedures, the USDOC failed to determine a 
margin of dumping for the product as a whole and, in so doing, artificially inflated the 
level of the anti-dump ing duty for the DuPont Group as assessed in this administrative 
review .17 
c. The Panel should reject the United States'  contention that the six challenged 
determinations filed with the Panel during the course of the first substantive meeting  – 
namely, the fif th administrative review in OTR Tires , the first administrative review in 
Solar, the fourth administrative review in Diamond Sawblades , the second administrative 
                                                
14 China's second written submission, pa ras. 495 -502. 
15 In this regard, China challenges the following determinations of the USDOC: OCTG  OI, Steel Cylinders  
OI and Coated Paper  OI. (China's second written submission, para. 495).  
16 China's second written submission, para. 495.  
17 China's second wr itten submission, para. 496.  WT/DS471/R  
 
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  review in Wood Flooring , the fifth administrative review in PET Film , and the ninth 
administra tive review in Furniture  – fall outside the Panel 's terms of reference.18 
d. The United States acted inconsistently with Articles  6.10, 9.2 , and 9.4 of the Anti-
Dumping  Agreement , because  the USDOC's  Single Rate Presumption for  NMEs , as such 
and as applied in the 38 challenged determinations , violates these provisions of the Anti-
Dumping Agreement in the following manner19: 
China's as such claims  
i. Article  6.10 of the Anti-Dumping Agreement , because by presuming the existence of 
a single NME -wide entity and by ass igning a single dumping rate to that entity, 
including al l of the producers or exporters within it, the USDOC fails to determine an 
individual margin of dumping for each known exporter or producer . 
ii. Article  9.2 of the Anti-Dumping  Agreement , because by pres uming the existence of a 
single NME -wide entity and by assigning a single dumping rate to that entity,  
including all of the producers or exporters within it, the USDOC fails to specify 
individual duties for each supplier . 
iii. Article  9.4 of the Anti-Dumping  Agreement , because the Separate Rate Test 
imposes, in NME cases in which the USDOC uses sampling, an additional condition,  
not contemplated by Article  9.4, for the receipt of an individual duty. This condition 
applies to non -selected producers or exporters t hat are included in the NME -wide 
entity and is a condition that applies even if such respondents provide all the 
"necessary information " required for the calculation of a margin of dumping.  
China's as applied claims concerning 38 challenged determinations20 of the USDOC  
iv. Article  6.10 of the Anti-Dumping  Agreement , because by presuming the existence of 
a single PRC-wide entity and by assigning a single dumping rate to that entity,  
including all of the producers or exporters within it, the USDOC failed to deter mine 
an individual margin of dumping for each known exporter or producer.  
v. Article  9.2 of the Anti-Dumping  Agreement , because by presuming the existence of a 
single PRC-wide entity and by assigning a single dumping rate to that entity,  
including all of the producers or exporters within it, the USDOC failed to specify 
individual duties for each supplier . 
vi. Article  9.4 of the Anti-Dumping  Agreement , because in each of the challenged 
determinations, the USDOC used sampling under the second sentence of 
Article  6.10, yet, by applying the Separate Rate Test, it imposed an additional 
condition , not contemplated by Article  9.4, for the receipt of an individual  duty by 
non-selected producers or exporters included within the PRC -wide entity.  
e. The United States acted incon sistently with Articles  6.1, 6.8 and Annex  II of the Anti-
Dumping  Agreement , because the USDOC's failure to request the inf ormation required to 
calculate a margin of dumping for the PRC -wide entity in  30 challenged determinations21 
                                                
18 China's second written submission, para. 497.  
19 China's second written submission, paras. 498 -499. 
20 In this regard, China challenges the following determinations of the USDOC: Aluminum OI, Aluminum 
AR1, Aluminum AR2, Coated Paper OI, Shrimp OI, Shrimp AR7, Shrimp AR8, Shrimp AR9, OTR Tires OI, OTR 
Tires AR3, OTR Tires AR5, OCTG OI, OCTG AR1, Solar OI, Solar AR1, Diamond Sawblades OI, Diamond 
Sawblades AR1, Diamond Sawblades AR2, Diamond Sawblades AR3, Diamond Sawblades AR4, Steel Cylinders 
OI, Wood Flooring OI, Wood Flooring AR1, Wood Flooring AR2, Ribbons OI, Ribbons AR1, Ribbons AR3, Bags 
OI, Bags AR3, Bags AR4, PET Film OI, PET Film AR3, PET Film AR4, PET Film AR5, Furniture OI, Furniture AR7, 
Furniture AR8, and Furniture AR9. (China's second written submission, para. 499, fn 764).  
21 In this regard, China challenges the following determinations of the USDOC: Aluminum OI, Aluminum 
AR1, Aluminum AR2, Coated Paper  OI, Shrimp OI, Shrimp AR7, Shrimp AR8, OTR Tires OI, OTR Tires  AR5, 
OCTG  OI, Solar OI, Solar AR1, Diamond Sawblades  OI, Diamond Sawblades AR1, Diamond Sawblades AR2, 
Diamond Sawblades AR3, Diamond Sawblades AR4, Steel Cylinders OI, Wood Flooring OI, Wood Flooring AR1, WT/DS471/R  
 
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  in which the USDOC determ ined a rate for the PRC -wide entity violated these provisions 
of the Anti-Dumping  Agreement in the following manner22: 
i. Article  6.1 of the Anti-Dumping  Agreement, because the USDOC did not give notice 
of the information required and did not provide ample opp ortunity for certain 
interested  parties to present, in writing, all evidence they consider ed to be relevant . 
ii. Article  6.8 and Annex  II of the Anti-Dumping  Agreement, because  the USDOC had 
recourse to facts available to determine the rate for the PRC -wide entity, and all the 
producers or exporters included within it, without having specified in detail the 
information required in order to calculate a margin of dumping for the PRC -wide 
entity.  
f. The United States acted inconsistently with Article  6.8 and Annex  II of the Anti-Dumping 
Agreement, because the USDOC's use of adverse facts available in certain challenged 
determinations and its  AFA Norm, as such , violate these provisions of the Anti-Dumping  
Agreement in the following manner23: 
China's as such claims  
i. The U SDOC's AFA Norm, as such, is inconsistent with Article  6.8 and Annex  II of the 
Anti-Dumping  Agreement , because when it applies that N orm, the USDOC does not 
undertake a comparative, evaluative process aimed at identifying the best 
information available, bu t rather chooses information that is adverse to the interests 
of NME -wide entiti es, including all the producers or exporters within them, based on 
the procedural circumstance of non -cooperation alone . 
China's as applied claims  
ii. The USDOC 's use of facts avai lable in each of the 20 challenged determinations24 in 
which  the USDOC made an express finding of non -cooperation  as well as the eight 
challenged administrative review s25 in which  the USDOC pulled -forward or re -applied 
a facts available rate is inconsistent with Article  6.8 and Annex  II of the Anti-
Dumping  Agreement , because each determination involved application of the WTO-
inconsistent AFA Norm; and in each determination, the USDOC: ( a) failed  to 
undertake a comparative, evaluative process aimed at identify ing the best 
information available, but rather chose information that was adverse to the interests 
of the PRC -wide entity and all of the producers or exporters included within it; ( b) 
selected facts available based on the procedural circumstance of non -cooperation 
alone; ( c) failed  to properly undertake a reasoned and selective evaluation in order 
to find the best facts available; and ( d) failed to provide a reasoned and adequate 
explanation of how it had exercised special circumspection and selected the be st 
information available . 
iii. The USDOC 's use of facts available in two challenged determinations ─ the fifth 
administrative review in OTR Tires  and the fourth administrative review in Diamond 
Sawblades  ─ is inconsistent with Article  6.8 and Annex  II of the  Anti-Dumping  
Agreement , because in each determination, the USDOC: ( a) failed proper ly to 
undertake a reasoned and selective evaluation in order to find the best facts 
available; and ( b) failed to provide a reasoned and adequate explanation of how it 
had exer cised special circumspection and selected the best information available.  
                                                                                                                                                  
Wood Flooring AR2, Ribbons OI, Ribbons AR1, Ribbons  AR3, Bags OI, Bags AR3, PET Film OI, Furniture OI, 
Furniture AR7, and Furniture AR8. (China's second written submission, para. 500, fn 765).  
22 China's second written submission, para. 500. 
23 China's second written submission, para. 501.  
24 In this regard, China challenges the following determinations of the USDOC: Aluminum  OI, Aluminum  
AR1, Aluminum AR2, Coated Paper  OI, Shrimp  OI, Shrimp AR7, Shrimp AR8, OTR Tires  OI, OCTG  OI, Solar OI, 
Solar AR1, Diamond Sawblades  OI, Steel Cylinders  OI, Wood Flooring  OI, Ribbons  OI, Ribbons  AR3, Bags OI, 
PET Film  OI, Furniture  OI, and Furniture  AR7. (China's second written submission, para. 501, fn 766).  
25 In this regard, China challenges the following determinations of the USDOC: Diamond Sawblades 
AR1, Diamond Sawblades AR2, Diamond Sawblades AR3, Wood Flooring AR1, Wood Flooring AR2, Ribbons 
AR1, Bags AR3, and Furniture AR8. (China's second written submission, para. 501, fn 767).  WT/DS471/R  
 
- 17 - 
 
  g. The United States acted inconsistently with Article  9.4 of the Anti-Dumping  Agreement , 
in assigning a rate to the PRC -wide entity an d all of the distinct producers or exporters 
included within it in 30 challenged determinations.26  This is  because, to the extent that 
the PRC -wide entity was not individually investigated in any of these challenged 
determinations, the anti -dumping duties applied to the PRC -wide entity as well as the 
non-individually investigated producers or exporters included within that entity exceeded 
the weighted average of the rates determined for the mandatory respondents, excluding 
facts available , zero or de minimis  rates or otherwise failed to comply with the dis ciplines 
of Article  9.4.27 
3.2.  China requests, pursuant to Article  19.1 of the DSU, that the Panel recommend that the 
United States bring its measures, found to be inconsistent with the Anti-Dumping  Agreement and 
the GATT 1994 , into conformity with its WTO obli gations.  
3.3.  The United States requests that the Panel reject China's claims in this dispute in their 
entirety.  
4  ARGUMENTS OF THE PAR TIES  
4.1.  The arguments of the parties are reflected in their executive summaries, provided to the 
Panel in accordance with paragraph  20 of the Working Procedures adopted by the Pan el (see 
Annexes  B-1, B-2, B-3, and B -4). 
5  ARGUMENTS OF THE THI RD PARTIES  
5.1.  The arguments of Brazil, Canada, the European Union, Japan, Korea, Norway, Turkey,  and 
Viet Nam are reflected in their executive summari es, provided in accordance with paragraph  21 of 
the Working Procedures adopted by the Panel  (see Annexes  C-1, C-2, C-3, C-4, C-5, C-6, C-7, and 
C-8). India, Russia , the Kingdom of Saudi Arabia, Chinese Taipei , and Ukraine did not submit 
written or oral arg uments to the Panel.  
6  INTERIM REVIEW  
6.1.  On 15 April 2016, the Panel issued its Interim Report to the parties. On 3 May 2016, China 
and the United States each submitted written requests for the Panel to review aspects of the 
Interim Report. On 23 May 2016, both  parties submitted comments on the other's requests for 
review. Neither party requested an interim review meeting.  
6.2.  In accordance with Article 15.3 of the DSU, this section of the Report sets out the Panel's 
response to the parties' requests made at the int erim review stage. The numbering of some of the 
paragraphs and footnotes in the Final Report has changed from the numbering in the Interim 
Report. The discussion below refers to the numbering in the Final Report and, where it differs, 
includes the correspo nding numbering in the Interim Report.  
6.3.   The parties' requests for substantive modifications are discussed below. In addition to the 
requests discussed below, corrections were made for typographical and other non -substantive 
errors in the Report, including those identified by the parties.  
6.1  China's claims concerning the USDOC's use of the WA -T methodology under 
Article  2.4.2 of the Anti -Dumping Agreement  
6.4.  China requests us to modify the first sentence of paragraph  ‎7.2 where we desc ribe the WA -
WA and T -T methodologies as the two "normal" methodologies provided  for in Article 2.4.2 of the 
Anti-Dumping Agreement, because the word "normal" does not appear in that provision. Instead, 
                                                
26 In this regard, China challenges the following determinations of the USDOC: Aluminum OI, Aluminum 
AR1, Aluminum AR2, Coated Paper  OI, Shrimp OI, Shrimp AR7, Shrimp AR8, OTR Tires OI, OTR Tires  AR5, 
OCTG  OI, Solar OI, Solar AR1, Diamond Sawblades  OI, Diamond Sawblades AR1, Diamond Sawblades AR2, 
Diamond Sawblades AR3, Diamond Sawblades AR4, Steel Cylinders OI, Wood Flooring OI, Wood Flooring AR1, 
Wood Flooring AR2, Ribbons OI, Ribbons AR1, Ribbons AR3, Bags OI, Bags AR3, PET Film OI, Furniture OI, 
Furniture AR7, and Furniture AR8. (China's second written submission, para. 502, fn 768).  
27 China's second written submission, para. 502.  WT/DS471/R  
 
- 18 - 
 
  China requests us to refer to these methodologies as t he two methodologies that must "normally" 
be used, to accurately reflect the text of Article 2.4.2. The United States has not commented  on 
this request by China.  In order to address China's concern in this regard, we have made the 
suggested modification to this paragraph.  
6.5.  The United States notes that in paragraph ‎7.4, footnote  43 to that paragraph  (footnote 31 
of the Interim Report)  and other parts of the Interim Report, we use the term "pattern test" to 
refer to the first stage of the Nails test and "price gap test" to refer to the second stage of the 
Nails test. By contrast, t he United States observes that the records of the three investigations at 
issue show that the USDOC used the terms "standard deviation test" and "gap test" to refer to the 
first and second stage s of the Nails test , respectively. The United States does not object to our use 
of the term price gap test to refer to the second stage of the Nails test  but objects to our use of 
the term pattern test to refer to the first stage of that test and requests us to use the term 
standard deviation test instead. In this regard, the United States submits that the use of the term 
pattern test  could give the wrong impression  that the USDOC considered the obligations under the 
pattern clause of Article 2.4.2 to be met when the requirements of  only the first stage of the Nails 
test were met, when in actuality the USDOC used the first as well as the second stage of the  Nails 
test to meet these obligations.  China opposes the United States' request and finds it unnecessary 
to change the term that we used in the Interim Report  in this regard. Further, noting that the first 
stage of the Nails test comprise d two steps, the f irst involving the use of a one standard deviation 
threshold and the second involving a 33% volume threshold, China argues that using the term 
standard deviation test to describe both steps of th is first stage may confuse the reader.  
6.6.  Given that the USDOC i tself used the term standard deviation test in referring to the first 
stage of the Nails test in the  OCTG , Steel Cylinders  and Coated Paper  investigations  (three 
challenged investigations ), we have granted the United States' request , and modified  the relev ant 
parts of the Report, including footnote 43. We are not convinced by China's objection since we do 
not see how the use of a term which was used by the USDOC itself in the challenged investigations 
could confuse the reader.  Therefore, with the exception of paragraph ‎7.71 where we quote directly 
from China's first written submission, we have modified relevant parts of the Report to refer to the 
first stage of the Nails test as the standard deviati on test rather than the pattern test. We have 
also modified the relevant part of paragraph ‎7.71 to clarify that the term pattern test is used by 
China, not the Panel.  We continue to use the term price gap test to refer to the second stage of 
the Nails test because the United States does not object to this. 
6.7.  China states that paragraph ‎7.18 does not fully reflect its argument regarding the 
qualitative issues with the Nails test , and asks the Panel to  add two additional sentences, either at 
the end of this paragraph or in a footnote. The United States has not commented  on this request 
by China. Considering that the requested modification concerns the description of China's own 
argument s in these procee dings  and has a basis on the record, we have accepted China's request. 
Since the additional sentences suggested by China pertain exclusively to the Steel Cylinders  
investigation, we have introduced these additional sentences after the first two sentences i n that 
paragraph , which explain China's arguments regarding that investigation.  
6.8.  China notes that in paragraph  ‎7.147  we find that the explanation provided by the USDOC in 
the three challenged investigations befo re resorting to the exceptional WA -T methodology violate s 
the explanation clause of Article 2.4.2 because it is premised on the use of zeroing under the WA -T 
methodology, which we find to be inconsistent with Article 2.4.2. China observes that in light of 
this finding we do not assess China's second argument that this explanation was also inconsistent 
with Article 2.4.2 because it was overly brief, offered no analysis and did not consider any of the 
characteristics of the relevant pricing pattern. China req uests us to address this second argument 
in order to  provide greater certainty in connection with the United States' implementation 
obligations in the event the Appellate Body reverses our finding that the use of zeroing under the 
WA-T methodology is incon sistent with Article 2.4.2. The United States disagrees with China and 
notes that the Pa nel's approach in this regard i s a proper use of judicial economy and that a panel 
need not address each and every argument made by a party.  
6.9.  We recall that it is well e stablished in WTO dispute settlement that a panel has the discretion 
to address only those arguments , which it deems necessary to resolve a particular claim.28 Having 
                                                
28 See, e.g. Appellate Body Reports, EC – Fasteners (China) , para. 511; and EC – Poultry  para. 135.  WT/DS471/R  
 
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  already found that the USDOC's explanation in the three challenged investigations w as inconsistent 
with the explanation clause of Article 2.4.2 because it was  premised on the use of zeroing under 
the WA -T methodology, we do not find it necessary to also examine whether that explanation was 
inconsistent with that provision for the reasons presen ted under  China's second argument.  
6.10.   The United States notes that in paragraph 135 of the Appellate Body report in US – Zeroing 
(Japan ), which we quote in paragraph  ‎7.178  of our Report, the Appellate Body misquot es the 
second sentence of Article 2.4.2 when it states that the emphasis of that sentence is on finding a 
pattern of export prices which "differs" significantly among purchasers, regions or time periods. 
This is because Article 2.4.2 uses the word "differ"  rather than "differs". To make it clear that we 
correctly quote the Appellate Body report , the United States requests us to either add [sic] after 
the word "differs" in this quote, or, alternatively, add a footnote after the word "differs" to note 
that th e text of Article 2.4.2 uses the word "differ" rather than "differs". China  has not commented  
on this request by the United States.  We have granted the United States' request and provided the 
requested clarification in footnote 308 introduced to paragraph ‎7.178 . 
6.11.   The United States notes that  the first sentence of paragraph ‎7.181  does not accurately 
reflect its argument. Specifically, t he United States observes  that while the first sentence of this 
paragraph sug gests that the United States' argument is that the WA -T methodology "must" be 
applied to all export sales,  in fact,  its argument is that the WA -T methodology "may" be applied to 
all export sales. China  has not commented  on this request by the United States . In order to 
accurately reflect the United States' argument, we have made the request ed modification to 
paragraph ‎7.181 . 
6.12.   China makes two comments regarding paragraph  ‎7.201 . First, China requests us to add a 
cross-reference to paragraph ‎7.150  of the Report in the fourth sentence of this parag raph. Second, 
China requests us to state in paragraph ‎7.201  that the exceptional nature of the WA -T 
methodology is apparent from the text of Article 2.4.2. The United States has not commented  on 
this request by  China.  We have granted China's first request and added a cross -reference to 
paragraph 7.150 in the fourth sentence of paragraph ‎7.201  in order to enhance the clarity of the 
Report. We have decline d China's second request because , in our view, paragraph ‎7.150  of the 
Report , which is now cross-referenced in paragraph ‎7.201 , already makes it clear that the 
exceptional nature of the WA -T methodology is apparent  from the text of Article 2.4.2.  
6.13.   China notes that in paragraph  ‎7.202  we refer to the three principles concerning the 
calculation of dumping margins , developed by the Appellate Body in previ ous zeroing disputes. 
China observes that these principles were developed by the Appellate Body with close regard to 
the text and context of the Anti -Dumping Agreement and the GATT 1994. China requests us to 
explicitly refer to th ose textual and contextual  bases in the Report. The United States opposes 
China's request on the ground that the additions requested by China would not enhance the clarity 
of the Report.  In our view, unless relevant for a particular reason, it is not necessary to describe  in 
detail  the bases for the Appellate Body findings every time we make  a reference to such findings in 
our Report . In this particular case , we do not consider that reproducing the discussion in these 
Appellate Body reports regarding the textual and contextual bas es for these three principles  would 
enhance the clarity of our Report. Therefore, w e have decline d China's request.  
6.14.   China makes two comments regarding paragraph  ‎7.203 . First, China requests us to 
explicitly refer to the textual and contextual bas es of the Appellate Body's reasoning that the term 
"margins of dumping" has the same meaning throughout the Anti -Dumping Agreement. Second, 
China requests us to rephrase  the penultimate sentence in this paragraph where we note that the 
USDOC disregarded negative intermediate comparison results by treating them as zero in 
calculating the margin of dumping for the investigated product as a whole  in the three challenged 
investigations . China finds the phrase "calculating the margin of dumping" in this context, and 
without further qualification, to be confusing because a margin calculated using zeroing is not a 
margin of dumping within the meaning  of the Anti -Dumping Agreement . Therefore, China requests 
us to modify this sentence such that it says that the "USDOC disregarded negative intermediate 
comparison results by treating them as zero in purporting to calculate the margin of dumping for 
the investigated product as a whole. "29 The United States oppose s both aspects of China's request. 
                                                
29 China's request for review of the Interim Report, para. 13.  WT/DS471/R  
 
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  Regarding the first aspect , the United States argues that the additions requested by China would 
not enhance the clarity of the Report. Regarding the second aspect , the United States disagrees 
with China's contention  that the Panel's description of the manner in which the USDOC calculated 
the dumping margin s in the challenged investigations is confusing , and notes that China itself 
described the USDOC's dumping margin calculations in a substantia lly similar manner in its panel 
request.  
6.15.   We have decline d both requests by China. Regarding China's first request , as we stated in 
paragraph ‎6.13 above, unless relevant for a particular reason, we do not find it necessary to 
describe in detail the bases for the Appellate Body findings every time we make a reference to 
such findings in our Report. We also do not consider that such an addition would enhance the 
clarity of the Report. Regarding China's second request , the statement that the USDOC 
disregarded negative intermediate comparison results by treating them as zero "in calculating the 
margin of dumping", makes it clear, in our view, that the USDOC used zeroing in the process of 
calculating the margin of dumping. It does not suggest, as China appears to contend, that a 
margin calculated using zeroing is a margin of dumping within the meaning of the Anti -Dumping 
Agreement.  
6.16.   China requests us to expressly state in paragraph  ‎7.219  that when the T -T comparison 
methodology is applied to any subset of the export transactions, mathematical equivalence does 
not arise. The United States opposes China's req uest, and notes that China does not submit any 
evidence to support this broad assertion . Further, the United States asserts that the dumping 
margin obtained through the T -T methodology could also be mathematically equivalent to that 
obtained through the WA -WA and WA -T methodologies in certain circumstances , depending on the 
values of home market and export sales. Our view is that when an investigating authority applies 
the WA -T methodology to the export transactions falling within the pattern and the T -T 
methodology to the export transactions falling outside the pattern, mathematical equivalence will 
not necessarily arise. This view is explained in paragraph s ‎7.219  and ‎7.215  of the Report. Hence, 
we have declined China's request  to modify paragraph ‎7.219 . In order to further clarify our view, 
however, we have added the word "necessarily" to the last sentence of paragraph ‎7.215  of the 
Report.  
6.17.   China requests us to delete footnote  385 (footnote 370 of the Interim Report ) on the 
ground that the issue addressed in this footnote was not subject to any briefing by the part ies or 
third parties in these proceedings. China also states that the relevant paragraphs from the panel 
report in US – Washing Machines that we refer to in this footnote have been appealed and 
therefore, it is neither necessary nor appropriate for us to a ddress this issue, which is not before 
us. The United States opposes China's request and asserts that the issue address ed in this 
footnote was subject to extensive argumentation in these proceedings.  We note that footnote 385 
contains an observation reflect ing our understanding of the objective of the WA -T methodology 
provided for in the second sentence of Article 2.4.2 of the Anti -Dumping Agreement.  It is not 
uncommon for WTO panels or the Appellate Body to make such observati ons, and we do not 
consider that we are precluded from making such an observation in this case. Hence, we have 
decline d China's request to delete footnote 385. 
6.2  Whether the six administrative review determinations introduced at  the Panel's first 
substantive meeting with the parties are within the Panel's terms of reference  
6.18.   China request s us to be more precise in paragraph ‎7.262  when referring to the 
determinations that are explicitly listed in China 's panel request , by adding the word "explicitly" 
before reference s to these determinations . China argues that this modification would ensure 
consistency between paragraph ‎7.262  and our finding in paragraph ‎7.260  that the six 
determinations introduced at the first  substantive  meeting of the Panel with the parties fall within 
our terms of reference because they are closely connected and subsequent to the determination s 
explicitly listed in China's panel request . The United States opposes China's request for the 
modification of paragraph ‎7.262 , arguing that the text of this paragraph does not create any 
confusion with  respect to  the finding s made in paragraph ‎7.260 . The United States argues that, in 
making this request, China misinterprets the Panel's findings in paragraph ‎7.260 , which are based 
on the Panel's view that the six dete rminations subsequently introduced by China are closely 
connected to the determinations that were listed in China's panel request.  While we agree with the WT/DS471/R  
 
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  United States' characterization of our findings in paragraph  ‎7.260  with respect to the six new 
determinations, we have granted China's request because it adds clarity to our explanation in 
paragraph ‎7.262 . For purposes of consistency, we have also made the same modific ation in 
paragraphs ‎7.260 , ‎7.268 , ‎7.271 , and ‎7.389  of the Report.  
6.3  Whether the Single Rate Presumption is, as such and as applied  in 38 
determinations , inconsistent with Articles 6.10, 9.2, and the second sentence of 
Article  9.4 of the Anti -Dumping Agreement  
6.19.   The United States requests that we delete the references to "jurisprudence" and modify 
certain language used in paragraph ‎7.305  in order to clarify that we are  merely drawing upon 
the analys es of prior panels  and the Appellate Body  in support of our legal reasoning , rather than 
indicating that rights and obligations may originate from WTO panel or Appellate Body reports. 
China has not commented on the United States'  request.  We have modified the relevant language 
in paragraph ‎7.305  to clarify that we are merely relying on the analyses conducted by prior panels 
and the Appellate Body , reflected i n adopted reports,  in support of our legal reasoning . 
6.20.   The United States requests that we use the phrase  "issues with" rather than "shortcomings 
of" in paragraph ‎7.317  when explaining Policy Bulletin 05.1 's desc ription of the previous regime  
regarding the assignment of separate duty rates to exporters in anti -dumping proceedings 
involving  NME countries . In particular, the United States notes that the phrase "shortcomings of" 
was employed by certain commenters and  only referred to in Policy Bulletin 05.1 in the context of 
recalling such comments.  China opposes the Unites States' request, arguing that "shortcomings of" 
is an accurate description of the relevant part of the Policy Bulletin explaining the previous reg ime. 
Having reviewed the relevant exhibits, we consider that the modification suggested by the United 
States add s precision to the description of the content of Policy Bulletin 05.1 and have therefore  
made th e suggested modification  to paragrap h ‎7.317 . 
6.21.   China is of the view  that a cro ss-reference to earlier parts of  the Report  would  be useful  in 
paragraph ‎7.331 , which states "[a]s explained above, the filing of the separate rate certification 
may abso lve the exporter concerned from filing a full separate rate application."  The United States 
has not commented on China's request.  We have added references to relevant parts of the Report 
through footnote  650, introduced to par agraph  ‎7.331 . 
6.22.   China request s us to delete the fourth and fifth sentences of paragraph ‎7.352  in order to 
accurately reflect the text of paragraph  15(d) of China's Accession Protocol. China also requests 
that we refer , in paragraph ‎7.352 , to the notions of "market economy status" and "non -market 
economy" in a more complete and precise manner and in strict conformity with paragraph 15(d) of 
the Accession Protocol.  The United States disagree s with China's request for the deletion of the 
fourth and fifth sentences of paragraph ‎7.352 , arguing that China's concern regarding these 
sentences is misplaced. The United States also disagrees with the secon d aspect of China's request 
and opposes the textual modification proposed by China. We have granted China's request and 
deleted the two sentences , and also made further modifi cations to  the text of this paragraph in 
order to more accurately  reflect the text of paragraph  15(d) of China's Accession Protocol.  
6.23.   Rather than referring generally to "certain concerns the representative of China raised 
during the WT O accession process over the treatment of China in anti -dumping proceedings 
conducted by other WTO Memb ers" in paragraph ‎7.357  of the Report , China ask s us to explain 
these concerns in greater detail, in particular to note that "the Representative of China had 
expressed concerns that anti -dumping measures had been imposed by ce rtain WTO Members 
without giving Chinese companies sufficient opportunity to present evidence and defend their 
interests in a fair manner. "30 The United States disagrees with China's request on the ground that 
this is not a request "to review precise aspect s of the interim report" within the meaning of 
Article  15.2 of the DSU, and that paragraph ‎7.357  adequately  explains the basic rationale 
underlying  the finding that the Panel makes therein , as required under Article 12.7 of the DSU.  
The United States also notes that a panel report does not need to summarize every argument 
made by a party. Although the addition requested by China is not particularly relevant to the issue 
                                                
30 China's request for review of the Interim Report, para.  27. WT/DS471/R  
 
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  dealt with in  paragraph ‎7.357 , namely , whether China's Accession Working Party Report provides a 
legal and factual predicate for th e Single Rate Presumption, we  have granted  China's request in 
order to explain the content of paragraph 151 of China's Accession Working Party Report. To this 
end, we have quoted the relevant part of this paragraph in footnote  711 to paragraph ‎7.357 . We 
have also added, in paragraph ‎7.357 , a more specific description of the contents of paragraph 152 
of China's Accession Working Party Report . 
6.24.   China request s that, when rejecting the United States' ar gument that Article 9.2 of the Anti -
Dumping Agreement does not apply to original investigations in paragraph ‎7.366 , we refer to the 
Appellate Body's prior findings "that cash deposit rates calculated with zeroi ng are inconsistent 
with the obligation s under Article 9.3 of the Anti-Dumping Agreement and Article VI:2 of the GATT 
1994"31 and the Appellate Body's "revers[al of] a finding by the Panel in US – Shrimp (Thailand) / 
US – Customs Bond Directive 'that cash d eposits required under United States law following the 
imposition of an anti -dumping duty order are not anti -dumping duties covered by Article 9 of the 
Anti-Dumping Agreement '."32 The United States disagrees with China's request, arguing that it is 
not a pr ecise request for review, and that China has not demonstrated where in its submissions it 
referred to these prior reports , nor explained their relevance to the present issue. In any case, the 
United States contends that China's characterization of these re ports is erroneous and that such 
reports are not pertinent to the issue discussed in paragraph ‎7.366  of the Report.  
6.25.   We do not consider  that refe rences to these Appellate Body r eports would be useful  in the 
context of our finding in paragraph ‎7.366 . With respect to the Appellate Body's findings in the f irst 
group of reports, we note that these were related to Article 9.3 of the Anti -Dumping Agreement, 
which requires that the amount of the anti -dumping duty not exceed the margin of dumping as 
established under Article 2, whereas the issue  discussed  in paragraph ‎7.366  is the obligation under 
Article 9.2 to assign an individual anti -dumping duty rate to each supplier . With respect to the 
Appellate Body's finding in US – Shrimp (Thailand) / US – Customs Bond Directive  that China 
refers to, we note that the Appella te Body stated that it  had not been necessary for the panel in 
that dispute to decide whether cash deposits are anti -dumping duties governed by Article  9 of the 
Anti-Dumping Agreement. In light of this, the Appellate Body state d: 
Therefore, we do not consi der it necessary to rule on the merits of the appeals  by 
Thailand and India concerning the cash deposits. We do not share the reasoning of the 
Panel on this issue and declare of no legal effect the interpretation developed by the 
Panel that the cash deposi ts required under United States law following the imposition 
of an anti -dumping duty order are not anti -dumping duties governed by Article 9 of 
the Anti-Dumping Agreement .33 
The Appellate Body was thus explicit in stating that it did not rule on the questio n of whether cash 
deposits required under US law are anti -dumping duties governed by Article 9  of the Anti -Dumping 
Agreement . Although the Appellate Body declared the panel's finding that such cash deposits are 
not anti -dumping duties governed by Article 9  moot and of no legal effect, we do not consider it 
appropriate to interpret this to mean  that cash deposits are anti -dumping duties governed by 
Article 9. We therefore decline China's request.  
6.26.   China request s that we provide additional evidence in support of our findings in 
paragraphs ‎7.372  through  ‎7.377  that the Single Rate Presumption was appli ed in the 13 
challenged investigations. To this end , China request s, first,  that we refer to the United States' 
response to Panel question No. 44 , confi rming that  in all 13 challenged investigations "all Chinese 
exporters concerned were notified that to receive a rate separate from that of the China -
government entity, they would need to submit a Separate Rate Application o r Separate Rate 
                                                
31 China's request for review of the Interim Report, para. 29 (referring to Appellate Body Reports, US – 
Stainless Steel (Mexico) , paras. 133 -134 and 156(a); US – Continued Zeroing , paras. 315 -316 and 395(d); US 
– Zeroing (EC) (Article 21.5 – EC), para . 304; and US – Zeroing (Japan) , para. 156). (emphasis original)  
32 China's request for review of the Interim Report, para. 29 (quoting Appellate Body Report, US – 
Shrimp (Thailand) / US – Customs Bond Directive , para. 242). (emphasis original)  
33 Appellate Body Report, US – Shrimp (Thailand) / US – Customs Bond Directive , para. 242. (emphasis 
original)  WT/DS471/R  
 
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  Certification, where approp riate, or complete 'Section A' of the dumping questionnaire."34 Second , 
China request s us to refer to China's response to Panel question No. 44, demonstrating "that the 
initiation notice in all 13 challenged investigations also made explicit that respondent s would need 
to prove separate rate status before receiving an individual rate".35 The United States disagrees 
with China's request, arguing that this is not a precise request for review, and that China has 
failed to demonstrate where this evidence should b e placed in these paragraphs and its relevance 
to the findings made by the Panel.  
6.27.   We have granted the second aspect of China's request and referred to China's response to 
Panel question No. 44 as well as the relevant exhibits referred to by China in footno te 735, 
introduced to paragraph ‎7.377 . In this regard, w e note that China itself, in its response to Panel 
question No.  44, acknowledges that "in the initiation notice of Furniture  OI, [the] USDOC  did not 
refer to separate rate applications.  Indeed, the Furniture  OI does not seem to contain any 
language informing Chinese respondents about the need to satisfy the separate rate test ."36 We 
have therefore reflected this factual difference in the text o f footnote 735, introduced to paragraph 
‎7.377 .  In light of this modification, w e do not consider that an additional reference to the United 
States' response to the same question would provide any  further  clarity and therefore decline the 
first aspect of China's request.  
6.28.   China request s that a cross-reference to earlier parts of the Report be inserted in 
paragraph ‎7.381 , which states "[a]s explained above, the Separate Rate Test may be satisfied in 
two ways, namely, through the filing  of a separate rate application  or a separate rate certification. " 
The United States has not commented on this request by China.  We have granted China's request 
and introduced footnotes 741 and 742 to paragraph  ‎7.381  in order to refer to the relevant parts of 
the Report . 
 
6.4  China's claims under Article s 6.1 and 6.8, paragraphs 1 and 7 of Annex II, and the 
first sentence of Article 9.4  of the Anti -Dumping Agreement  
6.29.   China request s that we modify paragraph ‎7.389  to clarify that the 30 determinations 
challenged by China under its as applied claims under Article s 6.1 and 6.8, paragraphs 1 and 7 of 
Annex II, and the first sentence of Article 9.4 of the Anti -Dumping Agreement  are those of the 38 
challenged determinations in which the USDOC determined an anti -dumping duty rate for the PRC -
wide entity. The United States has not commented on China's request.  We have provided the 
requested clarification through footnote  753, introduced  to paragraph ‎7.389 . 
6.30.   For the same reasons that it asks the Panel to modify paragraph ‎7.305  of the Report,  the 
United States ask s the Panel to delete the reference to "jurisprudence" and modify certain 
language used in paragraph ‎7.419  of the Report . China has not commented on the United States' 
request.  We have modified the text of paragraph ‎7.419  in a manner similar to the modification of  
paragraph ‎7.305 . 
6.31.   China point s out that paragraph 7.437 of the Interim Report  contain s a quote from the 
USCIT decision in Peer Bearing Co. -Changshan v . United States , in addition to the excerpt quoted 
by China as evidence  of the existence of the alleged AFA Norm, which , in China's view,  is 
incomplete and misleading. China request s us to complete the quote and provide a reference for it. 
The United States argues that completing this quote as suggested by China might be misl eading 
without the context of the subsequent discussion in the decision, and requests that we maintain 
the language as it is.  In light of both parties' comments , and given that this paragraph merely 
served to reinforce our reasoning in the two preceding  paragraphs, we have deleted paragraph 
7.437 of the Interim Report in its entirety.  
6.32.   China request s us to modify our description in paragraph ‎7.441  (paragraph 7.442 of the 
Interim Report) of the excerpt from the USCIT decision in East Sea Seafoods LLC v . United States 
to more accurately reflect the actual text of this excerpt, in particular with regard to the reference 
                                                
34 China's request for review of the Interim Report, paras. 30 and 32 (quoting United States' response 
to Panel question No. 44, para. 115).  
35 China's request for review of the Interim Report, paras. 31 -32. 
36 China's response to Panel question No. 44, para. 252.  WT/DS471/R  
 
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  to the USDOC's use of adverse inferences. The United States does not object to the modification of 
the description  of the USCIT decision i n paragraph  ‎7.441  but emphasizes that this modification 
should not imply that the USCIT decision support s China's  description of the precise content of the 
alleged AFA Norm.  We have made the modification requested by China. We have also made 
further modifications to  the text of this paragraph to ensure the coherence of our analysis.  
6.33.   China request s us to use the phrase "less favourable than the missing facts" instead of  "less 
favourable than those [facts] being withheld by the NME -wide entity" in paragraph ‎7.453  
(paragraph 7.454 of the Interim Report) as China understands the Panel not to take a position on 
the factual issue  of whether the information at issue was actually requested by the USDOC and 
deliberately withheld by the individual respondents formi ng part of the NME -wide entity . The 
United States does not object to China's request, and proposes that we use the phrase "less 
favourable to the non -cooperative NME -wide entity"  in order to address China's concern.  China  is 
right that this is a factual is sue that we did not have to decide  on in resolving China's claim . In our 
view,  the modification proposed by China better captures the relevant issue, namely whether the 
facts chosen as facts available by the USDOC  were less favourable  than the facts not pr ovided by 
the NME -wide entity, regardless of the reason behind these facts not being provided. We have 
therefore granted China's request and modified paragraph ‎7.453  in the manner requested by 
China . 
6.34.   China ask s us to refer , in footnote 933 (footnote 916 of the Interim Report)  to paragraph 
‎7.472  (paragraph 7.473 of the Interim Report) , to the United States' "negative" response to a 
question from the Panel  at the second substantive meeting with the parties,  inquiring about 
examples of anti-dumping determinations involving non -cooperating NME -wide entities in which 
the USDOC did not draw adverse inferences . The United States argues that China has failed t o 
explain why the United States'  response to that question at the second substantive meeting with 
the parties is pertinent to the Panel's findings in paragraph ‎7.472 . Furthermore, the United States 
asserts that the Panel's finding in paragraph ‎7.472  that " there is no evidence of determinations 
made during that period in which the USDOC did not follow the process of which the allege d AFA 
Norm consists, namely, that upon finding that an NME -wide entity had failed to cooperate to the 
best of its ability, the USDOC drew adverse inferences and selected adverse facts " encompasses its 
response to the question at issue at the second substan tive meeting of the Panel with the parties. 
While we agree with the United States that our finding in paragraph ‎7.472  is sufficiently broad to 
encompass the United States' response to this question at the second substantive meeting of the 
Panel with the parties, given its relevance to our  finding , we have included a reference to the 
United States' response in footnote 933. 
6.35.   China request s that we delete footnote 980 (footnote 963 of the Interim Report) , which 
quotes a  statement by the United States regarding the use of judicial economy,  as it "may be read 
as endorsing the United States' argumentative view that it was somehow inappropriate for China 
to raise claims under Articles 6.1, 6.8, 9.4 and Paragraphs 1 and 7 of Annex II."37 The United 
States disagrees with China's request, arguing that footnote 980 "does not create the broad 
inference that China claims – that China acted illegitimately by raising certain claims under the 
[Anti-Dumping Agreement]."38 We do not agree with China's characterizatio n of the United States' 
statement  as an "argumentative view that it was somehow inappropriate for China to raise claims 
under Articles 6.1, 6.8, 9.4 and Paragraphs 1 and 7 of Annex II." Rather, we view the United 
States' statement  as one that link s the use of judicial economy to the  effective allocation of 
resources. We have, however, modified the text of this paragraph i n order to better illustrate the 
nature of the United States' statement . To this end , we have provided a more complete quote  in 
footnote 980 and modified the introductory language in order to underline the fact that this quote 
represents the views of the United States and not the Panel.  
6.36.   China request s that we provide an additional finding under our alternative f actual findings 
with respect to China's as applied claims under Articles 6.1 and 6.8, paragraphs 1 and 7 of 
Annex  II, and the first sentence of Article 9.4  of the Anti -Dumping Agreement, namely that the 
PRC-wide entity was not selected as a mandatory respo ndent in any of the 30 challenged 
determinatio ns at issue. The United States disagrees with China's request, pointing out that China 
                                                
37 China's request for review of the Interim Report, para. 44.  
38 United States' comments on China's request for review of the Interim Report, para. 25.  WT/DS471/R  
 
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  does not refer to any record evidence  in support of its request nor explain why this additional 
factual finding would be re levant.  
6.37.   We first recall that the purpose of our alternative factual findings , provided  in paragraphs 
‎7.501  through ‎7.508  of the Report, is to assist the Appellate B ody in completing the legal 
analysis  of China's as applied claims under Articles 6.1 and 6.8, paragraphs 1 and 7 of Annex II, 
and the first sentence of Article 9.4 of the Anti -Dumping Agreement, should it consider such 
analysis necessary or useful. In maki ng these additional findings, we have not considered it 
necessary to address the issue of whether the PRC -wide entity was explicitly designated as a 
mandatory respondent by the USDOC. Furthermore, w e note that China has not pointed to record 
evidence in su pport of its request. To the contrary, we note that in  the Shrimp  original 
investigation , for instance, the USDOC's preliminary determination lists the PRC -wide entity as a 
mandatory respondent.39 We have therefore declined China's request.  
7  FINDINGS  
7.1  China's  claims concerning the USDOC'S use of the WA-T methodology under 
Article  2.4.2 of the Anti-Dumping Agreement  
7.1.1   Provisions at issue  
7.1.  Article  2.4.2 of the Anti -Dumping Agreement reads:  
Subject to the provisions governing fair comparison in paragraph  4, the exis tence of 
margins of dumping during the investigation phase shall normally be established on 
the basis of a comparison of a weighted average normal value with a weighted 
average of prices of all comparable export transactions or by a comparison of normal 
value and export prices on a transaction -to-transaction basis. A normal value 
established on a weighted average basis may be compared to prices of individual 
export transactions if the authorities find a pattern of export prices which differ 
significantly am ong different purchasers, regions or time periods, and if an 
explanation is provided as to why such differences cannot be taken into account 
appropriately by the use of a weighted average -to-weighted average or transaction -
to-transaction comparison.  
7.2.  Article 2.4.2 refers to two  methodologies that must "normally" be used  and one exceptional 
methodology that may be used to calculate dumping margins in anti -dumping investigations. The 
first sentence of this provision stipulates that the two methodologies that a n investigating 
authority "shall normally" follow in an anti -dumping investigation are the WA -WA methodology or 
the T -T methodology. The second sentence of this provision permits the use of the WA -T 
methodology when two conditions are met. First, the inves tigating authority should find "a pattern 
of export prices which differ significantly among different purchasers, regions or time periods" 
(significantly differing pricing pattern). We refer to this requirement as the "pattern clause of 
Article  2.4.2". Sec ond, the investigating authority should provide an "explanation" as to why "such 
differences" in the pattern cannot be "taken into account appropriately" by the use of a WA -WA or 
T-T methodology. We refer to this requirement as the "explanation clause of Article 2.4.2".  
7.1.2   Factual background  
7.3.  In the three challenged investigations, the USDOC used what it called the Nails test to meet 
the requirements under the pattern clause of Article  2.4.2 to find a pattern of export prices which 
differ significantly among di fferent purchasers or time periods.40 Under the Nails test, the USDOC 
sought to establish whether the pattern of export prices to an allegedly targeted purchaser or time 
period (alleged target) differed significantly from export prices to non -targeted purch asers or time 
                                                
39 Shrimp  OI, Notice of Preliminary Determination, (Exhibit CHN -215), p.  42671 . 
40 In this regard, while the pattern clause of Article  2.4.2 also refers to a pattern of export prices which 
differ significantly among different regions, that is not at issue in this dispute because the USDOC did not find a 
pattern on that basis in the three challenged investigations.  WT/DS471/R  
 
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  periods (non -targets).41 The USDOC required the domestic industry petitioner to make a specific 
allegation of targeted dumping and also identify the alleged target, before it applied the Nails 
test.42 
7.4.  The Nails test consisted of two sequential stages. The first stage is referred  to as the 
"standard deviation test " and the second stage is what we refer to as the "price gap test".43 In the 
three challenged investigations, the USDOC stated that it used the standard deviation test  to meet 
the "patter n" requirement whereas it used the price gap test to meet the "significant difference" 
requirement of the pattern clause of Article  2.4.2. We understand this reference in the USDOC's 
determinations to mean that that the objective of the standard deviation test was to find a pattern 
of export prices which differed among different purchasers, regions or time periods within the 
meaning of the pattern clause of Article  2.4.2, whereas the objective of the price gap test was to 
find whether the differences identi fied under the standard deviation test  were significant. Both 
parties agree with our understanding in this regard.44 
7.5.  In the Coated Paper  investigation, applying the Nails test, the USDOC found that the pattern 
of export prices of APP China to alleged target ed purchaser [[BCI]] differed significantly from 
export prices to non -targeted purchasers.45 In the Steel Cylinders  investigation, the USDOC found 
that the pattern of export prices of BTIC in alleged targeted time periods [[ BCI]] differed 
significantly from  export prices in non -targeted time periods.46 In the OCTG investigation, the 
USDOC found that the pattern of export prices of TPCO in the alleged targeted time period [[ BCI]] 
differed significantly from export prices in non -targeted time periods.47 
7.6.  Having c oncluded that the export sales of these exporters to the United States showed a 
pattern of export prices which differed significantly among different purchasers or different time 
periods, the USDOC calculated the margins of dumping for these exporters usin g both the WA -WA 
and the WA -T methodology. The USDOC found that, in each of the three challenged investigations, 
the margin of dumping calculated through the WA -WA methodology, without zeroing, was lower 
than that calculated through the WA -T methodology, w ith zeroing.48 In the Coated Paper  
investigation, the margin of dumping for APP China was [[ BCI]]% under the WA -WA methodology 
whereas it was 7.62% under the WA -T methodology. In the OCTG  investigation, the margin of 
dumping for TPCO was [[ BCI]]% under the WA-WA methodology whereas it was 32.07% under 
the WA -T methodology. In the Steel Cylinders  investigation, the margin of dumping for BTIC was 
[[BCI]]% under the WA -WA methodology whereas it was 6.62% under the WA -T methodology. 
The USDOC considered that the se differences in the margins showed that the WA -WA methodology 
"conceal[ed] differences in price patterns between the targeted and non -targeted groups by 
averaging low -priced sales to the targeted group with high -priced sales to the non -targeted 
                                                
41 We use the term "alleged target" to refer more generally to an allegedly targeted purchaser or time 
period. Similarly, we use the term "non -target s" to refer, more generally, to non -targeted purchasers or time 
periods.  
42 United States' first written submission, para. 85.  
43 In this regard, we note that in the three challenged investigations, the USDOC described this first 
stage of the Nails test as t he "standard deviation test", and the second stage as the "gap test". In contrast, 
China uses the terms "pattern test" and "price gap test" in its submissions. Because the United States objects 
to the use of the term "pattern test", we use the term actuall y contained in the record of the investigations, 
namely, the "standard deviation test". On the other hand, because the United States does not object to the use 
of the term "price gap test", we use the term "price gap test" as suggested by China.  
44 In this  regard, we note that China's expert submits that the purpose of the standard deviation test 
was to determine whether there was a pattern of price differences for comparable merchandise (i.e. specific 
CONNUMs sold by an exporter) between the alleged target  and non -targets and that the purpose of the price 
gap test was to determine whether the price differences identified under the standard deviation test were 
significant. (See, e.g. First expert statement by Lisa Tenore (Lisa Tenore's first statement), (Exh ibit CHN-2) 
(BCI), paras. 16 and 20). The United States, on its part, comments that this understanding of the specific 
objectives of the standard deviation test and the price gap test is "generally correct". (United States' response 
to Panel question No. 9 2, para. 1).  
45 See, e.g. United States' first written submission, para. 106 (referring to Coated Paper OI, Final 
Targeted Dumping Memorandum, (Exhibit  CHN-3) (BCI), p. 4).  
46 United States' first written submission, para. 106 (referring to Steel Cylinders OI, Analysis of the Final 
Determination of the Antidumping Duty Investigation of High Pressure Steel Cylinders from the People's 
Republic of China: Beijing Tianhai Industry Co., Ltd, (Exhibit  USA-23) (BCI), Attachment 4, pp. 138 and 158).  
47 United States' f irst written submission, para. 106 (referring to OCTG OI, Post Preliminary 
Determination Analysis of Targeted Dumping: Results for Tianjin Pipe (Group) Co., (Exhibit  CHN-6) (BCI), 
p. 3). 
48 United States' first written submission, paras. 184 -186. WT/DS471/R  
 
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  group".49 This was the explanation provided by the USDOC in relation to its obligations under the 
explanation clause of Article  2.4.2 of the Anti -Dumping Agreement. The USDOC did not provide a 
separate explanation as to whether the significantly differing pricing pa ttern could be taken into 
account appropriately under the T -T methodology.50 
7.7.  Having considered that the conditions for the use of the WA -T methodology were met, the 
USDOC applied the WA -T methodology to all export transactions of the Chinese exporters invol ved 
in the three challenged investigations.51 
7.8.  The USDOC used zeroing when calculating the margins of dumping through the WA -T 
methodology. In this context, the USDOC first calculated multiple annual average normal values 
for different CONNUMs (i.e. models).52 Then each export transaction was compared individually to 
the relevant, comparable normal value.53 This exercise generated numerous individual comparison 
results, some of which were positive, i.e. when the export price was lower than the comparable 
weight ed average normal value , and the others negative, i.e. when the export price was higher 
than the comparable weighted average normal value.54 The USDOC aggregated these intermediate 
comparison results and, while doing so, treated the negative intermediate re sults as zero.55 The 
USDOC then divided the aggregate amount of dumping by the aggregate value of all export sales 
to the United States made by the exporter concerned during the period of investigation  (POI)  to 
arrive at the weighted average dumping margin.56 
7.9.  China presents four claims under the second sentence of Article  2.4.2 in connection with the 
USDOC's use of the WA -T methodology in the OCTG , Steel Cylinders  and Coated Paper  
investigations. First, China claims that the USDOC acted inconsistently with th e pattern clause of 
Article  2.4.2. Second, China claims that the USDOC acted inconsistently with the explanation 
clause of Article  2.4.2. Third, China claims that the USDOC acted inconsistently with the second 
sentence of Article  2.4.2 because it applied t he WA -T methodology to all export transactions 
instead of limiting it to those individual export transactions that were found to form the relevant 
export price pattern. Fourth, China claims that the USDOC acted inconsistently with the second 
sentence of Article 2.4.2 because it used zeroing under the WA -T methodology. We will address 
China's claims in this same order.  
7.1.3   China's claim  under  the pattern clause of Article  2.4.2  of the Anti -Dumping 
Agreement  
7.10.   China's claim under the pattern clause of Article  2.4.2 concerns the USDOC's alleged failure 
to properly find "a pattern of export prices which differ significantly" among different purchasers or 
different time periods, in the three challenged investigations. This claim raises three sets of issues 
with the Nai ls test, namely, quantitative issues,  qualitative issues , and the use of purchaser or 
time period averages, as opposed to all individual export transaction prices to purchasers or time 
periods which made up those averages.57 
                                                
49 United S tates' first written submission, para. 187 (quoting Steel Cylinders OI, Issues and Decision 
Memorandum, (Exhibit  CHN-66), p. 24); see also Coated Paper OI, Issues and Decision Memorandum, 
(Exhibit  CHN-64), pp. 23 -24; and OCTG OI, Issues and Decision Memora ndum, (Exhibit  CHN-77), Comment 2.  
50 United States' response to Panel question No. 18, para. 35.  
51 China's first written submission, paras. 98 -104 (citing OCTG OI, Issues and Decision Memorandum, 
(Exhibit  CHN-77), Comment 2; Coated Paper OI, Issues and Dec ision Memorandum, (Exhibit  CHN-64), pp. 24 -
25; and Steel Cylinders OI, Issues and Decision Memorandum, (Exhibit  CHN-66), p. 24).  
52 United States' response to Panel question No. 23(b), para. 46. In this regard, we note that in the 
three challenged investiga tions, the USDOC used the term CONNUMs to refer to different models of the product 
under consideration.  
53 United States' response to Panel question No. 23(b), para. 46.  
54 United States' response to Panel question No. 23(b), para. 46.  
55 United States' respo nse to Panel question No. 23(b), para. 46.  
56 United States' response to Panel question No. 23(b), para. 46.  
57 In this regard, we use the term "purchaser average" to refer to the weighted average of all individual 
export transaction prices to a particular p urchaser and "time period average" to refer to the weighted average 
of all individual export transaction prices in a particular time period.  WT/DS471/R  
 
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  7.1.3.1   Main a rguments of the parties  
7.1.3.1.1   China 
7.11.   Regarding the quantitative58 issues with the Nails test, China contends that the USDOC 
failed to properly find that the differences in export prices forming the pattern were significant, in 
a quantitative sense, as required under the pattern clause of Article 2.4.2. China presents two 
factual bases for its arguments. China first identifies four quantitative flaws with the Nails test, 
which allegedly affected its application in the three challenged investigations. China then refers to 
two SAS programming errors which allegedly distorted the application of the Nails test in the OCTG  
and Coated Paper  investigations (but not the Steel Cylinders  investigation).  
7.12.   The first alleged quantitative flaw concerns the application of the standard deviation test . In 
this regard, China contends that the Nails test depended on the assumption that the export price 
data in the examined CONNUM were, in a statistical sense, normally distributed or at least, single -
peaked and symmetric around the mean (single peaked and symmetri c). Specifically, China 
submits that the Nails test depended on this assumption because if the export price data were not 
distributed in this manner, the USDOC's use of a one standard deviation below mean threshold 
(one standard deviation threshold), under  the standard deviation test , would be "meaningless, or 
at best arbitrary".59 However, the USDOC failed to confirm whether this assumption was correct 
with respect to the export data to which this test was applied in the three challenged 
investigations.60 Because the manner in which the USDOC made its finding under the pattern 
clause of Article  2.4.2 was arbitrary, and hence not objective, in China's view, the USDOC acted 
inconsistently with this provision.  
7.13.   The second alleged quantitative flaw concerns the US DOC's use of a one standard deviation 
threshold under the standard deviation test . In China's view,  prices that are just one standard 
deviation below the mean are not considered, in statistical conventions, to be significantly different 
from the mean.61 Instead, statistical conventions require the use of a higher standard deviation 
threshold, such as 1.96 standard deviations.62 Therefore, according to China, the USDOC acted 
inconsistently with the pattern clause of Article  2.4.2 by using a one standard deviat ion threshold, 
rather than a higher threshold, to find whether differences in export prices forming the relevant 
pattern were significant in a quantitative sense.  
7.14.   The third alleged quantitative flaw concerns the operation of the price gap test. In this 
regard, China notes that, under the price gap test, the USDOC compared the alleged target price 
gap, in a CONNUM, which was based on purchaser or time period averages located at the "tail" of 
the distribution of the export price data, with the weighted averag e non -target price gap, in the 
same CONNUM, which was based on a comparison of purchaser or time period averages, located 
nearer to the "peak" of that distribution. The USDOC found that the differences between the 
alleged target price and the non -target pr ices were significant when the alleged target price gap 
was wider  than the weighted average non -target price gap. China finds this approach to be 
statistically flawed because the differences found through such a comparison were attributable to 
the "inheren t feature of every peaked distribution with tails" and did not show that differences in 
export prices forming the relevant pattern were significant in a quantitative sense, as required 
under the pattern clause of Article  2.4.2.63 In China's view , in any pea ked distribution with tails, 
the gap between any two given prices, which are located at the tail of the distribution, will 
necessarily be wider  than those at the peak of the distribution of the data.  
7.15.   Concerning the fourth alleged quantitative flaw, China c ontends that by calculating the 
weighted average non -target price gap only on the basis of the individual gaps between the 
weighted average export prices to each of the non -targets (non -target prices64) which were higher 
                                                
58 The issues raised by China are both of a quantitative and statistical nature. For ease of reference, 
however, we refer to them as "quantitative issues".  
59 China's response to Panel question No. 6(a), para. 37.  
60 China's second written submission, para. 35.  
61 China's second written submission, para. 39.  
62 China's first written submission, paras. 243 -245. 
63 China's sec ond written submission, para. 43. (emphasis omitted)  
64 In this regard, when we refer to a non -target price, we mean the price which is the weighted average 
of all individual export transaction prices to a particular non -targeted purchaser or in a particula r non -targeted 
time period. Similarly, when we refer to an alleged target price, we mean the price which is the weighted WT/DS471/R  
 
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  than the weighted average export pri ce to the alleged target (alleged target price) and 
disregarding those that were lower, the USDOC arbitrarily reduced the average size of the 
weighted average non -target price gap.65 According to China, this increased the likelihood that the 
alleged target price gap would be wider  than the weighted average non -target price gap, and 
consequently, that the price gap test would be passed.66 Therefore, because of this arbitrary 
application of the price gap test, the USDOC failed to objectively find that the diffe rences in export 
prices forming the relevant pattern were significant in a quantitative sense, and thereby acted 
inconsistently with the pattern clause of Article  2.4.2.  
7.16.   In relation to both of the two SAS programming errors, China argues that these errors show 
that in the OCTG  and Coated Paper  investigations the USDOC failed to identify a significantly 
differing pricing pattern, based on an unbiased and objective evaluation of properly established 
facts within the meaning of Article  17.6(i) of the Anti -Dump ing Agreement.67 With specific regard 
to the first SAS programming error, China observes that due to this programming error, instead of 
comparing the alleged target price gap with the weighted average non -target price gap, in the 
examined CONNUM, the USDOC,  under the price gap test, incorrectly compared the alleged target 
price gap with the individual non -target price gaps which made up that weighted average non -
target price gap.68 China asserts that as a result of this SAS programming error, it became more 
likely that the USDOC would find that the differences in the export prices forming the relevant 
pattern were significant. Therefore, in China's view, the USDOC failed to objectively find that the 
differences in export prices forming the relevant pattern wer e significant in a quantitative sense, 
and thereby acted inconsistently with the pattern clause of Article  2.4.2. With specific regard to 
the second SAS programming error, China submits that this error distorted the calculation of the 
weighted average non -target price gap. China acknowledges, however, that this error made it less 
likely rather than more likely that the USDOC would find the differences in the pattern of export 
prices to the alleged target were significant.69 China nevertheless challenges this  error because as 
a result of this error the Nail test did not do what it was supposed to do.70 
7.17.   In relation to the qualitative issues with the Nails test, China contends that the USDOC 
failed to consider whether the differences in export prices forming the relevant pattern were 
significant in a qualitative sense. Noting that the ordinary meaning of "significant" is "sufficiently 
great or important to be worthy of attention" or "appropriate" to convey a meaning, China 
emphasizes that differences cannot be wor thy of attention or appropriate to convey a meaning if 
they depend only on the numerical amount of the difference. Instead, the pattern clause of 
Article  2.4.2 requires an investigating authority to focus on the nature of the differences or the 
reason why the differences exist and whether those differences are unconnected with targeted 
dumping.71 
7.18.   With reference to the Steel Cylinders  investigation, China notes that the Chinese exporter 
BTIC specifically submitted that the differences which the USDOC found in  the prices of steel 
cylinders over time periods were attributable to the increases in the price of its input, i.e. steel, 
over the POI.72 China contends that by failing to provide a reasoned and adequate explanation as 
to why the observed differences in th e export prices forming the relevant pattern could not be 
attributed to the reasons provided by BTIC, the USDOC acted inconsistently with the pattern 
clause of Article  2.4.2.73 In this regard, China contends that the USDOC, in its role as the 
investigating authority, and in light of the exporter’s plausible explanation of the observable price 
fluctuations in the steel market, could easily have requested BTIC to supplement the record with 
                                                                                                                                                  
average of all individual export transaction prices to an allegedly targeted purchaser or in an allegedly targeted 
time period. This sh ould not be confused with the use of the terms "purchaser averages" or "time period 
averages", which we use to refer more generally to the methodology adopted by the USDOC to aggregate the 
individual export transaction prices to each purchaser or in each t ime period to arrive at a single weighted 
average price for each purchaser or time period.  
65 China's first written submission, para. 239.  
66 China's first written submission, para. 239.  
67 China's second written submission, para. 26.  
68 China's first written submission, para. 78.  
69 See, e.g. China's response to Panel question No. 91(a), paras. 5 -6. 
70 China's response to Panel question No. 91(b), para. 9.  
71 China's first written submission, para. 140; and response to Panel question No. 11, para. 77.  
72 China's f irst written submission, paras. 252 -255. 
73 China's response to Panel question No. 10(a), para. 64.  WT/DS471/R  
 
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  evidence necessary to make an informed determination regarding this cri tical issue.74 China 
considers that  the USDOC was obliged, as a matter of WTO law, to do so, in light of the Appellate 
Body’s statement in US – Anti-Dumping and Countervailing Duties (China) that "investigating 
authorities have a duty to seek out relevant i nformation and to evaluate it in an objective 
manner."75  With reference to the Coated Paper and OCTG  investigations, China does not dispute 
that the interested parties made no submissions concerning the possible reasons why the export 
prices differed among  different purchasers or time periods. China nevertheless contends that the 
USDOC acted inconsistently with the pattern clause of Article  2.4.2 by failing to  adopt a 
methodology to filter out price variations that stem from normal economic behaviour and/or  
exogenous factors independent of the information made available by the interested parties.76 
7.19.   Regarding the use of purchaser or time period averages under the Nails test, China submits 
that the use of such averages was inconsistent with the textual requirem ents under the pattern 
clause of Article  2.4.2.77 China asserts that by using the weighted average of individual export 
transaction prices to purchasers or time periods, the USDOC ignored the within -purchaser and 
within -time period variances, thereby creati ng a "system atic bias" towards finding a significantly 
differing pricing pattern.78 China submits that if the standard deviation calculated under the Nails 
test was calculated on the basis of individual export transaction prices, as opposed to purchaser or 
time period averages, the USDOC would not have found a pattern in the OCTG  and Coated Paper  
investigations79 and would have found a pattern in [[ BCI]] CONNUMs instead of [[ BCI]] CONNUMs 
in the Steel Cylinders  investigation.80 
7.1.3.1.2   United States  
7.20.   The United States rejects all three issues identified by China in support of its claim that the 
USDOC acted inconsistently with the pattern clause of Article  2.4.2 in the three challenged 
investigations.  
7.21.   In relation to the alleged quantitative issues with the Nails test, th e United States disputes 
each of the four alleged quantitative flaws with the Nails test and rejects China's contention that 
the two SAS programming errors which occurred in the OCTG  and Coated Paper  investigations led 
to violations of the pattern clause o f Article  2.4.2.  
7.22.   With regard to the first alleged quantitative flaw with the Nails test, the United States 
rejects China's assertion that this test depended on the assumption that the examined export price 
data were normally distributed or at least single -peaked and symmetric. Further, the United States 
clarifies that the USDOC itself also made no such assumption regarding the distribution of the 
export price data in the three challenged investigations.81 Therefore, there was, in the United 
States' view, no need to confirm that the export price data were indeed distributed in this manner 
and the USDOC did not act inconsistently with the pattern clause of Article  2.4.2 by not doing so.  
7.23.   As regards the second alleged quantitative flaw with the Nails test, the Un ited States 
contends that China's argument that the use of a one standard deviation threshold is contrary to 
statistical conventions is irrelevant because the USDOC simply did not use that threshold to make 
statistical inferences.82 Further, the United Stat es notes that the higher standard deviation 
thresholds proposed by China would limit the pattern to random and aberrational outliers, and 
contends that the text of Article  2.4.2 does not require that a pattern be limited to such outliers.83 
The United State s also asserts that the objective of unmasking targeted dumping may be 
                                                
74 China's response to Panel question No.  10(a), para. 63.  
75 China's response to Panel question No. 10(a), para. 64 (citing Appellate Body Report, US – Anti-
Dumping and Countervailing Duties (China) , para. 344 ). 
76 China's response to Panel question No. 10(b), para. 66.  
77 China's second written submission, para. 60.  
78 China's second written submission, para. 60; and response to Panel question No. 14, para. 96.  
79 China's first written submission, para. 268. In this regard, China asserts that in the OCTG  and Coated 
Paper  investigations, had the standard deviation been correctly calculated, the volume of sales represented by 
CONNUMs in which the alleged target price  was lower than the threshold price would have been less than 33% 
of total sales by volume to the alleged target.  
80 China's first written submission, para. 268.  
81 United States' comments on China's response to Panel question No. 94(d), para. 10.  
82 See, e.g . United States' first written submission, para. 135.  
83 United States' first written submission, para. 133.  WT/DS471/R  
 
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  compromised if the pattern is limited to outliers because low -priced exports may be targeted even 
when such export prices are not outliers.84 
7.24.   With respect to the third alleged quantitati ve flaw with the Nails test, which is based on 
China's understanding that it is an inherent feature of every peaked distribution with tails that 
there will be wider  gaps in the tail of the distribution, compared to gaps at the peak, the United 
States submi ts that the USDOC made no assumptions concerning the probability distribution of the 
export price data.85 Therefore, such statistical arguments which are based on the nature of 
probability distribution have no merit. Further, the United States notes that wh ile China's 
argument is premised on the existence of a distribution with a tail, China has not demonstrated 
that the actual export price data examined under the Nails test in the three challenged 
investigations even had a tail.86 
7.25.   Regarding the fourth allege d quantitative flaw with the Nails test, concerning the USDOC's 
decision to disregard non -target prices which were lower than the alleged target price, the United 
States asserts that the USDOC was right in not taking such prices into account because it had  
already found the alleged target price to be low as it was one standard deviation below the 
CONNUM -specific weighted average export price.87 Therefore, according to the United States, 
considering that the USDOC used the Nails test to identify a pattern of low prices to the alleged 
target in relation to other higher export prices, it was logical that the USDOC would compare the 
low-priced exports to an alleged target with higher -priced exports to non -targets.88 
7.26.   Regarding China's arguments concerning the two S AS programming errors, the United 
States argues that China has not shown how these two errors violated any specific provision of the 
Anti-Dumping Agreement.89 Further, the United States disagrees that these two errors show that 
the USDOC failed to make an u nbiased and objective evaluation of properly established facts 
within the meaning of Article  17.6(i) of the Anti -Dumping Agreement. The United States asserts 
that programming errors are simply mistakes, and do not show that the USDOC failed to establish 
facts properly or evaluate them in an unbiased and objective manner.90 
7.27.   With respect to the alleged qualitative issues with the Nails test, the United States agrees 
with China's argument that the word "significant" has a quantitative as well as a qualitative 
dimension.91 However, the United States disagrees with China's understanding of a qualitative 
analysis and submits that the pattern clause of Article  2.4.2 requires an investigating authority to 
examine how export prices differ and not why they differ.92 The United States also asserts that 
China's argument regarding this issue fails in light of the facts on the records of the three 
challenged investigations. With respect to the Steel Cylinders  investigation, the United States 
notes that the Chinese exporter BT IC argued that increases in steel prices had led to an increase in 
the prices of the investigated product but that the USDOC rejected this argument because it lacked 
any evidentiary basis.93 With reference to the OCTG  and Coated Paper  investigations, the Un ited 
States submits that China has not shown that the Chinese exporters presented arguments on why 
there were significant differences in the export prices forming the relevant pattern found by the 
USDOC.94 
7.28.   As regards the issue concerning the use of purchase r or time period averages under the 
Nails test, the United States disagrees with the interpretation of the pattern clause of Article  2.4.2 
which underlies China's arguments. The United States notes that while describing the WA -T 
methodology, the second sen tence of Article  2.4.2 states that the weighted average normal value 
                                                
84 United States' second written submission, para. 27.  
85 United States' first written submission, para. 123.  
86 United States' comments on China's res ponse to Panel question Nos. 99 (a), (b), (c), and (d), 
para. 39. 
87 United States' first written submission, para. 126.  
88 United States' response to Panel question No. 101(c), para. 29.  
89 United States' response to Panel question No. 4(c), para. 6.  
90 United States' response to Panel question No. 4(c), para. 7.  
91 United States' first written submission, para. 69 (referring to Appellate Body Report, US – Large Civil 
Aircraft (Second Complaint) , para. 1272).  
92 See, e.g. United States' first written submission,  paras. 69 and 73.  
93 United States' first written submission, para. 144 (citing Steel Cylinders OI, Issues and Decision 
Memorandum, (Exhibit  CHN-66), p. 32).  
94 United States' first written submission, para. 143.  WT/DS471/R  
 
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  is to be compared with individual export transaction prices. However, when setting out the first 
condition for its use, the pattern clause of Article  2.4.2 refers to a "pattern of export prices" and 
not individual export transaction prices.95 According to the United States, this textual difference 
shows that the pattern clause  of Article 2.4.2  does not require the use of individual export 
transaction prices when finding a significantly diff ering pricing pattern.96 Further, the United States 
emphasizes that the pattern clause of Article  2.4.2 requires an investigating authority to focus on 
the differences "among" different purchasers, regions or time periods and not within the export 
prices to  such purchasers , regions or time periods .97 
7.1.3.2   Main a rguments of  the third parties98 
7.1.3.2.1   Brazil  
7.29.   Brazil contends that while the pattern clause of Article  2.4.2 did not require the USDOC to 
use any particular methodology, the methodology that it chose, namely the Na ils test, should have 
allowed for an unbiased and objective evaluation of the relevant facts under investigation.99 
Regarding China's argument that an investigating authority is required to consider whether 
differences in export prices are significant in a qualitative sense, Brazil considers that an 
investigating authority may need to consider whether differences in export prices are 
quantitatively as well as qualitatively significant, but notes that nothing in the Anti -Dumping 
Agreement compels an investiga ting authority to consider why export prices differ.100 
7.1.3.2.2   Canada  
7.30.   Canada agrees with China's argument concerning the fourth alleged quantitative flaw in the 
Nails test that the USDOC distorted the price gap test by disregarding non -target prices which 
were lowe r than the alleged target price.101 Canada also agrees with China that the USDOC was 
required, under the pattern clause of Article  2.4.2, to use individual export transaction prices to 
each purchaser or time period, rather than purchaser or time period avera ges.102 In this regard, 
Canada submits that through the use of purchaser and time period averages, the USDOC 
concealed whether or not there was a form or sequence to export prices and failed to identify a 
pattern in the differences in export prices.103 
7.1.3.2.3   Europea n Union  
7.31.   Regarding the alleged quantitative issues with the Nails test, the European Union argues 
that the issue before the Panel is not whether the USDOC found differences in export prices that 
were statistically significant.104 The issue is whether the USDO C made an unbiased and objective 
evaluation of facts, as required under Article  17.6(i) of the Anti -Dumping Agreement, in finding 
whether the  differences in the relevant  export prices  were significant , as required under the 
pattern clause of Article  2.4.2.105 In regard to the alleged qualitative issues with the Nails test, the 
European Union asserts that the terms "pattern" and "significantly" in the pattern clause of 
Article  2.4.2 can be understood quantitatively.106 The European Union also agrees with the Uni ted 
States' narrower understanding of what qualitatively significant differences mean.107 The European 
Union further submits that the reason why the relevant pattern exists may be pertinent  under the 
explanation clause  of Article 2.4.2 , but not under the pat tern clause of Article  2.4.2.108 With 
reference to the alleged issue concerning the use of purchaser or time period averages under the 
                                                
95 United States' first written submission, p ara. 58.  
96 United States' first written submission, para. 58.  
97 United States' first written submission, para. 147.  
98 India, Russia, the Kingdom of Saudi Arabia, Chinese Taipei and Ukraine made no submissions to the 
Panel.  
99 Brazil's third -party submission , paras. 6 -7. 
100 Brazil's third -party submission, paras. 8 -9. 
101 Canada's third -party submission, para. 13.  
102 Canada's third -party submission, para. 11.  
103 Canada's third -party submission, paras. 11 -12. 
104 European Union's third -party submission, para. 29.  
105 European Union's third -party submission, para. 29.  
106 European Union's third -party submission, para. 33.  
107 European Union's third -party submission, para. 33.  
108 European Union's third -party submission, para. 33.  WT/DS471/R  
 
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  Nails test, the European Union maintains that, since comparisons involving a large number of 
individual export transaction prices may be difficult, a practical approach would be needed.109 
7.1.3.2.4   Japan  
7.32.   With respect to the alleged quantitative issues with the Nails test, Japan agrees with China 
that the USDOC should have examined the nature of distribution of the export price data befor e 
applying the one standard deviation threshold.110 To illustrate this point, Japan refers to the 
USDOC's Steel Cylinders  investigation wherein the USDOC noted that 16% of all export prices 
would " typically " fall one standard deviation below the weighted ave rage mean, " assuming a 
normal distribution of prices ".111 According to Japan, this statement implies that the USDOC 
perceived that when more than 16% of export sales fell below that threshold, it was suggestive of 
"atypical" pricing behaviour or targeted dum ping.112 However, this perception was wholly based on 
the USDOC's assumption of normal distribution which contradicts the United States' position before 
the Panel that normal or any kind of probability distribution cannot be assumed ex ante .113 
Therefore, in J apan's view, the Nails test was statistically flawed. With respect to the alleged 
qualitative issues with the Nails test, Japan argues that the use of the words "pattern" and 
"significantly" shows that the drafters did not want to use purely quantitative t hresholds under the 
pattern clause of Article  2.4.2 to determine targeted dumping.114 Japan asserts that the qualitative 
evaluation of differences in export prices must be guided by the object of the second sentence of 
Article  2.4.2 to unmask targeted dumpin g, therefore requiring investigating authorities to show 
that export prices differ significantly in a way that they can be conceived to be targeted.115 Japan 
also states that when comparing the prices to certain purchasers, regions or time periods with 
those  to other purchasers, regions or time periods, an investigating authority is required to ensure 
that the prices at issue are comparable.116 Therefore, an investigating authority should consider 
whether factors, such as seasonal trends or changes in input cos ts over time, affect 
comparability.117 
7.1.3.2.5   Korea  
7.33.   Regarding the fourth alleged quantitative flaw with the Nails test, Korea questions the 
USDOC's decision to disregard, without explanation, non -target prices which were lower than the 
alleged target price.118 Korea contends that because the alleged target was identified by the 
domestic industry petitioner, such an approach may have allowed the petitioner to cherry pick 
transactions to pass the Nails test.119 In relation to the qualitative issues with the Nails test, Ko rea 
focuses on the use of the word "significantly" in the pattern clause of Article  2.4.2, which, in 
Korea's view, requires the demonstration of something other than merely large quantitative 
differences.120 Regarding the use of purchaser and time period ave rages under the Nails test, 
Korea contends that the use of such averages biased the calculation of standard deviations used as 
part of the Nails test. In this regard, Korea agrees with China' s argument that the pattern clause 
of Article  2.4.2 requires that  a pattern be discerned through a comparison of individual export 
transaction prices, and not their weighted averages.121 
7.1.3.2.6   Turkey  
7.34.   Turkey submits that an investigating authority has discretion in choosing a methodology it 
considers  appropriate to find a signif icantly differing pricing pattern as long as it acts in an even -
                                                
109 European Union's third -party submission, para . 37. 
110 Japan's third -party statement, para. 14 (citing Steel Cylinders OI, Issues and Decision Memorandum, 
(Exhibit  CHN-66), p. 29). (emphasis added by Japan)  
111 Japan's third -party statement, para. 14 (citing Steel Cylinders OI, Issues and Decision Memora ndum, 
(Exhibit  CHN-66), p. 29). (emphasis added by Japan)  
112 See Japan's third -party statement, para. 14.  
113 Japan's third -party statement, para. 14.  
114 Japan's third -party statement, para. 11.  
115 Japan's third -party submission, para. 38.  
116 Japan's third party  submission, para. 40.  
117 Japan's third party submission, para. 40.  
118 Korea's third -party submission, para. 28.  
119 Korea's third -party submission, para. 28.  
120 Korea's third -party submission, para. 7.  
121 Korea's third -party submission, para. 27.  WT/DS471/R  
 
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  handed and unbiased manner.122 In relation to the need to consider whether  the differences in the 
export prices  which form the relevant pattern  are qualitatively significant, while Turkey agrees  that 
the word "significantly" under the pattern clause of Article  2.4.2 may have quantitative and 
qualitative dimensions, it contends that the quantitative aspect of the word is more pronounced 
than the qualitative one.123 
7.1.3.2.7   Viet Nam  
7.35.   Viet Nam agrees with the second alleged quantitative flaw alluded to by China and finds the 
USDOC's use of a one standard deviation threshold to be too low to find whether a pattern exists 
or whether it differs significantly.124 Regarding the alleged qualitative issues with the Nail s test, 
Viet Nam asserts that to ensure an effective interpretation of the term "pattern" under the pattern 
clause of Article  2.4.2, an investigating authority must consider whether the differences in export 
prices arise due to standard business practices.125 With reference to the issue concerning the use 
of purchaser or time period averages under the Nails test, Viet Nam notes that the pattern clause 
of Article  2.4.2 refers to a pattern of "export prices" in the plural, and argues that the use of 
purchaser o r time period averages is inconsistent with that requirement.126 
7.1.3.3   Evaluation by the Panel  
7.36.   China's claim under the pattern clause of Article  2.4.2 raises three sets of issues regarding 
the application of the Nails test in the three challenged investigations.  
7.37.   Before turning to examine those issues, we note that while the pattern clause of 
Article  2.4.2 specifies what an investigating authority should find, namely, a significantly differing 
pricing pattern , it does not prescribe how an investigating authority sho uld make such a finding. 
Therefore, this clause provides an investigating authority with some discretion in making this 
particular finding. This does not mean, however, that the authority has a carte blanche  in this 
regard . We recall that Article  17.6(i) o f the Anti -Dumping Agreement, which sets out the standard 
of review that applies in disputes arising under this Agreement, states that in its assessment of the 
facts of the matter, "the panel shall determine whether the authorities' establishment of the fa cts 
was proper and whether their evaluation of those facts was unbiased and objective ." Article  17.6(i) 
does not impose any independent obligation on a party. But, as stated by the Appellate Body in US 
– Hot Rolled Steel , while couched in terms of an oblig ation on panels, in effect, this provision 
defines when an investigating authority can be considered to have acted inconsistently with the 
Anti-Dumping Agreement in the course of its establishment and evaluation of the relevant facts.127 
Further, as explaine d by the Appellate Body in US – Softwood Lumber VI (Article 21.5 – Canada) , 
in applying this standard of review under Article  17.6(i), a panel's task is  "to assess whether the 
explanations provided by the authority are 'reasoned and adequate' by testing th e relationship 
between the evidence on which the authority relied in drawing specific inferences, and the 
coherence of its reasoning ".128 Guided by these clarifications by the Appellate Body, in our 
evaluation of China's claim under the pattern clause of Article 2.4.2, we will evaluate whether the 
USDOC found a significantly differing pricing pattern consistently with the pattern clause of 
Article  2.4.2, through an objective and unbiased evaluation of properly established facts.  
7.38.   We will commence our analysis by providing a brief description of the Nails test applied by 
the USDOC in the three challenged investigations and the two SAS programming errors which 
occurred in the OCTG  and Coated Paper  investigations. Thereafter, we will examine each of the 
three sets  of issues raised by China’s claim under the pattern clause of Article  2.4.2, namely, the 
quantitative issues, the qualitative issues and the use of purchaser or time period averages.  
                                                
122 Turkey's thi rd-party submission, para. 7.  
123 Turkey's third -party submission, para. 9.  
124 Viet Nam's third party submission, para. 12.  
125 Viet Nam's third -party submission, para. 15.  
126 Viet Nam's third -party submission, para. 13.  
127 Appellate Body Report, US – Hot-Rolled Steel, para. 56.  
128 See, e.g. Appellate Body Report, US – Softwood Lumber VI (Article 21.5 – Canada) , para. 97.  WT/DS471/R  
 
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  7.1.3.3.1   Nails test  
7.39.   The Nails test applied by the USDOC consisted  of two sequenti al stages, which we refer to in 
these proceedings as ( a) the standard deviation test  and ( b) the price gap test. These stages were 
sequential because if the requirements of the standard deviation test  were not met, the USDOC 
did not proceed to the second s tage of the Nails test, namely the price gap test.  
7.40.   In the three challenged investigations, following the requirements of the Nails test, the 
USDOC first required the domestic industry petitioner to make an allegation of targeted dumping 
against an exporter , and to identify the alleged target.129 Purchasers or time periods, as the case 
may have been, which were not identified by the petitioner as an alleged target were considered to 
be non -targets. The USDOC did not test whether the export prices to these pres umed non -targets 
were actually targeted.130 Second, under both stages of the Nails test ( standard deviation test  and 
price gap test), the USDOC made its initial analysis on a CONNUM -specific basis. The USDOC 
examined only those CONNUMs which were sold to bot h the alleged target and the non -targets. If 
a particular CONNUM was sold only to the alleged target, or only to non -targets, that CONNUM was 
not included in the examination.131 
Standard deviation test  
7.41.   Under the standard deviation test , there was a two -step process pursuant to which the 
USDOC first identified whether the weighted average export price to the alleged target, which we 
refer to as the "alleged target price", was one standard deviation below the weighted average 
export price to all purchasers (or time periods) in the examined CONNUM (CONNUM -specific 
weighted average price).132 We refer to this price as the "threshold price". To illustrate the 
operation of this test, let us assume that in CONNUM X, examined under the standard deviation 
test, the weigh ted average export price to purchasers A, B, C, D, E , and F by exporter Z were USD 
5, 6, 10, 15, 16 , and 17, respectively.133 For simplicity, let us further assume that the quantity 
sold to each of these purchasers was 1 unit and that the domestic industry p etitioner alleged that 
exporter Z was targeting purchaser B. Hence, in this case, the USDOC would consider purchaser B 
to be the alleged target, and all other purchasers to be non -targets. The CONNUM -specific 
weighted average export price (i.e. the mean pr ice134), which is essentially the weighted average 
of all export transaction prices in CONNUM X, or put differently, the weighted average export price 
to all purchasers in that CONNUM, is USD 11.5.  
CONNUM -specific 
weighted average 
export price (M)  (5*1)+(6*1 )+(10*1)+(15*1)+(16*1)+(17*1)   
 
 = USD 11.5  
6 (Total Quantity)   
 
7.42.   The numerical value of one standard deviation for the data used in our illustration is 4.78.135 
This figure was obtained through the calculations shown in the table below:  
                                                
129 United States' first written submission, para. 86.  
130 United States' first written submission, para. 86.  
131 United States' response to Panel ques tion Nos. 109 (a), (b), and (c), paras. 49 -51; China's response 
to Panel question No. 109(c), para. 72; and Lisa Tenore's first statement, (Exhibit CHN -2) (BCI), para. 8.  
132 United States' first written submission, para. 97; and China's first written submis sion, para. 68.  
133 Whereas our illustration relates to the application of the Nails test to identify a pattern of export 
prices which differ significantly among different purchasers, exactly the same methodology was applied by the 
USDOC when identifying a p attern of export prices which differed significantly among different time periods.  
134 In this regard, we note that "mean" is a statistical concept, which simply refers to the average of a 
given data set. In the specific context of the standard deviation tes t, the mean is the weighted average of the 
export price of all export transactions in the examined CONNUM, which we refer to as the CONNUM -specific 
weighted average export price. In this report, we have used the term "mean" to describe the statistical basi s of 
China's argument, and the term "CONNUM -specific weighted average export price" when describing the 
application of this statistical basis to the Nails test.  
135 In this regard, we note that the numerical value of one standard deviation depends on the num erical 
values in the examined data and hence will change if data with different numerical values are used.  We also WT/DS471/R  
 
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CONNUM X  
Purchaser  Weighted 
average 
price to 
each 
purchaser  
 
(P) Sales 
quantity  
[in 
kilograms]  
 
 
(Q) 
 
 Weighted 
average 
export 
price to a 
purchaser * 
sales 
quantity   
 
(P*Q)  The d ifference  
between  the 
weighted average 
export price to a 
purchaser and 
the CONNUM -
specifi c weighted 
average export  
price (M) of USD 
11.5  
 
(M-P) (Square of the 
difference  between  
the weighted 
average export 
price to a 
purchaser and the  
CONNUM -specific 
weighted average 
export  price of USD 
11.5)* sales 
quantity  
 
([M-P]2 *Q) 
 
A 5 1 5 6.5 42.25  
B (Alleged 
target ) 6 1 6 5.5 30.25  
C 10 1 10 1.5 2.25 
D 15 1 15 -3.5 12.25  
E 16 1 16 -4.5 20.25  
F 17 1 17 -5.5 30.25  
Total  sum  6 69  137.5  
 
Weighted standard deviation = Square Root of [{Total sum of [M -P]2 *Q}/Q] = Square root of 
137.5/6  = 4.78 
 
7.43.   Therefore, the threshold price is the CONNUM -specific weighted average price minus one 
standard deviation, i.e. USD 11.5 – 4.78 = USD 6.72. The USDOC would examine whether the 
alleged target price to B was below this threshold price of USD 6.72. Considering t hat the alleged 
target price to B was USD 6, i.e. less than USD 6.72, the USDOC would fin d that the requirements 
of the standard deviation test  were met insofar as CONNUM X was concerned.  
7.44.   After repeating this exercise across all examined CONNUMs, the USDOC  would consider 
whether the volume of sales in CONNUMs where the alleged target price was below the CONNUM -
specific weighted average export price exceeded 33% of the total volume of the exporter's sales to 
the alleged target.136 In calculating the total volu me of the exporter's sales to the alleged target, 
the USDOC would not include sales volumes pertaining to CONNUMs that were not sold to both the 
alleged target and a non -target.137 Therefore, in our illustration, assuming that the volume of sales 
in CONNUM X  to purchaser B was 40 units, that CONNUM X was the only CONNUM where the 
alleged target price was below the CONNUM -specific weighted average export price, and the total 
volume of sales in all CONNUMs to purchaser B examined under the Nails test was 100 un its, the 
standard deviation test  would be passed. This is because the volume of sales in CONNUM X would 
be 40% of the total sales volume to purchaser B and hence higher than 33%. The USDOC would 
then move on to the price gap test.  
Price gap test  
7.45.   Under the price gap test, the USDOC calculated, again on a CONNUM -specific basis, an 
alleged target price gap, which was the difference between the alleged target price and the next 
higher non -target price.138 The USDOC also calculated for that same CONNUM a weighted average 
non-target price gap, on the basis of the individual gaps between non -target prices that were 
higher than the alleged target price.139 In calculating this weighted average non -target price gap, 
                                                                                                                                                  
note that in  the three challenged investigations the USDOC calculated a weighted standard deviation under the 
standard deviation test . For ea se of reference, we refer to this as "standard deviation".  
136 United States' first written submission, para. 100; and China's first written submission, para. 72.  
137 United States' response to Panel question No. 109(a), para. 51.  
138 United States' first writte n submission, para. 101; and China's first written submission, para. 76.  
139 United States' first written submission, para. 101; and China's first written submission, para. 76.  WT/DS471/R  
 
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  the USDOC disregarded non -target prices which were lower  than the alleged target price.140 The 
USDOC then compared the alleged target price gap with the weighted average non -target price 
gap in order to find which one was wider . Therefore, in our illustration above, the USDOC would 
not consider, under the price g ap test, the non -target price to purchaser A because that price was 
lower than the alleged target price to purchaser B. 
7.46.   In this illustration, the alleged target price gap is the difference between the alleged target 
price to purchaser B, which is USD 6 and  the next higher non -target price, which is the price of 
USD 10 to purchaser  C. Therefore, the alleged target price gap is USD 4 (10 – 6). 
 
Purchaser  Weigh ted 
Average 
Price  to 
each 
purchaser  
(USD)  Quantity  Individual 
Gaps  
(USD)  Weight 
associated 
with 
indiv idual 
gaps  
A 5 1     
B 6 1     
C 10 1     
D 15 1 5 (Gap 
between 
C&D)  2 (1+1)  
E 16 1 1 (Gap 
between 
D&E) 2 (1+1)  
F 17 1 1 (Gap 
between 
E&F) 2 (1+1)  
 
7.47.   The weighted average non -target price gap is USD 2.33. This is calculated by multiplying 
each indivi dual non -target price gap with its associated weight and dividing the total by the total 
associated weight, as shown in the equation below.  
 
(5*2)+(1*2)+(1*2)   
 
 = USD 2.33  
6 (Total Quantity)   
 
7.48.   Since the alleged target price gap of USD 4 is wider  than the weighted average non -target 
price gap of USD 2.33, the USDOC would consider the requirements of the price gap test to be 
also met, insofar as CONNUM X was concerned. The USDOC would repeat this exercise across all 
CONNUMs examined under the price gap t est. But if a CONNUM did not pass the standard 
deviation test , that CONNUM would not be examined under the price gap test. If all CONNUMs 
where the alleged target price gap was wider  than the weighted average non -target price gap 
exceeded 5% of the total v olume of the exporter's sales to the alleged target, the USDOC would 
conclude that the exporter had passed the price gap test.141 As under the standard deviation test , 
the USDOC did not include, in the total volume of the exporter's sales to the alleged targ et, sales 
volume in those CONNUMs which were sold only to the alleged target but not to a non -target.142 
This way, through the standard deviation test  and the price gap test, the USDOC sought to 
establish whether there was "a pattern of export prices which d iffer[ed] significantly among 
different purchasers, regions or time periods", as required under the pattern clause of 
Article  2.4.2.  
                                                
140 United States' first written submission, para. 101; and China's first written s ubmission, para. 76.  
141 Steel Cylinders OI, Issues and Decision Memorandum, (Exhibit  CHN-66), p. 23; Coated Paper OI, 
Issues and Decision Memorandum, (Exhibit  CHN-64), p. 22; and OCTG OI, Issues and Decision Memorandum, 
(Exhibit  CHN-77), Comment 2.  
142 United  States' response to Panel question No. 109(b), para. 50.  WT/DS471/R  
 
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  7.1.3.3.1.1   SAS programming errors  
7.49.   China challenges two SAS programming errors which occurred in the OCTG  and Coated 
Paper  investigatio ns only. Both of these errors occurred in the calculation of the weighted average 
non-target price gap under the price gap test. The description of the two SAS programming errors, 
which we provide below, is based on China's factual characterization of such  errors which the 
United States agrees with.143 
First SAS programming error  
7.50.   The first SAS programming error was that instead of comparing the alleged target price gap 
with the weighted average non -target price gap, as required under the price gap test, the U SDOC 
compared the alleged target price gap with each of the individual non -target price gaps which 
made up this weighted average non -target price gap.144 The USDOC found the "significant 
difference" requirements of the price gap test to be met, in the examin ed CONNUM, when the 
alleged target price gap was wider  than any of these individual non -target price gaps, even the 
smallest one.145 To illustrate this, let us assume that in a given CONNUM, examined under the 
price gap test, the weighted average export pric e to purchasers B, C, D, E , and F were USD 7, 10, 
11, 16 , and 22 respectively; the total unit sold to each of these purchasers was 1 unit; and that 
purchaser B was the alleged target. In this case, the alleged target price gap would be USD 3, i.e. 
the diff erence between the alleged target price to B and the next higher non -target price to C. The 
individual non -target price gaps between C and D, D and E, and E and F, would be USD 1, 5 , and 6 
respectively. The weighted average non -target price gap, based on t hese individual non -target 
price gaps would be USD 4. Under the price gap test, considering that the alleged target price gap 
of USD 3 is lower than the weighted average non -target price gap of USD 4, the requirement of 
the price gap test would not be met in the examined CONNUM. However, because of this SAS 
programming error, the price gap test was passed when the alleged target price gap was wider 
than any of the individual non -target price gaps. Since one of the individual non -target price gaps 
in our ill ustration is USD 1, and hence lower than the alleged target price gap of USD 3, the 
requirements of the price gap test would erroneously be met as a result of the first SAS 
programming error.  
Second SAS programming error  
7.51.   As mentioned above, under the price  gap test, the weighted average non -target price gap 
was calculated by multiplying each individual non -target gap with its associated weight (i.e. 
quantity) and dividing the total by the total weight associated with those gaps. The second SAS 
programming e rror occurred in the multiplication of each individual gap with its associated weight. 
Put in mathematical terms, this error occurred in the calculation of the numerator and not the 
denominator, which remained constant. The difference in the correct formul a and the formula used 
as a result of the SAS programming error is provided in the table below.146 In response to our 
questions, China also provided hypothetical calculations to describe the effect of this error.147 In 
this hypothetical calculation, China assu mes that the individual non -target price gaps 1, 2 and 3 
are USD 2, 4 , and 3 respectively. The associated weight of these price gaps are 5, 6 and 8 units 
respectively. These hypothetical calculations are also provided in Table A along with the formula.  
Table A 
Description   
Correct formula for 
calculating the 
numerator of the 
weighted average non -
target price gap  (price gap 1* weigh ting factor 1) + (price gap 2* weigh ting 
factor 2) + (price gap 3* weigh ting factor 3)  
                                                
143 United States' response to Panel question No. 4(c), para. 4.  
144 China's first written submission, para. 78.  
145 China's first written submission, para. 78.  
146 See, e.g. Appendix to Lisa Tenore's first  statement, (Exhibit  CHN-2) (BCI), para. 2.  
147 China's visual aid presented at second substantive meeting with parties, (Exhibit  CHN-520).  WT/DS471/R  
 
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  Description   
Hypothetical calculation 
based on corre ct formula  (2* 5) + (4* 6) + (3*8) = 58  
Correctly -calculated 
weighted average non-
target price gap  58/19=3.05  
Incorrect formula used 
as a result of the SAS 
programming error  (price gap 1* weigh ting factor 1) + ((price gap 1 + price gap 
2)* weigh ting fact or 2) + ((price gap 1+ price gap 2 + price 
gap 3)* weigh ting factor 3)  
Hypothetical calculation 
based on incorrect 
formula used due to 
second SAS 
programming error   
 (2 * 5) + ((2 + 4) * 6) + ((2 + 4 + 3) * 8) = 10 + 36 + 72 = 
118 
Incorrectly -calculated 
weighted average non-
target  price gap  118/19 =6.21  
 
7.52.   Because the numerator increased and the denominator remained constant, the weighted 
average non -target price gap increased as a result of this error. Considering that the USDOC 
concluded that an exporter had met the requirements of the price gap test when the alleged target 
price gap was wider  than the weighted average non -target price gap, as a result of the erroneous 
increase in the latter, it became less likely that the USDOC would find that the exporte r had 
passed the price gap test. Consequently, it became less likely that the USDOC would find that the 
differences in the pattern of export prices to the alleged target were significant.  
7.1.3.3.2   Quantitative issues with the Nails test  
7.53.   China presents two factual b ases for its arguments regarding the quantitative issues with 
the Nails test. First, China contends that due to four quantitative flaws in the Nails test, the 
USDOC failed to find in the three challenged investigations, through an unbiased and objective 
evaluation of properly established facts, that the differences in export prices forming the relevant 
pattern were significant in a quantitative sense. Therefore, China submits that as a result of these 
four quantitative flaws, the USDOC acted inconsistently with the pattern clause of Article  2.4.2 in 
the three challenged investigations. Second, China argues that because of two SAS programming 
errors, which distorted the application of the Nails test in the OCTG  and Coated Paper  
investigations, the USDOC faile d to find in these two investigations, through an unbiased and 
objective evaluation of properly established facts, that the differences in export prices forming the 
relevant pattern were significant in a quantitative sense. For this reason also, according to China, 
the USDOC acted inconsistently with the pattern clause of Article  2.4.2 in these two challenged 
investigations. We will first examine the four alleged quantitative flaws with the Nails test which 
according to China affected all three challenged i nvestigations and then proceed to the two SAS 
programming errors which occurred in the OCTG  and Coated Paper  investigations.  
7.1.3.3.2.1   Four alleged quantitative flaws with the Nails test  
7.54.   China relies on the phrase "differ significantly" in the pattern clause of Article 2.4.2 to 
contend that because of the four alleged quantitative flaws with the Nails test, the USDOC failed to 
find, in an objective and unbiased manner, a pattern of export prices which "differ[ed] 
significantly" among different purchasers or time peri ods, in a quantitative sense. Two of these 
flaws concern the USDOC's application of the first stage of the Nails test, namely the standard 
deviation test , whereas the other two concern the application of the second stage of the Nails test, 
namely the price  gap test.  
7.55.   In this regard, we note that an investigating authority may find export prices which "differ 
significantly" within the meaning of the pattern clause of Article  2.4.2 only through a comparison 
of high and low export prices which differ significan tly from each other. In explaining the operation 
of the standard deviation test , the USDOC stated that it sought to establish, through this test, a 
"pattern of low [export] prices" concerning targeted sales, i.e. a pattern of low export prices to the WT/DS471/R  
 
- 40 - 
 
  alleged target.148 This shows that the USDOC examined, under the standard deviation test , 
whether "low" export prices to the alleged target "differ[ed]" from higher export prices to non -
targets, and under the price gap test, whether these differences were "signif icant". It follows, in 
our view, that if the USDOC failed to properly identify, under the standard deviation test , that the 
alleged target price was low, it may have affected the USDOC's ultimate determination that the 
pattern of low export prices to the a lleged target differed significantly from export prices to non -
targets. Therefore, in specifically examining the two alleged quantitative flaws which concern the 
application of the standard deviation test , we will examine whether the USDOC failed to proper ly 
find that export prices to the alleged target were low such that it affected the USDOC's ultimate 
determination that the pattern of export prices differed significantly within the meaning of the 
pattern clause of Article  2.4.2. In relation to the two al leged quantitative flaws concerning the 
application of the price gap test, we will evaluate whether the USDOC failed to find a pattern of 
export prices which "differ significantly" within the meaning of the pattern clause of Article  2.4.2. 
With this in min d, we now turn to examine each of the four alleged quantitative flaws with the 
Nails test.  
First alleged quantitative flaw with the Nails test: The USDOC's application of the one 
standard deviation threshold under the standard deviation test  on the basis o f an 
alleged assumption that the examined export price data were normally distributed or 
single -peaked and symmetric  
7.56.   With respect to the first alleged quantitative flaw with the Nails test, China contends that 
the Nails test "depend[ed] on the assumption " that the examined export price data were either, in 
terms of statistics, normally distributed, or at least, single peaked and symmetric around the 
mean, which means that there were approximately as many prices above the mean as there were 
below it.149 China submits that the USDOC acted inconsistently with the pattern clause of 
Article  2.4.2 by applying the Nails test without confirming whether this assumption was correct, or 
in other words, without verifying that the export price data in the three challenged investigations 
were indeed normally distributed or at least single peaked and symmetric. The United States does 
not dispute that the USDOC did not test the export price data to confirm whether it was normally 
distributed or single -peaked and symmetric.150 However, the United States asserts that the pattern 
clause of Article  2.4.2 imposes no obligation on an investigating authority to examine how export 
prices are distributed in a given investigation.151 
7.57.   We note that China 's contention that the Nails test depend ed on the assumption that the 
examined export price data were either normally distributed or single -peaked and symmetric is not 
based on any statement by the USDOC, as reflected in its determinations in the three challenged 
investigations.152 Instead, for Ch ina, such an assumption is implicit and based on the fact that the 
USDOC's use of a one standard deviation threshold under the standard deviation test  would be 
"meaningless, or at best arbitrary" if the export prices were not distributed in this manner.153 It 
would be arbitrary because in China's view, the USDOC used the one standard deviation threshold 
to identify whether the alleged target price was unusually or sufficiently low, as is, in China's view, 
required under the pattern clause of Article  2.4.2. Bu t the one standard deviation threshold is not, 
according to China, an appropriate statistical tool to identify whether the alleged target price is 
unusually or sufficiently low unless the export price data are normally distributed or single -peaked 
and symm etric. 
                                                
148 See, e.g. Steel Cylinders OI, Issues and Decision Memorandum, (Exhibit  CHN-66), p. 31. In this 
regard, we note that while the USDOC made this specific statement in the Steel Cylinders investigation, the 
USDOC did so in the context of explaining the general operation of the standard deviation test, which was 
applied in the same manner in the OCTG  and Coated Paper  investi gations. Therefore, this explanation shows 
that the USDOC used the standard deviation test to establish a pattern of low export prices to the alleged 
target in all three challenged investigations.  
149 China's comments on the United States' response to Panel question No. 93, para. 3. (emphasis 
added)  
150 See, e.g. United States' response to Panel question No. 94(c), para. 15.  
151 United States' response to Panel question No. 94(b), para. 10.  
152 China's response to Panel question No. 94(d), para. 18; and comments on  the United States' 
response to Panel question No. 94(c), para. 12.  
153 China's response to Panel question No. 6(c), para. 45; see also response to Panel question No. 6(a), 
para. 36.  WT/DS471/R  
 
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  7.58.   China asserts that, statistically speaking, when a given data set is normally distributed or 
single -peaked and symmetric, 50% of the data points will fall below the mean. Further, when data 
are normally distributed, only 15.87% of the data points wi ll fall one standard deviation below the 
mean.154 In contrast, when data are not normally distributed or single -peaked and symmetric, a 
large mass of data points, sometimes more than 50%, may fall one standard deviation below the 
mean.155 Similarly, when the r elevant data are export price data, as in the case of the USDOC's 
determinations under the pattern clause of Article  2.4.2 in the three challenged investigations, 
China argues that a large number of export transactions (i.e. data points) may be at prices w hich 
are one standard deviation below the CONNUM -specific weighted average price (i.e. the mean), 
when the export price data are not normally distributed or single -peaked and symmetric.156 China 
finds this problematic because if a large number of export tran sactions are at prices which are one 
standard deviation below the CONNUM -specific weighted average price, such prices would reflect 
the dynamics of the relevant market and would not be unusually or sufficiently low. Therefore, in 
China's view, the USDOC co uld not have concluded, through the use of a one standard deviation 
threshold, that the price to the alleged target was unusually or sufficiently low so as to form a 
pattern of export prices which differ significantly within the meaning of the pattern clau se of 
Article  2.4.2 unless the export price data were normally distributed or single peaked and 
symmetric.  
7.59.   The issue that this alleged flaw raises is twofold and requires us to determine whether or 
not, as China argues, the Nails test is of such a nature t hat it could only be used if the export price 
data were normally distributed or single peaked and symmetric, and if so, whether the USDOC 
verified that the export price data in the three challenged investigations were of that nature.  
7.60.   Turning to the first a spect of this issue, as noted above, China's argument that the Nails 
test could only be used if the export price data were normally distributed is based on the use of 
the one standard deviation threshold within this test. China contends that if the export price data 
are not normally distributed, applying the one standard deviation will lead to a large number of 
export transactions falling below the threshold price, which is one standard deviation below the 
CONNUM -specific weighted average export price. When  a large number of transactions are made 
at export prices which are below the threshold price, in China's view, those export prices cannot be 
considered to be unusually or sufficiently low, so as to form a pattern of export prices which "differ 
significant ly" within the meaning of the pattern clause of Article  2.4.2.  
7.61.   In this regard, we note that the pattern clause of Article  2.4.2 does not use phrases such as 
"unusually low" or "sufficiently low" which are used by the parties in these proceedings to highlig ht 
the legal requirements under that clause. The United States specifically objects to the use of the 
phrase "unusually low", noting that in statistics the term "unusually low" is used to describe 
outliers.157 Therefore, when China argues that the USDOC shou ld have identified whether the 
alleged target price was unusually low, the United States understands this to mean that the 
USDOC should have found whether the alleged target price was a random or aberrational outlier, 
which in its view is not required unde r the pattern clause of Article  2.4.2. The United States 
contends that the USDOC used the one standard deviation threshold to identify whether the 
alleged target price was sufficiently low rather than unusually low. China, on its part, clarifies that 
it do es not argue that an investigating authority should limit the pattern to random and 
aberrational outliers and that its reference to unusually low prices was only a short -hand reference 
for the requirements under the pattern clause of Article  2.4.2.158 China submits that its argument 
regarding this flaw would hold good even if the USDOC sought to identify whether the alleged 
target price was sufficiently low rather than unusually low. To the extent China's reference to 
                                                
154 See, e.g. First expert statement by Dr. Peter Egger (Dr. Egger's first st atement), (CHN -1) (BCI), 
para. 44. In this regard, China states that when a distribution is single -peaked and symmetric but not normally 
distributed, the data points which are one standard deviation below the mean may be "much smaller or larger" 
than 15.87 %. (China's response to Panel question No. 93, para. 16).  
155 China's comments on the United States' response to Panel question No. 94(a), para. 9.  
156 In its comments on the United States' response to our questions, for instance, China states that 
"whenever t here is a large mass of data points (here, export transactions)  below the threshold of a single 
standard deviation", the one -standard -deviation threshold will fail to function as a meaningful test, and will 
instead wrongly identify as sufficiently low pric es that may in fact be quite typical of the relevant market for 
the CONNUM being tested. (China's comments on the United States' response to Panel question No. 94(a) , 
para. 9 ). (emphasis added)  
157 United States' comments on China's response to Panel questio n No. 97(a), para. 17.  
158 China's response to Panel question No. 97(a), paras. 21 -22. WT/DS471/R  
 
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  unusually low prices means that only rand om and aberrational outliers among export prices can 
form part of a pattern, we disagree. We do not see any textual basis in Article  2.4.2 to limit a 
pattern to such outliers. Further, in our assessment, we do not find it necessary to discuss the 
differenc e, if any, between the phrases "unusually low" export prices and "sufficiently low" export 
prices which are used by the parties. Instead, in line with our interpretation of the phrase "differ 
significantly" and our  understanding of the objective of the standard deviation test  in 
paragraph  ‎7.55 above , we will assess whether the USDOC failed to properly find that export prices 
to the alleged target were low, under the standard deviation test , such that it affected  the 
USDOC's ultimate determination that the differences in the export pr ices forming the relevant 
pattern were significant, within the  meaning of the pattern clause of Article  2.4.2.  
7.62.   The only reason provided by China as to why the USDOC could not have use d the one 
standard deviation threshold to identify whether the export prices to the alleged target were, as 
China puts it, unusually or sufficiently low, is that when export price data are not normally 
distributed or single -peaked and symmetric, a large nu mber of export transactions, sometimes 
more than 50% of all export transactions, will be one standard deviation below the CONNUM -
specific weighted average price. In our view, it cannot be said that an export price is not low or 
sufficiently low, just becau se a large number of export transactions are made  at such low  level of  
prices. It is entirely possible, for instance, that an exporter makes repeated low priced sales to its 
targeted purchaser. Such sales may be made in terms of a large number of export tr ansactions or 
large quantities of sales through fewer export transactions. The same rationale applies in cases 
where the exporter makes repeated low -priced sales in targeted regions or time periods. 
Therefore, the fact that a large number of export transac tions are made at low prices would not 
necessarily preclude an investigating authority from finding that such low prices differ significantly 
from other higher prices.  
7.63.   To support its argument, China submitted evidence to show that in the three investigatio ns 
at issue a large number of export transactions fell below the threshold price.159 The United States 
has not confirmed the factual veracity of this evidence  because the USDOC did not engage in this 
type of analysis in the three challenged investigations .160 In any case, China does not show how 
the fact that in many situations a large number of export price transactions fell one standard 
deviation below the CONNUM -specific weighted average export price undermined the USDOC's 
finding in the three challenged inv estigations that the differences in the export prices forming the 
relevant pattern were significant. Instead, China appears to find the mere presence of a large 
number of export price transactions at such low prices to be, in and of itself, a ground for fi nding 
that the USDOC failed to properly find such significant differences. We disagree. Accordingly, we 
do not agree with China' s contention that where a large number of export transactions are made 
at prices that are one standard deviation below the CONNU M-specific weighted average price, such 
prices cannot form the relevant pattern within the meaning of the pattern clause of Article  2.4.2.  
7.64.   In addition, we note that in the three challenged investigations the USDOC applied the one 
standard deviation thresho ld under the standard deviation test  to a data set which co nsisted of 
purchaser or time period averages, to identify whether the alleged target price, i.e. the weighted 
average export price to the allegedly targeted purchaser or time period, was lower than  the 
CONNUM -specific weighted average export price. The USDOC did not apply the Nails test to a data 
set which co nsisted of individual export transaction prices and did not seek to identify how many 
export transactions fell one standard deviation below the  CONNUM -specific weighted average 
export price. Therefore, we see no correlation between the supposed statistical problem 
highlighted by China, namely, that a large number of export price transactions will be one 
standard deviation below the CONNUM -specifi c weighted average export price when data are not 
normally distributed or single -peaked and symmetric and what the USDOC was trying to achieve 
through the use of the one standard deviation threshold, i.e. identify whether the weighted 
average export price to the alleged target was lower than the CONNUM -specific weighted average 
export price. For this reason also, we find no merit in China's argument that the USDOC acted 
inconsistently with the pattern clause of Article  2.4.2 because the Nails test depended on the 
assumption that the export price data were normally distributed or single -peaked and symmetric.  
                                                
159 China's response to Panel question No. 94(b), para. 17 (referring to Second expert statement by Lisa 
Tenore (Lisa Tenore's second statement), (Exhibit  CHN-497) (BCI), Ta bles 1 -3). 
160 United States' response to Panel question No. 94(b), para. 12.  WT/DS471/R  
 
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  7.65.   Before concluding, however, we wish to make an observation regarding the USDOC's 
determination in the Steel Cylinders  investigation. In the Issues and De cision Memorandum 
published by the USDOC in that investigation, the USDOC stated as follows:  
[T]he use of one standard deviation limits the number of sales that could be 
considered targeted because no more than 16 percent of all prices would typically be 
found to be more than one standard deviation below the mean, assuming a normal 
distribution of prices .161 (emphasis added)  
7.66.   We also find similar references to the assumption of normal distribution in other parts of 
that Memorandum. We asked the United States t o clarify why such references to an assumption of 
normal distribution did not suggest that the USDOC did, in fact, assume that the examined export 
price data were normally distributed. The United States argues that this statement was made in 
response to Ch inese exporter BTIC's statistical arguments and that, in presenting those 
arguments, it was BTIC rather than the USDOC that assumed that the export price data were 
normally distributed.162 We note that the record of the Steel Cylinders  investigation supports  the 
explanation made by the United States.163 China does not question this explanation by the United 
States. In fact, China explicitly states that it does not rely on these USDOC statements in the Steel 
Cylinders  investigation in support of its argument tha t the Nails test depended on the assumption 
that export prices were normally distributed or single -peaked and symmetric.164 Therefore, we find 
it unnecessary to examine whether the USDOC's statements in the Steel Cylinders  investigation 
suggested that the US DOC assumed that the export price data were normally distributed in that 
investigation.  
7.67.   For the reasons discussed above, we find that China has not shown that the Nails test is of 
such a nature that it could only be used if the export price data were norma lly distributed or 
single -peaked and symmetric. Therefore, the fact that the USDOC did not verify whether the 
export price data in the three challenged investigations were normally distributed or single -peaked 
and symmetric becomes irrelevant to our assess ment of this alleged quantitative flaw. We 
therefore reject China's claim under the pattern clause of Article  2.4.2 in respect of the first 
alleged quantitative flaw with the Nails test.  
Second  alleged  quantitative flaw with the Nails test: The USDOC's use  of a "one" 
standard deviation threshold under the standard deviation test  to find that export prices 
forming the relevant pattern differed significantly  
7.68.   The second alleged quantitative flaw is that the USDOC used a "one" standard deviation 
threshold under  the standard deviation test  which, according to China, was contrary to established 
statistical conventions, which require the use of a higher threshold, such as 1.96 standard 
deviations.165 China contends that, in the field of statistics, a threshold of one  standard deviation is 
"universally regarded as being insufficient to show that a given price difference is significant, in a 
quantitative sense".166 China adds that prices that are just one standard deviation above or below 
the mean, are not significantly d ifferent from the mean in a statistical sense.167 The United States, 
on its part, asserts that the USDOC did not use the one standard deviation threshold to make 
statistical inferences.168 Hence, according to the United States, whether or not the USDOC's use o f 
one standard deviation threshold was regarded as sufficient in the field of statistics to show that a 
                                                
161 Steel Cylinders OI, Issues and Decision Memorandum, (Exhibit  CHN-66), p. 29.  
162 United States' response to Panel question No. 94(c), para. 13.  
163 In this regard, we note that in it s submission to the USDOC, BTIC questioned the use of a one 
standard deviation threshold, arguing that "[o]ne standard deviation is defined mathematically to capture only 
68% of the data points of any data set". (Case Brief of BTIC to USDOC in the Steel Cy linders  OI, (Exhibit  USA-
126), p. 37). The statement that the one standard deviation threshold captures only 68% of data points is a 
statistical fact, which holds true only for normal distribution. This statistical fact is also presented in China's 
expert' s first statement. (Dr. Egger's first statement, (Exhibit  CHN-1) (BCI), para. 35).  
164 China's response to Panel q uestion No. 94(d), para. 18; and comments on the United States' 
response to Panel question No. 94(c), para. 12.  
165 China's first written submissi on, paras. 243 -245. 
166 China's response to Panel question No. 95, para. 20.  
167 China's second written submission, para. 39.  
168 United States' second written submission, para. 24 (citing OCTG  OI, Issues and Decision 
Memorandum , (Exhibit  CHN-77), Comment 2; and  Steel Cylinders OI, Issues and Decision Memorandum , 
(Exhibit  CHN-66), Comment IV).  WT/DS471/R  
 
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  given price difference was significant in a quantitative sense is not relevant to the issue of whether 
the USDOC's use of this threshold was consistent with the pattern clause of Article  2.4.2. Further, 
the United States asserts that a price which is 1.96 or two standard deviations below the mean is 
an outlier which is highly unlikely to be observed.169 The United States notes that the pattern 
clause of Article 2.4.2 does not require an investigating authority to identify only export prices 
which are outliers and that even when low -priced sales are not outliers, they may be targeted.170 
7.69.   In this regard, we note that China has clarified that it does not argue th at only random and 
aberrational outliers can form part of a pattern of export prices which "differ significantly" within 
the meaning of the pattern clause of Article  2.4.2.171 We have also stated , in paragraph ‎7.61 
above,  that the pattern clause of Article  2.4.2 does not require an investigating authority to limit a 
pattern to such outliers. China does not rebut the United States' argument that the use of higher 
standard deviation  thresholds  such as 1.96 or tw o standard deviations proposed by China would 
limit the pattern to such outliers. Instead, China argues that even if it were true that export prices 
which were two or more standard deviations below the mean price would be highly unlikely to be 
observed and  would be outliers, "that fact would not affect the validity of the generally recognized 
statistical conventions for showing that prices differ significantly in a quantitative sense".172 
7.70.   The issue raised by this second alleged quantitative flaw with the Nail s test is whether the 
USDOC acted inconsistently with the pattern clause of Article  2.4.2 in the three challenged 
investigations by using a one standard deviation threshold to identify whether the differences in 
the export prices forming the relevant patte rn were significant in a quantitative sense.  
7.71.   We recall that Article  2.4.2 does not prescribe a particular methodology for the identification 
of a significantly differing pricing pattern. Further, we find it important to recall that the Nails test, 
which wa s used by the USDOC in the three challenged investigations to find such a pattern, 
consisted  of the standard deviation test , which sought to establish a "pattern of export prices 
which differ" and the price gap test, which sought to establish whether those  differences were 
significant. The one standard deviation threshold was applied as part of the standard deviation 
test, not the price gap test. China's argument, however, is that by applying the one standard 
deviation threshold the USDOC failed to find tha t the pattern of low export prices to the alleged 
target differed "significantly" in a quantitative sense within the meaning of the pattern clause of 
Article  2.4.2. Thus, China's argument under the second alleged quantitative flaw with the Nails test 
seems  to target the wrong component of that test. In fact, China itself acknowledges this 
confusion in its first written submission  when it presents the following arguments regarding the 
use of the one standard deviation threshold under the standard deviation t est, which China refers 
to as the pattern test  in its submissions : 
China notes that USDOC does not appear to use its Pattern Test in order to determine 
whether prices "differ significantly" in the sense of Article  2.4.2. Nevertheless, for the 
sake of compl eteness, China notes that the statistical tool of the standard deviation 
and the "confidence intervals" that can be derived from standard deviations are 
frequently used to measure statistical significance. However, as China will 
demonstrate in the followin g, USDOC’s threshold of one standard deviation below the 
mean, as applied by USDOC in the three challenged determinations as part of the 
Pattern Test, is not an appropriate measure of whether certain prices are significantly 
different from other prices, in  a statistical sense. In other words, the Pattern Test, as 
applied by USDOC in the three challenged determinations, is not able to demonstrate 
– whether deliberately or inadvertently – that AT prices "differ significantly" from NT 
prices.173 (footnotes omitt ed) 
7.72.   Thus, China is challenging the use of a one standard deviation threshold on the ground that 
"in the field of statistics, a threshold of merely a single standard deviation is universally regarded 
as being insufficient for showing that a given price diff erence is significant in a quantitative sense" 
even though China agrees that the USDOC did not use the one standard threshold to find whether 
                                                
169 See, e.g. United States' first written submission, para. 133.  
170 United States' second written submission, paras. 26 -27. 
171 China's response to Panel question No. 97(a), pa ra. 21.  
172 China's response to Panel question No. 8, para. 53.  
173 China's first written submission, para. 242.  WT/DS471/R  
 
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  the identified price differences were significant in a quantitative sense.174 Therefore, we find no 
basis to conclud e that the USDOC acted inconsistently with the pattern clause of Article  2.4.2 by 
failing to find, through the one standard deviation threshold used under the  standard deviation 
test, that the differences in export prices forming the relevant pattern were  significant in a 
quantitative sense.  
7.73.   However, we find it important to note, as we acknowledged in paragraph  ‎7.55 above, that it 
is entirely possible that the USDOC's determination under the standard deviation test  affected its 
ultimate determination in the three challenged investigations, that the pattern of low export prices 
to the alleged target "differ[ed] significantly" from export prices to non -targets. China, however, 
has not shown that the USDOC's use of a one standard deviation threshold was of such a nature 
that it affected the USDOC's ultimate finding in relation to a pattern of export prices which "d iffer 
significantly" among different purchasers or time periods. In other words, China has not shown 
how the use of the one standard deviation threshold under the standard deviation test  vitiated the 
USDOC's ultimate conclusions under the pattern clause of  Article  2.4.2. Instead, China relies on 
statistical conventions to show that the one standard deviation threshold was insufficient, in and of 
itself, to measure quantitative significance. We disagree. Therefore, we reject China's argument 
that the one sta ndard deviation threshold was insufficient to show that the pattern of export prices 
differed significantly in a quantitative sense.  
7.74.   Accordingly, we reject China's claim under the pattern clause of Article  2.4.2 in respect of 
the second alleged quantitativ e flaw with the Nails test.  
Third alleged quantitative flaw with the Nails test: The USDOC's attribution of 
"significance" to wider  price gaps in the tail of the price distribution compared to price 
gaps closer to the mean  
7.75.   The third alleged quantitative fl aw concerns the USDOC's application of the price gap test. 
Specifically, this flaw relates to the manner in which the USDOC calculated the weighted average 
non-target price gap and the alleged target price gap and then compared them. We recall that 
under t he price gap test, the USDOC examined, on a CONNUM -specific basis, whether the alleged 
target price gap was wider  than the weighted average non -target price gap and found the 
significant difference requirement to be met, in the examined CONNUM, when this w as the case. 
China argues that the USDOC acted inconsistently with the pattern clause of Article  2.4.2 in the 
three challenged investigations by applying this method under the price gap test because when the 
export price data were normally distributed, "by  definition", the alleged target price gap would be 
based on prices located at the "tail" of the distribution whereas the weighted average non -target 
price gap would be based on prices located closer to the peak of the distribution.175 China asserts 
that, in  terms of statistics, in case of any peaked distribution with tails, the gap between any two 
given prices, which are located at the tail of the distribution, are inherently wider  than those at the 
peak of the distribution of the data. China submits that th is feature of inherently larger gaps at the 
tails of a distribution as compared to the peak holds true for "any peaked distribution with tails", 
and not just for normal or single -peaked and symmetric distributions.  
7.76.   Therefore, in China's view, when in the t hree challenged investigations the USDOC found 
the alleged target price gap, which was based on prices located at the tail of the distribution, to be 
wider  than the weighted average non -target price gap, which was based on prices located nearer 
to the peak , it merely confirmed an "inherent feature of every peaked distribution with tails".176 
This did not show that the pattern of export prices to the alleged target differed significantly from 
the export prices to the non -targets, in a quantitative sense. There fore, according to China, the 
USDOC did not properly find, in the three challenged investigations, that the pattern of export 
prices "differ[ed] significantly" in a quantitative sense and as a result acted inconsistently with the 
pattern clause of Article  2.4.2 in these investigations.  
7.77.   The United States denies that the USDOC acted inconsistently with the pattern clause of 
Article  2.4.2 in the three challenged investigations because of this third alleged quantitative flaw 
and questions the factual premise on  which China's argument regarding this flaw is based. 
Specifically, the United States notes that while China's argument is premised on the existence of a 
                                                
174 China's response to Panel question No. 95, para. 20.  
175 China's first written submission, para. 234.  
176 China's second written submission, para. 43 . (emphasis omitted)  WT/DS471/R  
 
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  distribution with a tail, China has not demonstrated that the actual export price data examined 
under the Nails test in the three challenged investigations even had a tail.177 
7.78.   The issue raised by this alleged flaw is two -fold. First, we note that the third alleged 
quantitative flaw rests on the assumption that in the three challenged investigations, the alle ged 
target price gap was based on prices located at the tail of the distribution of the export price data 
and the weighted average non -target price gap was based on prices located nearer to the peak of 
that distribution. Therefore, we have to first verify whether this assumption is factually correct. 
Second, if we find this assumption to be factually correct, we will have to examine whether the 
USDOC acted inconsistently with the pattern clause of Article  2.4.2 because when it compared the 
alleged target pr ice gap, based on prices located at the tail of the distribution , with the weighted 
average non -target price gap, based on prices nearer to the peak, it only confirmed an inherent 
feature of every peaked distribution with tails.  
7.79.   Before proceeding to an ass essment of these issues, we find it useful to explain the 
statistical basis of China's arguments, specifically the concepts of "peak" and "tails" of a 
distribution. We note that data which are normally distributed, when graphically represented, take 
the sh ape of a bell.178 This is the bell curve, which has certain identifiable characteristics. It has a 
single "peak" and two "tails", one on the left and one on the right. Figure 1 below, taken from the 
first statement of China's expert, contains a graphical rep resentation of this bell curve with its 
associated "peak" and "tails".  
 
Figure 1  
 
 
7.80.   Furthermore, another feature of normal distribution is that the weighted average of all 
prices (i.e. the mean) contained in this distribution is at the peak of the distribu tion.179 Also, most 
of the prices are concentrated towards the peak of the distribution, which is in the middle of the 
bell curve, whereas fewer prices are located at the tail of the distribution. Therefore, the peak is 
denser than the tails in terms of the distribution of prices. Both parties agree that the gaps 
between any two given prices located at the tail of the distribution are wider  than that at the peak 
of the distribution if there is normal or single -peaked and symmetric distribution.180 However, it i s 
also possible that actual distribution of data is neither normal nor single -peaked and symmetric. 
Specifically, the distribution may be one which has two or more peaks with tails, and hence is not 
single -peaked, or may even be a distribution which does n ot have a tail.  
7.81.   Turning to the first aspect of the issue, we recall that China argues that if the export price 
data were normally distributed in the three challenged investigations, the alleged target price, 
examined under the price gap test, would by defi nition be located at the tail of the distribution. 
This is because under the price gap test, the USDOC would have only examined the alleged target 
price if that price was one standard deviation below the CONNUM -specific weighted average export 
price and he nce located at the tail of the distribution. Because the alleged target price gap was 
based on a comparison of the alleged target price with a higher non -target price, this gap could be 
                                                
177 United States' comments on China's response to Panel question Nos. 99 (a), (b), (c) and (d), 
para. 39. 
178 United States' response to Panel question No. 93, para. 3; and Dr. Egger's first statement, 
(Exhibit  CHN-1) (BCI), para. 30.  
179 Dr. Egger's first statement, (Exhibit  CHN-1) (BCI), para. 62.  
180 Dr. Egger's first statement, (Exhibit  CHN-1) (BCI), para. 62; and United States' response to Panel 
question No. 99(e), para. 23.  WT/DS471/R  
 
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  based on prices located at the tail of the distribution.181 However, Chi na itself presented evidence 
in these proceedings show ing that in the three challenged investigations, the export price data 
were not actually normally distributed or even single -peaked and symmetric.182 Considering that 
the export price data in the three ch allenged investigations were not normally distributed, we 
cannot conclude that the alleged target price was by definition located at the tail of the distribution 
of that data. In such a situation, it would be for China to show that in the three challenged 
investigations the alleged target price gap was based on export prices located at the tail of the 
data distribution.  
7.82.   China does not show that even though the export price data were not normally distributed 
in the three challenged investigations, the distri bution still had a tail, and that the alleged target 
price was located at the tail. Therefore, we find that China has not shown that the assumption on 
which the third alleged quantitative flaw rests, which is that the alleged target price gap was based 
on prices located at the tail of the distribution of the export price data, is factually correct insofar 
as the three challenged investigations are concerned.  
7.83.   Further, in its response to our questions following the second substantive meeting, China 
qualified its argument regarding this flaw, by stating that this flaw would apply in all cases where 
the first alleged quantitative flaw did not apply. That is to say, China's argument regarding this 
flaw would apply in "instances involving a distribution that is si ngle-peaked and symmetric around 
the mean and thus has a left hand tail" whereas the first alleged quantitative flaw would apply in 
situations where the export price data were not distributed in this manner.183 We note, however, 
that China does not identify "instances" in the three challenged investigations where the export 
price data were "single -peaked and symmetric around the mean and thus ha[d] a left hand tail". 
After the second substantive meeting with the parties, we asked China whether China was argui ng 
that in each of the three challenged investigations, the alleged target price gap (which according 
to China was based on prices from the tail of the price distribution) was always found to be wider 
than the individual non -target price gaps at the peak o f the price distribution. In response, China 
stated that "there [was] no specific evidence in the record to which the Panel could usefully refer 
when examining this aspect of China's argument."184 Therefore, again, China does not 
demonstrate that the assumpt ion on which the third alleged quantitative flaw rests is factual ly 
correct. Accordingly, we also reject this argument by China.  
7.84.   Having found that China has not shown that the assumption on which the alleged third 
quantitative flaw rests, namely, that the alleged target price gap was based on prices located at 
the tail of the distribution in the three challenged investigations, is factually correct, we need not, 
and do not, proceed to an assessment of the second aspect of the issue raised by this flaw.185 We 
                                                
181 In this regard, it is not clear from China's submissions wheth er the next higher non -target price with 
which the alleged target price was compared to calculate the alleged target price gap was also based on prices 
located at the tail of the distribution of the export price data, when the export price data were normal ly 
distributed.  
182 See, e.g. Third expert statement by Dr. Peter Egger (Dr. Egger's third statement), (Exhibit  CHN-522) 
(BCI), para. 3 and Figures 1 -12. 
183 See, e.g. China's response to Panel question No. 100, para. 53.  
184 China's response to Panel question N o. 99(c), para. 45.  
185 We find it useful to note, however, that China has not been consistent in presenting its arguments 
regarding the second aspect of this issue. Specifically, it is not clear to us whether China questions the 
comparison of prices located  at the tail of the distribution with those located nearer to the peak because it only 
confirmed an (a) inherent feature of a normal distribution or (b) an inherent feature of a single -peaked and 
symmetric distribution or (c) an inherent feature of every p eaked distribution with tails, which maybe a 
distribution with two or more peaks. For instance, in its opening statement at the first substantive meeting, 
China argued that "it was inappropriate, in the three challenged determinations, for USDOC to attribu te 
'significance' to wider price gaps in the tail of the price distribution compared to price gaps closer to the mean, 
because this is an inherent feature  of every normal distribution." (China's opening statement at the first 
meeting of the Panel, para. 18 ). (emphasis original). In response to our questions pursuant to the first 
substantive meeting, however, China stated that the third quantitative flaw applied whenever the export price 
data in the three challenged investigations had single -peaked and symme tric distributions and not just when 
the data were normally distributed. (China's response to Panel question No. 6(c), para. 46). In contrast, in its 
response to our questions pursuant to the second substantive meeting, China confirmed that its argument 
regarding the third alleged quantitative flaw applied in case of "all distributions with tails, including 
distributions with two or more peaks" and not just when the export price data were normally distributed or 
single -peaked and symmetric. ( China's respons e to Panel question No. 99(a) and (b), paras. 42 -43; see also 
first written submission, paras. 231 -232).  In another part of that same submission, however, China stated that 
its argument in relation to this flaw was that the USDOC treated as significant som ething which was "inherent WT/DS471/R  
 
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  therefore reject China's claim under the pattern clause of Article  2.4.2 in respect of the third 
alleged quantitative flaw with the Nails test.  
Fourth alleged quantitative flaw with the Nails test: The USDOC 's decision to disregard 
non-target prices which were lower than the alleged target price, under the price gap 
test 
7.85.   The fourth alleged quantitative flaw also concerns the USDOC's application of the price gap 
test. Specifically, this flaw relates to the manner in which the USDOC calculated the weighted 
average non -target price gap under this test in the three challenged investigations. In this regard, 
we recall that when calculating this weighted average non -target price gap, the USDOC 
disregarded individual gaps between non -target prices which were found to be lower than the 
alleged target price. China argues that because the USDOC did not take into account these non -
target prices in the calculation of the weighted average non -target price gap, it failed to objectively 
determine, through the price gap test , that the pattern of low export prices to the alleged target 
"differ[ed] significantly" from export prices to the non -targets, in a quantitative sense and thereby 
acted inconsistently with the pattern clause of Article  2.4.2. The United States rejects Chi na's 
arguments, noting that the USDOC applied the Nails test to identify a specific type of pattern, 
namely, a pattern of sufficiently low export prices in relation to other higher export prices.186 
Therefore, in the United States' view, it was "logical" tha t the price gap test would compare the 
export prices to an alleged target with higher export prices to non -targets and that the USDOC did 
not act inconsistently with the pattern clause of Article  2.4.2 by doing so.187 
7.86.   Turning to the relevant facts, we note t hat in the OCTG  investigation, [[ BCI]] of the [[ BCI]] 
CONNUMs examined under the price gap test had non -target prices which were lower than the 
alleged target price.188 In the Coated Paper  investigation, [[ BCI]] of the [[ BCI]] CONNUMs had 
non-target prices w hich were lower than the alleged target price.189 In both investigations, the 
USDOC disregarded, under the price gap test, these non -target prices which were lower than the 
alleged target price in calculating the weighted average non -target price gap.190 Furth er, the 
United States agrees with China's assertion that, under the specific facts of these two 
investigations, the inclusion of these lower non -target prices would have increased the weighted 
average non -target price gap which in turn would have decreased  the likelihood of the price gap 
test being passed.191 However, in the Steel Cylinders  investigation, the alleged target price was 
the lowest price in all the examined CONNUMs. Hence, there were no non -target prices which were 
lower than the alleged target p rice and the question of disregarding non -target prices lower than 
the alleged target price did not arise in this particular investigation.192 Therefore, while China 
raises this flaw with respect to all three challenged investigations, we find no factual bas is to make 
a determination in relation to the Steel Cylinders  investigation in this regard. Our findings with 
respect to the fourth alleged quantitative flaw with the Nails test will therefore relate only to the 
OCTG  and Coated Paper  investigations.  
7.87.   The qu estion that this alleged flaw raises is whether or not by disregarding non -target 
export prices which were lower than the alleged target price from the scope of export prices used 
to determine the weighted average non -target price gap, the USDOC failed to make an objective 
and unbiased determination regarding the existence of a pattern of export prices which differed 
significantly in a quantitative sense, consistently with the requirements of the pattern clause of 
Article  2.4.2.  
7.88.   By disregarding the non -target prices which were lower than the alleged target price in 
calculating the weighted average non -target price gaps, the USDOC found that the pattern of 
export prices to the allegedly targeted purchaser (or time period) differed significantly among 
differen t purchasers (or among different time periods), on the basis of export prices to some but 
not all different purchasers (or time periods). We recall that the purpose of the price gap test that 
                                                                                                                                                  
in distributions that are single -peaked  and symmetric around the mean". ( China's response to Panel question 
No. 100, para. 53). (emphasis added)  
186 United States' response to Panel question No. 101(c), para. 29.  
187 United States' r esponse to Panel question No. 101(c), para. 29.  
188 United States' response to Panel question No. 101(a), para. 25.  
189 United States' response to Panel question No. 101(a), para. 25.  
190 United States' response to Panel question No. 101(a), para. 25.  
191 United S tates' response to Panel question No. 101(a), para. 26.  
192 China's response to Panel question No. 101(b), para. 55.  WT/DS471/R  
 
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  the USDOC applied in the challenged investigations was to find w hether the differences in the 
pattern of export prices were significant, within the meaning of the pattern clause of Article  2.4.2. 
In our view, it is possible that when an investigating authority compares the export prices to an 
allegedly targeted purchas er with the export prices to some or even most other purchasers, the 
differences between them may appear significant. However, when that investigating authority 
compares the export prices to that same allegedly targeted purchaser with the export prices to all 
purchasers, such differences may no longer appear significant. The same rationale holds when the 
investigating authority compares the export prices to an alleged targeted time period with export 
prices to other time periods. Therefore, we consider that  an unbiased and objective investigating 
authority would not have rejected, without justification, evidence on record pertaining to the 
weighted average export prices to some non -targeted purchasers or time periods, as the case may 
have been, which were lo wer than the alleged target price. This is particularly because such 
evidence may bring into question an investigating authority's finding that the pattern of export 
prices to the alleged target differ s significantly from export prices to non -targets.  
7.89.   In this context, we note the United States' argument that because the USDOC applied the 
Nails test to identify a specific type of pattern, namely, a pattern of sufficiently low export prices in 
relation to other higher export prices, it was "logical" that the price gap test would compare the 
export prices to an alleged target to higher export prices to non -targets. We are not persuaded by 
this argument for two reasons. First, the pattern clause of Article  2.4.2 does not permit an 
investigating authority to conc lude that the pattern of export prices to the alleged target differs 
significantly from those to non -targets by considering only the export prices to non -targeted 
purchasers or time periods which are higher than those to the alleged target. In our view, fo r 
export prices to the alleged target to be low, they have to be low relative to export prices to all 
other non -targets. The USDOC found export prices to the alleged target to be low, under the 
standard deviation test , because they were one standard deviat ion below the CONNUM -specific 
weighted average export price. However, if the export prices to a number of non -targeted 
purchasers or non -targeted time periods are below that one standard deviation threshold and 
below the alleged target price, this may requ ire an investigating authority to question whether the 
export prices to the alleged target are indeed low relative to the prices to these non -targeted 
purchasers or time periods. Faced with such a situation, an unbiased and objective investigating 
authorit y would be expected to take such lower non -target prices into consideration and evaluate 
whether the presence of such prices cast s doubt on its finding of a pattern of export prices which 
differ significantly, within the meaning of the pattern clause of Article 2.4.2. However, the USDOC 
chose to disregard, without explanation, data on the record pertaining to such lower non -target 
prices. That, in our view, is neither an objective nor an unbiased evaluation of record evidence.  
7.90.   Second, we recall that there i s an element of subjectivity in the identification of the alleged 
target under the Nails test. In the challenged investigations, the domestic industry petitioner 
identified the alleged target before the USDOC applied the Nails test. Consequently, which 
purchaser or which time period would be the alleged target, and which would be the non -targets, 
was determined before the USDOC applied the Nails test. As the United States itself acknowledges, 
the petitioner's identification of the alleged target influenced which non -target prices would be 
considered under the price gap test and which would not be.193 To illustrate this, let us assume 
that the weighted average export prices to purchasers A, B, C , and D are found to be one standard 
deviation below the CONNUM -specific weighted average export price. Let us also assume that the 
weighted average export prices to A, B, C , and D are USD 2, USD 3, USD 4 , and USD 5, 
respectively. In this case, if the petitioner had identified purchaser D as the alleged target, the 
USDOC would not have considered the weighted average export price to purchasers A, B and C 
under the price gap test. In contrast, if the petitioner had identified purchaser A as the alleged 
target, the USDOC would not have disregarded any of the prices to the no n-targets from the 
computation of the weighted average non -target price gap. Therefore, we do not consider that, in 
the three challenged investigations, the USDOC determined, as the United States puts it, a pattern 
of sufficiently low export prices in rela tion to other higher export prices, on the basis of a purely 
objective examination of the export price data  given that the alleged target was initially identified 
by the petitioner.  
7.91.   We also note that the records in the OCTG  and Coated Paper  investigations do not contain 
any explanation as to why such lower prices were excluded from the scope of the calculation of the 
weighted average non -target price gap. The United States contends that because no interested 
                                                
193 United States' response to Panel question No. 9(b), para. 13.  WT/DS471/R  
 
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  party raised any questions in this regard, there was no reason for the USDOC to discuss this in its 
determinations.194 However, in such a situation, one would have expected an unbiased and 
objective investigating authority to provide an explanation for its decision to disregard export price 
data on the rec ord which could have affected its determination even in the absence of any 
objection or inquiry by an interested party.195 There is no such explanation in the USDOC's records 
in the OCTG  and Coated Paper  investigation. Because the USDOC disregarded, without 
explanation, non -target prices which were lower than the alleged target price in the OCTG  and 
Coated Paper  investigations, we consider that the USDOC failed to find, in an objective and 
unbiased manner, a pattern of export prices which differ significantly  among different purchasers 
or among different time periods, as required under the pattern clause of Article  2.4.2.  
7.92.   The United States also argues that even if the USDOC had not disregarded, in the OCTG  and 
Coated Paper  investigations, the non -target prices  which were found to be lower than the alleged 
target price , that would not have changed the outcome of the USDOC's determinations under the 
pattern clause of Article  2.4.2. Specifically, the United States argues that whereas the weighted 
average non -targe t price gap would have increased in the OCTG  and Coated Paper  investigations if 
non-target prices lower than the alleged target price were taken into account in its calculation, the 
price gap test would still have been passed in these investigations.196 We h ave already found , in 
paragraph ‎7.87, that the USDOC acted inconsistently with the pattern clause of Article  2.4.2 
because it disregarded, without explanation, non -target prices which were lower than the alleged 
target price. We do not consider the fact that the outcome of the price ga p test would not have 
changed, even if the USDOC acted consistently with the pattern clause of Article  2.4.2, or that the 
error which we have found in the USDOC's determinations was harmless to be of any relevance to 
our determination. We find support for this view in the panel report in EC – Salmon (Norway) , 
where the panel found that in evaluating an investigating authority's determination it was not 
required to take cognizance of an argument of harmless error.197 Therefore, we also reject this 
argument by the United States.  
7.93.   In light of the above, we conclude that the USDOC acted inconsistently with the pattern 
clause of Article  2.4.2 in the OCTG  and Coated Paper  investigations, by failing to find, in an 
objective and unbiased manner, a pattern of export pri ces which differed significantly, within the 
meaning of the pattern clause of Article  2.4.2. We therefore uphold China's claim under the 
pattern clause of Article  2.4.2 in respect of the fourth alleged quantitative flaw with the Nails test 
insofar as the OCTG and Coated Paper  investigations are concerned. We reject China's claim under 
the pattern clause of Article  2.4.2 in respect of the fourth alleged quantitative flaw with the Nails 
test insofar as the Steel Cylinders  investigation is concerned.  
7.1.3.3.2.2   SAS progr amming errors  
First SAS programming error  
7.94.   The first SAS programming error occurred in the application of the price gap test in the 
OCTG  and Coated Paper  investigations. We recall that as a result of the first SAS programming 
error, instead of comparing the  alleged target price gap in a given CONNUM with the weighted 
average non -target price gap in that CONNUM, the USDOC compared the alleged target price gap 
with the individual non -target price gaps which made up the overall weighted average non -target 
price gap. The USDOC found the "significant difference" requirement of the price gap test to be 
met, in the examined CONNUM, when the alleged target price gap was greater than any of these 
non-target price gaps taken individually, even the smallest one.198 China contends that as a result 
                                                
194 United States' response to Panel question No. 101(c), para. 30.  
195 In this r egard, we note the United States' argument that in the Steel Cylinders  investigation the 
USDOC explained the reasons for rejecting non -target prices which were lower than the alleged target price, by 
stating that the Chinese exporter BTIC had not demonstra ted why the significant difference requirement could 
only be met by taking into account all non -target prices, including those that were lower than the alleged 
target price. (United States' response to Panel question No. 101(c), para. 29 (citing Steel Cyli nders , Issues and 
Decision Memorandum, (Exhibit  CHN-66), p. 30)). Since we have found that there was no non -target prices 
lower than that the alleged target price in this particular investigation, we do not make findings on the 
adequacy of the USDOC's expl anation.  
196 United States' response to Panel question No. 101(a), para. 26.  
197 Panel Report,  EC - Salmon (Norway) , fn 763. See also Panel Reports, Argentina – Ceramic Tiles , 
para. 6.103; and EC – Fasteners (China) , fn 732.  
198 China's first written submission,  para. 78.  WT/DS471/R  
 
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  of this SAS programming error, it became more likely that the USDOC would find that the exporter 
had passed the price gap test and that the USDOC would  conclude  that the "significant difference" 
requirement under the pattern claus e of Article  2.4.2 was met.199 Therefore, in China's view, as a 
result of this error, the USDOC failed to find, in an objective and unbiased manner , a pattern of 
export prices which differed significantly, in a quantitative sense, as required under the patte rn 
clause of Article  2.4.2.200 We recall that the United States agrees that this error occurred in the 
OCTG  and Coated Paper  investigations and also agrees with China's factual characterization of this 
error. However, the United States contends that China ha s not shown how this error led to a 
violation of any specific provision of the Anti -Dumping Agreement.  
7.95.   The facts show that in the OCTG  and Coated Paper  investigations the USDOC found the 
significant difference requirement in the examined CONNUM to be met w hen the alleged target 
price gap was wider  than any individual gap between two non -targeted purchasers or time periods. 
Even if inadvertently, the USDOC failed to consider, due to this error, the record evidence on all 
non-target prices which made up the w eighted average non -target price gap, and did not provide 
any explanation for this approach. In our view, this shows that the USDOC's finding that there was 
a pattern of export prices which differed significantly among different purchasers or time -periods 
in the OCTG  and Coated Paper  investigations lacked an adequate factual basis.  
7.96.   In light of the above, we conclude that, because of the first SAS programming error, the 
USDOC acted inconsistently with the pattern clause of Article  2.4.2 in the OCTG  and Coate d Paper  
investigations, by failing to find, in an objective and unbiased manner, a pattern of export prices 
which differed significantly, within the meaning of the pattern clause of Article  2.4.2. We therefore 
uphold China's claim under the pattern clause of Article  2.4.2 in respect of the first SAS 
programming error insofar as the OCTG  and Coated Paper  investigations are concerned.  
Second SAS programming error  
7.97.   The second SAS programming error also occurred in the application of the price gap test in 
the OCTG and Coated Paper  investigations. Specifically, this error relates to the calculation of the 
weighted average non -target price gap, under the price gap test. The specific nature of this error 
is presented in paragraphs  ‎7.51 through ‎7.52 above. In particular, we recall that as a result of this 
error, the weighted average non -target price gap erroneously became wider  than what it would 
otherwise have been.  
7.98.   We note th at China changed its factual characterization of this error during our second 
substantive meeting with the parties. Initially, China challenged the second SAS programming 
error, along with the first SAS programming error, because in China's view, this erro r increased 
the likelihood that the alleged target price gap would pass the price gap test.201 Therefore, 
according to China, this second SAS programming error, along with the first one, "biased the Nails 
test" towards finding that the differences in export prices forming the relevant pattern were 
significant.202 In response to our questions following the second substantive meeting, however, 
China clarified that as a result of this error, the weighted average non -target price gap in the 
examined CONNUMs increas ed rather than decreased. Because the requirements of the price gap 
test were met in an examined CONNUM when the alleged target price gap was wider  than the 
weighted average non -target price gap, as a result of this increase, it became less, not more , 
likely that the alleged target price gap would be wider  than the weighted average non -target price 
gap. Therefore, contrary to what China stated earlier in the proceedings, China subsequently 
clarified that the second SAS programming error decreased rather tha n increased the likelihood 
that the price gap test would be passed in the OCTG  and Coated Paper  investigations.203 
7.99.   Factually, it is clear that, as a result of the second SAS programming error, it became less 
likely rather than more likely that the USDOC woul d find in the OCTG  and Coated Paper  
investigations that the pattern of export prices differed significantly, in a quantitative sense, within 
the meaning of the pattern clause of Article  2.4.2. China nevertheless continues to challenge this 
error because fo r China the relevant legal issue raised by this error is that the price gap test "did 
                                                
199 See, e.g. China's first written submission, para. 78; and response to Panel question No. 9 0, para. 3. 
200 See, e.g. China's second written submission, para. 26.  
201 China's response to Panel question No. 4(a), para. 21.  
202 China's response to Panel  question No. 4(a), para. 21.  
203 China's response to Panel question No. 91(a), paras. 6 -7. WT/DS471/R  
 
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  not do what [it was]  supposed to do according to USDOC 's own description of the way in which the 
Price Gap Test operates".204 China also contends that because there was a m ismatch between the 
USDOC's explanation of how the price gap test would operate and how it actually operated as a 
result of this error, the USDOC failed to "provide the required reasoned and adequate explanation 
showing compliance of the Price Gap Test wit h the requirements of the Anti -Dumping 
Agreement".205 
7.100.   In our view, the issue is not whether the USDOC acted inconsistently with the price gap 
test, or whether the price gap test "did not do what [it was] supposed to do" but whether this 
admitted error render ed the USDOC’s determination inconsistent with the pattern clause of  
Article  2.4.2. We acknowledge that the second SAS programming error caused the Nails test to 
operate in a way different from how it should have operated in the two investigations at issue . 
However, we cannot conclude on this basis alone that the USDOC's findings were inconsistent with 
the pattern clause of Article  2.4.2. China's argument does not go beyond the acknowledged fact 
that the Nails test did not do what it was supposed to do in t hese two investigations. China has not 
shown that the second SAS programming error led to a violation of the pattern clause of 
Article  2.4.2 in the OCTG  and Coated Paper  investigations.  
7.101.   In addition, we find it i mportant to underline the fact that the secon d SAS programming 
error made it less likely for the USDOC to find a pattern of export prices that differed significantly. 
We also recall that in the two investigations at issue, the USDOC concluded that there was a 
pattern of export prices which differed s ignificantly among different purchasers or time periods. 
Therefore, the absence of the second SAS programming error would only have strengthened the 
USDOC's finding that the differences in export prices forming the relevant pattern were significant 
within the meaning of the pattern clause of Article  2.4.2.  
7.102.   Taking into account the particular circumstances of these two investigations and the nature 
of the second SAS programming error, we conclude that China has not shown that the second SAS 
programming error led to a finding that was inconsistent with the requirements of the pattern 
clause of Article  2.4.2 in the OCTG  and Coated Paper  investigations. We therefore reject China's 
claim under the pattern clause of Article  2.4.2 in respect of the second SAS progra mming error 
insofar as the OCTG  and Coated Paper  investigations are concerned.  
7.1.3.3.2.3   Conclusion  
7.103.   Based on the foregoing, we find that the USDOC acted inconsistently with the pattern 
clause of Article  2.4.2 of the Anti -Dumping Agreement in the OCTG  and Coated Pape r 
investigations, as a result of the fourth quantitative flaw with the Nails test and the first SAS 
programming error.  We however reject China's claim under the pattern clause of Article  2.4.2 in 
relation to the first, second , and third alleged quantitativ e flaws with the Nails test and the second 
SAS programming error insofar as the OCTG  and Coated Paper  investigations are concerned.  
7.104.   We reject China's claim under the pattern clause of Article  2.4.2 in relation to all four 
alleged quantitative flaw s with th e Nails test insofar as the Steel Cylinders  investigation  is 
concerned.  
7.1.3.3.3   Qualitative issues with the Nails test  
7.105.   China argues that when an investigating authority seeks to find whether the pattern of 
export prices "differ significantly" within the meaning of  the pattern clause of Article  2.4.2, it 
should not just focus on how large the quantitative or numerical differences in export prices are 
but also examine whether those differences are qualitatively significant. Relying on the ordinary 
meaning of the word  "significant" as "sufficiently great or important to be worthy of attention" or 
"appropriate" to convey a meaning, China emphasizes that differences cannot be worthy of 
attention or appropriate to convey a meaning if they depend only on the numerical amou nt of the 
difference. Instead, in China's view, an investigating authority must also focus on the nature of the 
differences or the reason why the differences exist.206 Further, noting that the object and purpose 
of the second sentence of Article  2.4.2 is to deal with targeted dumping, China submits that when 
                                                
204 China's response to Panel question No. 91(b), para. 9.  
205 China's response to Panel question No. 91(b), para. 10.  
206 China's first written submission, para. 140.  WT/DS471/R  
 
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  quantitative differences in export prices are unconnected with targeted dumping, they are unlikely 
to be significant within the meaning of the pattern clause of Article  2.4.2.207 Therefore, an 
investigating  authority should consider the reasons for the price differences to examine if that is 
the case in a given investigation. China submits that the USDOC acted inconsistently with the 
pattern clause of Article  2.4.2 in the three challenged investigations beca use it did not consider the 
reasons for the identified differences in export prices forming the relevant pattern, as part of its 
enquiry into whether such differences were significant. The United States agrees with China that 
the word "significant" has a q uantitative as well as a qualitative dimension. However, in the United 
States' view, to examine whether the differences in export prices are qualitatively significant, an 
investigating authority is required to assess how export prices differ and not why th ey differ.208 
The United States explains that in assessing how export prices differ, the USDOC will do case -
specific analyses with due regard the nature of the product under investigation or the industry at 
issue.209 However, according to the United States, th e USDOC was not required to consider, in the 
three challenged investigations, the commercial reasons or market explanations for differences in 
export prices, as part of its qualitative analysis, as those factors pertain to why export prices differ 
and not how they differ.210 
7.106.   Regarding the factual basis of this alleged flaw, insofar as the OCTG  and Coated Paper  
investigations are concerned, it remains undisputed that no interested party made submissions to 
the USDOC as to the reasons for the identified differe nces in export prices forming the relevant 
pattern. Insofar as the Steel Cylinders  investigation is concerned, BTIC argued before the USDOC 
that the differences that it found in export prices over different time periods were attributable to 
changes in the price of the input used to manufacture steel cylinders, namely steel, in the course 
of the POI. The USDOC rejected this argument because it found that it had no evidentiary value.211 
7.107.   With respect to the legal requirements under the pattern clause of Article  2.4.2, we find no 
explicit requirement in this clause to consider the reasons for the identified differences in export 
prices forming the relevant pattern. China, however, contends that such reasons need to be 
considered when an investigating authority exa mines whether the differences in export prices are 
qualitatively significant. In this regard, both parties agree that "significant" means "[s]ufficiently 
great or important to be worthy of attention".212 In our view, this term can also be defined as 
"importa nt, notable; consequential".213 
7.108.   We note that under the pattern clause of Article  2.4.2, the differences that are sought to 
be identified are the differences in the levels of various export prices. We therefore consider that in 
examining whether such differen ces are "sufficiently great or important to be worthy of attention" 
or "important, notable; consequential", an investigating authority would first take into account the 
size of the numerical differences. In other words, whether or not the differences in ex port prices 
are significant is an enquiry concerning the magnitude of such differences and how such prices 
differ, rather than the reasons for such differences. Indeed, we see no textual basis in Article  2.4.2 
to suggest that an investigating authority is required to examine the reasons for the differences in 
export prices forming the relevant pattern.  
7.109.   In this regard, we note China's argument that when quantitative differences are 
unconnected with targeted dumping, they are unlikely to be significant within  the meaning of the 
pattern clause of Article  2.4.2. It is important to recall that the phrase "targeted dumping" is 
neither used nor defined in the second sentence of Article  2.4.2 nor in any other part of the Anti -
Dumping Agreement. Instead, the second s entence of Article  2.4.2 requires an investigating 
authority to find "a pattern of export prices which differ significantly among different purchasers, 
regions or time -periods". The text does not impose any additional condition on an investigating 
authorit y to find whether the quantitatively significant differences found under the pattern clause 
of Article  2.4.2 are unconnected with targeted dumping. Therefore, we disagree with China's 
                                                
207 China's response to Panel question No. 11, para. 77; see also first written submission, para. 148.  
208 United States' first written submission, para. 73.  
209 See, e.g. United States' second written submission, para. 47.  
210 United States' response to Panel questio n No. 104, para. 40.  
211 United States' response to Panel question Nos. 103(a) and (b), para. 35 (referring to Steel Cylinders 
OI Issues and Decision Memorandum, (Exhibit  CHN-66), p. 32).  
212 China's first written submission, para. 138 (referring to Oxford Eng lish Dictionary Online, access 4 
February 2015, (Exhibit  CHN-92)); and United States' first written submission, para. 45.  
213 Shorter Oxford English Dictionary , 6th edn, A.  Stevenson (ed.) (Oxford University Press, 2007), 
Vol. 2, p. 2833.  WT/DS471/R  
 
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  argument that an investigating authority is required to examine whether the quantitatively 
significant differences in export prices examined under the pattern clause of Article  2.4.2 are 
unconnected with targeted dumping.  
7.110.   This does not mean, however, that numerical or quantitative differences alone can, in all 
factual circumst ances, lead to the conclusion that the identified differences in export prices are 
significant within the meaning of the pattern clause of Article  2.4.2. In this regard, we agree with 
the parties that the word "significant", as used in the pattern clause o f Article  2.4.2, has a 
qualitative dimension in addition to a quantitative one. Thus purely larger quantitative or 
numerical differences cannot, in all factual circumstances, lead to the conclusion that the identified 
differences in export prices forming t he relevant pattern are significant within the meaning of the 
pattern clause of Article  2.4.2, without regard to whether such differences are also qualitatively 
significant. However, we do not agree with China that to consider whether such differences are 
qualitatively significant, an investigating authority is required to consider why export prices differ.  
7.111.   Instead, in our view, when an investigating authority examines whether observed 
quantitative differences in export prices forming the relevant pattern a re qualitatively significant, 
that authority is required to consider how such export prices differ and not why they differ. When 
examining how export prices differ, the investigating authority may find that a given margin of 
difference in export prices, wh ich are in mathematical or numerical terms, "sufficiently great", are 
not "worthy of attention" and hence not "significant", in light of the circumstances surrounding an 
investigation, including most importantly the nature of the product under investigatio n and the 
relevant industry. For example, an investigating authority may find a small difference in the prices 
of industrial machinery to not be "significant" when that same difference in the prices of apples 
may be significant. In this regard, we note tha t China relied on the panel report in US – Upland 
Cotton in support of its view that the word "significant" has a quantitative as well as qualitative 
dimension, and that purely numerical or quantitative differences cannot always be significant.214 
We recall that in those parts of the US – Upland Cotton  panel report referred to by China, the 
panel was examining the meaning of "significance" in the context of Article  6.3(c) of the 
Agreement on Subsidies and Countervailing Measures  (SCM Agreement ), which speaks of 
"significant price suppression".215 However, a closer reading of that report shows that that report 
supports our view, rather than China's view, as to how an investigating authority is required to 
examine whether differences in prices are qualitatively si gnificant. In this regard, we find it useful 
to refer to the following paragraphs of the panel report in US – Upland Cotton : 
The "significance" of any degree of price suppression may vary from case to case, 
depending upon the factual circumstances, and may  not solely depend upon a given 
level of numeric significance. Other considerations, including the nature of the "same 
market" and the product under consideration may also enter into such an assessment, 
as appropriate in a given case.  
We cannot believe tha t what may be significant in a market for upland cotton would 
necessarily also be applicable or relevant to a market for a very different product . We 
consider that, for a basic and widely traded commodity, such as upland cotton, a 
relatively small decrease  or suppression of prices could be significant because, for 
example, profit margins may ordinarily be narrow, product homogeneity means that 
sales are price sensitive or because of the sheer size of the market in terms of the 
amount of revenue involved in large volumes traded on the markets experiencing the 
price suppression.216 (emphasis added; footnotes omitted)  
7.112.   We do not read these findings as supporting China's argument that under the pattern 
clause of Article  2.4.2 an investigating authority is required to examine why export prices differ. 
The panel in US – Upland Cotton stated that numerical differences alone may not lead to the 
conclusion that the differences in question are significant, and that an assessment of whether they 
are must be made after taki ng into consideration the relevant market and the specific nature of 
the product at issue. Such an assessment concerns how the prices differ, and not why they differ. 
The panel did not examine, for instance, the reasons for the price suppression at issue i n that 
                                                
214 See, e.g. China's  first written submission, fn 211 (referring to Panel Report, US – Upland Cotton , 
para. 7.1329).  
215 Panel Report, US – Upland Cotton , para. 7.1329.  
216 Panel Report, US – Upland Cotton , paras. 7.1329 -7.1330.  WT/DS471/R  
 
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  case. Similarly, we do not consider that under the pattern clause of Article  2.4.2 an investigating 
authority is required to consider the reasons for the differences in the export prices forming the 
relevant pattern in order to determine whether tho se differences are qualitatively significant.  
7.113.   Finally, we note that the panel in US – Washing Machines examined the same issue that is 
before us, and concluded that there is no requirement under the pattern clause of Article  2.4.2 to 
examine the reasons fo r the quantitatively large differences in export prices forming the relevant 
pattern, as part of an enquiry into whether such differences are qualitatively significant.217 In 
particular, that panel stated that an authority may properly find that certain pric es differ 
significantly, within the meaning of the pattern clause of Article  2.4.2 if they are notably greater, 
in purely numerical terms, irrespective of the reasons for those differences.218 However, that panel 
recognized that in examining how export price s differ , in certain cases, the investigating authority 
may have to examine the numerical size of the price difference in light of the prevailing factual 
circumstances regarding the nature of the product or relevant market at issue, before it concludes 
that those differences are significant.219 We agree with these findings and note that they are 
consistent with our interpretation of the pattern clause of Article  2.4.2 in this particular regard.220 
7.114.   On the basis of the foregoing, we find that the USDOC was not re quired to consider the 
reasons for the differences in export prices forming the relevant pattern in order to determine 
whether those differences were qualitatively significant within the meaning of the pattern clause of 
Article  2.4.2. We therefore reject C hina's claim under the pattern clause of Article  2.4.2 in the 
three challenged investigations insofar as it relates to the alleged qualitative issues with the Nails 
test. 
7.1.3.3.4   Use of purchaser or time period averages under the Nails test  
7.115.   We recall that under th e Nails test applied in the three challenged investigations, the 
USDOC aggregated the individual export transaction prices to each of the purchasers or time 
periods to calculate a weighted average price per purchaser or time period, which we refer to in 
our report as a purchaser or time period average. In both stages of the Nails test, namely, the 
standard deviation test  and the price gap test, the USDOC examined, on the basis of these 
purchaser or time period averages, whether there was a significantly dif fering pricing pattern, 
within the meaning of the pattern clause of Article  2.4.2. China submits that the USDOC acted 
inconsistently with the pattern clause of Article  2.4.2 in the three challenged investigations by 
making its determination under the Nails  test on the basis of purchaser or time period averages 
instead of the individual export transaction prices which made up those averages.  
7.116.   China presents two arguments in support of this issue. First, China contends that the text 
of the pattern clause of Article 2.4.2 proscribes the use of purchaser or time period averages in the 
identification of a significantly differing pricing pattern.221 Second, China argues that the use of 
purchaser or time period averages created a systematic bias  in the USDOC's pattern  
determinations in the three challenged investigations because it precluded the USDOC from taking 
into account price variations within purchasers or time periods in identifying the significantly 
differing pricing pattern under the pattern clause of Article  2.4.2.  
                                                
217 Panel Report, US – Washing Machines , para. 7.51 ( citing Appellate Body Repor t, US – Large Civil 
Aircraft (2nd Complaint) , para. 1272).  
218 Panel Report, US – Washing Machines , para. 7.48.  
219 Panel Report, US – Washing Machines , paras. 7.49 -7.50. 
220 We note that the panel in US – Washing Machines  concluded th at while an investigating authority is 
not required to consider the reasons for the differences in the export prices forming the relevant pattern, as 
part of its enquiry under the pattern clause of Article  2.4.2 as to whether such differences are significa nt, an 
investigating authority may be required to consider such reasons, as part of its enquiry under the explanation 
clause of Article  2.4.2 that the significant differences in export prices forming the relevant pattern cannot be 
taken into account approp riately under the WA -WA or T -T methodology. (Panel Report, US – Washing 
Machines , para. 7.48). In these proceedings, China has not claimed that the USDOC acted inconsistently with 
the explanation clause of Article  2.4.2 because it failed to consider the re asons for the differences in export 
prices forming the relevant pattern. Therefore, we are not required to consider in these proceedings whether 
an investigating authority is required, under the explanation clause of Article  2.4.2, to consider the reasons for 
the differences in export prices forming the relevant pattern.  
221 China's second written submission, para. 60.  WT/DS471/R  
 
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  7.117.   The United States argues that there is no legal requirement under the pattern clause of 
Article  2.4.2 to find the relevant pattern on the basis of individual export transaction prices instead 
of purchaser or time period averages. Specifically, the United States rejects China's argument that 
the USDOC was required to consider the within -purchaser or within -time period variances in export 
prices, noting that the pattern clause of Article  2.4.2 requires an investigating authority to find 
differences in  export prices "among" different purchasers or time periods rather than within them. 
The United States asserts that purchaser or time period averages in fact allowed the USDOC to 
ignore within -purchaser or within -time period variances and focus on finding differences "among" 
them, as required under the pattern clause of Article  2.4.2.  
7.118.   In our assessment of this issue, we will first examine China's argument based on the text 
of the pattern clause of Article  2.4.2. If we find that such text requires, as China argues, that a 
pattern determination be based on an assessment of individual export transaction prices, we will 
find for China. If we find no such textual requirement, we will proceed to China's second argument 
to evaluate whether the Nails test suffered f rom a systematic bias  because it stopped the USDOC 
from taking into consideration price variations within purchasers or time periods in the 
identification of the relevant pattern in the three challenged investigations.  
7.119.   Turning to the textual requirements u nder the pattern clause of Article  2.4.2, we note that 
this clause requires an investigating authority to find "a pattern of export prices" which "differ 
significantly" among different purchasers, regions or time periods. The text does not, however, 
explai n how such a determination is to be made. Importantly, it does not clarify whether an 
investigating authority should rely on individual export transaction prices or purchaser or time 
period averages thereof in such a determination. We find no explicit proh ibition in this text on the 
use of purchaser or time period averages to find such a significantly differing pricing pattern. We 
note that the use of the phrase "differ significantly among different purchasers, regions or time 
periods" in the pattern clause  of Article  2.4.2 suggests that the relevant enquiry under that clause 
is whether there are differences in the export prices that an exporter charges to different 
purchasers or regions or in different time periods, and whether those differences are signifi cant. 
We do not see how this provision can be interpreted, as China argues, as prohibiting the use of 
purchaser or time period averages. China presents three reasons in support of its argument. We 
disagree with these reasons, on the grounds explained below . 
7.120.   First, China argues that the use of individual export transaction prices in a pattern 
determination would ensure parallelism between the method used for that determination and the 
actual application of the WA -T methodology.222 In other words, China contend s that since the 
second sentence of Article  2.4.2 explicitly states that the WA -T methodology has to be applied on 
the basis of the "prices of individual export transactions", the pattern determination should also be 
made on the same basis. However, we see  nothing in the text of Article  2.4.2 that requires such 
parallelism. In our view, if the text required such parallelism, it would have said so. The second 
sentence of Article  2.4.2 explicitly states that the WA -T methodology is to be applied on the basis 
of the "prices of individual export transactions". However, in that same sentence, when describing 
the requirements of the pattern clause of Article  2.4.2, the text is silent as to whether an 
investigating authority is required to use the prices of individ ual export transactions to find the 
relevant pattern. This strengthens our view that Article  2.4.2 does not necessarily require that a 
finding regarding  the relevant pattern be made on the basis of a comparison of the prices of 
individual export transactio ns. We acknowledge that the silence in a treaty text in relation to a 
requirement may mean that that requirement was intended to be included by implication in the 
text.223 However, we do not consider that to be the case here. Instead, the silence in the patt ern 
clause of Article  2.4.2 with respect to whether an investigating authority has to use individual 
export transaction prices in its findings under that clause makes sense in the context of what this 
provision seeks to achieve. Specifically, this clause i s concerned with the identification of a 
significantly differing pricing pattern, whereas the WA -T methodology is, as elaborated below, 
concerned with the application of the WA -T methodology to individual export transaction prices 
which fall within that pa ttern. The pattern clause of Article  2.4.2 is structured in a way that 
provides an investigating authority with discretion in identifying this pattern. Hence, the text does 
not mandate the use of individual export transaction prices to identify the relevan t pattern. Even 
                                                
222 China's first written submission, paras. 133 and 258.  
223 See, e.g. Appellate Body Report, US – Carbon Steel , para. 65. In this regard, the Ap pellate Body 
stated in this case, that the silence of a text in prescribing a requirement does not exclude the possibility that 
that requirement was intended to be included by implication.  WT/DS471/R  
 
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  though the relevant pattern is identified through the use of purchaser or time period averages, the 
pattern itself, such as a pattern of low export prices to a targeted purchaser or time period, as was 
the case in the three challenged inves tigations, will consist  of one or more individual export 
transactions. When the WA -T methodology is applied to the pattern that methodology will have to 
be applied to the individual export transactions which make up the pattern. Therefore, we find no 
merit  in China's reasoning that an investigating authority is required to ensure parallelism between 
the tool adopted to examine whether the WA -T methodology may be used and the actual 
application of the WA -T methodology itself.  
7.121.   Second, China refers to the Appe llate Body report in US – Zeroing (Japan) , where the 
Appellate Body read the phrase "individual export transactions" in the second sentence of 
Article  2.4.2 as referring to "the transactions that fall within the relevant pricing pattern".224 
According to Chi na, this statement by the Appellate Body indicates that in order to identify a 
meaningful pattern, an investigating authority must assess such a pattern by observing the prices 
of individual export transactions.225 We do not agree with China's reading of thi s statement by the 
Appellate Body. The Appellate Body made this observation in the context of how the WA -T 
methodology is to be applied, rather than how the conditions under the pattern clause of 
Article  2.4.2 are to be met.226 We have already stated that wh en the WA -T methodology is applied, 
it has to be applied to  the individual export transactions forming the relevant pattern. However, as 
explained above, that does not mean that the relevant pattern cannot be identified through the 
use of purchaser or time  period averages, as the USDOC did in the three challenged investigations.  
7.122.   Third, China contends that the use of the word "pattern" in the second sentence of 
Article  2.4.2 suggests that an investigating authority is required to discern an "intelligible for m or 
arrangement" from amongst a "sufficient number of events".227 We understand China to argue that 
the use of a purchaser or time period average reduces the number of events from which an 
"intelligible form or arrangement" can be discerned. Hence, it under mines an investigating 
authority's ability to discern a pattern from the multiple export prices charged by an exporter.228 
China also finds support for this view in the phrase "such difference s" in the second sentence of 
Article  2.4.2, i.e. significant diffe rences in export prices forming the relevant pattern. China argues 
that when multiple export transaction prices to a purchaser or time period are aggregated to 
calculate a single purchaser or time period average, an investigating authority reduces the natu re 
and extent of overall differences in the export price data.229 This, in China's view, undermines an 
investigating authority's ability to determine whether the differences in export prices forming the 
relevant pattern are significant.230 China also finds add itional textual support for this view in the 
fact that the pattern clause of Article  2.4.2 uses the plural tense to refer to a pattern of "export 
prices".  
7.123.   We consider that China's argument in this regard is based on a wrong understanding of the 
objective o f the pattern clause of Article  2.4.2. This clause requires an investigating authority to 
examine whether there are significant differences in export prices to different purchasers, regions 
or time periods. An exporter may make multiple export transactions  to a particular purchaser, 
region or time period, and there may be differences or variations in the prices of those export 
transactions. However, we do not find anything in the text of the pattern clause of Article  2.4.2 
which would suggest that an invest igating authority is required to take into account those 
differences within the export prices to a particular purchaser, region or time period. Put differently, 
we do not consider, as China argues, that the pattern clause of Article  2.4.2 requires an 
investigating authority to consider the within -purchaser or within -time period variances in export 
prices. Nor do we consider that the use of the plural tense in the pattern clause of Article  2.4.2, in 
referring to a pattern of "export prices" to be dispositive  on this issue. The text refers to a pattern 
of export prices "which differ significantly among different purchasers, regions or time periods" and 
thus underlines the differences between the export prices to different purchasers, regions or time 
periods, a nd not the differences within the prices to a given purchaser, region or time period.  
                                                
224 China's response to Panel question No. 13, para. 84 (quoting Appe llate Body Report, US – Zeroing 
(Japan) , para. 135).  
225 China's response to Panel question No. 13, para. 85.  
226 See, e.g. Appellate Body Report, US – Zeroing (Japan) , para. 135.  
227 China's first written submission, para. 134.  
228 See, e.g. China's first written  submission, para. 134.  
229 See, e.g. China's first written submission, para. 134.  
230 China's first written submission, para. 134.  WT/DS471/R  
 
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  7.124.   On the basis of the foregoing, we disagree with China's first argument that the text of the 
pattern clause of Article  2.4.2 precludes an investigating authority from find ing a significantly 
differing pricing pattern on the basis of purchaser or time period averages. In our view, the 
pattern clause of Article  2.4.2 provides investigating authorities with discretion with respect to 
whether a pattern determination is to be ba sed on individual export transaction prices to 
purchasers or time periods or purchaser or time period averages. An authority can choose either of 
these approaches provided that it makes an objective and reasoned determination on the basis of 
properly estab lished facts. This takes us to China's second argument, namely that the USDOC's 
pattern determination s in the three challenged investigations were inconsistent with the pattern 
clause of Article  2.4.2 because the use of purchaser or time period averages cr eated a systematic 
bias in those determinations by precluding the USDOC from taking into account price variations 
within purchasers or time periods.  
7.125.   Under the second argument, as we noted above, China argues that the Nails test suffered 
from a systematic b ias because it stopped the USDOC from taking into consideration price 
variations within purchasers or time periods in the identification of the relevant pattern in the 
three challenged investigations. Specifically, China's allegation of a systematic bias r elates to the 
manner in which the USDOC calculated the numerical value of one standard deviation under the 
standard deviation test , in the three challenged investigations, and the manner in which the 
USDOC calculated the threshold price based on that numer ical value. China submits that the 
numerical value of one standard deviation which is calculated on the basis of individual export 
transaction prices, as a matter of statistical certainty, "cannot be smaller" but will "usually be 
larger" than the numerical  value of one standard deviation calculated on the basis of purchaser or 
time period averages.231 When the numerical value of one standard deviation is larger, the 
threshold price which is one standard deviation below the CONNUM -specific average export price  is 
lower. Because the USDOC found the requirements of the standard deviation test  to be met in the 
examined CONNUM when the alleged target price was lower than the threshold price, a low 
threshold price increased the likelihood that the alleged target pri ce would be above this threshold 
price and similarly, a high threshold price decreased that likelihood.  
7.126.   To illustrate this, as explained in paragraph  ‎7.42 above , when the value of one standard 
deviation used in our example was  4.78, the threshold price was USD 11.5 – 4.78 (CONNUM -
specific weighted average export price – one standard deviation) which is equal to USD 6.72. 
Because  the alleged target price in our example was USD 6, it was lower than this threshold price 
of USD 6.72 and the standard deviation test  requirement in the examined CONNUM was met. 
However, if the value of one standard deviation had been higher, such as 6 instead of 4.78, the 
threshold price would have been USD 5.5 (USD 11.5 – 6) instead of USD 6.72, and th e alleged 
target price would not have been found to be lower than this lower threshold price. In that 
situation, the standard deviation test  requirement in the examined CONNUM w ould not have been 
met. China presents evidence to show that in the OCTG  and Coated Paper  investigations, if the 
USDOC had calculated the standard deviation on the basis of individual export transaction prices, 
the requirements of the standard deviation test  would not have been met.232 In the Steel Cylinders  
investigation, China conten ds that the USDOC would have found a pattern in only [[ BCI]] instead 
of [[BCI]] CONNUMs.233 The United States does not confirm the factual veracity of this evidence 
submitted by China.234 
7.127.   We recall that China's argument that the Nails test suffered from a "sys tematic bias" is 
based on its view that the USDOC failed to take into consideration price variations within 
purchasers or time period s because it aggregated all individual export transaction prices to a 
purchaser or time period to calculate a purchaser or time period average. We have already found , 
in paragraph ‎7.123 , that there is no requirement under the pattern clause of Article  2.4.2 to 
consider such within -purchaser or within -time period variances in export prices. Further , we have 
also found , in paragraph ‎7.124 , that the pattern clause of Article  2.4.2 gives the investigating 
authority the discretion to choose between individual export transaction prices and purchaser or 
time period averages i n finding the relevant pattern. The USDOC chose to make its pattern 
determination on the basis of purchaser or time period averages. Even if it is true that , in the 
three challenged investigations, the numerical value of one standard deviation would have b een 
                                                
231 Dr. Peter Egger's first statement, (Exhibit  CHN-1) (BCI), para. 77.  
232 China's first written submission, para. 268.  
233 China's f irst written submission, para. 268.  
234 United States' response to Panel question No. 105, para. 45.  WT/DS471/R  
 
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  higher if it had been calculated on the basis of individual export transaction prices rather than 
purchaser or time period averages we cannot find that the USDOC's determination was biased on 
that basis. When the pattern clause of Article  2.4.2 provide d the USDOC with the discretion to use 
either of these two methods in its pattern determination, we do not consider that the USDOC's 
determination in the three challenged investigations could be consider biased, simply because the 
method that it chose led to an outcome which was less favourable to the exporters than the other.  
7.128.   On the basis of the foregoing, we find that the USDOC did not act inconsistently with the 
pattern clause of Article  2.4.2 in the three challenged investigations by finding the relevan t pattern 
on the basis of purchaser or time period averages as opposed to individual export transaction 
prices. We therefore reject China's claim under the pattern clause of Article  2.4.2 in the three 
challenged investigations insofar as it relates to the USDOC's use of purchaser or time period 
averages under the Nails test in these investigations.  
7.1.4   China's claim under the explanation clause of Article  2.4.2  of the Anti -Dumping 
Agreement  
7.1.4.1   Main a rgument s of the parties  
7.1.4.1.1   China  
7.129.   China claims that the explanations provided by the USDOC in the three challenged 
investigations as to why the WA -T methodology had to be used to calculate the dumping margins 
were inconsistent with the explanation clause of Article  2.4.2. China identifies two issues in this 
regard. First, C hina maintains that the USDOC's explanations were qualitatively insufficient to 
discharge its obligations under the explanation clause of Article  2.4.2. Second, China contends that 
the USDOC acted inconsistently with the explanation clause of Article  2.4.2 by failing to explain 
why the T -T methodology could not appropriately take into account the significant differences in 
the relevant export prices, within the meaning of that clause.  
7.130.   Regarding the first issue, China argues that the USDOC's explanations in the three 
challenged investigations were qualitatively insufficient to meet its obligations under the 
explanation clause of Article  2.4.2, for two reasons. First, China notes that the USDOC's 
explanations in the three challenged investigations that the WA -WA methodology masked targeted 
dumping whereas the WA -T methodology unmasked it, were based on the fact that the dumping 
margin obtained through the WA -T methodology, with zeroing, was higher than that obtained 
through the WA -WA methodology, without zeroin g. China asserts that the USDOC's explanations in 
these investigations were based on an erroneous legal premise that Article  2.4.2 permits the use 
of zeroing under the WA -T methodology.235 Second, China contends that the USDOC's 
explanations were remarkably brief, offered no analysis , and did not consider any of the 
characteristics of the relevant export price pattern.236 
7.131.   With respect to the second issue, China asserts that the explanation clause of Article  2.4.2 
requires an investigating authority to provide a n explanation as to why the WA -WA as well  as the 
T-T methodology cannot take into account appropriately the significant differences in the relevant 
export prices. China submits that the USDOC acted inconsistently with that clause in the three 
challenged in vestigations by failing to provide an explanation with respect to the T -T 
methodology.237 
7.1.4.1.2   United States  
7.132.   In relation to the first issue, the United States disagrees with China's assertion that the 
USDOC's explanations were based on an erroneous legal premise that Article  2.4.2 permitted the 
use of zeroing under the WA -T methodology, arguing that zeroing is indeed permitted under the 
WA-T methodology set forth in Article  2.4.2.238 With respect to China's argument challenging the 
quality of the USDOC's explanation , the United States submits that a brief explanation is sufficient 
to discharge an investigating authority's obligation under the explanation clause of Article  2.4.2 
                                                
235 See, e.g. China's second written submission, paras. 85 -86. 
236 China's first written submission, para.  280. 
237 China's first written submission, para. 282.  
238 United States' second written submission, para. 63. WT/DS471/R  
 
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  when the comparison of dumping margins obtained through one of the normal methodologies an d 
the WA -T methodology makes it clear that the normal methodology masks dumping to a material 
or meaningful degree.239 The United States insists that it is only through the kind of comparison 
that the USDOC did in the three challenged investigations that an investigating authority can 
examine which of the two methodologies can more appropriately take into account the significant 
differences in the relevant export prices.240 
7.133.   In regard to the second issue identified by China, the United States contends that the 
explanation clause of Article  2.4.2 does not require an investigating authority to provide an 
explanation with respect to both the WA -WA and the T -T methodologies. In this regard, relying on 
the Appellate Body report in US – Softwood Lumber V (Article 21.5 – Canada) , the United States 
asserts that the WA -WA and the T -T methodologies are supposed to yield systematically similar 
results.241 Therefore, in the United States' view, there is no purpose in requiring an investigating 
authority to explain why both of t hese two methodologies cannot be used to take into account 
appropriately the significant differences in the relevant export prices.242 Further, the United States 
submits that in investigations concerning non -market economies, such as China, normal value is 
not based on transaction -specific home market prices, and hence the T -T methodology cannot be 
used in these investigations.243 It follows that, in such investigations, an investigating authority is 
not required, under the explanation clause of Article  2.4.2, to explain why the significant 
differences in the relevant export prices cannot be taken into account appropriately by the T -T 
methodology.  
7.1.4.2   Main a rguments of the third parties  
7.1.4.2.1   Brazil  
7.134.   Brazil agrees with China that Article  2.4.2 requires an explanation as to  why the WA -WA as 
well as the T -T methodology cannot be used by an investigating authority to take into account 
appropriately the significant differences in the relevant export prices, before an investigating 
authority resorts to the WA -T methodology.244 Brazil also finds the USDOC's explanations in the 
three investigations at issue to be qualitatively deficient. In particular, Brazil considers that the 
mathematical differences observed in the dumping margins obtained though the WA -WA and the 
WA-T methodologi es were attributable to the intrinsic characteristics of the operation of each of 
these methodologies.245 Brazil finds the USDOC's explanations which were premised on these 
observed differences to be circular.246 
7.1.4.2.2   European Union  
7.135.   The European Union notes that th e USDOC's explanations made no reference to the 
possible use of the T -T methodology.247 The European Union, however, does not express a specific 
view on whether the omission of such an explanation leads to a violation of the explanation clause 
of Article  2.4.2.248 
7.1.4.2.3   Japan  
7.136.   Japan argues that an investigating authority's explanation under the explanation clause of 
Article  2.4.2 must be with respect to the WA -WA as well as the T -T methodology, and not just one 
of them.249 Japan refers to the USDOC's Steel Cylinders  investigation to highlight this point. In 
Japan's view, when, as suggested by the concerned exporter in that investigation, the changes in 
export prices were attributable to changes in input costs, such a situation could be addressed 
                                                
239 United States' first written submission, para. 171.  
240 United States' second written submission, para. 61.  
241 United States' first written submission, paras. 173 -174 (citing Appellate Body Report, US – Softwood 
Lumber V (Article 21.5 – Canada) , para. 93).  
242 United States' first written submission, para. 174. 
243 United States' response to Panel question No. 16, para. 28.  
244 Brazil's third -party submission, para.  14. 
245 Brazil's third -party statement, para. 12.  
246 Brazil's third -party statement, para. 12.  
247 European Union's third-party submission, para. 40. 
248 European Union's third-party submission, para. 40. 
249 Japan's third -party submission, para. 60.  WT/DS471/R  
 
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  through the contemporaneo us comparison of normal value and export price under the T -T 
methodology.250 In such a situation, the investigating authority could have used the T -T 
methodology to take into account appropriately the significant differences in the relevant export 
prices, in stead of resorting to the WA -T methodology.  
7.1.4.2.4   Korea  
7.137.   Korea questions the USDOC's explanations in the three challenged investigations, noting 
that the differences which the USDOC found in the dumping margins obtained through the WA -WA 
methodology and the WA -T methodology arose only due to the use of  zeroing under the WA -T 
methodology.251 Further, Korea submits that the explanation clause of Article  2.4.2 requires an 
explanation covering the T -T methodology, which the USDOC failed to provide.252 
7.1.4.2.5   Turkey  
7.138.   Turkey consid ers the explanation clause of Article  2.4.2 to be a "procedural obligation" 
which requires an investigating authority to respect the "due process" rights of interested 
parties.253 
7.1.4.2.6   Viet Nam  
7.139.   Viet Nam maintains that the scope of the explanation clause of Article 2.4.2 covers both 
the WA -WA and the T -T methodology.254 Viet Nam also questions the USDOC's explanations which 
were based on the higher dumping margin obtained through the WA -T methodology, with zeroing, 
as compared to the WA -WA methodology, without zeroin g, noting that a dumping margin will 
always be higher when zeroing is used.255 
7.1.4.3   Evaluation by the Panel  
7.140.   China's claim under the explanation clause of Article  2.4.2 of the Anti -Dumping Agreement 
raises two issues, namely whether or not the USDOC's explanations  in the three challenged 
investigations were qualitatively insufficient to meet the requirements of the explanation clause of 
Article  2.4.2, and whether the USDOC acted inconsistently with the explanation clause of 
Article  2.4.2 by not explaining in these investigations why the significant differences in the 
relevant export prices could not be taken into account appropriately by the use of the T -T 
methodology.  
7.1.4.3.1   Quality of the USDOC's explanations in the three challenged investigations  
7.141.   We recall that the USDO C provided similar explanations in all of the three challenged 
investigations. In the Coated Paper  investigation, the USDOC provided the following explanation:  
[T]he Department finds that the pattern of price differences identified cannot be taken 
into acc ount using the standard average -to-average methodology because the 
average -to-average methodology conceals differences in price patterns between the 
targeted and non -targeted groups by averaging low -priced sales to the targeted group 
with high -priced sales  to the non -targeted group. Thus, the Department finds, 
pursuant to section 777A(d)(1)(B) of the Act, that application of the standard 
average -to-average comparison methodology would result in the masking of dumping 
that would be unmasked by application of  the alternative average -to-transaction 
comparison method to all of APP -China's sales.256 
                                                
250 Japan's third -party submission, para. 60.  
251 Korea's third -party submission, para. 17.  
252 Korea's third -party submission, para. 16.  
253 Turkey's third -party submission, paras. 6 and 11.  
254 Viet Nam's third -party submission, para. 16 . 
255 Viet Nam's third -party submission, para. 16.  
256 Coated Paper  OI, Issues and Decision Memorandum , (Exhibit  CHN-64), pp. 23 -24. WT/DS471/R  
 
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  7.142.   The USDOC's explanations in the OCTG  and Steel Cylinders  investigations were similar to 
this explanation provided in the Coated Paper  investigation.257 
7.143.   China presents two  arguments challenging the quality of these explanations by the USDOC 
justifying the use of the WA -T methodology in the three challenged investigations. First, China 
argues that the USDOC's explanations were based on the erroneous legal premise that 
Article 2.4.2 permits the use of zeroing under the WA -T methodology. Second, China contends that 
the USDOC's explanations were remarkably brief, offered no analysis and did not consider any of 
the characteristics of the relevant export price pattern.  
7.144.   With respec t to China's first argument, we note that the explanation clause of Article  2.4.2 
does not prescribe a particular manner in which an investigating authority should provide its 
explanation as to why the significant differences in the relevant export prices cannot be taken into 
account appropriately by the use of a WA -WA or T -T methodology. Therefore, we find that an 
investigating authority has discretion in deciding how this explanation is to be made. In our view, 
however, in making this explanation and choo sing the methodology to be used in its dumping 
determinations, an investigating authority has to make a decision based on determinations that 
are consistent with the relevant provisions of the Anti -Dumping Agreement.  
7.145.   In the three challenged investigations,  the USDOC based its explanation justifying the use 
of the WA -T methodology on the fact that the dumping margin obtained through the WA -T 
methodology, with zeroing, was higher than the dumping margin obtained through the WA -WA 
methodology, without zeroing.  The USDOC concluded on the basis of these observed mathematical 
differences in dumping margins obtained through the WA -WA and the WA -T methodology that the 
WA-WA methodology concealed differences in price patterns and masked dumping, which was 
unmasked by  the use of the WA -T methodology. We note that the observed mathematical 
differences in the dumping margins obtained through the WA -WA and the WA -T methodology in 
these investigations were attributable to the fact that the USDOC used zeroing under the WA -T 
methodology and did not do so under the WA -WA methodology.258 In this regard, we recall that if 
zeroing was not used under either the WA -WA or the WA -T methodology, the dumping margin 
obtained through the WA -T methodology in the three challenged investigati ons would have been 
mathematically equivalent to that obtained through the WA -WA methodology.259 This shows that 
the only reason why the USDOC found in the three challenged investigations that the dumping 
margin obtained through the WA -T methodology was high er than that obtained through the WA -
WA methodology was because it used zeroing under the WA -T methodology.  
7.146.   As explained in paragraph  ‎7.220  below , we are of the view  that the use of zeroing under 
the WA -T metho dology is inconsistent with Article  2.4.2 of the Anti -Dumping Agreement. Because 
the USDOC's explanations were premised on the use of the WA -T methodology with zeroing, we 
find that such explanations were based on an erroneous legal basis. Such an explanat ion cannot, 
in our view, be consistent with the explanation clause of Article  2.4.2.  
7.147.   On this basis, we find that the USDOC's explanations in the three challenged investigations 
were inconsistent with the explanation clause of Article  2.4.2. In light of thi s finding, we do not 
find it necessary to assess China's second argument, namely, whether the USDOC's explanations 
were also inconsistent with Article  2.4.2 because they were remarkably brief, offered no analysis , 
and did not consider any of the characteri stics of the relevant export price pattern.  
7.1.4.3.2   USDOC's failure to provide an explanation with respect to the T -T methodology  
7.148.   Factually, it is uncontested that in the three challenged investigations the USDOC did not 
provide an explanation as to whether the si gnificant differences in the relevant export prices could 
                                                
257 OCTG  OI, Issues and Decision Memorandum , (Exhibit  CHN-77), Comment 2 ; and Steel Cylinders  OI, 
Issues and Decision Memorandum , (Exhibit  CHN-66), p. 24. 
258 In this regard, in response to our question as to whether th e observed differences in dumping 
margins obtained through the WA -WA methodology and the WA -T methodology were attributable partly or 
wholly to the fact that the USDOC used zeroing under the WA -T methodology and did not use zeroing under 
the WA -WA methodol ogy, the United States did not deny that this was the case. (United States' response to 
Panel question No. 15, paras. 24 -25). 
259 United States' first written submission, paras. 266 -272. WT/DS471/R  
 
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  be taken into account appropriately through the T -T methodology.260 Instead, in the three 
challenged investigations, as we noted above, the USDOC provided similar explanations as to why 
the significan t differences in the relevant export prices could not be taken into account 
appropriately by the use of the WA -WA methodology. The USDOC did not explain in these 
investigations why the T -T methodology could not be used for this purpose.  
7.149.   The parties disagre e as to whether the explanation clause of Article  2.4.2 contains such a 
requirement. The issue before us is therefore one of legal interpretation, namely whether the 
explanation clause of Article  2.4.2 requires an investigating authority to provide an expl anation 
with respect to either the WA -WA methodology or the T -T methodology or whether it requires an 
explanation with respect to both of these two methodologies. In this regard, we recall that 
Article  2.4.2 reads as follows:  
Subject to the provisions gove rning fair comparison in paragraph  4, the existence of 
margins of dumping during the investigation phase shall normally be established on 
the basis of a comparison of a weighted average normal value with a weighted 
average of prices of all comparable expor t transactions or by a comparison of normal 
value and export prices on a transaction -to-transaction basis. A normal value 
established on a weighted average basis may be compared to prices of individual 
export transactions if the authorities find a pattern of export prices which differ 
significantly among different purchasers, regions or time periods, and if an 
explanation is provided as to why such differences cannot be taken into account 
appropriately by the use of a weighted average -to-weighted average or  
transaction -to-transaction comparison . (emphasis  added)  
7.150.   The first sentence of Article  2.4.2 refers to two methodologies to calculate the dumping 
margin that shall apply "normally", i.e. the WA -WA methodology and the T -T methodology. It is 
well established  that the first sentence provides an investigating authority with discretion to 
choose between either of the two normal methodologies in comparing the normal value with the 
export price.261 The second sentence allows an investigating authority to use the WA -T 
methodology in exceptional circumstances, provided, inter alia , the authority explains why the 
significant differences in the relevant export prices, "cannot be taken into account appropriately by 
the use of a weighted average -to-weighted average or tran saction -to-transaction comparison ".262 
The WA -T methodology has been recognized in past Appellate Body reports as an "exception" to 
the normal methodologies.263 
7.151.   We recall that, faced with the same legal question, the panel in US – Washing Machines  
found that t he use of the indefinite article  "a" in the explanation clause of Article  2.4.2, combined 
with the disjunctive "or", and the use of the term "comparison" in the singular ("a comparison"), 
shows that the requisite explanation needs to be provided only in re spect of one type of 
comparison methodology, be it the WA -WA "or" the T -T methodology.264 That panel found further 
support for its view in the context provided by the first sentence of Article  2.4.2 which provides an 
investigating authority with the discreti on to choose between either of the two normal 
methodologies, depending on which of the two was most suitable in a particular investigation.265 
According to that panel, having made a choice, in light of the particularities of the investigation, to 
use either the WA -WA or the T -T methodology, it would be anomalous to expect the investigating 
authority to provide an explanation why both of these methodologies, rather than the normal 
methodology which it decided to use, could not take into account the significant  differences in the 
relevant export prices. 266 However, for the reasons provided below, we disagree with the panel in 
US – Washing Machines , and find that the explanation clause of Article  2.4.2 requires an 
investigating authority to provide an explanation with respect to both the WA -WA and the T -T 
methodology, and not either of them.  
                                                
260 United States' response to Panel question No. 18, para. 35.  
261 See, e. g. Appellate Body Report s, US – Softwood Lumber V (Article 21.5 – Canada) , para. 93.  
262 Emphasis added.  
263 See, e.g. Appellate Body Report s, US – Softwood Lumber V (Article 21.5 – Canada) , para. 9 7; and 
US – Zeroing (Japan) , para. 131.  
264 Panel Report, US – Washing Machines , para. 7.79.  
265 Panel Report, US – Washing Machines , para. 7.80.  
266 Panel Report, US – Washing Machines , para. 7.80.  WT/DS471/R  
 
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  7.152.   Firstly, we are of the view that the use of "or" in the explanation clause of Article  2.4.2 
does not necessarily suggest that it is sufficient to provide an explanation which e ngages with only 
one of the two normal methodologies. This is because the use of the conjunction "and" instead of 
"or" would have made no grammatical sense in the context of the explanation clause of 
Article  2.4.2. If the explanation clause of Article  2.4.2 stated that an investigating authority needs 
to explain why the significant differences in the relevant export prices cannot be taken into 
account appropriately through "a WA -WA and T-T comparison", this would incorrectly suggest that 
an investigating au thority needs to adopt a mixed methodology consisting  of the WA -WA and the 
T-T methodology to take into account the significant differences in the relevant export prices. 
Secondly, the reference to "a … comparison" in the singular and particularly the use of the 
indefinite article "a" in the English text does not, in our view, mean that an explanation with 
regard to one of the two normal methodologies would satisfy the requirements of the explanation 
clause of Article  2.4.2. We find support for this view in  the French text of the Anti -Dumping 
Agreement. T he French text does not use the indefinite article " une", the equivalent of the article 
"a" in English, but uses the French definitive article "les".267 
7.153.   Our interpretation is informed by the context of the exp lanation clause of Article  2.4.2 and 
the object and purpose of the Anti -Dumping Agreement as reflected in that provision. We find the 
first sentence of Article  2.4.2 to provide immediate "context" to the explanation clause of 
Article  2.4.2 which appears in  the second sentence. In this regard, as we noted earlier, the WA -T 
methodology under the second sentence of Article  2.4.2 has been recognized by the Appellate 
Body as an exception to the normal methodologies set forth in the first sentence of Article  2.4.2. 
We find this characterization persuasive and also consider that the WA -T methodology is an 
exception to both of the normal methodologies, and not just to one of them. Therefore, when an 
investigating authority resorts to this exceptional methodology, it  must explain why neither of the 
two normal methodologies can take into account appropriately the significant differences in the 
relevant export prices. We find support for this interpretation in the following observation of the 
Appellate Body in US – Zeroing (Japan) : 
[A]n "explanation" [needs to] be provided as to why such differences in export prices 
cannot be taken into account appropriately by the use of either of the two symmetrical 
comparison methodologies set out in the first sentence of Article  2.4.2. The second 
requirement thus contemplates that there may be circumstances in which targeted 
dumping could be adequately addressed through the normal symmetrical comparison 
methodologies . The asymmetrical methodology in the second sentence is clearly an 
exception to the comparison methodologies which normally are to be used .268 (italics 
original; underlining added)  
7.154.   The Appellate Body's observation that an investigating authority needs to explain why the 
differences in export prices cannot be taken into accou nt by the use of either of the two 
                                                
267 The French text of the second sentence of Article  2.4.2 states as follows:  
Une valeur normale établie sur la base d'une moy enne pondérée pourra être comparée aux prix 
de transactions à l'exportation prises individuellement si les autorités constatent que, d'après 
leur configuration, les prix à l'exportation  diffèrent notablement entre différents acheteurs, 
régions ou périodes,  et si une explication est donnée quant à la raison pour laquelle il n'est pas 
possible de prendre dûment en compte de telles différences en utilisant les méthodes  de 
comparaison moyenne pondérée à moyenne pondérée ou transaction par transaction.  (emphasis  
added)  
In this regard, we note that the Spanish text, like the English text , uses the indefinite article ("una") in 
the explanation clause of Article  2.4.2. The text of the second sentence of Article  2.4.2 in Spanish is as follows:  
Un valor normal estable cido sobre la base del promedio ponderado podrá compararse con los 
precios de transacciones de exportación individuales si las autoridades constatan una pauta de 
precios de exportación significativamente diferentes según los distintos compradores, regiones  o 
períodos, y si se presenta una explicación de por qué esas diferencias no pueden ser tomadas 
debidamente en cuenta mediante una comparación entre promedios ponderados o transacción 
por transacción. (emphasis  added)  
In this regard, we note  that under Article 33.1 of the Vienna Convention on the Law of Treaties  (VCLT),  
when a treaty has been authenticated in two or more languages, as is the case with the WTO Agreement, the 
text is equally authoritative in each language unless the treaty provides or the par ties agree that, in case of 
divergence, a particular text shall prevail. The WTO Agreement does not suggest that the English or Spanish 
text is more authoritative than the French text. We also note  that Article  33.3 of the V CLT states that the 
terms of the  treaty are presumed to have the same meaning in each authentic text.  
268 Appellate Body Report, US – Zeroing (Japan) , para. 131. WT/DS471/R  
 
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  symmetrical comparison methodologies set out in the first sentence of Article  2.4.2 suggests that 
the explanation needs to be provided with respect to both of the normal methodologies. Further, 
we are of the view that thi s interpretation properly takes account of those situations where one of 
the "normal" methodologies may "appropriately" take into account the significant differences in the 
relevant export prices. Therefore, it preserves the object of the second sentence o f Article  2.4.2, 
which is to permit the use of the WA -T methodology as an "exception" rather than as the norm.  
7.155.   In this regard, we disagree with the United States' argument, based on the Appellate 
Body's finding in US – Softwood Lumber V (Article 21.5 – Canada), that because the WA -WA and 
the T -T methodologies are supposed to yield systematically similar results, there is no purpose in 
requiring an investigating authority to provide an explanation with respect to both of these two 
methodologies. We note that  the United States' argument is based on an incomplete reading of 
that Appellate Body report. In the cited case, the Appellate Body clearly recognized that the WA -
WA and the T -T methodologies are "distinct".269 Further, the Appellate Body stated that these t wo 
methodologies are "equivalent in the sense that Article  2.4.2 does not establish a hierarchy 
between the two ".270 In other words, the two methodologies are equivalent only because the first 
sentence of Article  2.4.2 provides an investigating authority wit h discretion to choose between 
these two normal methodologies, and not because they yield similar mathematical results. Indeed, 
the United States itself acknowledges in the context of its arguments in response to China's 
zeroing claim that the T -T and the WA-WA methodologies need not yield the same mathematical 
results.271 That the dumping margins obtained through the T -T methodology and the WA -WA 
methodology may be mathematically different strengthens our view that an investigating authority 
is required to e xamine and explain why neither of these methodologies can take into account 
appropriately the significant differences in the relevant export prices. Therefore, we disagree with 
this argument presented by the United States.  
7.156.   Further, in relation to the Unite d States' argument that the T -T methodology cannot be 
used in investigations involving NMEs like China because in such investigations, normal value is 
not based on transaction -specific home market prices, we asked the United States to refer to the 
relevant  parts of the USDOC's determinations in the three challenged investigations where the 
USDOC stated that it could not use the T -T methodology for this particular reason. The United 
States has not shown any such finding by the USDOC.272 This argument therefore  represents an ex 
post facto rationalization  which we cannot take into account.273 
7.157.   We therefore find that the USDOC acted inconsistently with the explanation clause of 
Article  2.4.2 in the three challenged investigations because it failed to provide an expla nation as to 
why neither the WA -WA nor the T -T methodology could take into account appropriately the 
significant differences in the relevant export prices, within the meaning of that clause.  
7.1.4.3.3   Conclusion  
7.158.   On the basis of the foregoing, we conclude that the US DOC acted inconsistently with the 
explanation clause of Article  2.4.2 of the Anti -Dumping Agreement in the OCTG , Coated Paper  and 
Steel Cylinders  investigations.  
                                                
269 Appellate Body Report, US – Softwood Lumber V (Article 21.5 – Canada) , para. 93.  
270 Appellate Body Report, US – Softwood Lumber  V (Article 21.5 – Canada) , para. 93.  
271 United States' second written submission, para. 103. 
272 United States' response to Panel question No. 106, para. 46.  
273 In this regard, we note that we are required pursuant to Article  17.5(ii) of the Anti -Dumping 
Agreement to examine the matter before us based upon " the facts made available in conformity with 
appropriate domestic procedures to the authorities of the importing Member. " WT/DS471/R  
 
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  7.1.5   China's claim under  the second sentence of Article  2.4.2  of the Anti -Dumping 
Agreement  with re spect to  the USDOC's application of the WA -T methodology to all 
export transactions in the three challenged investigations  
7.1.5.1   Main a rguments of the parties  
7.1.5.1.1   China  
7.159.   China argues that when the conditions prescribed in the second sentence of Article  2.4.2 
for use of the WA -T methodology are met, the second sentence permits an investigating authority 
to apply that methodology only to those export transactions which fall within the "pattern of export 
prices" which differ significantly among different purchasers, regi ons or time periods. China 
submits that the USDOC acted inconsistently with the second sentence of Article  2.4.2 in the three 
challenged investigations by applying the WA -T methodology to all export transactions, instead of 
limiting it to those transaction s that fell within this pattern.  
7.160.   China recalls that the USDOC used the Nails test to identify the relevant pattern in the 
three challenged investigations. Noting that the USDOC made its analysis under the Nails test on a 
CONNUM -specific basis, China assert s that the USDOC found a pattern by reference to purchasers 
or time periods, as well as by reference to CONNUMs.274 In China's view, the relevant pattern in 
the three challenged investigations contained  only the export transactions to the targeted 
purchaser or time period in CONNUMs which passed both stages of the Nails test, i.e. the standard 
deviation test  and the price gap test. It follows that the USDOC should have limited the application 
of the WA -T methodology to those export transactions.275 
7.161.   China presen ts three main arguments in support of its view. First, noting that the WA -T 
methodology requires comparison of a normal value established on a weighted -average basis with 
prices of "individual export transactions", China states that, as indicated by the Ap pellate Body in 
US – Zeroing (Japan) , such individual export transactions are transactions that fall within the 
relevant pricing pattern.276 In this regard, China also notes the Appellate Body's observation in 
that case that the "universe of export transacti ons" subject to the WA -T methodology "would 
necessarily be more limited than the universe of export transactions to which the symmetrical  
comparison methodologies in the first sentence of Article  2.4.2 would apply" .277 China considers 
that these observations  support its view that the WA -T methodology can only be applied to the 
more limited export transactions falling within the relevant pattern and not to all export 
transactions.  
7.162.   Second, China asserts that the second sentence of Article  2.4.2 permits an inves tigating 
authority to use the WA -T methodology only to the extent the use of one of the normal 
methodologies is not "appropriate" to take into account the significantly differing pricing pattern.278 
In China's view, the application of the WA -T methodology to  export transactions falling outside 
such a pattern is unreasonable and hence not appropriate.279 
7.163.   Third, China submits that the WA -T methodology is an exception to the general rule which 
requires the use of the WA -WA or the T -T methodology.280 Therefore, as an  exception, the WA -T 
methodology replaces the general rule of using the normal methodologies only to the extent it is 
necessary to take into account appropriately the pattern of export prices which differ 
significantly.281 However, for export transactions fa lling outside the pattern, the exception does not 
apply, which means that the investigating authority must use one of the two normal 
methodologies for export transactions falling outside the pattern.282 
                                                
274 See, e.g. China's response to Panel question No. 22(a), para. 110.  
275 See, e.g. China's response to Panel question No. 110(b), paras. 75 -76. 
276 China's first written submission, para s. 179-180 (quoting Appellate Body Report, US – Zeroing 
(Japan) , para. 135) . 
277 China's first written submission, para. 181  (quoting  Appellate Body Report, US – Zeroing (Japan) , 
para. 135).  
278 China's first written submission, paras. 182 and 193.  
279 China's first written submission, para.  193. 
280 China's first written submission, para. 194.  
281 China's first written submission, para. 197.  
282 See, e.g. China's first wri tten submission, para. 199.  WT/DS471/R  
 
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  7.1.5.1.2   United States  
7.164.   The United States rejects all three main arguments presented by China in support of its 
view that the second sentence of Article  2.4.2 did not permit the USDOC to apply the WA -T 
methodology to all export transactions in the three challenged investigations, and submits that all 
these arguments are  based on China's erroneous understanding of the meaning of a pattern of 
export prices under that sentence.283 In this regard, the United States disagrees with China's 
contention that the relevant pattern identified by the USDOC in the three challenged inves tigations 
comprised export sales made in those CONNUMs to the alleged targeted purchaser or time period, 
which passed the pattern and the price gap tests. The United States asserts that, contrary to 
China's argument, the relevant pattern identified by the USDOC in these investigations consisted  
of all export transactions made by the concerned exporter, and not just those made to the 
targeted purchaser or in the targeted time period.284 The United States also rejects China's 
assertion that in these investigati ons, the USDOC found a pattern in relation to certain but not all 
CONNUMs sold to the targeted purchaser or time period, and hence should have limited the WA -T 
methodology to export transactions made in those CONNUMs.  
7.165.   Firstly, regarding its assertion that in the investigations at issue, the USDOC found the 
relevant pattern to comprise all export transactions, the United States submits that "a pattern" 
within the meaning of the second sentence of Article  2.4.2 consists  of high export prices as well as 
low ex port prices, which "differ significantly" from each other.285 The United States submits that 
low export prices cannot differ significantly from other low export prices, and hence low export 
prices alone cannot form the relevant pattern of export prices which  differ significantly.286 In the 
context of the three challenged investigations, the United States asserts that the USDOC found the 
relevant pattern to contain  low export prices to the targeted purchaser or in the targeted time 
period, identified through the  Nails test, as well as the high export prices of other sales.287 Because 
the pattern identified by the USDOC consisted  of all export transactions, in the view of the United 
States, the USDOC did not act inconsistently with the second sentence of Article  2.4.2 by applying 
the WA -T methodology to all export transactions.288 
7.166.   The United States presents two additional arguments questioning China's contention that 
the WA -T methodology should be limited to low export prices to the targeted purchaser or in the 
targete d time period. The United States maintains that the WA -T methodology may be used to 
unmask targeted dumping only if that methodology is applied to high export prices, which are 
used to mask low export prices, and not if it is limited to low export prices, as argued by China.289 
Further, the United States contends that the WA -T methodology cannot be limited to certain 
transactions falling within the relevant pattern or those transactions for which targeted dumping is 
found, because targeted dumping cannot exis t for certain transactions alone, considering that 
dumping exists for the product as a whole and not in respect of certain transactions only.290 
7.167.   Secondly, the United States rejects China's argument that the USDOC found a pattern on a 
CONNUM -specific basis in  the three challenged investigations, noting that while the USDOC made 
its initial analysis on a CONNUM -specific basis, the USDOC did not find a pattern for certain 
CONNUMs. Instead, under the Nails test, the USDOC found a pattern on the basis of purchaser s, 
time periods or regions.291 The United States also considers China's argument that the pattern 
existed for certain models to be contrary to the Appellate Body's observation in EC – Bed Linen  
that the second sentence of Article  2.4.2 speaks of dumping that  is targeted to certain purchasers, 
regions or time periods, and not certain models.292 
                                                
283 United States' first written submission, para. 205.  
284 United States' response to Panel question No. 107, para. 47.  
285 United States' first written submission, para. 202.  
286 United States' response to Panel question No. 20(a), pa ra. 37.  
287 United States' first written submission, para. 203.  
288 United States' first written submission, para. 203.  
289 United States' first written submission, para. 204.  
290 United States' first written submission, para. 206.  
291 United States' second written submission, para. 78.  
292 United States' first written submission, para. 208 (citing Appellate Body Report, EC – Bed Linen , 
para. 62).  WT/DS471/R  
 
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  7.1.5.2   Main a rguments of the third parties  
7.1.5.2.1   European Union  
7.168.   The European Union disagrees with China's argument that Article  2.4.2 requires the WA -T 
methodology to be limited to ex port transactions falling within the pattern, finding such an 
approach to be incompatible with the objective of unmasking targeted dumping.293 
7.1.5.2.2   Japan  
7.169.   Japan disagrees with the United States' argument that the WA -T methodology can be 
applied to all export trans actions once the conditions for its use are met. In this regard, Japan 
disagrees particularly with the United States' view that a pattern includes both high -priced and 
low-priced sales, and, like China, finds such a view to be incompatible with the Appella te Body's 
reasoning in US – Zeroing (Japan) .294 Japan asserts that the scope of application of the WA -T 
methodology must be assessed carefully in light of the objective of the second sentence of 
Article  2.4.2 to unmask targeted dumping, rather than on the ba sis of the United States' 
understanding of the term "pattern".295 
7.1.5.2.3   Korea  
7.170.   Korea finds the United States' view that the WA -T methodology may be applied to all 
export transactions because a pattern includes both high -priced and low -priced sales to be self -
contra dictory.296 This is because the USDOC did not test whether the high -priced sales in the three 
challenged investigations were also targeted.297 In this regard, Korea notes that the USDOC itself 
found a pattern only in relation to a subset of all export prices, i.e. export prices to the targeted 
purchaser or time period.298 
7.1.5.2.4   Viet Nam  
7.171.   Viet Nam submits that the WA -T methodology must be limited to export prices which differ 
significantly, or in other words, export prices which fall within the pattern.299 Either of the tw o 
normal methodologies must be applied to export transactions which fall outside this pattern.300 
7.1.5.3   Evaluation by the Panel  
7.172.   It is factually undisputed that in the three challenged investigations the USDOC applied the 
WA-T methodology to all export transactions . The parties disagree over whether such an 
application of this methodology is permitted under the second sentence of Article  2.4.2.  
7.173.   The second sentence of Article  2.4.2 reads:  
A normal value established on a weighted average basis may be compared to price s of 
individual export transactions  if the authorities find a pattern  of export prices which 
differ significantly among different purchasers, regions or time periods, and if an 
explanation is provided as to why such differences  cannot be taken into account  
appropriately by the use of a weighted average -to-weighted average or 
transaction -to-transaction comparison. ( emphasis  added)  
7.174.   We note that the second sentence of Article  2.4.2 is composed of three parts. The first part 
describes the WA -T methodology as on e requiring comparison of a normal value established on a 
weighted average basis with  the prices of individual export transactions. The second part describes 
the first condition for use of the WA -T methodology , namely  that an investigating authority should  
                                                
293 European Union's third -party submission, para. 46.  
294 Japan's third -party statement, para. 8.  
295 Japan's third -party statem ent, para. 8.  
296 Korea's third -party submission, para. 25. 
297 Korea's third -party submission, para. 25. 
298 Korea's third -party submission, para. 25.  
299 Viet Nam's third -party submission, para. 17.  
300 Viet Nam's third -party submission, para. 17.  WT/DS471/R  
 
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  find a pattern of export prices which differ significantly among different purchasers, regions or 
time periods. The third part sets out the second condition for the use of the WA -T methodology, 
namely that the investigating authority should provide an exp lanation as to why such differences 
cannot be taken into account appropriately by the use of a WA -WA or T -T methodology.  
7.175.   We recall that this is not the first WTO dispute in which this legal issue has been raised. In 
US – Washing Machines  where the same iss ue was raised, the panel expressed the view that the 
use of the term "individual" in the first part of the second sentence of Article  2.4.2 suggests that 
the WA -T methodology will not cover all export transactions of the exporter at issue, but will 
rather apply to certain export transactions that will be identified individually.301 Regarding how 
these individual export transactions are to be identified by the investigating authority that panel 
found guidance in the second part of the second sentence of Article 2.4.2. Specifically, the panel 
found that the only textual basis for individual identification of export transactions to be used in 
the WA -T methodology is that they form the pattern referred to in the second part of the second 
sentence.302 
7.176.   That panel foun d further support for this view in the third part of the second sentence of 
Article  2.4.2. In particular, it found that the phrase "such differences" in the third part refers to the 
significant price differences identified under the second part of that sen tence.303 This textual 
connection between the second and third parts of the second sentence of Article  2.4.2 suggested 
to that panel that the third part requires an explanation as to why it would not be appropriate to 
apply the WA -WA or T -T comparison method ology to export transactions which fall within the 
relevant pattern.304 The panel inferred that the third part requires an explanation only in relation 
to the export transactions which fall within the relevant pattern precisely because it is only those 
expor t transactions which could be subject to the WA -T methodology in case an investigating 
authority explains that the WA -WA or T -T methodology cannot be used with respect to those 
transactions.305 On this basis, the panel found that the WA -T methodology may be applied only to 
those export transactions which fall within the relevant pattern identified under the pattern clause 
of Article  2.4.2.  
7.177.   We share this understanding of the panel in US – Washing Machines regarding the 
requirements of the second sentence of Article 2.4.2. Like that panel, we are also of the view that 
the use of the word "individual" in that sentence suggests that the WA -T methodology will apply 
only to certain "individual export transactions" and not all export transactions. Similarly, we are o f 
the view that the second part of this sentence, which speaks of a "pattern of export prices" which 
"differ significantly", clarifies that the individual export transactions to which the WA -T 
methodology shall apply will fall within that pattern. In other  words, the first part of the second 
sentence of Article  2.4.2 indicates that the WA -T methodology may only be applied with respect to 
individual export transactions, as opposed to all export transactions, whereas its second part 
clarifies that the individ ual export transactions to which that methodology applies are those 
transactions that fall within the pattern identified by the investigating authority.  
7.178.   As regards the identification of the individual export transactions falling within the relevant 
pattern , the United States contends that in the three challenged investigations, all export 
transactions fell within the relevant pattern because all export transactions formed the relevant 
pattern. We disagree. We note that the dictionary definition of the word "pattern" is "a regular and 
intelligible form or sequence discernible in certain actions or situations" and that both parties 
agree with this definition.306 We recall that the pattern clause of Article  2.4.2 speaks of "a pattern 
of export prices" which "diff er significantly among different purchasers, regions or time periods". 
Firstly, the use of the words  "a pattern" suggests that a subset of export prices, i.e. a "pattern", 
has to be discerned from a larger universe, namely, the entirety of the export sales  of the relevant 
exporter. Therefore, export prices which form part of that discernible group form the relevant 
"pattern" rather than the larger universe of export prices from which that group is discerned or 
distinguished. Secondly, we are of the view tha t in the context of the pattern clause of 
Article  2.4.2, that pattern is discernible because the export prices falling within the pattern  will 
                                                
301 Panel Report, US – Washing Machines , para. 7.22.  
302 Panel Report, US – Washing Machines , para. 7.22.  
303 Panel Report, US – Washing Machines , para. 7.23.  
304 Panel Report, US – Washing Machines , para. 7.23.  
305 Panel Report, US – Washing Machines , para. 7.23.  
306 China's first w ritten submission, para. 128  (quoting Oxford English Dictionary Online, accessed 
4 February 2015, (Exhibit  CHN-90)); and United States' first written submission, para. 40.  WT/DS471/R  
 
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  "differ significantly among different purchasers, regions or time periods". This suggests to us that 
the relevant  "pattern" is a pattern of export prices to one or more purchasers (or regions or time 
periods) which differ significantly from export prices to other purchasers (or regions or time 
periods) which fall outside the pattern. We find support for our view in t he following observation of 
the Appellate Body in US – Zeroing (Japan) : 
As regards the relationship between the T -T comparison methodology and the W -T 
comparison methodology of the second sentence of Article  2.4.2, the Panel's 
reasoning appears to assume t hat the universe of export transactions to which these 
two comparison methodologies apply is the same , and that these two methodologies 
differ only in that, under the W -T comparison methodology, a normal value is 
established on a weighted average basis, wh ile it is established on a transaction -
specific basis under the T -T comparison methodology. Thus, according to the Panel, if 
zeroing is permitted under the W -T comparison methodology in the second sentence 
of Article  2.4.2, it should logically be permitted  under the T -T comparison 
methodology as well.307 (emphasis  added ; footnote omitted ) 
We disagree with the assumption underlying the Panel's reasoning . The emphasis in 
the second sentence of Article  2.4.2 is on a "pattern", namely a "pattern of export 
prices which differs308 significantly among different purchasers, regions or time 
periods." The prices of transactions that fall within this pattern  must be found to differ 
significantly from other export prices. We therefore read the phrase "individual export 
transactions" in that sentence as referring to the transactions that fall within the 
relevant pricing pattern. This universe of export transactions would necessarily be 
more limited than the universe of export transactions to which the symmetrical 
comparison m ethodologies in the first sentence of Article  2.4.2 would apply . In order 
to unmask targeted dumping, an investigating authority may limit the application of 
the W -T comparison methodology to the prices of export transactions falling within the 
relevant pa ttern.309 (italics original; underlining added)  
7.179.   The Appellate Body has thus made it clear that the export prices falling within the pattern 
found under the second sentence of Article  2.4.2 will have to differ from other export prices and 
that therefore the r eference to "individual export transactions" in the first part of that sentence 
describes the export transactions that fall within the pattern found.  
7.180.   The United States contends that because the Appellate Body in US – Zeroing (Japan) 
observed that an invest igating authority "may" limit the application of the WA -T methodology to 
prices of export transactions falling within the relevant pricing pattern, the Appellate Body did not 
consider that the application of the WA -T methodology is necessarily limited to e xport transactions 
which fall within the relevant export price pattern. However, we find that reading that statement in 
its context leaves no doubt that the Appellate Body said the opposite of what the United States 
argues in this regard. In the first of t he two paragraphs quoted above, the Appellate Body starts 
by noting that the panel in that dispute assumed that the scope of application of the T -T and the 
WA-T methodologies would be the same. In the following paragraph, which in its last sentence also 
contains the word "may" on which the United States bases its argument, the Appellate Body 
disagrees with that assumption. Importantly, t he Appellate Body states clearly that the scope of 
application of the WA -T methodology would necessarily be narrower than that of the T -T 
methodology. We consider that this reasoning lends support to our view, rather than that of the 
United States.  
7.181.   Finally, we recall that the United States presents two additional arguments in support of its 
contention that the WA -T methodolog y may be applied to all export sales rather than to the sales 
to the targeted purchaser or in the targeted time period. Firstly, the United States argues that the 
WA-T methodology may be used to unmask targeted dumping only if that methodology is applied 
to high export prices, which are used to mask low export prices, and not if it is limited to low 
                                                
307 Appellate Body Report,  US – Zeroing (Japan) , para. 134. 
308 In this regard, we note,  as also underlined by the United States, that the text of the pattern clause of 
Article 2.4.2 uses the word "differ" and not "differs".  
309 Appellate Body Report,  US – Zeroing (Japan) , para. 135; see also Appellate Body US – Softwood 
Lumber V (Article 21.5  – Canada ), fn 166 . WT/DS471/R  
 
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  export prices, as China suggests.310 However, we note that this argument is premised on the 
United States' view that it can apply zeroing under the WA -T methodolo gy to unmask targeted 
dumping.311 We find below that the second sentence of Article  2.4.2 does not permit the use of 
zeroing under the WA -T methodology. We therefore also disagree with this argument presented by 
the United States which is based on the assump tion that zeroing is allowed under the WA -T 
methodology.  
7.182.   Secondly, the United States argues that the WA -T methodology cannot be limited to 
certain export transactions falling within the relevant pattern or those transactions for which 
targeted dumping is f ound, because targeted dumping cannot exist for certain transactions alone, 
considering that dumping exists for the product as a whole and not in respect of certain 
transactions only. We are aware of the established principle in WTO jurisprudence that the results 
of transaction -specific comparison results are not, in themselves, margins of dumping.312 Our 
finding that the WA -T methodology should only apply to the export transactions falling within the 
relevant pattern does not conflict with this principle. We  recall that China's claim concerns the 
application of the WA -T methodology in the three challenged investigations. Looking at the facts of 
these investigations, we note that the USDOC applied the WA -T methodology to all export 
transactions, as opposed to the pattern found. It did not apply the WA -T methodology to the 
pattern and some other methodology to the other export transactions . Therefore, in resolving this 
claim, we do not need to express a view on how an investigating  authority  will treat the expor t 
transactions outside the pattern in finding a margin of dumping for the investigated product as a 
whole. Importantly, we do not suggest that such transactions should be excluded from the 
investigating authority's dumping calculations. An investigating au thority may use another 
methodology with respect to the export transactions falling outside the pattern provided it 
complies with Article  2.4.2 and other relevant provisions of the Anti -Dumping Agreement.313  
7.183.   Based on the foregoing, we consider that the USDO C acted inconsistently with the second 
sentence of Article  2.4.2 by applying the WA -T methodology to all export transactions, instead of 
limiting it to export transactions to the targeted purchaser or in the targeted time period that 
formed the relevant pa ttern of export prices which differed significantly among different 
purchasers or different time periods.  
7.184.   We note that China also argues that the relevant pattern identified by the USDOC in the 
three challenged investigations did not consist of all export transactions to the targeted purchaser 
or in the targeted time period but a subset thereof. Specifically, China argues that the relevant 
pattern only contained  CONNUMs which passed the standard deviation test  and the price gap test. 
In China's view, only t hose CONNUMs in which the alleged target price was found to be lower than 
the CONNUM -specific weighted average export price, under the standard deviation test , and in 
which the alleged target price gap was found to be wider  than the weighted average non -target 
price gap, under the price gap test, formed the relevant pattern. In this regard, China argues that 
an investigating authority is permitted under the second sentence of Article  2.4.2 to find a pattern 
by reference to models, and does not understand th e Appellate Body's findings in EC – Bed Linen 
to suggest that an investigating authority cannot find a pattern in such a manner.314 China asserts 
that in the three challenged investigations, using the Nails test, the USDOC found a pattern by 
reference to CON NUMs or models, and contends that having found a pattern by reference to 
CONNUMs, the USDOC should have limited the use of the WA -T methodology to those CONNUMs. 
                                                
310 United States' first written submission, para. 204.  
311 See, e.g. United States' first written submission, para. 204. In this regard, in presenting its 
argument as to why the WA -T methodology has to be applied to high -priced export trans actions to unmask 
targeted dumping, the United States argues that targeted dumping is unmasked only by ensuring that high - 
priced sales do not "offset dumping" through lower priced export sales. We understand from this that in the 
United States' view, an i nvestigating authority needs to use zeroing to ensure that high -priced sales do not 
"offset dumping" through lower priced ones.  
312 Appellate Body Report, US – Softwood Lumber V (Article 21.5 - Canada) , para. 87.  
313 In this regard, we note that in the US – Washing Machines case, the panel examined a new 
methodology used by the USDOC to meet i ts obligations under the second sentence of Article  2.4.2, namely 
the Differential Pricing Methodology (DPM). Under the DPM, the USDOC applied in certain situations the WA -T 
methodology to export transactions falling within the relevant pattern, and the WA -WA methodology to export 
transactions falling outside it. (Panel Report, US – Washing Machines , para. 7.161 and fn 226).  
314 China's response to Panel question No. 22(a), p ara. 111; and response to Panel question No. 22(c), 
para. 117.  WT/DS471/R  
 
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  We disagree with China's argument and consider it to be based on an erroneous legal and factua l 
basis.  
7.185.   In this regard, we find no textual basis in the second sentence of Article  2.4.2 to suggest 
that an investigating authority is required or permitted to find a pattern for specific CONNUMs or 
models of the product under consideration. That sentence  speaks of a pattern of export prices 
which differ significantly among different "purchasers, regions or time periods", rather than 
models. We find support for our view in the Appellate Body report in EC – Bed Linen . In that case, 
noting that the purpose o f the second sentence of Article  2.4.2 is to address targeted dumping, the 
Appellate Body observed that the second sentence only addresses dumping that targets certain 
purchasers, regions or time periods, and does not speak of dumping that targets certain models of 
the product under consideration.315 Therefore, we do not consider that the second sentence of 
Article  2.4.2 imposed any obligation on the USDOC to limit the application of the WA -T 
methodology in the three challenged investigations to those CONNUMs  sold to the allegedly 
targeted purchaser or in the allegedly targeted time period which passed the pattern and the price 
gap tests.  
7.186.   In any case, we find no factual basis to conclude that in the three challenged 
investigations, the USDOC found a pattern of export prices which differed significantly among 
different models, rather than among different purchasers or time periods. In this regard, we recall 
that, under the Nails test, the USDOC made its initial analysis on a CONNUM -specific basis and 
examined th ose CONNUMs which were sold to both the alleged target and the non -targets. Hence, 
under the Nails test, the USDOC did not examine those CONNUMs which were sold to the alleged 
target but not to a non -target. However, we note that China does not challenge t his aspect of the 
USDOC's determination. Further, while the USDOC made its initial analysis on a CONNUM -specific 
basis under both the standard deviation test  and the price gap test, it ultimately examined 
whether the volume of sales in those CONNUMs which met the requirements of the standard 
deviation  and price gap tests exceeded a certain volume of the total sales of the product as a 
whole to the alleged target. Under the standard deviation test , for instance, the USDOC examined 
whether the volume of sales  in CONNUMs where the alleged target price was one standard 
deviation below the CONNUM -specific weighted average export price exceeded 33% of "the total 
volume of a respondent's sale of subject merchandise" to the allegedly targeted purchaser or time 
period.316 Under the price gap test, the USDOC examined whether the volume of sales in 
CONNUMs where the alleged target price gap was wider  than the weighted average non -target 
price gap exceeded 5% of "the total volume of a respondent's sale of subject merchandi se" to the 
allegedly targeted purchaser or time period.317 In this regard, we note that China has not raised 
any claim regarding the specifics of the standard deviation test  and the price gap test on the basis 
of which the USDOC made its determination for th e investigated product as a whole in the 
challenged three investigations, and hence we are not making any findings in that regard. The 
USDOC's description shows that whereas the USDOC made its initial analysis under the standard 
deviation test  and the pric e gap test on a CONNUM -specific basis, it made its final determination 
on the basis of the total volume of sales of the subject merchandise to the targeted purchaser or in 
the targeted time period. Therefore, we find that China's argument is based on an er roneous 
factual basis.  
7.187.   On the basis of the foregoing, we conclude that the USDOC acted inconsistently with the 
second sentence of Article  2.4.2 of the Anti -Dumping Agreement in the OCTG , Coated Paper  and 
Steel Cylinders  investigations by applying the WA -T methodology to all export transactions.  
7.1.6   China's claim  under Article  2.4.2 of the Anti -Dumping Agreement  concerning the 
USDOC's use of zeroing in the application of the WA -T methodology  
7.188.   As we noted above, in the three challenged investigations, in order to  calculate the 
margins of dumping through the WA -T methodology, the USDOC first categorized the product 
                                                
315 Appellate Body Report, EC – Bed Linen , para. 62.  
316 Coated Paper OI, Issues and Decision Memorandum, (CHN -64), p. 22; Steel Cylinders  OI, Issues and 
Decision Memorandum, (CHN -66), p. 23;  and OCTG OI, Issues and Decision Memorandum, (CHN -77), 
Comment 2.  
317 Coated Paper OI, Issues and Decision Memorandum, (CHN -64), p. 22; Steel Cylinders  OI, Issues and 
Decision Memorandum, (CHN -66), p. 23; and OCTG  OI, Issues and Decision Memorandum, (CHN -77), 
Comment 2.  WT/DS471/R  
 
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  under consideration into different CONNUMs. The USDOC calculated a weighted average normal 
value for each CONNUM.318 The USDOC then compared the relevant CONNUM -specific weighted 
average normal value with the prices of each relevant individual export transaction, which 
generated positive or negative intermediate comparison results depending on whether the normal 
value was higher  or lower  than the export pri ce.319 When aggregating the intermediate comparison 
results to calculate the overall margin of dumping for the relevant CONNUM, the USDOC included 
the positive intermediate results but treated the negative intermediate results as zero.320 China 
claims that the  USDOC's decision to disregard negative intermediate results by treating them as 
zero, that is, its use of zeroing, under the WA -T methodology in the three challenged 
investigations, was inconsistent with Article  2.4.2 of the Anti -Dumping Agreement.  
7.1.6.1   Main a rguments of the parties  
7.1.6.1.1   China  
7.189.   China contends that the USDOC violated Article  2.4.2 of the Anti -Dumping Agreement by 
calculating  the dumping margins through the use of  zeroing under  the WA -T methodology in the 
three challenged investigations. In support of its contention that Article  2.4.2 does not permit the 
use of zeroing under the WA -T methodology, China relies on prior Appellate Body reports. In this 
regard, China recalls that the Appellate Body has found that the first sentence of Article  2.4.2 does 
not permit the use of zeroing under the WA -WA and T -T methodologies in original 
investigations.321 The Appellate Body has also found that the use of zeroing in anti -dumping duty 
assessment proceedings violates Article  9.3 of the Anti -Dumping Agreement and Article VI:2 of the 
GATT 1994 whereas its use in new shipper reviews violates Article  9.5 of the Anti -Dumping 
Agreement and Article  VI:2 of the GATT 1994.322 China notes that the Appellate Body's findings in 
these cases were based on the view that a dumping margi n has to be calculated for the 
investigated product as a whole, and argues that the use of zeroing under the WA -T methodology 
violates Article  2.4.2 because it prevents the investigating authority from calculating a margin of 
dumping for the investigated p roduct as a whole.323 In this regard, China asserts that the second 
sentence of Article  2.4.2 provides no exception to the requirement to calculate margins of dumping 
for the investigated product as a whole.324 
7.1.6.1.2   United States  
7.190.   The United States disagrees that Article 2.4.2 proscribes the use of zeroing under the WA -
T methodology and disputes China's reliance on prior Appellate Body reports in support of that 
view. The United States acknowledges , as underlined in prior WTO disputes,  that the results of 
transaction -specific comparisons obtained through the WA-T methodology a re not "margins of 
dumping" in and of themselve s, and does not request this Panel  to depart from this precedent .325 
However, the United States asserts that the specific words or phrases in Article  2.4.2 , which were 
interpreted by the Appellate Body to find the use of zeroing to be impermissible under the WA -WA 
and T -T methodologies , appear only in the first sentence of this provision and are not found in its 
second sentence, which is at issue in the se proceedings.326 
7.191.    The United States further  argues,  with the support of hypothetical  examples as well as 
actual price data from the three challenged investigations,  that if the use of zeroing is not 
permitted  under the WA-T methodology , the margin s of dump ing calculated through that 
methodology  will be mathematically equivalent to th ose calculated through the WA-WA 
methodology without zeroing .327 This holds true regardless of whether the investigating authority 
                                                
318 United States' response to Panel question No. 23(b), para. 46.  
319 United States' response to Panel question No. 23(b), para. 46.  
320 United States' response to Panel question No. 23(b), para. 46.  
321 China's first written submission, paras. 209 -212 ( citing Appellate Body Reports, US – Softwood 
Lumber V , para. 98; US – Softwood Lumber V (Article 21.5  - Canada ), paras. 87 -88; US – Zeroing (EC) , 
para. 100; and US – Zeroing (Japan) , para. 120 ). 
322 China's first written submission, para. 213 (referring to Ap pellate Body Reports, US – Zeroing (EC) , 
para. 133; and US – Zeroing (Japan) , para. 165).  
323 China's first written submission, para s. 215-216. 
324 China's first written submission, para. 218.  
325 United States' first written submission, para. 217. 
326 United Stat es' second written submission, para. 91.  
327 United States' first written submission, paras. 242 -263 and 266 -272. WT/DS471/R  
 
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  applies the WA -T methodology to all export trans actions or uses a mixed methodology wherein it 
applies the WA -T methodology to export transactions falling within the pattern and the WA -WA 
methodology to export transactions falling outside it.328 Such an interpretation, in the United 
States' view, would re nder inutile  the second sentence of Article  2.4.2 which permits the use of the 
WA-T methodology under certain circumstances. In addition, the United States argues that such 
mathematical equivalence will frustrate the objective of the WA -T methodology, whic h is to 
unmask targeted dumping.329 Finally , the United States relies on the negotiating history of the 
Anti-Dumping Agreement to assert that the text of Article  2.4.2 reflects a compromise reached at 
the Uruguay Round that permitted the use of the WA-T methodology  with zeroing to unmask 
targeted dumping.330 
7.1.6.2   Main a rguments of  the third parties  
7.1.6.2.1   Brazil  
7.192.   Brazil does not express a specific view on whether the second sentence of Article  2.4.2 
permits the use of zeroing under the WA -T methodology. Brazil notes, howeve r, that bearing in 
mind the customary rules of treaty interpretation, we should give meaning to all the terms of the 
treaty, including the WA -T methodology provided in the second sentence of Article  2.4.2.331 
7.1.6.2.2   Canada  
7.193.   Canada maintains that just because the use  of zeroing under the WA -T methodology will 
allow that methodology to yield a result that is mathematically different from that obtained under 
the WA -WA methodology does not mean that its use is permitted.332 Canada also notes that the 
Appellate Body has in past cases rejected the mathematical equivalence argument.333 
7.1.6.2.3   European Union  
7.194.   The European Union  submits that under the WA -T methodology "high priced export 
transactions would not be allowed to offset the dumping amount ".334 However, the European Union 
asserts that such an offset mechanism should not be referred to as zeroing.335 
7.1.6.2.4   Japan  
7.195.   Japan  agrees  with China's argument  that the use of zeroing under the WA -T methodology 
is not permissible. Japan refutes the United States' argument concerning mathematical 
equivalen ce, noting  that this argument would not hold in two situations. First, Japan states that if 
the normal values under the WA -WA and WA -T methodologies are based on different time -periods , 
mathematical equivalence will not arise.336 Second, Japan observes that dumping margins 
obtained through the T -T methodology will in any case differ from those obtained through the WA -
T methodology.337 
7.1.6.2.5   Korea  
7.196.   Korea , like China , finds the use of  zeroing  under the WA -T methodology to be 
impermissible.  In this regard, Korea  rejects the United States' argument concerning mathematical 
equivalence. Korea notes that mathematical equivalence can be avoided by using different time 
periods for calculating the normal value  under the WA -WA and WA -T methodologies .338 Korea 
derives supports for t his view from the different manner  in which the text of Article  2.4.2 describes 
                                                
328 United States' first written submission, para s. 242-251, 254 -261, 266 -272, and 292 -304. 
329 United States' first written submission, para. 230.  
330 United States' first written submission, para. 316.  
331 Brazil's third -party statement, para. 17.  
332 Canada's third -party submission, para. 21.  
333 Canada's third -party submission, para. 21.  
334 European Union's third -party submission, para. 46.  
335 European Unio n's third -party submission, para. 47.  
336 Japan's third -party submission, para. 28.  
337 Japan's third -party submission, para. 28.  
338 Korea's third -party submission, para. 52.  WT/DS471/R  
 
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  normal value under the WA -WA methodology and the WA -T methodology.339 Korea also observes 
that comparison of the prices of individual export transactions with a monthly normal va lue may 
allow for a more precise comparison of prices that may be changing over time.340 
7.1.6.2.6   Norway  
7.197.   Norway  contends  that the use of zeroing under the WA -T methodology violates 
Article  2.4.2 as well as the fair comparison requirement under Article  2.4 of the Anti -Dumping 
Agreement .341 Norway submits that the United States' mathematical equivalence argument is 
based on the incorrect assumption  that the normal value used under the WA -T and WA -WA 
methodologies must be based on the same time periods.342 In this regard, No rway also alludes to 
the different manner in which normal value is described under the WA -WA methodology and the 
WA-T methodology in the text of Article  2.4.2, to contend that this text does not support the view 
that the normal values under both methodolog ies should be the same.343 
7.1.6.2.7   Turkey  
7.198.   Turkey also does not express a specific view on whether the second sentence of 
Article  2.4.2 permits the use of zeroing under the WA -T methodology. Turkey maintains, however, 
that applying the legal principles that govern th e normal methodologies provided for under the 
first sentence of Article  2.4.2 to the exceptional WA -T methodology provided for under the second 
sentence may erode the effectiveness of the results expected from the WA -T methodology.344 
7.1.6.2.8   Viet Nam  
7.199.   Viet Nam finds  the use of zeroing to be unfair  and maintains that while the WA -T 
methodology is an exception to the normal methodologies provided for in  the first sentence of 
Article  2.4.2, it is not an exception to the fair comparison obligation under Article  2.4.345 
Therefore, in Viet Nam's view, it is equally impermissible to use zeroing under the WA -T 
methodology as it is under the two normal methodologies.346 
7.1.6.3   Evaluation by the Panel  
7.200.   The issue that China's claim raises is whether Article  2.4.2, and specifically the secon d 
sentence thereof, permits the use of zeroing under the WA -T methodology. In evaluating this 
claim, we will first examine whether the use of zeroing under the WA -T methodology violates the 
second sentence of Article  2.4.2. If we find that it does, we will  proceed to an assessment of the 
United States' mathematical equivalence argument.  
7.1.6.3.1   Whether the use of zeroing under the WA -T methodology violates the second 
sentence of Article  2.4.2  of the Anti -Dumping Agreement  
7.201.   As we noted above, the first sentence of Article 2.4.2 describes the WA -WA and T -T 
methodologies as methodologies which "shall normally" apply in an anti -dumping investigation. 
The WA -WA methodology is described in the first sentence of Article  2.4.2 as a methodology which 
requires "a comparison of  a weighted average normal value with a weighted average of prices of 
all comparable export transactions" while the T -T methodology is described as one which requires 
"a comparison of normal value and export prices on a transaction -to-transaction basis" . The 
second sentence of Article  2.4.2 describes the WA -T methodology, which provides for the 
comparison of "[a] normal value established on a weighted average basis" with "prices of 
individual export transactions". As noted in paragraph ‎7.150  above , this methodology has been 
recognized in WTO jurisprudence as an exception to the normal methodologies provided for in the 
first sentence of Article  2.4.2. Even though the WA -T methodology is distinct from the WA -WA and 
                                                
339 Korea's third -party submission, para. 51.  
340 Korea's third -party submission, para. 52 . 
341 Norway's third -party submission, para. 13.  
342 Norway's third -party statement, para. 4.  
343 Norway's third -party statement, para. 4.  
344 See, e.g. Turkey's third -party submission, para. 15.  
345 Viet Nam's third -party submission, para. 19.  
346 Viet Nam's third -party submission, para. 19.  WT/DS471/R  
 
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  T-T methodologi es in terms of its operation and in terms of being an exception to these normal 
methodologies, we find it important to note that under Article  2.4.2 all of these three 
methodologies have a common purpose of finding "the existence of margins of dumping duri ng the 
investigation phase".  
7.202.   The text of Article  2.4.2 does not refer to zeroing . We recall, however, that the WTO -
consistency of zeroing under the WA -WA and the T -T methodologies has been discussed 
extensively in past disputes and a consistent line of rea soning has emerged in this regard. 
Specifically, we recall that the Appellate Body has stated that Article  2.4.2 does not permit an 
investigating authority to use zeroing in the calculation of dumping margins through the WA -WA 
and T -T methodologies.347 The A ppellate Body has also found the use of zeroing in duty 
assessment proceedings, such as US administrative reviews, to be inconsistent with Article  9.3 of 
the Anti -Dumping Agreement and Article  VI:2 of the GATT 1994.348 The Appellate Body's findings 
in this r egard have been based, inter alia , on three principles: (a) that the margins of dumping 
have to be calculated for the investigated product as a whole349; (b) that the margin s of dumping 
have to be calculated for an exporter, rather than an importer350; and (c) that where the margin s 
of dumping are calculated in two steps, all intermediate results have to be taken into consideration 
with their mathematical values when they are aggregated to calculate  the margin  of dumping  for 
the investigated product  as a whole.351 The Appellate Body has found the use of zeroing  to be 
impermissible because it disregards  the intermediate  comparison  results that yield negative 
margins by treating them as zero.  
7.203.   Although the Appellate Body in these disputes was not dealing with the per missibility of 
zeroing in the context of the WA -T methodology, in our view, these principles on which the 
Appellate Body's findings were based are also relevant to the calculation of dumping margins 
through the WA -T methodology set forth in the second sent ence of Article  2.4.2. Specifically, as 
we noted above, the WA -T methodology also serves to find the existence of margins of dumping in 
an anti -dumping investigation. The Appellate Body has clarified that the term "margins of 
dumping" has the same meaning throughout the Anti -Dumping Agreement.352 Therefore, as both 
parties also agree, dumping margins calculated on the basis of the WA -T methodology provided in 
the second sentence of Article  2.4.2 also have to be calculated for the investigated product as a 
whole.353 We note, and parties agree, that by using zeroing under the WA -T methodology in the 
three challenged investigations, the USDOC disregarded negative intermediate comparison results 
by treating them as zero in calculating the margin of dumping for the i nvestigated product as a 
whole.354 Such margins, in our view, were not calculated for the investigated product as a whole 
and were therefore inconsistent with the second sentence of Article  2.4.2.  
7.204.   We note that the United States seeks to distinguish past Appe llate Body reports, 
specifically the ones where the Appellate Body found the use of zeroing under the WA -WA and T -T 
methodologies to be inconsistent with Article  2.4.2, from the legal question before us in these 
proceedings. The United States emphasizes th at the Appellate Body has found zeroing to be 
impermissible in these past disputes based on its interpretation of the words and phrases , which 
appear only in the first sentence of Article  2.4.2 that describes the WA -WA and T -T 
                                                
347 Appellate Body Reports, EC – Bed Linen , para. 66; US – Softwood Lumber V , para.  117; and US – 
Softwood Lumber (Article 21.5 – Canada) , para s. 88 and 122.  
348 See, e.g. Appellate Body Report, US – Zeroing (EC) , para. 133 . 
349 See, e. g. Appellate Body Reports, US – Softwood Lumber V , para. 93;  US – Softwood Lumber  V 
(Article 21.5 – Canada) , para . 114; and US – Zeroing (EC) , para. 127.  
350 See, e.g. Appellate Body Report, US – Stainless Steel (Mexico) , para. 1 12. 
351 Appellate Body Reports,  US – Softwood Lumber V , para.  98; US – Softwood Lumber (Article 21.5 – 
Canada) , para s. 94 and 122 ; US – Zeroing (EC) , para. 1 27; US – Stainless Steel (Mexico) , para. 103; and US – 
Continued Zeroing , para. 286.  
352 See, e.g. Appellate Body Reports, US – Stainless Steel (Mexico) , para. 85; and US – Continued 
Zeroing , para. 286  
353 In this regard, we note that the United States agrees that the results of transaction -specific 
comparisons generated through the application of the WA -T methodology are not margins of dumping in and of 
themselves. The United States also refers in parts of its first written submission to the requirement to calculate 
the margins of dumping under the WA -T methodology for the investigated product as a whole and for a specific 
exporter. (Uni ted States' first written submission, paras. 206 and 217); see also China's first written 
submission, para. 175.  
354 United States' response to Panel question No. 23(b), para. 46; and China's first written submission, 
paras. 292 -294. WT/DS471/R  
 
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  methodologies.355 Specifically,  the United States notes that the Appellate Body relied on the 
phrase "all" in "all comparable transactions" in the first sentence of Article  2.4.2 to find zeroing to 
be impermissible under the WA -WA methodology.356 The Appellate Body relied on the reference  to 
"a comparison" in the singular and the word "basis" to find zeroing to be impermissible under the 
T-T methodology.357 The United States argues that because these words and phrases do not 
appear in the second sentence of Article  2.4.2, which describes the  WA-T methodology, there is no 
similar textual basis in the second sentence to proscribe the use of zeroing under that 
methodology.358 We disagree. We consider that reading the long line of Appellate Body reports 
that have addressed zeroing under different m ethodologies and in various anti -dumping 
proceedings make s it clear that the Appellate Body has not found zeroing to be impermissible 
based solely  on an interpretation of the first sentence of Article  2.4.2. Instead, the Appellate Body 
has found zeroing to  be impermissible because it has found its use to be contrary to the obligation 
to calculate the margins of dumping for the investigated product as a whole. In turn, the Appellate 
Body's view that the margins of dumping have to be calculated for the invest igated product as a 
whole was based on various contextual considerations, including the context provided by the text 
of Article  2.1 of the Anti -Dumping Agreement.359 
7.205.   We find particular support for our view in the fact that the Appellate Body has also found 
the use of zeroing in US administrative or periodic reviews to be inconsistent with Article  9.3 of the 
Anti-Dumping Agreement and Article  VI:2 of the GATT 1994, and its use in new shipper reviews to 
be inconsistent with Article  9.5 of the Anti -Dumping Agree ment and Article  VI:2 of the 
GATT  1994.360 The words and phrases alluded to by the United States with respect to the first 
sentence of Article  2.4.2 are not present in the text of Articles  9.3 and 9.5 of the Anti -Dumping 
Agreement or Article  VI:2 of the GATT  1994, just as they are not present in the second sentence 
of Article  2.4.2 of the Anti -Dumping Agreement . This confirms that the Appellate Body did not find 
zeroing to be impermissible based on its interpretation of the first sentence of Article  2.4.2 alo ne. 
Relying particularly on the Appellate Body's finding in US – Zeroing (EC) , as an example, we asked 
the United States to clarify how it reconciled its argument that the Appellate Body has found 
against zeroing on the basis of its interpretation of the t extual elements present in the first 
sentence of Article  2.4.2, with the fact that the Appellate Body found the use of zeroing in US 
administrative reviews to be inconsistent with Article  9.3 of the Anti -Dumping Agreement and 
Article  VI:2 of the GATT 1994 in that case. The United States responded that the Appellate Body's 
finding in US – Zeroing (EC) is inapposite because the Appellate Body in that case was not 
reviewing the calculations of the margins of dumping, but was instead reviewing the USDOC's 
asses sment of anti -dumping duties collected from an importer.361 The United States argues that 
the Appellate Body found a violation of Article  9.3 in that case because the USDOC used zeroing 
under the methodology which it adopted to assess the anti -dumping duty l iability, and the anti -
dumping duty so assessed exceeded the "margin of dumping" calculated through the WA -WA 
methodology.362 According to the United States, therefore, the Appellate Body's finding in that 
dispute do es not offer any guidance on whether the u se of zeroing is permissible in calculating 
dumping margins using the WA -T methodology under the second sentence of Article  2.4.2. While it 
is true that the Appellate Body's finding under Article  9.3 of the Anti -Dumping Agreement and 
Article  VI:2 of the GA TT 1994 in US – Zeroing (EC)  concerned duty assessment, as opposed to the 
calculation of dumping margins, we find it relevant to our inquiry in this dispute because the 
Appellate Body found  zeroing to be impermissible  based on grounds other than the words and 
phrases which are unique to the first sentence of Article  2.4.2. To explain our point, we refer to 
the following extract from the Appellate Body report in US – Zeroing (EC) : 
[W]e recall that, in the administrative reviews at issue, the USDOC assessed t he anti -
dumping duties according to a methodology in which, for each individual importer, 
comparisons were carried out between the export price of each individual transaction 
                                                
355 United States' second written submission, para. 91.  
356 United States' second written submission, para. 91 (citing Appellate Body Report , EC – Bed Linen , 
para. 55).  
357 United States' second written submission, para. 91 (citing Appellate Body Report, US – Softwood 
Lumber V (Article  21.5 – Canada) , para. 87).  
358 United States' second written submission, para. 92.  
359 See, e.g. Appellate Body Report, US – Softwood Lumber V , para. 93.  
360 See, e.g. Appellate Body Reports, US – Zeroing (Japan) , paras. 165 -166; US – Zeroing (EC) , 
para. 133; a nd US – Stainless Steel (Mexico) , para. 103.  
361 United States' response to Panel question No. 111(c), para. 57.  
362 United States' response to Panel question No. 111(c), para. 58.  WT/DS471/R  
 
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  made by the importer and a contemporaneous average normal value . The results of 
these multiple comparisons were then aggregated to calculate the anti -dumping duties 
owed by each individual importer. If, for a given individual transaction, the export 
price exceeded the contemporaneous average normal value, the USDOC, at the 
aggregation stage, disregarded the result of this individual comparison. Because 
results of this type were systematically disregarded, the methodology applied by the 
USDOC in the administrative reviews at issue resulted in amounts of assessed anti -
dumping duties that exceeded the foreign producers' or exporters' margins of 
dumping with which the anti -dumping duties had to be compared under Article  9.3 of 
the Anti-Dumping Agreement  and Article  VI:2 of the GATT 1994 . Accordingly,  the 
zeroing methodology, as applied by th e USDOC in the administrative reviews at issue, 
is inconsistent with Article  9.3 of the Anti-Dumping Agreement  and Article  VI:2 of the 
GATT  1994.363 (italics original; underlining added)  
7.206.   Thus, the Appellate Body found zeroing in the context of duty assessmen t proceedings to 
be inconsistent with Article  9.3 of the Anti-Dumping  Agreement  and Article  VI:2 of the GATT 1994 
on the ground that it led the investigating authority to  disregard negative intermediate comparison 
results . The Appellate Body reached this c onclusion without examining the text of the first 
sentence of Article  2.4.2. Importantly, the Appellate Body recalled in the same report that in 
finding, in a previous dispute, that the use of zeroing under the WA -WA methodology in original 
investigations was inconsistent with the first sentence of Article  2.4.2, the Appellate Body had 
stated unambiguously that the terms "dumping" and "margins of dumping" in Article  VI of the 
GATT 1994 and the Anti -Dumping Agreement applied to the investigated product  as a whole.364 
The Appellate Body also stressed that this finding "was based not only on Article  2.4.2, first 
sentence, but also on the context found in Article  2.1 of the Anti-Dumping Agreement ".365 
Therefore, we do not agree with the United States' argument that the Appellate Body in US – 
Zeroing (EC) found against zeroing based simply on its interpretation of the text of the first 
sentence of Article  2.4.2, and that the use of zeroing is permissible when these textual elements 
are absent.  
7.207.   Furthermore, we disagree  with the United States that there is no textual basis in the 
second sentence of Article  2.4.2 to proscribe the use of zeroing. We recall that the text of the 
second sentence states that under the WA -T methodology an investigating authority will compare 
the weighted average normal value with the prices of "individual" export transactions. The word 
"individual" when used as an adjective, as is the case under the second sentence of Article  2.4.2, 
can be defined to mean "distinguished from others by qualities of its own".366 We understand from 
this that in the context of the WA -T methodology, the price of each export transaction is presumed 
to possess certain qualities of its own. Hence, an investigating authority needs to have particular 
regard to the price of e ach such export transaction, and particularly the intermediate comparison 
results generated from a comparison of the weighted average normal value with each such 
transaction , so as to not disregard the "individual" characteristics of the prices of such 
transactions. We consider that due to zeroing, an investigating authority fails to have proper 
regard to the "individual" characteristics of the prices of those export transactions which are found 
to be higher than the normal value. This is because an investi gating authority disregards , by 
treating as zero, the results generated from a comparison of the normal value and those specific 
export transactions. Importantly, we also do not find anything in the second sentence of 
Article  2.4.2 which would suggest that  the use of zeroing under the WA -T methodology is 
permissible, even though its use is impermissible in other contexts such as under the WA -WA or 
the T -T methodology. We recall, in this context, the Appellate Body report in US – Softwood 
Lumber V, where, noting that Article  2.4.2 contains no express language permitting an 
investigating authority to disregard the results of multiple comparisons at the aggregation stage, 
the Appellate Body stated that when negotiators sought to permit an investigating authorit y to 
disregard certain matters under the Anti -Dumping Agreement, they did so explicitly.367 Thus, the 
Appellate Body found the absence of any express language in Article  2.4.2 permitting the use of 
zeroing to be relevant to its finding that this provision do es not permit zeroing under the WA -WA 
methodology. Similarly, we find the absence of any express language in the text of the second 
                                                
363 Appellate Body Report , US – Zeroing (EC) , para. 133.  
364 Appellate Body Report , US – Zeroing (EC) , para. 126.  
365 Appellate Body Report , US – Zeroing (EC) , para. 126. (emphasis original)  
366 Shorter Oxford English Dictionary , 6th edn, A.  Stevenson (ed.) (Oxford University Press, 2007), 
Vol. 1, p. 1367.  
367 Appellate Body Report, US – Softw ood Lumber V , para. 100.  WT/DS471/R  
 
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  sentence of Article  2.4.2 permitting the use of zeroing under the WA -T methodology to be 
instructive, and find that this als o supports our view that the use of zeroing under this 
methodology is impermissible.  
7.208.   We find that our understanding of the obligations  under the second sentence of 
Article  2.4.2 is similar to that of the panel in US – Washing Machines , which addressed the same 
legal question, i.e. whether Article  2.4.2 permits the use of zeroing under the WA -T methodology. 
Noting that the second sentence of Article  2.4.2 permits the application of the WA -T methodology 
only to export transactions falling within the relevant pattern, that panel found that an 
investigating authority should fully take into account each and every export transaction falling 
within that pattern when applying the WA -T methodology  to that pattern .368 That panel, like us, 
found support for this view in the fact that the second sentence of Article  2.4.2 describes the WA -T 
methodology as a methodology which entails the  comparison of a weighted average normal value 
with prices of "individual" export transactions. The panel stated that the use of the word 
"individual" suggests that an investigating authority is required to consider each export transaction 
on its own right, and with equal weight, irrespective of whether the export price is above or below 
the normal value.369 Further, that panel also found that t here is no textual basis in the second 
sentence of Article  2.4.2 to disregard evidence pertaining to export transactions where the export 
price is above the normal value.370 On this basis, the panel concluded that the use of zeroing 
under the second sentence  of Article  2.4.2 is impermissible. We agree with these views of the 
panel in US – Washing Machines and note that they confirm our own understanding of the 
requirements under the second sentence of Article  2.4.2.  
7.209.   Based on the foregoing, we are of the view that Article  2.4.2 proscribes the use of zeroing 
under the WA -T methodology.  
7.1.6.3.2   Mathematical equivalence  
7.210.   The United States contends that if zeroing is found to be impermissible under the WA -T 
methodology provided for in the second sentence of Article  2.4.2, t hat provision will be rendered 
inutile  because in such a situation the margins of dumping calculated through the WA -T 
methodology will be mathematically equivalent to those calculated through the WA -WA 
methodology. Noting that the purpose of the second sen tence of Article  2.4.2 is to provide an 
investigating authority with the means to address targeted dumping, the United States contends 
that mathematical equivalence in the dumping margins generated through the exceptional WA -T 
methodology and the normal WA -WA methodology will frustrate that purpose. In this regard, the 
United States emphasizes that mathematical equivalence will arise regardless of whether the WA -T 
methodology is applied to all export transactions, or whether the WA -T methodology is applied 
only to export transactions which fall within the relevant pattern and the WA -WA methodology is 
applied to export transactions which fall outside it. China disagrees with the United States' 
arguments and maintains that mathematical equivalence will not ari se in two situations: (a) when 
the investigating authority changes the temporal basis on which normal value is calculated, under 
the WA -WA or WA -T methodology, or both371; and (b) when the investigating authority uses the T -
T methodology rather than the WA -WA methodology.372 
7.211.   We recall that the mathematical equivalence argument has been raised in past disputes  
and has been consistently rejected by the Appellate Body.373 This argument was first addressed by 
the Appellate Body in US – Softwood Lumber V (Article 21.5 – Canada) . In that case, the Appellate 
Body disagreed with the United States' argument on mathematical equivalence and the panel's 
acceptance of it for several reasons.374 One such reason was that the United States had not proved 
that the WA -WA and the WA -T methodologies would produce the same results in all or at least 
                                                
368 Panel Report, US – Washing Machines , para. 7.190.  
369 Panel Report, US – Washing Machines , para. 7.190.  
370 Panel Report, US – Washing Machines , para. 7.190.  
371 China's response to Panel question No.  24, para. 127 (referring to Lisa T enore's second statement, 
(Exhibit  CHN-497) (BCI), paras. 9 -10 and Table 4).  
372 See, e.g. China's opening statement at the first meeting of the Panel, para. 54.  
373 Appellate Body Reports, US – Softwood Lumber V (Article  21.5 – Canada) , paras. 97 -100; US – 
Zeroing (Japan) , paras. 135 -136; US – Stainless Steel (Mexico) , paras. 126 -127; and US – Continued Zeroing , 
para. 298.  
374 Appellate Body Report, US – Softwood Lumber V (Article  21.5 – Canada) , paras. 97 -99. WT/DS471/R  
 
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  most cases.375 The Appellate Body held that one part of a provision setting forth a methodology is 
not rendered  inutile  simply because in a "specific set of circumstances " its application would  
produce results that  are equivalent to those obtained from the application of a comparison 
methodology set out in another  part of that provision.376 In US – Continued Zeroing , the Appellate 
Body also concluded, along  similar lines, that the fact that under certain circumstances, the 
application of WA-T methodology could produce results that were equivalent to those obtained 
through the application of the WA -WA methodology was insufficient to conclude that the second 
sentence of Article  2.4.2 was thereby rend ered ineffective.377 
7.212.   We also recall that, in US – Softwood Lumber V (Article 21.5 – Canada) and in certain 
other disputes where the argument of mathematical equivalence was raised, the Appellate Body 
addressed specific circumstances where the mathematical eq uivalence argument would not apply. 
In US – Softwood Lumber V (Article 21.5 – Canada) , the Appellate Body faulted the panel for not 
considering arguments which showed that the WA -WA and WA -T methodologies would yield the 
same results only under certain spe cific assumptions, such as when the normal value used under 
these two methodologies were the same rather than different.378 Further, in US – Stainless Steel 
(Mexico) , noting that the United States did not contest in that case that if the normal value under 
these methodologies w as based on different time periods, mathematical equivalence would not 
arise, the Appellate Body stated that this suggested that mathematical equivalence worked only 
under a specific set of assumptions.379 
7.213.   We note that the context in whic h these discussions took place in past disputes is different 
from the context in which this issue is raised in the present proceedings. More specifically, 
whereas the mathematical equivalence argument was raised in previous disputes in connection 
with the issue of whether or not zeroing was permissible under comparison methodologies other 
than the WA -T methodology, in this dispute it has been presented in connection with the actual 
application of the WA -T methodology. Despite this difference, however, we ar e of the view that the 
nature of the argument before us is the same: we are called upon to consider whether our finding 
that zeroing is impermissible under the WA -T methodology provided for in the second sentence of 
Article  2.4.2 renders this provision inutile because of the United States' mathematical equivalence 
argument.  
7.214.   We recall that the United States argues that mathematical equivalence arises both where 
the investigating authority applies the WA -WA methodology and the WA -T methodology to the 
entirety  of the export transactions, and also where it applies a mixed methodology wherein it 
applies the WA -T methodology to the export transactions falling within the pattern and the WA -WA 
methodology to the export transactions falling outside it. As far as the first situation described by 
the United States is concerned, we recall our finding above that applying the WA -T methodology to 
all export transactions is not permitted under the second sentence of Article  2.4.2. Hence we 
disagree with this aspect of the Un ited States' mathematical equivalence argument.  
7.215.   With respect to the second situation described by the United States, we observe that the 
United States' description of the mixed methodology is based on the application of the WA -WA 
methodology to export tran sactions falling outside the pattern. However, an investigating authority 
may also apply the T -T methodology to such sales , in which case mathematical equivalence will 
not necessarily arise.  
7.216.   Further, we note that in its description of the mixed methodology , the United States 
assumes that normal value s for both the WA -WA methodology and the WA -T methodology are the 
same .380 However, we note that, if the investigating authority bases its normal value 
determinations on different time periods, mathematical equiva lence does not arise. In this regard, 
we recall that China presented evidence, based on price data from the three challenged 
investigations, to show that the dumping margins generated through the WA -WA methodology and 
the WA -T methodology would not be math ematically equivalent if the temporal basis for 
calculating the normal value w as changed. In particular, China presented four alternative scenarios 
                                                
375 Appellate Body Report, US – Softwood Lumber V (Art icle 21.5 – Canada) , para. 99.  
376 Appellate Body Report, US – Softwood Lumber V (Article  21.5 – Canada) , para. 99.  
377 Appellate Body Report,  US – Continued Zeroing , para. 298.  
378 Appellate Body Report, US – Softwood Lumber V (Article  21.5 – Canada) , para. 99.  
379 Appellate Body Report, US – Stainless Steel (Mexico) , para. 126.  
380 See, e.g. United States' first written submission, paras. 243, 295, and 298.  WT/DS471/R  
 
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  where changing the temporal basis for the normal value in the manner described below would 
have led to diffe rent dumping margins under the WA -WA methodology and the WA -T methodology. 
In each of these four scenarios, the WA -T methodology is applied, without zeroing, to export 
transactions falling within the pattern (targeted sales) and the WA -WA methodology, with out 
zeroing, is applied to export transactions falling outside it (non -targeted sales)381:  
a. The n ormal value s under both the WA -T methodology and the WA -WA methodology are 
calculated on a quarterly basis;  
b. The n ormal value s under both the WA -T methodology and  the WA -WA methodology are 
calculated on a monthly basis;  
c. The normal value s under the WA -T methodology are calculated on a quarterly basis and 
that under the WA -WA methodology is calculated on a POI -wide basis; and  
d. The normal value s under the WA -T methodol ogy are calculated on a monthly basis and 
that under the WA -WA methodology is calculated on a POI -wide basis.  
7.217.   The United States does not question that the mathematical results generated under the 
WA-T methodology and the WA -WA methodology will be different  in the situations described by 
China. However, the United States rejects China's argument on the ground that there is no textual 
basis in Article  2.4.2 to calculate normal values differently under the WA -WA methodology and the 
WA-T methodology, and that C hina does not show how changing the temporal basis for the 
determination of normal values would allow an investigating authority to take into account a 
pattern of export prices which differ significantly.382 Further, the United States notes that the 
evidence  presented by China shows that changing the temporal basis for the determination of 
normal values may at times lead to situations where the dumping margin calculated through the 
WA-T methodology is actually lower than that calculated through the WA -WA meth odology, and 
contends that changing the normal values in such a manner leads to results which are 
unpredictable and not systematic.383 
7.218.   We disagree. Nothing in the text of Article  2.4.2 prohibits an investigating authority from 
calculating the normal value un der the WA -WA and the WA -T methodology on the basis of different 
time periods, provided this is done in a manner otherwise consistent with the Anti -Dumping 
Agreement. The United States does not argue that Article  2.4.2 imposes any such obligation on an 
investigating authority either.384 We find that Article  2.4.2 grants an investigating authority the 
flexibility to adopt different normal values under the WA -WA and the WA -T methodologies, 
depending on the particularities of a given investigation, and if an inv estigating authority does so, 
mathematical equivalence will not arise. We also do not find merit in the United States' argument 
that changing the normal values in the manner proposed by China leads to results which are 
unpredictable and not systematic. We do not suggest that an investigating authority is required to 
use different time periods for calculating the normal values under the WA -WA and WA -T 
methodologies. We only note that an investigating authority has the flexibility to do so. What 
matters is th at where the investigating authority uses different time periods for calculating normal 
values under these two methodologies, mathematical equivalence does not arise.  
7.219.   Therefore, we are of the view that the United States' mathematical equivalence argument 
holds only in specific circumstances, i.e. when the investigating authority uses a mixed 
methodology wherein it applies the WA -T methodology to export transactions falling within the 
pattern and the WA -WA methodology (but not the T -T methodology) to export transactions falling 
outside it, and uses the same normal value under both of these methodologies.  We do not 
consider that the second sentence of Article  2.4.2 is rendered inutile  simply because in these 
specific circumstances the dumping margin obtained t hrough the WA -T methodology will be 
mathematically equivalent to that obtained through the WA -WA methodology. Therefore, we reject 
the United States' mathematical equivalence argument.  
                                                
381 China's response to Panel question No. 24, para. 127.  
382 United States' second written submission, paras. 98  and 100.  
383 United States' second written submission, para. 102. 
384 United States' second written submission, para. 99. WT/DS471/R  
 
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  7.1.6.3.3   Conclusion  
7.220.   On the basis of the foregoing, we conclude that the USDOC ac ted inconsistently with 
Article  2.4.2 of the Anti -Dumping Agreement in the OCTG , Coated Paper , and Steel Cylinders  
investigations by using zeroing under the WA -T methodology in calculating dumping margins for 
the concerned Chinese exporters.385 
7.2  Use of the WA -T methodology in the third administrative review in PET Film : Alleged 
violation of Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 of the GATT 1994  
7.2.1   Provisions at issue  
7.221.   The chapeau of Article  9.3 of the Anti -Dumping Agreement reads:  
The amount o f the anti -dumping duty shall not exceed the margin of dumping as 
established under Article  2. 
7.222.   Article  9.3 stipulates that the anti-dumping duty  rate shall not be greater than the 
dumping margin determined by the investigating authority pursuant to Article  2 of the Anti -
Dumping Agreement. Therefore, the dumping margin determined consistently with Article  2 
operates as a ceiling for the level of anti -dumping duty that may be imposed by a Member.386 
7.223.   Article  VI:2 of the GATT 1994 reads in relevant part:  
In order  to offset or prevent dumping, a contracting party may levy on any dumped 
product an anti -dumping duty not greater in amount than the margin of dumping in 
respect of such product.  
7.224.   Article  VI:2 of the GATT 1994 reiterates the principle that an anti -dumping duty rate 
should not go beyond the dumping margin determined by the investigating authority.  
7.2.2   Factual background  
7.225.   At the preliminary determinations stage in the  third administrative review in  PET Film , the 
USDOC found in the export sales of the DuPont Group to the United States a pattern of export 
prices which differed significantly among different time periods and regions.387 The USDOC then 
explained that the WA -WA methodology could not take into account these price differences 
because there was a meaningful d ifference in the dumping margins calculated through the WA -WA 
and the WA -T methodologies, which indicated that the WA -WA methodology masked dumping.388 
On this basis, in its preliminary determinations, the USDOC decided to use the WA -T methodology 
                                                
385 By finding that zeroing is not permissible under the WA -T methodology, we do not suggest that the 
options under Article  2.4.2 for dumpi ng determinations by investigating authorities are limited, as that would 
render the second sentence of Article  2.4.2 inutile . We find it particularly important to underline this given the 
exceptional nature of the WA -T methodology in that it addresses cer tain complexities arising in dumping 
determinations which may not be resolved through the normal methodologies provided for in the first sentence 
of Article  2.4.2.  
We are cognizant that where an investigating authority applies the WA -T methodology to the e xport 
transactions falling within the pattern and one of the two normal methodologies to the export transactions 
falling outside the pattern, and the results of the calculations for the export transactions falling outside the 
pattern show negative dumping,  it may be necessary, in order to give full meaning to the second sentence of 
Article  2.4.2, not to let that negative dumping offset the dumping found within the pattern. We make this 
observation bearing in mind the objective of the WA -T methodology which,  as underlined by the Appellate 
Body, is to unmask targeted dumping.  
In this regard, we recall that this situation presented itself in the US – Washing Machines  dispute and 
that panel found that Article  2.4.2 of the Anti -Dumping Agreement allowed an invest igating authority to 
disregard the negative result of the margin calculations for the export transactions falling outside the pattern, 
when aggregating such results with those obtained in the calculations for the export transactions falling within 
the patt ern. (Panel Report, US – Washing Machines , paras.  7.161-7.163 and 7.167).  
386 See, e.g. Appellate Body Report, US – Zeroing (Ja pan), para. 155.  
387 PET Film  AR3, Decision Memorandum, (Exhibit  CHN-104), p. 18.  
388 PET Film  AR3, Decision Memorandum, (Exhibit  CHN-104), pp. 18 -19. WT/DS471/R  
 
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  to calcula te the dumping margin for the DuPont Group.389 At the final determinations stage of this 
administrative review, the USDOC continued to apply the WA -T methodology.390 In its final 
determination, the USDOC explained that when it applied the WA -T methodology to " all of the 
exporter's sales (including the profitable sales that the exporter used to mask its dumping through 
offsetting), it eliminate[d] the offsetting that mask[ed] dumping ".391 This indicates that the USDOC 
used zeroing in this administrative review, wh ich the United States also confirms.392 
7.226.   The USDOC issued an amendment to its final determination in the  third administrative 
review in  PET Film  during the course of these proceedings. In that amendment, the USDOC 
modified the dumping margin for the DuPont Gr oup, but for reasons unrelated to the USDOC's use 
of zeroing under the WA -T methodology provided in the second sentence of Article  2.4.2.393 
Therefore, this amendment does not affect the nature of China's claim , which concerns the use of 
zeroing under the WA -T methodology in the  third administrative review in PET Film . In light of this 
amendment notice, China clarifies that the measure that it challenges in these proceedings is the 
final determination in in this administrative review , as modified as described  in this notice of 
amendment.394 The United States does not contest China's right to introduce this amendment 
notice in this dispute. We take note of this amendment, and will make our findings accordingly . 
7.2.3   Main a rguments of the parties  
7.2.3.1   China  
7.227.   China observes t hat the USDOC used zeroing under the WA -T methodology prescribed in 
the second sentence of Article  2.4.2 to calculate the dumping margin for the DuPont Group in the 
third administrative review in PET Film . China does not take issue with the USDOC's use of the 
WA-T methodology per se  in this review, stating that the Anti -Dumping Agreement does not 
restrict the ability of an investigating authority to use the WA -T methodology in an administrative 
review.395 However, in China's view, Article  9.3 of the Anti -Dump ing Agreement and Article  VI:2 of 
the GATT 1994 do not permit the use of zeroing under the WA -T methodology in duty assessment 
proceeding such as administrative reviews in the US system.  
7.228.   In this regard, China notes that Article  9.3 of the Anti -Dumping Agre ement and Article  VI:2 
of the GATT 1994 stipulate that the anti-dumping duty  rate imposed by a Member should not 
exceed the underlying margin of dumping. Relying on prior Appellate Body reports in support of its 
view, China contends that the dumping margin  on which the anti-dumping duty  rate is based must 
be determined for the investigated product as a whole.396 Noting that zeroing means that an 
investigating authority disregards negative intermediate results in the final stage of the calculation 
of the dumpi ng margin, China argues that a dumping margin calculated in this manner is not one 
which is calculated for the investigated product as a whole.397 Further, China insists that 
Article  2.4.2 does not apply to administrative reviews, and that it only applies to  original 
investigations.398 Therefore, even assuming that the second sentence of Article  2.4.2 permits the 
use of zeroing under the WA -T methodology in original investigations, according to China, 
Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 of the GATT 1994 do not permit its use 
                                                
389 PET Film  AR3, Decision Memorandum, (Exhibit  CHN-104), p. 19.  
390 PET Film  AR3, Issues and Decision Memorandum, (Exhibit  CHN-101), p. 28.  
391 China's first written submission, para. 304 (citing PET Film  AR3, Issues and Decision Memorandum, 
(Exhibit CHN-101), p. 31). (emphasis added by China)  
392 The United States explains that the USDOC calculated the dumping margin under the WA -T 
methodology in the third administrative review in PET Film  and in the three challenged investigations, i.e. the 
OCTG , Coated Paper  and Steel Cylinders  investigations, in the same manner. Given that the USDOC used 
zeroing under the WA -T methodology when calculating dumping margins in the three challenged investigations, 
this indicates that the USDOC also used zeroing in t he third administrative review in PET Film . (United States' 
response to Panel question No. 26, para. 55).  
393 PET Film  AR3, Notice of Amendment, (Exhibit  CHN-479), p. 13826; see also China's response to 
Panel question No. 1, para. 2.  
394 China's response to Pa nel question No. 1, para. 5  
395 China's first written submission, para. 300.  
396 China's first written submission, para. 300 (citing Appellate Body Reports , US – Zeroing (EC) , 
paras.  132-133; US – Zeroing (Japan) , paras. 108 -115, 166 and 174 -176; US – Stainles s Steel (Mexico) , 
paras. 97 -139; and  US – Continued Zeroing , paras. 276 -287 and 314 -316).  
397 China's first written submission, para. 310.  
398 China's second written submission, para. 124.  WT/DS471/R  
 
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  in administrative reviews.399 China concludes that by basing the anti -dumping duty  rate for the 
DuPont Group on such a margin of dumping calculated through zeroing, the USDOC acted 
inconsistently with Article  9.3 of the Anti-Dumping Agreement and Article  VI:2 of the GATT 1994 in 
the third administrative review in  PET Film .400 
7.2.3.2   United States  
7.229.   The United States argues that the second sentence of Article  2.4.2 permits the use of 
zeroing under the WA -T methodology when the two co nditions provided therein are met. The 
United States contends that in the  third administrative review in  PET Film , this is precisely what 
the USDOC did: after finding that the two conditions provided for in the second sentence of 
Article  2.4.2 were met, th e USDOC calculated the dumping margin for the DuPont Group under the 
WA-T methodology, with zeroing.  
7.230.   The United States notes that Article  9.3 of the Anti -Dumping Agreement requires that the 
anti-dumping duty  rate not exceed the dumping margin "established under Article  2" of the Anti -
Dumping Agreement . Article  VI:2 of GATT 1994 also states that the anti -dumping duty rate should 
not be greater in amount than the dumping margin determined for the dumped product. The 
United States submits that a dumping margin  determined consistently with the requirements of 
the second sentence of Article  2.4.2 is "by definition" a dumping margin "established under 
Article  2" of the Anti -Dumping Agreement within the meaning of Article  9.3.401 The United States 
argues that as long  as the anti -dumping duty  rate is equal to a dumping margin calculated 
consistently with Article  2.4.2, there is no question of the anti -dumping duty rate exceeding or 
being greater than the dumping margin "established under Article  2" of the Anti -Dumping 
Agreement.402 
7.2.4   Main a rguments of the third parties  
7.2.4.1   European Union  
7.231.   The European Union  notes that past Appellate Body reports where the use of zeroing in 
administrative reviews was found to be impermissible under the WA -T methodology did not 
concern a finding o f targeted dumping, which is at issue in this dispute.403 For this reason, in the 
European Union's view, those Appellate Body reports do not determine whether the use of zeroing 
is permissible in administrative reviews in which targeted dumping is found.404 The European 
Union asserts that in administrative reviews, as in original investigations, high -priced export 
transactions should not be allowed to offset the "dumping amount".405 
7.2.4.2   Japan  
7.232.   Japan recalls that the Appellate Body has found the use of zeroing in admin istrative 
reviews to be impermissible under Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 of 
the GATT 1994 because its use is contrary to the requirement to calculate the dumping margin for 
the investigated product as a whole.406 
7.2.5   Evaluation by t he Panel  
7.233.   We note that while the text of Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 
of the GATT 1994 are worded slightly differently, both require a Member to ensure that an anti -
dumping duty does not exceed the dumping margin calculated for  the relevant exporter. 
Article  VI:2 of the GATT 1994 prohibits a Member from imposing an anti -dumping duty  rate which 
is "greater in amount" than the margin of dumping. Article  9.3 of the Anti -Dumping Agreement is 
                                                
399 China's second written submission, para. 124.  
400 China's first written  submission, paras. 311 and 314 -315. 
401 United States'  first written submission, para. 323. 
402 United States' second written submission, para. 114.  
403 European Union's third -party submission, para. 50.  
404 European Union's third -party submission, para. 50.  
405 European Union's third -party submission, para. 51.  
406 Japan's third -party submission, paras. 62 -63. WT/DS471/R  
 
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  more specific inasmuch as it prohibits a Member from imposing an anti -dumping duty  rate which 
exceeds the dumping margin "as established under Article  2" of the Anti -Dumping Agreement.  
7.234.   We recall that the question of whether the use of zeroing in duty assessment proceedings 
is permissible under Article 9.3 of the Anti -Dumping Agreement and Article  VI:2 of the GATT 1994 
has arisen in a number of prior disputes, and in all of them the Appellate Body has found the use 
of zeroing to be inconsistent with these provisions .407 There is, however, an importan t difference 
between those past disputes and the present dispute. To illustrate this difference, we find it useful 
to discuss the Appellate Body's finding in US – Zeroing (EC) , which was the first case to address 
the issue of zeroing in administrative revi ews. In the administrative review proceedings at issue in 
that case, the USDOC used a methodology wherein it based the importer's anti -dumping duty 
liability on a dumping margin determined through the comparison of the export price of each 
individual trans action made by an importer with a contemporaneous weighted average normal 
value of the exporter.408 While aggregating the intermediate results generated through the 
comparison of the weighted average normal value with these individual export transaction pric es, 
the USDOC disregarded the negative intermediate results by treating them as zero.409 Thus, the 
USDOC used a methodology that – in terms of its mechanics  – looked like the WA -T methodology 
provided for in the second sentence of Article  2.4.2. However, in those administrative reviews, the 
USDOC did not explicitly rely on Article  2.4.2 and did not state that it was using the WA -T 
methodology in accordance with the requirements set forth in that provision. Further, in US – 
Zeroing (EC) , the Appellate Body spe cifically stated that it did not find it necessary to resolve the 
issue of zeroing in administrative reviews through an examination of Article  2.4.2, and emphasized 
that it was not expressing any view as to whether Article  2.4.2 is applicable in administra tive 
reviews or not.410  
7.235.   That being said, we note that in US – Zeroing (EC) , as well as  in a number of other cases, 
the Appellate Body found a violation of Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 
of the GATT 1994 on the grounds that, under  these provisions, a margin of dumping has to be 
determined: (a) for the investigated product as a whole411 and (b) for an individual exporter or 
foreign producer .412 Specifically, in US – Zeroing (EC) , the Appellate Body recalled that its earlier 
findings tha t the margin of dumping has to be calculated for the investigated product as a whole 
was based, among others, on Article  2.1 of the Anti -Dumping Agreement.413 Noting that Article  9.3 
refers to Article  2, the Appellate Body stated that it followed that under Article  9.3 of the Anti -
Dumping Agreement as well as Article  VI:2 of the GATT 1994, the amount of assessed anti -
dumping duty  rate should not exceed the margin of dumping for the investigated product as a 
whole.414 
7.236.   Based on the above, it is clear that under Article 9.3 of the Anti -Dumping Agreement and 
Article  VI:2 of the GATT 1994, an anti -dumping duty should not exceed the dumping margin 
calculated for the relevant exporter and for the investigated product as a whole. Further, as has 
also been clarified over  a large number of cases, the obligation to determine the dumping margin 
for the investigated product as a whole means that when the dumping margin is determined on 
the basis of multiple comparisons made at an intermediate stage, the investigating authorit y is 
required to ensure that all intermediate results generated through such multiple comparisons are 
aggregated in calculating the dumping margin for the investigated product as a whole.415 The use 
of zeroing is inconsistent with this requirement because wh en zeroing is used, the investigating 
                                                
407 In US – Zeroing (EC) and US – Zeroing ( Japan) , for example,  the Appellate Body found the use of 
zeroing to be inconsistent with Article  9.3 of the Anti -Dumpi ng Agreement and Article  VI:2 of GATT 1994. 
(Appellate Body Report s, US – Zeroing (EC) , para. 135; and US – Zeroing (Japan) , paras. 166 and 176 ). In US 
– Stainless Steel (Mexico) , the Appellate Body found the use of zeroing to be "as such" inconsistent wit h 
Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 of GATT. ( Appellate Body Report, US – Stainless 
Steel (Mexico) , para. 1 33). 
408 See, e.g. Appellate Body Report, US – Zeroing (EC) , para.  110. 
409 See, e.g. Appellate Body Report, US – Zeroing (EC) , para. 110.  
410 Appellate Body Report, US – Zeroing (EC) , para.  164. 
411 See, e.g. Appellate Body Report s, US – Zeroing (EC) , para. 127; and US –Stainless Steel (Mexico) , 
paras. 106 and 112.  
412 See, e.g. Appellate Body Report s, US – Zeroing (EC) , para.  129; US – Stainless Steel (Mexico) , 
para. 94; and US – Continued Zeroing , para. 283.  
413 Appellate Body Report, US – Zeroing (EC) , para. 126.  
414 Appellate Body Report, US – Zeroing (EC) , para. 127.  
415 See, e.g. Appellate Body Report s, US – Zeroing (EC ), para. 132;  and US – Stainless Steel (Mexico) , 
para. 103. WT/DS471/R  
 
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  authority treats the negative intermediate comparison results as zero, and hence does not take 
them into account at the aggregation stage.  
7.237.   In the third administrative review in PET Film , the USDOC explicitly used the W A-T 
methodology referred to in the second sentence of Article  2.4.2 by stating that the conditions set 
forth therein for the use of that methodology were satisfied.416 We are of the view that 
notwithstanding the difference between the administrative or perio dic reviews discussed in prior 
Appellate Body reports and the  third administrative review in  PET Film , the principles that emerged 
from the case law are convincing and apply equally to the use of the WA -T methodology 
challenged in this dispute. This is bec ause, as in the past disputes, in the present administrative 
review, the USDOC compared the weighted average of the normal value with individual export 
transaction prices, and then aggregated the results of such intermediate comparisons in 
calculating the margin of dumping for the investigated product as a whole. At the aggregation 
stage, the USDOC treated the negative intermediate results as zero. This shows that the USDOC 
did not determine the margin of dumping for the investigated product as a whole and,  by basing 
the anti -dumping duty rate on such a WTO -inconsistent margin of dumping, failed to ensure that 
the anti -dumping duty rate did not exceed or was not greater than the underlying dumping 
margin, as required under Article  9.3 of the Anti -Dumping Agr eement and Article  VI:2 of the GATT 
1994.  
7.238.   We note that the United States seeks to distinguish past Appellate Body reports on the 
basis that, differently from the administrative reviews subject to those disputes, in this 
administrative review  the USDOC calc ulated the dumping margin consistently with the 
requirements of the second sentence of Article  2.4.2. In the United States' view, the second 
sentence of Article  2.4.2 permits the use of zeroing under the WA -T methodology when the two 
conditions for the use  of that methodology are met.  The United States therefore submits that a 
dumping margin calculated consistently with the requirements of the second sentence of 
Article  2.4.2 is by definition a dumping margin established under Article  2 of the Anti -Dumping 
Agreement and that a duty rate determined on the basis of such a margin will be consistent with 
Article  9.3 of the Anti -Dumping Agreement and Article  VI:2 of the GATT 1994. We have found in 
paragraph  ‎7.220  above  that Article  2.4.2 does not permit zeroing under the WA -T methodology in 
original investigations. Therefore, the United States' argument does not hold.  
7.239.   Based on the foregoing, we find that the USDOC acted inconsistently with Article  9.3 of the 
Anti-Dumping Agreement and  Article  VI:2 of GATT 1994 by using zeroing in determining the 
dumping margin for the DuPont Group in the  third administrative review in  PET Film  as amended 
by the Notice of Amendment.  
7.3  Whether the six administrative review determinations introduced  at the Panel's first 
substantive meeting with the parties are within the Panel's term s of reference  
7.3.1   Introduction  
7.240.   In its opening statement at the Panel's first substantive meeting with the parties, China 
introduced for consideration four administrative review dete rminations issued by the USDOC after 
the filing of China's first written submission on 6 March 2015.417 In its closing statement at the 
same meeting, China introduced two more administrative review determinations.418 In this section 
of our Report, we refer col lectively to these as "the six determinations".  
7.241.   The USDOC issued the Final Results of the six determinations as follows: the fifth 
administrative review in OTR Tires  on 15 April 2015419; the fifth administrative review in PET Film  
on 11 June 2015420; the ninth  administrative review in Furniture  on 17 June 2015421; the fourth 
                                                
416 PET Film  AR3, Decision Memorandum, (Exhibit  CHN-104), pp. 18 -19; and PET Film  AR3, Issues and 
Decision Memorandum, (Exhibit  CHN-101), p. 28.  
417 These four determinations are OTR Tires AR5, PET Film AR5, Furniture  AR9 and Diamond Sawblades 
AR4. See China's opening statement at the first meeting of the Panel, para. 132.  
418 These two determinations are Solar AR1 and Wood Flooring AR2. See China's closing statement at 
the first meeting of the Panel, para. 27.  
419 OTR Tir es AR5, Final Results , (Exhibit  CHN-486).  
420 PET Film AR5, Final Results , (Exhibit  CHN-484).  
421 Furniture AR9, Final Results , (Exhibit  CHN-483).  WT/DS471/R  
 
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  administrative review in Diamond Sawblades on 8 June 2015422; the first administrative review in 
Solar on 14 July 2015423; and the second administrative review in Wood Flooring on 15 July 
2015.424 
7.242.   China challenges all six determinations and contends that they are inconsistent with 
Articles  6.10, 9.2 , and the second sentence of 9.4 of the Anti -Dumping Agreement for the same 
reasons that China argues that the 32 challenged determinations described in paragraph  35 of 
China's first written submission are inconsistent with the same provisions.425 China also challenges 
four of these six determinations, namely, the fifth administrative review in OTR Tires , the fourth 
administrative review in Diamond Sawblades , the first administrative review in Solar, and  the 
second administrative review in  Wood Flooring , as part of its as applied claims under Articles  6.1 
and 6.8,  paragraphs  1 and 7 of Annex  II, and  the first sentence of Article  9.4 of  the Anti -Dumping 
Agreem ent. China, however, distinguishes two of these four determinations from the other two in 
terms of the arguments on which its claims are based. China challenges the determinations in the 
first administrative review in Solar and the second administrative re view in Wood Flooring  for all 
the same reasons for which it challenges the 26 determinations identified in its first written 
submission under Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of 
Article  9.4 of  the Anti -Dumping Ag reement.426 With respect to the fifth administrative review in 
OTR Tires  and the fourth administrative review in Diamond Sawblades , China argues that there are 
violations of Articles  6.1 and  6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of 
Article 9.4 on the basis of a more limited set of arguments.427 
7.243.   The United States contends that the six determinations are new and, therefore, do not fall 
within the terms of reference of the Panel. The United States presents its objection on two 
grounds, namely : (a) the six determinations were not subject to consultations between the parties 
to the dispute within the meaning of Article  4.4 of the DSU; and ( b) they were not identified in 
China's panel request, as required under Article  6.2 of the DSU. We understa nd the United States 
to argue that each of these two grounds requires the Panel to exclude the six determinations from 
the scope of this dispute. In other words, the United States' arguments are not cumulative.428 
7.244.   In the light of the United States' objection  with respect to the six determinations, we will 
first examine whether these determinations fall within our terms of reference before proceeding, if 
at all, to an assessment of China's claims against such determinations. To this end, we will 
analys e, first , whether the identification of the specific measure s at issue in China's panel request 
includes these six determinations, as required under Article  6.2 of the DSU. If we conclude that it 
does not, we will find the six determinations  to fall outside our te rms of reference.  If, however, we 
find that the six determinations are included in China's panel request, we will examine whether the 
fact that the six determinations were not part of the consultations between the parties constitutes 
a jurisdictional bar under Article  4.4 of the DSU.  
7.3.2   Whether China's panel request covers the six determinations  
7.245.   Article  6.2 of the DSU sets forth the requirements applicable to panel requests.429 That 
provision reads:  
The request for the establishment of a panel shall be made in w riting. It shall indicate 
whether consultations were held, identify the specific measures at issue and provide a 
brief summary of the legal basis of the complaint sufficient to present the problem 
clearly. In case the applicant requests the establishment o f a panel with other than 
standard terms of reference, the written request shall include the proposed text of 
special terms of reference.  
                                                
422 Diamond Sawblades AR4, Final Results , (Exhibit  CHN-485).  
423 Solar AR1, Final Results , (Exhibit  CHN-489).  
424 Wood Flooring AR2, Final Results , (Exhibit  CHN-490).  
425 China's response to Panel question No. 2(a), paras. 6 -8. 
426 China's response to Panel question No. 2(b), para. 10.  
427 China's response to Panel question No. 2(b), paras. 13 -20. 
428 United States' response to Pa nel question No. 3, paras. 1 -4; and second written submission, 
paras.  119-122. 
429 Appellate Body Report, US – Carbon Steel , para. 124. WT/DS471/R  
 
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  7.246.   Thus, pursuant to Article  6.2, a panel request has to identify the " specific  measure s at 
issue" and provide "a brief s ummary of the  legal basis of the complaint sufficient to present the 
problem clearly". Importantly, as the Appellate Body has made clear, compliance with the 
requirements of Article  6.2 is not a mere formality430, since  a panel request serves two chief 
objec tives: it establishes and delimits the jurisdiction of a panel431; and serves the due process 
objective of providing notice to the respondent and the third parties regar ding the nature of the 
dispute.432 
7.247.   We note that t he jurisdictional disagreement between the  parties pertains to the 
identification of the specific measures at issue, not the legal basis of the complaint. Article  6.2 of 
the DSU requires that a panel request identify the specific measures at issue against which the 
complaining party presents its c laims. As a general matter, measures that fall within a panel's 
terms of reference must be measures that are in existence at the time of the establishment of the 
panel.433 We recall, h owever,  that the Appellate Body and certain panels have recognize d that, i n 
certain limited circumstances,  measures adopted subsequent to the establishment of a panel may 
fall within a panel's terms of reference.434 
7.248.   In some disputes where this  particular  issue arose , the Appellate Body examined the 
relationship between the measure  identified in the panel request and the new measure adopted 
subsequent to the filing of the panel request. In Chile – Price Band System , for instance, the 
Appellate Body found that "where an original measure had merely been amended by a subsequent 
measure  and the amendment did not, in any way, change the essence of the original measure ", 
the measure in its amended form could constitute the specific measure at issue identified in the 
panel request.435 The panel in Japan – Film held that  the requirements of Article 6.2 would be met 
in the case of an unidentified measure that "is subsidiary or so closely related  to a 'measure' 
specifically identified, that the responding party can reasonably be found to have received 
adequate notice  of the scope of the claims as serted by the complaining party ."436 Along similar 
lines, the panel in Argentina – Footwear (EC)  explained that "it is the identification of these 
measures (rather than merely the numbers of the resolutions and the places of their promulgation 
in the Officia l Journal) which is primarily relevant for purposes of Article  6.2 of the DSU ."437 In that 
panel's view, the inquiry should centre on the substance of the measures "rather than the legal 
acts in their original or modified legal forms that are most relevant f or [that panel's] terms of 
reference".438 Thus, the specificity requirement  in Article  6.2 of the DSU means that "the measures 
at issue must be identified with sufficient precision so that what is referred to adjudication by a 
panel may be discerned from the  panel request".439 
7.249.   The Appellate Body has also observed that Article  6.2 does not "categorically prohibit[]" 
the inclusion of measures that come into existence or are completed after the establishment of a 
panel is requested440, provided that the panel reques t is framed with "sufficient particularity so as 
to indicate the nature of the measure and the gist of what is at issue".441 A complainant is not, 
under Article  6.2 of the DSU, required to identify each challenged measure independently from 
other measures , so long as a measure is discernible in the panel request.442 
                                                
430 Appellate Body Report, Australia – Apples , para. 416.  
431 Appellate Body Report, EC and certain member States – Large Civi l Aircraft , para. 640. 
432 Appellate Body Report, EC and certain member States – Large Civil Aircraft , para. 640. See also 
Appellate Body Report, Argentina – Import Measures , para. 5.11.  
433 Appellate Body Report, EC – Chicken Cuts , para. 156. 
434 Appellate Body  Report, EC – Chicken Cuts , para. 156. 
435 Appellate Body Report, EC – Chicken Cuts , para. 156 ( quoting  Appellate Body Report, Chile – Price 
Band System , para. 139). (emphasis original)  
436 Panel Report, Japan – Film, para. 10.8. (emphasis added) See also Pane l Report, Australia – Salmon 
(Article 21.5 – Canada) , para. 7.10, subpara. 27.  
437 Panel Report, Argentina – Footwear (EC) , para. 8.40.  
438 Panel Report, Argentina – Footwear (EC) , para. 8.40. 
439 Appellate Body Report, US – Continued Zeroing , para. 168. 
440 Appel late Body Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 125. 
441 Appellate Body Report, US – Continued Zeroing , para. 169. 
442 Appellate Body Report, US – Continued Zeroing , para. 170. The Appellate Body has indicated that 
"there may be circumstan ces in which a party describes a measure in a more generic way, which nonetheless 
allows the measure to be discerned." ( Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan) , 
para. 116). WT/DS471/R  
 
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  7.250.   Turning to the facts of the present dispute, as  noted above, t he United States argues that 
the six determinations fall outside our terms of reference because they were not included in 
China's panel request.  
7.251.   In its panel request, China identified, inter alia , the following measures:  
a. The Single Rate Presumption for Non -Market Economies (NMEs);  
b. The NME -wide Methodology; and  
c. The Use of Adverse Facts Available.  
7.252.   With respect to the Single Rate Presumption for NMEs, the panel request challenges a 
norm of general and prospective application as such, as well as the determinations and related 
measures listed in Annex  3.443 With respect to the NME -Wide Methodology, the panel request 
challenges the determinations a nd related measures listed in Annex  4.444 Finally, with respect to 
the Use of Adverse Facts Available, the panel request challenges a norm of general and 
prospective application  as such, as well as the determinations and related measures listed in 
Annex  5.445 
7.253.   Annexes  3, 4 and 5 of China's panel request each contain s a list of 13 anti -dumping 
orders. For each of the orders, China refers to the specific determinations, such as the original 
investigation, or the subsequent administrative reviews, which it challeng es. China included 
systematically, for each of the listed anti -dumping orders, the following phrases:  
"any modification, replacement or amendment to the measures listed above ; and  
any closely connected, subsequent measures  that involve the application of t he Single 
Rate Presumption"446;  
"any modification, replacement or amendment to the measures listed above; and  
any closely connected, subsequent measures  that involve the application of any 
challenged aspect of the NME -Wide Methodology "447; 
"any modification, replacement or amendment to the measures listed above; and  
any closely connected, subsequent measures  that involve the application of adverse 
facts available ."448  
7.254.   Hence, in terms of which measures have been identified in China's panel request, the 
phrase  "any closely connected, subsequent measures " informs the 13 challenged orders with 
respect to the application of the Single Rate Presumption, the NME -wide Methodology, and adverse 
facts available. The question is whether that phrase is broad, and yet precise , enough to 
encompass the six determinations not identified explicitly in China's panel request.  
7.255.   In this respect, we observe that a situation similar to this dispute arose in US – Zeroing 
(Japan) (Article 21.5 – Japan) . In that dispute, Japan identified in  its panel request eight 
administrative reviews449 pertaining to three anti -dumping duty orders. Japan's panel request also 
referred to " any subsequent closely connected measures".450 During the course of the panel 
proceedings, the USDOC issued another adminis trative review determination, which Japan argued 
was within the panel's terms of reference.  
                                                
443 WT/DS471/5, para. 16. 
444 WT/DS471/5, para. 19. 
445 WT/DS4 71/5, para. 25. 
446 WT/DS471/5 , Annex  3. (emphasis added)  
447 WT/DS471/5 , Annex  4. (emphasis added)  
448 WT/DS471/5 , Annex  5. (emphasis added)  
449 The Appellate Body referred to these as "periodic reviews".  
450 WT/DS322/27, para. 12.  WT/DS471/R  
 
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  7.256.   The panel in that dispute addressed two issues, namely, whether Japan's panel request 
met the specificity requirement of Article  6.2 of the DSU, and whether measure s not in existence 
at the time of the panel request fell within its terms of reference. With respect to  whether the 
phrase "subsequent closely connected measures" was sufficiently broad to encompass the new 
administrative review, the panel recalled that th e United States retrospective duty assessment 
system required importers to post a cash deposit of the estimated amount of duties due for the 
following period, and that if exporter(s) requested a review, the USDOC would assess the final 
liability for the ex porter(s) requesting the review.451 Importantly, the panel also noted that 
because each administrative review supersedes the preceding one, "there is a high degree of 
predictability regarding the future occurrence of subsequent administrative reviews".452 The panel 
thus determined that the phrase "subsequent closely connected measures" satisfied the specificity 
requirement of Article  6.2453 and covered "subsequent periodic reviews, occurring under the same 
identified anti -dumping duty order, which 'supersede' the  reviews named in the panel request".454 
The panel underlined that the new administrative review had been initiated before the 
establishment of the panel and that, once finalized, it would become the next administrative 
review in the continuum of administrat ive reviews related to the anti -dumping duty order identified 
in the panel request.455 The panel therefore concluded that the new administrative review came 
under its terms of reference because "the measure in issue eventually came into existence as part 
of a continuum that existed at the time of the panel request, and [] the process for bringing about 
the measure's existence was already underway".456 
7.257.   The Appellate Body upheld the panel's analysis and findings concerning the inclusion of the 
new administrative review in its terms of reference. It began by noting that the phrase 
"subsequent closely connected measures", as used in Japan's panel request, referred to measures 
"enacted after" (subsequent to), and "relate[d] … to" (closely connected to), the administr ative 
reviews identified by Japan in its panel request.457 The Appellate Body noted that, although 
successive administrative review determinations are separate and distinct measures, there is a link 
between the reviews "issued under the same respective anti -dumping duty order".458 In these 
circumstances, the successive administrative reviews "constitute[] 'connected stages ... involving 
the imposition, assessment and collection of duties under the same anti -dumping order'".459 
7.258.   The Appellate Body also observed tha t the administrative reviews listed in the panel 
request and the new administrative review "involved the same products, from the same countries, 
and formed part of a continuum of events".460 Moreover, the due process rights of the United 
States were not impa ired because it was given several opportunities to respond to the arguments 
raised by Japan, which were in any event "similar" to those raised in respect of the reviews 
identified in the panel request.461 Furthermore, the Appellate Body considered that the t hird 
parties were put on notice by the panel request given the inclusion of the reference to "subsequent 
closely connected measures " and  the connections between the reviews identified in the panel 
request and the new review.462 The Appellate Body also echoed  the panel's finding that the new 
administrative review had been initiated at the time of the panel request. In finding that the new 
                                                
451 If a review is not requested, " duties are assessed at the rate established in the completed review 
covering the most recent prior period, or if no review has been completed, the cash deposit rate applicable at 
the time merchandise was entered". ( United States Code of Federal Regulations , Title 19, Section 351.212(a), 
(Exhibit  CHN-28)). 
452 Panel Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 7.102.  
453 Panel Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 7.105.  
454 Panel Report, US – Zeroing (Japan) (Article 21.5 – Japan), para. 7.103. The panel also considered 
that, given the "the regularity and predictability associated with administrative reviews under an anti -dumping 
order, the United States should reasonably have expected that future administrative reviews may fall within 
the panel's jurisdiction." (Ibid. para. 7.105).  
455 Panel Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 7.110.  
456 Panel Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 7.116.  
457 Appellate Body Report, US – Zeroing (Japan) (Articl e 21.5 – Japan) , para. 112.  
458 Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 116 (quoting Appellate 
Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 230).  
459 Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan), para. 116 (quoting Appellate 
Body Report, US – Zeroing (EC) (Article 21.5 – EC), para . 230, in turn  quoting Appellate Body Report, US – 
Continued Zeroing , para. 181 )). (omission by the Appellate Body)  
460 Appellate Body Report, US – Zeroing (Japan) (Art icle 21.5 – Japan) , para. 116  (referring to Appellate 
Body Report, US – Zeroing (EC) (Article 21.5 – EC), para. 240) . 
461 Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 119.  
462 Appellate Body Report, US – Zeroing (Japan) (Article 21 .5 – Japan) , para. 119.  WT/DS471/R  
 
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  administrative review was within the panel's terms of reference, the Appellate Body concluded that 
this was consistent with  the objective, set out in Article  3.3 of the DSU, to ensure a prompt 
settlement of the dispute.463 
7.259.   Although the Appellate Body in that dispute dealt with a compliance proceeding under 
Article  21.5 of the DSU, we consider that its reasoning with regard to Article 6.2 of the DSU is 
highly relevant to the issue before us. The six determinations at issue in these proceedings were 
not identified explicitly in China's panel request. Yet all such determinations pertain to anti -
dumping duty orders that were explicit ly listed in China's panel request. Each of the six 
determinations represents an administrative review pertaining to one of the 13 anti -dumping duty 
orders at issue in this dispute. For each of the listed anti -dumping duty orders, China included the 
phrase  "any closely connected, subsequent measures". In addition, all six administrative reviews 
were initiated before the establishment of the Panel on 26 March 2015: the fifth administrative 
review in OTR Tires , on 8 November 2013464; the first administrative re view in Solar, on 3 
February 2014465; the fourth administrative review in Diamond Sawblades , on 30 December 
2013466; the second administrative review in Wood Flooring , on 3 February 2014467; the fifth 
administrative review in PET Film , on 30 December 2013468; and  the ninth administrative review in  
Furniture , on 28 February 2014.469 
7.260.   Against this backdrop, we consider that the phrase "any closely connected, subsequent 
measures" in China's panel request should be construed as encompassing the six determinations. 
The six  determinations before this Panel are "closely connected" to the determinations explicitly 
listed in China's panel request, and  form part of a chain of measures or a continuum wherein the 
six determinations were made in administrative reviews that supersed ed previous administrative 
reviews or original investigations. Moreover, the six determinations are linked to anti -dumping 
duty orders on the basis of which anti -dumping duties were originally imposed and, therefore, 
"involve[] the same products, from the same countries".470 In addition, the six determinations are 
"subsequent measures" because they were issued after, and hence succeeded, the determinations 
explicitly listed  in China's panel request.  
7.261.   Moreover, the administrative reviews leading up to the six d eterminations were initiated 
prior to the establishment of this Panel. Given the particularities of the United States'  retrospective 
duty assessment system471, the United States was aware that the six determinations would be 
issued in the future, i.e. after the establishment of the Panel on 26 March 2014. Hence, as far as 
the six determinations were concerned, we find it difficult to accept the United States' argument 
that it did not reasonably expect that the phrase "closely connected, subsequent measures" 
referred to those administrative review determinations that were underway. We also note that, in 
the particular circumstances of this dispute, the United States' due process rights have not been 
infringed, as it  had several opportunities to present its argu ments with respect to the consistency 
of these six determinations with the provisions of the Anti -Dumping Agreement on which China 
bases its relevant claims. Moreover , as noted above, the arguments that China raises in relation to 
the six determinations ar e identical in the case of the claim challenging the Single Rate 
Presumption, and more limited, but identical for the remaining arguments in the case of the claims 
under Article  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 of 
the Anti -Dumping Agreement.  
7.262.   The United States further argues that the six determinations pertain to time periods that 
are different from the time periods of the determinations explicitly listed  in China's panel request, 
and that they involve differ ent facts .472 We agree with the United States that the six 
determinations are different from the measures explicitly listed  in the panel request in terms of the 
                                                
463 Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 127.  
464 OTR Tires AR5, Preliminary Results,  (Exhibit  CHN-234), p. 61292.  
465 Solar AR1, Preliminary Results,  (Exhibit  CHN-243), p. 1022.  
466 Diamond Sawblades AR4, Preliminary Results,  (Exhibit  CHN-248), p. 71980.  
467 Wood Flooring  AR2, Preliminary Results,  (Exhibit  CHN-262), p. 1388.  
468 PET Film AR5, Decision Memorandum , (Exhibit  CHN-477), p. 2.  
469 Furniture AR9, Issues and Decision Memorandum , (Exhibit  CHN-480), p. 4. 
470 Appellate Body Report, US – Zeroing (Japan) (Article 21.5 – Japan) , para. 116.  
471 We note that the USDOC "shall", upon the filing of a request, "review and determine … the amount of 
any anti -dumping duty". ( United States Tariff Act of 1930 , Section 751 , United States Code , Title 19, 
Section  1675, (Exhibit  CHN-17), Section 1675(a)(1)(B)).  
472 United States' second written submission, para. 122. WT/DS471/R  
 
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  facts they involve and the time periods they concern. As noted above, however, this does not 
change the fact that the six determinations are closely connected to the anti -dumping duty orders 
explicitly listed in China's panel request, and are therefore captured by the phrase "any closely 
connected, subsequent measures". Moreover, the fact that, for tw o of the four determinations 
challenged under Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of 
Article  9.4 of the Anti -Dumping Agreement, China presents a narrower set of arguments  compared 
to those presented with regard to t he determinations explicitly listed  in its panel request, does not 
affect our jurisdiction concerning the six determinations. In this regard, we recall that as long as 
the contested measures and the relevant claims are identified in a panel request consist ently with 
the requirements of Article  6.2 of the DSU, the complaining Member's arguments in support of its 
claims do not affect the panel's jurisdiction and may be presented in the course of panel 
proceedings.473 The evaluation of China's arguments is only relevant to our assessment of the 
claims concerning the six determinations.  
7.263.   On this basis, we reject the United States' contention that the six determinations are not 
covered by China's panel request. We proceed to examine the United States' argument that the six 
determinations are outside our terms of reference because they were not subject to consultations 
within the meaning of Article  4.4 of the DSU.  
7.3.3   Whether the six determinations  should have been subject to consultations  
7.264.   In addition to its challenge und er Article  6.2 of the DSU, the United States argues that the 
six determinations fall outside this Panel's terms of reference because they were not subject to 
consultations under Article  4.4 of the DSU. There is no doubt that these determinations were not 
part of the consultations between the parties because none but one of these administrative 
reviews had been initiated, and none had been completed, at the time of consultations. Therefore, 
the question is whether the lack of consultations about the six dete rminations puts them outside 
our terms of reference in these proceedings.  
7.265.   Pursuant to Article  4.4 of the DSU, a request for consultations shall , inter alia , "includ[e] 
identification of the measures at issue". For its part, Article  6.2 of the DSU requires , inter alia , that 
a request for the establishment of a panel "identify the specific  measures at issue" .474 The 
Appellate Body has explained the degree of specificity required in identifying the measure at issue 
in consultations and in panel requests. It obse rved that the inclusion of the word "specific" in 
Article  6.2, but not in Article  4.4, "makes it clear that, in identifying the measure at issue, greater 
specificity is required in a panel request than in a consultations request"475. Put differently, the 
identification of the measure at issue in a request for consultations is not to be subject to "too rigid 
a standard" .476 
7.266.   That said, we recall that  a request for consultations "play[s] an important role in defining 
the scope of the dispute", as it informs the re spondent and the WTO membership of the "nature 
and object of the challenge raised by the complainant, and enables the respondent to prepare for 
the consultations themselves".477 The Appellate Body has also indicated that a measure that was 
not named in a req uest for consultations, but is contained in the subsequent panel request, may 
still fall within the terms of reference of a panel provided that it does not "expand the scope"478 or 
change the "essence"479 of the dispute as presented in the request for consulta tions.480 
7.267.   In this dispute, the listing of measures in China's request for consultations follows the 
same structure as the panel request described above. With respect to the Single Rate 
Presumption, the NME -Wide Methodology and the Use of Adverse Facts Availa ble, the request for 
consultations cites 13 anti -dumping orders. For each of the orders, China refers to the specific 
                                                
473 In this respect, the Appellate Body has underlined  that arguments in support of a claim that a 
measure violates  a WTO provision do not have to be set out in detail in a panel request; rather, they may be 
developed in the submissions made to the panel . (Appellate Body Report, Dominican Republic – Import and 
Sale of Cigarettes , para. 121) . 
474 Emphasis added . 
475 Appella te Body Report, Argentina – Import Measures , para. 5.9.  
476 Appellate Body Report, US – Upland Cotton , para. 293.  
477 Appellate Body Report, Argentina – Import Measures , para. 5.12.  
478 Appellate Body Report, US – Upland Cotton , para. 293.  
479 Appellate Body Repor t, Mexico – Anti-Dumping Measures on Rice , paras. 137 -138. 
480 Appellate Body Report, Argentina – Import Measures , para. 5.13.  WT/DS471/R  
 
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  determinations, such as the original investigation and subsequent administrative reviews, if any.481 
For each anti -dumping order, the consul tations request refers to "any closely connected, 
subsequent measures".482 
7.268.   Accordingly, the request for consultations makes clear that China's concerns extended to 
measures that were closely connected and subsequent to those explicitly identified therein. 
Although the request for consultations was filed on 3 December 2013 (thus predating the initiation 
of five of the six administrative reviews) , as noted above, the nature of the United States 
retrospective duty assessment system is such that the U nited States  could reasonably  have 
expect ed impending requests for an administrative review from the subject exporters  under the 
listed anti -dumping orders . We are  thus of the view that the six determinations should be 
considered as falling within the scope of the phr ase "any closely connected, subsequent 
measure s". In addition, the six determinations do not expand the scope or change the essence of 
the dispute as compared to the request for consultations , because  they involved the same 
products, from the same countrie s and, along with the determinations explicitly listed  in China's 
request for consultations, they form part of a continuum of events.  
7.269.   Therefore, we reject the United States' contention that the six determinations are outside 
our terms of reference because they were not subject to consultations under Article  4.4 of the 
DSU. 
7.3.4   Conclusion  
7.270.   On the basis of the foregoing, we reject the United States' arguments under Articles  4.4 
and 6.2 of the DSU and find that the six determinations fall within our terms of refere nce. 
7.4  Whether the Single Rate Presumption is, as such and as applied  in 38 
determinations , inconsistent with Articles  6.10, 9.2, and the second sentence of 
Article  9.4 of the Anti -Dumping Agreement  
7.4.1   Introduction  
7.271.   China argues  that what it calls the Single Rat e Presumption483 amounts to  a norm of 
general and prospective application  adopted by the USDOC, and that this measure is as such 
inconsistent with Articles  6.10, 9.2 , and the second sentence of Article  9.4 of the Anti -Dumping 
Agreement .484 China further assert s that the alleged Single Rate Presumption  was applied in  the 
38 determinations at issue (32 determinations explicitly listed in China's first written 
submission485, plus the six additional determinations introduced at the first substantive 
meeting486), and th at such an application was inconsistent with  the same provisions of the Anti-
Dumping Agreement  that the alleged Single Rate Presumption  violates as such.  
7.4.2   Provisions at issue  
7.272.   The chapeau of Article  6.10 of the Anti-Dumping Agreement , which governs the calculation  
of dumping margins, provides:  
The authorities shall, as a rule, determine an individual margin of dumping for each 
known exporter or producer concerned of the product under investigation. In cases 
where the number of exporters, producers, importers or types of products involved is 
so large as to make such a determination impracticable, the authorities may limit their 
examination either to a reasonable number of interested parties or products by using 
samples which are statistically valid on the basis  of information available to the 
                                                
481 WT/DS471/1,  Annexes  3-5. 
482 WT/DS471/1, Annexes  3-5. 
483 In this report, we refer to this alleged norm as the "Single Rate Presumpti on". 
484 China's first written submission, para. 319.  
485 China's first written submission, para. 35.  
486 China's opening statement at the first meeting of the Panel, para. 132; and closing statement at the 
first meeting of the Panel, para. 27. We have found in paragraph  ‎7.270  above that the six determinations 
introduced at our first substantive meeting with the parties are within our terms of reference.  WT/DS471/R  
 
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  authorities at the time of the selection, or to the largest percentage of the volume of 
the exports from the country in question which can reasonably be investigated.  
7.273.   Article  9.2 of the Anti-Dumping Agreement, which  governs  the assignment of anti -dumping 
duties, reads:  
When an anti -dumping duty is imposed in respect of any product, such anti -dumping 
duty shall be collected in the appropriate amounts in each case, on a non -
discriminatory basis on imports of such product from all sources found to be dumped 
and causing injury, except as to imports from those sources from which price 
undertakings under the terms of this Agreement have been accepted. The authorities 
shall name the supplier or suppliers of the product concerned. If , however, several 
suppliers from the same country are involved, and it is impracticable to name all these 
suppliers, the authorities may name the supplying country concerned. If several 
suppliers from more than one country are involved, the authorities ma y name either 
all the suppliers involved, or, if this is impracticable, all the supplying countries 
involved.  
7.274.   Article  9.4 of the Anti-Dumping Agreement  contains disciplines regarding the duty 
applicable to the exporters that are not individually examined in cases where an investigating 
authority  limits its examination as provided for in the second sentence of Article  6.10 of the Anti-
Dumping Agreement. The second  sentence of Article  9.4 stipulates:  
The authorities shall apply individual duties or normal val ues to imports from any 
exporter or producer not included in the examination who has provided the necessary 
information during the course of the investigation, as prov ided for in 
subparagraph  10.2 of Article  6. 
7.4.3   Main arguments of the parties  
7.4.3.1   China  
7.275.   China arg ues that, in anti -dumping proceedings involving exporters from NME countries, 
the USDOC applies the alleged Single Rate Presumption, which consists of a presumption that all 
exporters from an NME country comprise a single entity under common government con trol, and 
the assignment of a single margin of dumping, or anti -dumping duty rate, to that entity.487 To 
rebut this presumption, and obtain an individually determined margin of dumping, China submits 
that an exporter must prove, through the Separate Rate Tes t, an absence of government control, 
both in law and in fact, over its export activities.488 China considers that the alleged Single Rate 
Presumption constitutes a norm of general and prospective application, which is consistently used 
by the USDOC as a deliberate policy489, and is, as such and as applied in 38 anti -dumping 
determinations, inconsistent with Articles  6.10, 9.2 , and the second sentence of Article  9.4 of the 
Anti-Dumping Agreement.490 
7.276.   As evidence that the alleged Single Rate Presumption amounts to a  norm of general and 
prospective application, China notes the United States' admission that the USDOC required, in 
each of the challenged 38 determinations, each individual Chinese exporter to prove separate rate 
status in order to receive an individual du ty rate or a duty rate consistent with Article  9.4 of the 
Anti-Dumping Agreement.491 Moreover, China presents certain passages from the USDOC's Import 
Administration Policy Bulletin No. 05.1 (Policy Bulletin No. 05.1), which in its view show that the 
USDOC p resumes that all exporters comprise a single NME -wide entity under common government 
control492, and are therefore assigned a single anti -dumping duty rate.493 China further claims that 
according to Policy Bulletin No. 05.1, this presumption may be overcome pr ovided that each 
                                                
487 China's first written submission, para. 317.  
488 China's first written submission, para. 318.  
489 China's first written submission, para. 323.  
490 China's first written submission, para. 319; and second written submission, para. 1 65. 
491 China's second written submission, para. 181.  
492 China' s first written submission, para. 325.  
493 China' s first written submission, para. 325.  WT/DS471/R  
 
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  exporter demonstrates, through fulfilling certain criteria developed by the USDOC, an absence of 
both de jure and de facto  governmental control over its export activities.494 
7.277.   Similarly, China posits that the USDOC's Enforcement and Complianc e Antidumping Manual  
(Antidumping Manual) states that, in anti-dumping  proceedings involving NME countries, the 
USDOC begins with the presumption that all exporters are essentially operating units of a single, 
government -wide entity, and are thus assigned a single anti -dumping duty rate. The Antidumping 
Manual goes on to state that, to rebut that presumption, it is incumbent on the producer or 
exporter to prove an absence of government control, both in law and in fact, over its export 
activities.495 In additi on, China submits that the Single Rate Presumption has been referred to in 
the USDOC's anti -dumping determinations on numerous occasions over recent decades since the 
inception of the alleged measure in the Sparklers (1991) and Silicon Carbide (1994) cases .496 
7.278.   China also points to decisions by the United States Court of Appeals for the Federal Circuit 
(USCAFC) and the United States Court of International Trade (USCIT) that have each endorsed the 
USDOC's authority to rely on a presumption of central government al control and to place the 
burden on the exporters to demonstrate an absence of such control.497 Furthermore, China alleges 
that the fact that the USDOC has a procedure, with the relevant forms and documents, that NME 
exporters have to follow in completing their separate rate application or separate rate certification 
in order to obtain or retain separate rate status is evidence that the presumption of governmental 
control is applied generally and prospectively.498 
7.279.   On the basis of this evidence, China conclude s that the Single Rate Presumption is a well -
defined norm of general and prospective application that the USDOC has consistently described as 
a policy in anti -dumping proceedings involving NME countries.499 
7.280.   Turning to its claims of violation of the Anti -Dump ing Agreement, China argues first that 
the Single Rate Presumption is, as such, inconsistent with Articles  6.10 and 9.2 of the Anti -
Dumping Agreement. China considers that the use of the verb "shall" in Article  6.10 signifies that 
determining individual du mping margins for each known exporter or producer is a general 
obligation.500 Similarly, China notes that Article  9.2 lays down the obligation to collect anti -
dumping duties in the appropriate amounts in each case and from all sources found to be dumped, 
except those from which price undertakings have been accepted. China argues that the term 
"sources" in the first sentence of Article  9.2 refers to individual exporters and not to the country as 
a whole501, and that the amount of an anti -dumping duty is appropri ate if it is based on the 
individual margin of dumping for the exporter concerned.502 China recognizes that the obligations 
in Articles  6.10 and 9.2 are subject to a single, narrow exception503, i.e. when the number of 
subject exporters is so high that it is i mpracticable to determine individual dumping margins and 
impose individual anti -dumping duties. In China's view, it is only under this narrow exception that 
an investigating authority may limit its examination to certain exporters under Article  6.10, and 
name the "supplying country concerned" under Article  9.2 of the Anti -Dumping Agreement.504 
7.281.   China claims that the Single Rate Presumption violates Articles  6.10 and 9.2 because it 
presumes singularity505 and shifts the burden to the exporters to prove independen ce from 
governmental control.506 Based on the Appellate Body's reasoning in EC – Fasteners (China)507, 
                                                
494 China' s first written submission, para. 325.  
495 China's first written submission, para. 327.  
496 China' s first written submission, para. 329 and fn 365 . 
497 China's first written submission, para s. 332-333; and second written submission, fn 250 to 
para. 182. 
498 China's second written submission, para. 183.  
499 China's first written submission, para. 330 (citing Panel Report, US – Shrimp II (Viet Nam) , 
para. 7.115). See also China's second written submission, para. 182.  
500 China's first written submission, paras. 351 -352. 
501 China's first written submission, para. 358 ( citing  Appellate Body Report, EC – Fasteners (China) , 
para. 338).  
502 China's first written submission, para. 359 (citing Appellate Body Report, EC – Fasteners (China) , 
para. 339).  
503 China's first written submission, para. 351.  
504 China's first written submission, para. 360; and second written submission, paras. 171 -172. 
505 China's opening statement at the first meeting of the Panel, para. 90; closing statement at the first 
meeting of the Panel, para. 18; and  second written submission, para. 219.  
506 China's second written submission, para. 223.  WT/DS471/R  
 
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  China argues that, where the burden to rebut governmental control is not discharged, the 
exporters concerned will not be entitled to an individual dumping ma rgin (contrary to Article  6.10) 
and an individual anti -dumping duty rate (contrary to Article  9.2).508 In China's view, the Anti -
Dumping Agreement requires proof, rather than presumption, of singularity.509 
7.282.   China moreover submits that derogation from the gener al obligations set forth in 
Articles  6.10 and 9.2 with respect to imports from NME countries lacks any basis in the Anti -
Dumping Agreement or in the Protocol on the Accession of the People's Republic of China to the 
WTO (China's Accession Protocol ).510 Parag raph 15  of China's  Accession Protocol contains a single, 
limited derogation to the general rules of the Anti -Dumping Agreement, namely, a departure from 
domestic prices or costs in China as the basis for normal value .511 For China, the Accession 
Protocol doe s not foresee a presumption that all companies in China are part of a single, PRC -wide 
entity.512 
7.283.   In addition to its as such claims, China asserts that the application of the Single Rate 
Presumption in the 38 challenged determinations was inconsistent with Articles  6.10 and 9.2 of the 
Anti-Dumping Agreement for the same reasons that the Single Rate Presumption is as such 
inconsistent with those two provisions.513 
7.284.   China also claims that the Single Rate Presumption is as such inconsistent with the second 
sentence  of Article  9.4 of the Anti -Dumping Agreement. In this regard, China notes that, in cases 
where an investigating authority limits its examination in accordance with the second sentence of 
paragraph  10 of Article  6 of the Agreement, the second sentence of Article 9.4 requires the 
investigating authority to determine individual anti -dumping duties or normal values for any 
known exporter or producer not included in the examination but who nevertheless provides the 
necessary information to be considered individ ually. However, China argues that the Single Rate 
Presumption subjects the right provided for in the second sentence of Article  9.4 to an additional 
condition, namely, the fulfilment of the Separate Rate Test.514 For this reason, China contends that 
the Sing le Rate Presumption violates the second sentence of Article  9.4.515 
7.285.   Finally, China maintains that the application of the Single Rate Presumption in the 
challenged 38 determinations was also inconsistent with the second sentence of Article  9.4 of the 
Anti-Dumping Agreement for the same reasons that the Single Rate Presumption as such is 
inconsistent with that provision.  
7.4.3.2   United States  
7.286.   The United States contends that the alleged Single Rate Presumption is not a norm of 
general and prospective application that ca n be challenged in WTO dispute settlement and that, at 
any rate, it is consistent with Articles  6.10, 9.2 , and the second sentence of Article  9.4 of the Anti -
Dumping Agreement.  
7.287.   With respect to the characterization of the measure at issue, the United States  submits 
that China has not met the high threshold516 required to demonstrate that the alleged Single Rate 
Presumption has general and prospective application.517 The United States notes that the excerpts 
from the Policy Bulletin No. 05.1 on which China relies  form part of the "Background" section of 
                                                                                                                                                  
507 China's second written submission, para. 198 ( citing Appellate Body Report, EC – Fasteners (China) , 
para. 364).  
508 China's first written submission, para. 371. See also  China's response to Panel question No. 29, 
paras. 145 and 146; and second written submission, paras. 178 -179. 
509 China's second written submission, para. 197.  
510 China's first written submission, para. 374 ( citing Appellate Body Report, EC – Fasteners (Chin a), 
para. 374). See also China's opening statement at the first meeting of the Panel, para. 91; and second written 
submission, para. 207.  
511 China's response to Panel question No. 39(a), para. 179; and second written submission, para. 21 2. 
512 China's respons e to Panel question No. 39(b), para. 183.  
513 China's first written submission, para s. 378-382. 
514 China's first written submission, para. 384; and second written submission, paras. 174 and 202.  
515 China's response to Panel question No. 52, para. 272.  
516 United  States' second written submission, para. 128.  
517 United States' first written submission, para. 338.  WT/DS471/R  
 
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  the document, as opposed to the "Statement of Policy" section.518 In contrast, the Statement of 
Policy that the Policy Bulletin No. 05.1 announces is not concerned with the alleged Single Rate 
Presumption but with a new application process for separate rates and a new position on 
combination rates.519 In the view of the United States, the language of the Policy Bulletin No. 05.1 
cited by China does not explain how the excerpt cited has normative character and will neces sarily 
give rise to the alleged Single Rate Presumption.520 The United States also adds that the language 
cited by China deals exclusively with anti -dumping investigations involving  NME countries , not 
administrative reviews.521 
7.288.    As concerns the Antidumping Man ual, the United States submits that China has not 
explained how the quoted passages of this document support its contention that the alleged Single 
Rate Presumption will necessarily give rise to particular situations in the future.522 Furthermore, 
this docum ent clearly states that it "is for the internal training and guidance of Import 
Administration (IA) personnel only, and the practices set out [t]herein are subject to change 
without notice", and that "[t]his manual cannot be cited to establish [US]DOC prac tice."523 
7.289.   With regard to the USDOC anti -dumping determinations cited by China, the United States 
posits that "they summarize, at most, what has happened in the past" but not "what will happen 
generally and prospectively".524 In any event, the United States mai ntains that China has failed to 
explain how a practice can set out a binding norm of general and prospective application.525 Along 
similar lines, the United States argues that the statements in the court decisions China relies upon 
make it clear that the USD OC "may" undertake the actions described therein. For the United 
States, such discretion undermines the notion that a norm of general and prospective application 
that determines the USDOC's behaviour exists.526 In addition, the United States considers that t he 
United States court decisions put forth by China concern complaints made by particular parties 
rather than authoritative statements of future policy.527 
7.290.   On this basis, the United States concludes that adducing deficient evidence to a base of 
deficient evi dence does not render the evidence collectively any more reliable528 and that, in this 
dispute, China has failed to establish the existence of a norm of general and prospective 
application.529 
7.291.   The United States rejects China's as such claims under Articles  6.10 and 9.2 of the Anti -
Dumping Agreement. In the view of the United States, the initial question under Article  6.10 is to 
identify the entity, or group of entities, that constitute each "known exporter" or the "known 
producer".530 For the United States, this provision does not require an investigating authority to 
find that "every company or legal entity is ipso facto  a known exporter or producer entitled to an 
individual margin of dumping"531, since, as the Appellate Body has held532, "actual commercial 
                                                
518 United States' first written submission, para. 339; and opening statement at the first meeting of the 
Panel, para. 44.  
519 United States' second written su bmission, para. 136.  
520 United States' second written submission, para. 142 (referring to Panel Report, US – Zeroing 
(Japan) , para 7.48).  
521 United States' first written submission, para. 339. See also United States' response to Panel question 
No. 31, para. 72; and second written submission, para. 141.  
522 United States' second written submission, para. 145 (referring to Panel Report, US – Zeroing 
(Japan) , para 7.48).  
523 United States' first written submission, para. 340 (quoting Antidumping Manual, (Exhibits US A-28 
and CHN -23), p. 1). See also United States' opening statement at the first meeting of the Panel, para. 45.  
524 United States' second written submission, para. 161.  
525 United States' first written submission, para. 344. See also United States' response to  Panel question 
No. 30(b), para. 60; and second written submission, para. 161.  
526 United States' second written submission, para. 160.  
527 United States' opening statement at the first meeting of the Panel, para. 48. See also United States' 
response to Panel question No. 34, para . 83. 
528 United States' response to Panel question No. 30(b), para. 58. See also United States' closing 
statement at the first meeting of the Panel, para. 3.  
529 United States' closing statement at the first meeting of the Panel, para. 3.  
530 United States' first written submission, para. 348.  
531 United States' first written submission, para. 349. (emphasis original)  
532 United States' first written submission, para. 376 ( citing Appellate Body Report, EC – Fasteners 
(China) , para. 376). See als o United States' second written submission, paras. 184, 185, 234 , and 235.  WT/DS471/R  
 
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  activitie s and relationships of companies"533 could lead an investigating authority to regard all of 
them as a single exporter or producer despite their nominally or legally different status.534 
7.292.   Furthermore, the United States asserts that Article  9.2 does not prohibit an investigating 
authority from assigning a single anti -dumping duty rate to a number of companies, including , 
where appropriate a PRC -wide entity535, if the investigating authority determines that the 
relationship between multiple companies is sufficiently close to consider all of them as a single 
entity.536 Moreover, the United States maintains that Article  9.2 is "facially inapplicable"537 to the 
challenged measure inasmuch as it applies to original investigations. In such cases, the USDOC 
only determines a ca sh deposit rate calculated on the basis of the estimated margins of dumping, 
and which is only an estimate of the final duties that may be owed by a respective importer.538 The 
United States posits that, under the United States retrospective system, the actu al collection of 
anti-dumping duties governed by Article  9.2 does not occur until the USDOC conducts 
administrative reviews.539 
7.293.   The United States moreover criticizes the Appellate Body in EC – Fasteners (China)  for 
having rejected the argument that China's A ccession Protocol and the Report of the Working Party 
on the Accession of China (China's Accession Working Party Report) provide the legal and factual 
predicate for treating Chinese companies as part of a single PRC -wide entity in anti -dumping 
proceedings .540 Notably, the United States considers that the Appellate Body failed to find that 
paragraph 15(d) of China's Accession Protocol and paragraphs  26541; 43 through 49542; 147 
through 152543; and 171 through 176544 of China's Accession Working Party Report show that 
China was not to be accepted automatically as a market economy.545 According to the United 
States, China's Accession Protocol, China's Accession Working Party Report , and the USDOC's 
determination that China is an NME permit the USDOC to treat Chinese export ers and producers as 
a single entity absent evidence to the contrary.546 At any rate, the United States asserts that the 
USDOC affords Chinese exporters an opportunity to demonstrate independence from the PRC -wide 
entity through the Separate Rate Test.547 
7.294.   Along similar lines, the United States requests the Panel to reject China's as applied claims 
under Articles  6.10 and 9.2 because, in the challenged determinations, the USDOC's treatment of 
the Chinese exporters as part of the PRC -wide entity was adequately su pported by evidence and 
consistent with such provisions.548 In addition, the specific language China has quoted in Table 
SRP in respect of 18 challenged determinations does not demonstrate that the USDOC actually 
applied the alleged Single Rate Presumption.549 The United States further argues that in eight of 
the challenged administrative reviews, the PRC -wide entity was not under review, and China has 
not explained the reasons that render the Single Rate Presumption inconsistent with Articles  6.10 
and 9.2 of t he Anti -Dumping Agreement in the context of these determinations.550 
7.295.   With respect to China's as such claim under the second sentence of Article  9.4 of the Anti -
Dumping Agreement, the United States considers that this provision is applicable only to the anti -
dumping duty rates applied to imports from unexamined exporters, and does not govern the rate s 
                                                
533 United States' first written submission, para. 350.  
534 United States' first written submission, para. 350; and second written submission, para. 233.  
535 United States' first written submission, para. 355.  
536 United States' first written submission, para. 357.  
537 United States' first written submission, para. 359.  
538 United States' first written submission, para. 359; and second written submission, para. 190.  
539 United States' first writte n submission, paras. 358 -359. 
540 United States' second written submission, para. 195.  
541 United States' first written submission, para. 364 and fn 371 . 
542 United States' first written submission, para. 369 and fn 376 . 
543 United States' second written submissio n, fn 330 to para. 196.  
544 United States' first written submission, para. 369 and fn 377.  
545 United States' response to Panel question No. 40, para. 107.  
546 United States' response to Panel question No. 36, para. 89.  
547 United States' first written submission,  para. 385.  
548 United States' first written submission, para. 384.  
549 United States' response to Panel question No. 43, para. 11 4. These determinations are:  Aluminum 
OI, Shrimp  AR7, Shrimp  AR8, Shrimp  AR9, OTR Tires  AR3, OCTG  AR1, Diamond Sawblades  AR1, Diamond 
Sawblades  AR2, Diamonds Sawblades  AR3, Wood Flooring  AR1, Ribbons  AR1, Ribbons  AR3, Bags AR3, Bags 
AR4, PET Film  AR3, PET Film  AR4, Furniture  AR7, and Furniture  AR8. 
550 United States' second written submission, paras. 186 -188. WT/DS471/R  
 
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  assigned to those companies that have been included in the examination.551 The United States 
submits that China must, but has failed to, demonstrate that the NME-wide entity is not under 
examination in all NME cases.552 The United States also disagrees with China's as applied claims 
under the second sentence of Article  9.4 because China has not demonstrated, as a preliminary 
matter, the as such inconsistency of the al leged Single Rate Presumption with that provision.553 
The United States asserts that China has failed to demonstrate that the necessary conditions for 
the application of the second sentence of Article  9.4, including those in Article  6.10.2, were met in 
any o f the challenged determinations.554 
7.4.4   Main arguments of the third parties  
7.4.4.1   European Union  
7.296.   The European Union submits that evidence of the existence of a norm of general and 
prospective application may include proof of systematic application of the measure and i nternal 
documents providing administrative guidance, even if not binding, such as Policy Bulletin 
No. 05.1.555 
7.297.   With respect to China's claims under Articles  6.10 and 9.2 of the Anti -Dumping Agreement, 
the European Union refers to the Appellate Body Report in  EC – Fasteners (China)  to assert that a 
measure that presumes the existence of a single entity is inconsistent with these two provisions 
and that China's Accession Protocol does not contain an exception to the obligations set forth in 
those provisions.556 Thus, the European Union anticipates that the Panel will be guided by the 
reasoning developed by the Appellate Body in that dispute.  
7.298.   To the extent that the Panel discusses the criteria the USDOC employs to assess the 
relationship between exporters and the S tate, the European Union considers that WTO Members 
may make "single entity" determinations based on the type of criteria employed by the USDOC.557 
7.4.4.2   Viet Nam  
7.299.   Viet Nam argues that the use of the terms "shall, as a rule" in Article  6.10 suggests that an 
investi gating authority is required to determine individual dumping margins for each known 
exporter  or producer , and that the second sentence of that provision introduces a limited and 
defined exception with respect to the sampling of exporters or producers when it is impracticable 
to investigate all of them.558 Along similar lines, Viet Nam considers that Article  9.2 imposes the 
general requirement that suppliers shall be individually named with respect to the imposition of 
anti-dumping duties unless, by way of exc eption, doing so would be impracticable.559 Viet Nam 
maintains that both of these provisions require an investigating authority to determine individual 
dumping margins for, and assign individual duty rates to, known exporters  or producers , unless 
the investi gating authority can establish that the factual circumstances fit within the defined 
exception in each provision.560 
7.300.   However, for Viet Nam, the USDOC's presumption of the existence of an NME -wide entity 
conflicts with the obligations set forth in Articles  6.10 and 9.2. In particular, the USDOC presumes 
that all exporters within the NME country are, in fact, a single entity under the control of the 
government.561 It is only if each exporter rebuts this presumption that it will be entitled to a 
                                                
551 United States' first wri tten submission, para. 388; and second written submission, paras. 206 and 
217-218. 
552 United States' second written submission, paras. 218 and 222.  
553 United States' first written submission, para. 391.  
554 United States' response to Panel question No. 50, par as. 134 -135; and second written submission, 
para. 220.  
555 European Union's third -party submission, para. 59.  
556 European Union's third -party submission, para. 61 ( citing Appellate Body Report, EC – Fasteners 
(China) , para. 364).  
557 European Union's third -party submission, para. 66 (referring to United States' first written 
submission, para. 382).  
558 Viet Nam's third -party submission, paras. 42 and 45.  
559 Viet Nam's third -party submission, para. 49.  
560 Viet Nam's third -party submission, para. 50.  
561 Viet Nam's thir d-party subm ission, para. 53.  WT/DS471/R  
 
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  separate rate.562 Viet Nam concludes that the USDOC's practice does not fit within the single, 
limited exception provided for in Articles  6.10 and 9.2, and hence, the measure at issue is 
inconsistent with those provisions.563 
7.4.5   Evaluation by the Panel  
7.301.   China argues that, in anti -dumping proceedings involving exporters from NME countries, 
the USDOC applies the alleged Single Rate Presumption, which consists of a presumption that all 
exporters from an NME country comprise a single entity under common government control, and 
the assig nment of a single margin of dumping, or anti -dumping duty rate, to that entity.564 China 
submits that t o rebut this presumption and obtain an individually determined margin of dumping, 
an exporter must prove, through the Separate Rate Test, an absence of gov ernment control, both 
in law and in fact, over its export activities.565 
7.302.   We commence our legal analysis by addressing whether the alleged Single Rate 
Presumption constitutes a measure in the form of a norm of general and prospective application 
that can be c hallenged as such in WTO dispute settlement. If, as China argues, such a norm exists, 
we will assess China's as such and as applied claims under Articles  6.10 and 9.2 of the Anti -
Dumping Agreement. Depending on our findings on China's claims under these tw o provisions, we 
will consider whether, and if so to what extent, we should also address China's as such and as 
applied claims under the second sentence of Article  9.4. 
7.4.5.1   Whether the Single Rate Presumption constitutes a measure that can be 
challenged as suc h in WTO dispute settlement  
7.303.   The first question before us is whether the alleged Single Rate Presumption represents a 
measure that may be challenged in WTO dispute settlement as such. During the course of these 
proceedings, the parties have exchanged opposi ng arguments in this regard. China conceives of 
the Single Rate Presumption as a norm of general and prospective application whose scope and 
precise content are described in the Policy Bulletin No. 05.1, the Antidumping Manual, as well as in 
the USDOC's "p ractice" since at least 1991.566 China also relies on several United States court 
decisions where, in its view, the challenged norm was described. The United States, for its part, 
argues that the evidence China has adduced is insufficient, and therefore does  not meet the high 
evidentiary burden, to establish that the alleged norm has general and prospective application.567 
The parties agree that the alleged Single Rate Presumption is not written in a binding legal 
instrument under United States law.  
7.304.   We begin by  recalling that Article  3.3 of the DSU provides that the dispute settlement 
system addresses "situations in which a Member considers that any benefits accruing to it directly 
or indirectly under the covered agreements are being impaired by measures taken b y another 
Member". The word "measures" in that provision serves to "identif[y] the relevant nexus, for 
purposes of dispute settlement proceedings, between the 'measure' and a 'Member'".568 The 
Appellate Body has explained that a "measure" for purposes of WTO  dispute settlement is "[i]n 
principle, any act or omission attributable to a WTO Member" which are, in the usual case, "acts or 
omissions of the organs of the state, including those of the executive branch".569 
7.305.   In some disputes, complaining Members have cha llenged measures that were not 
embodied in a binding legal instrument under the law of the responding Member. This situation has 
presented itself in a number of WTO disputes and has been addressed in a consistent manner by 
panels and the Appellate Body, wh ich has given rise to a set of principles.  The Appellate Body has 
considered that measures such as a rule or norm of "general and prospective application"570, 
                                                
562 Viet Nam's third -party submission, para. 53.  
563 Viet Nam's third -party submission, paras. 51 and 54.  
564 China's first written submission, para. 317.  
565 China's first written submission, para. 318.  
566 See China's first written su bmission, paras. 322 -334. 
567 United States' first written submission, paras. 337 -346; and opening statement at the first meeting 
of the Panel, paras. 42 -51. 
568 Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para. 81.  
569 Appellate Body Re port, US – Corrosion -Resistant Steel Sunset Review , para. 81.  
570 Appellate Body Report, US – Zeroing (EC) , para. 179. See also Appellate Body Report, US – 
Corrosion -Resistant Steel Sunset Review , para. 82.  WT/DS471/R  
 
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  "ongoing conduct"571, "concerted action or practice"572 or a measure of "systematic and continued 
application"573 may be challenged in WTO dispute settlement. Accordingly , this consistent  prior 
analysis  has recognized  that a measure not written in a binding legal instrument may be 
challenged as such in WTO dispute settlement provided that it meets certain con ditions.  
7.306.   In this dispute, China claims that the alleged Single Rate Presumption constitutes a norm 
of general and prospective application.574 The Appellate Body has indicated that an  as such claim 
against a norm or a rule of general and prospective applicati on requires that the complaining 
Member clearly establish at a minimum: (a) that the alleged norm or rule is attributable to the 
responding Member; (b) its precise content; and (c) that it has general and prospective 
application.575 Both parties agree with t his three -prong legal test.576 The United States, however, 
argues that China has failed to show that the alleged rule or norm has general and prospective 
application.577 Specifically, the United States points out that the evidence China has put forward is 
insufficient to establish that the alleged Single Rate Presumption "will be invariably applied in the 
future", that is, in " all scenarios that … arise after  its issuance ."578 
7.307.   Although the United States does not take issue with the first and second elements of th e 
legal test laid out above, we consider it appropriate to verify whether the alleged Single Rate 
Presumption is attributable to the United States, as well as its precise content. If we find that 
these elements are duly substantiated by evidence, we will p roceed to assess whether the alleged 
measure has gene ral and prospective application.  
7.4.5.1.1   Attribution of the  alleged Single Rate Presumption to the United States  
7.308.   With respect to whether the alleged measure is attributable to the United States, it is 
undisputed  that the acts claimed to be part of such measure are carried out by the USDOC, which 
is an organ of the United States. Hence, the alleged Single Rate Presumption is attributable to the 
United States.  
7.4.5.1.2   The precise content of the alleged Single Rate Presumpt ion 
7.309.   As regards the precise content of the alleged measure, China describes the Single Rate 
Presumption as consisting of two elements, namely: ( a) the USDOC's "presum[ption] that all 
producers and exporters in the country comprise a single entity under comm on government 
control (the 'NME -wide entity') and assigns a single margin of dumping, or anti -dumping duty rate, 
to that entity"; and ( b) that "[t]o rebut this presumption and obtain  an individually -determined 
margin of dumping, a producer/exporter must co mplete USDOC's separate rate application and 
satisfy the 'Separate Rate Test' ."579 In this respect, China has submitted several USDOC 
documents describing the alleged norm. For example, the Policy Bulletin No. 05.1 states:  
                                                
571 Appellate Body Report, US – Continued Zeroing , para. 181. Similarly, the panel in US – Orange Juice 
(Brazil)  defined the term "ongoing conduct" as "conduct that is currently taking place and is likely to continue 
in the future ." (Panel Report, US – Orange Juice (Brazil) , para. 7.176). (emphasis original)  
572 Appellate Body Report, EC and certain member States – Large Civil Aircraft , para. 794 . In this 
regard,  the Appellate Body held that "[a]s a general proposition, [the Appellate Body] do[es] not exclude the 
possibility that concerted action or practice co uld be susceptible to challenge in WTO dispute settlement ." In 
these circumstances, the Appellate Body did not consider "that a complainant would necessarily be required to 
demonstrate the existence of a rule or norm of general and prospective application in order to show that such a 
measure exists ." (Ibid.).  
573 Appellate Body Report, Argentina – Import Measures , paras. 5.138 -5.146 . The Appellate Body 
agreed with the panel's view that a measure has a "systematic application" if it does not have "sporadic, 
unrelated applications" of individual parts; and that a measure has "continued application" if it "is currently 
applied and it will continue to be applied in the future until the underlying policy is modified or withdrawn ." 
(Ibid. para s. 5.142 - 5.143).  
574 China's first written submission, para. 323.  
575 Appellate Body Report, US – Zeroing (EC) , para. 198. In Argentina – Import Measures , the Appellate 
Body stated that the complainant may be required to demonstrate, in addition to attribution and precise 
content,  "other elements, depending on the particular characteristics or nature of the measure being 
challenged". (Appellate Body Report, Argentina – Import Measures , para. 5.104).  
576 China's first written submission, para. 323; and United States' first written sub mission, para. 338.  
577 United States' first written submission, para. 338.  
578 United States' opening statement at the first meeting of the Panel, para. 43. (emphasis original)  
579 China's first  written submission, para. 317.  WT/DS471/R  
 
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  In an NME antidumping investigation , the [USDOC] presumes that all companies 
within the NME country are subject to governmental control and should be assigned a 
single antidumping duty rate unless an exporter demonstrates the absence of both de 
jure and de facto governmental control over it s export activities.580 
7.310.   Furthermore, over 1 00 USDOC anti -dumping determinations on the record (including the 
38 anti -dumping determinations challenged as part of China's as applied claims) reproduce the 
core features of the Single Rate Presumption.581 These de terminations state that in proceedings 
                                                
580 Policy Bulletin No. 05.1, (Exhibi t CHN-109), p. 1.  
581 Grain -Oriented Electrical Steel  OI, Decision Memorandum, (Exhibit  CHN-404), p. 15; Monosodium 
Glutamate OI, Decision Memorandum, (Exhibit  CHN-407), pp. 9 -12; Silica Bricks and Shapes OI, Decision 
Memorandum, (Exhibit  CHN-408), pp. 8 -11; Hardwood and Decorative Plywood OI, Decision Memorandum, 
(Exhibit  CHN-409), pp. 12 -18; Xantham Gum OI, Decision Memorandum, (Exhibit  CHN-411), pp. 8 -11; Drawn 
Stainless Steel Sinks OI, Decision Memorandum, (Exhibit  CHN-412), pp. 8 -13; Solar OI, Preliminar y 
Determination, (Exhibit  CHN-168), pp. 31315 -31317; Steel Cylinders OI, Preliminary Determination , 
(Exhibit  CHN-65), pp. 77969 -77970; Certain Steel Wheels OI, Notice of Preliminary Determination, 
(Exhibit  CHN-309), pp. 67709 -67710; Wood Flooring OI, Final  Determination, (Exhibit  CHN-49), pp. 64321 -
64322; Aluminum Extrusions OI, Final Determination, (Exhibit  CHN-32), pp. 18527 -18528; PET Film OI, Final 
Determination, (Exhibit  CHN-56), p. 55040;  Drill Pipe OI, Final Determination, (Exhibit  CHN-332), p. 1969;  
Seamless Refined Copper Pipe and Tube OI, Preliminary Determination, (Exhibit  CHN-414), p. 26719 -26721; 
Certain Woven Electric Blankets OI, Preliminary Determination, (Exhibit  CHN-415), para. 5569 -5571; Carrier 
Bags from Viet Nam OI, Preliminary Determina tion, (Exhibit  CHN-416), pp. 56815 -56817; Certain Kitchen 
Appliance Shelving and Racks OI, Preliminary Determination, (Exhibit  CHN-312), pp. 9594 -9595; Citric Acid 
and Certain Citrate Salts OI, Final Determination, (Exhibit  CHN-337), p. 16840; Small Diamet er Graph ite 
Electrodes OI, Final Determination, (Exhibit  CHN-338), p. 2053; Lightweight Thermal Paper  OI, Preliminary 
Determination, (Exhibit  CHN-418), pp. 27507 -27508; Sodium Nitrite OI, Notice of Final Determination, 
(Exhibit  CHN-339), p. 38985; Circular  Welded Carbon Quality Steel Pipe OI, Notice of Preliminary 
Determination, (Exhibit  CHN-314), pp. 2449 -2451; Sodium Hexametaphosphate OI, Preliminary 
Determination, (Exhibit  CHN-318), pp. 52546 -52547; Coated Free Sheet Paper OI, Final Determination, 
(Exhib it CHN-342), p. 60634; Certain Polyester Staple Fiber OI, Final Determination, (Exhibit  CHN-343), p. 
19692; Certain Activated Carbon OI, Final Determination, (Exhibit  CHN-344), p. 9510; Certain Lined Paper 
Products OI, Notice of Final Determination, (Exhib it CHN-320), p. 53082; Diamond Sawblades OI, Final 
Determination, (Exhibit  CHN-45), pp. 29307 -29308; Certain Artist Canvas OI, Final Determination, 
(Exhibit  CHN-345), p. 16117; 53-Foot Domestic Dry Containers OI, Issues and Decision Memorandum, 
(Exhibit  USA-101), pp. 46 -53; Bicycles OI, Notice of Final Determination, (Exhibit  CHN-114), pp. 19027 -
19028; Chlorinated Isocyanurates OI, Notice of Final Determination, (Exhibit  CHN-346), p. 24504; Certain 
Tissue Paper Products OI, Notice of Final Determination, (E xhibit  CHN-347), pp. 7476 -7477; Hand Trucks and 
Certain Parts Thereof OI, Notice of Final Determination, (Exhibit  CHN-348), pp. 60981 -60982; Certain Color 
Television Receivers OI, Notice of Final Determination, (Exhibit  CHN-323), pp. 20595 -20596; Certain M alleable 
Iron Pipe Fitting OI, Final Determination, (Exhibit  CHN-349), p. 61396; Barium Carbonate OI, Notice of Final 
Determination, (Exhibit  CHN-350), p. 46578; Lawn and Garden Steel Fence Posts OI, Notice of Final 
Determination, (Exhibit  CHN-351), p. 203 74; Silicon Metal from the Russian Federation OI, Notice of Final 
Determination, (Exhibit  CHN-352), p. 6887; OTR Tires OI, Final Determination, (Exhibit  CHN-41), p. 40487; 
Certain Cold -Rolled Carbon Steel Flat Products OI, Notice of Final Determination, (E xhibit  CHN-353), p. 62109; 
Carbon and Certain Alloy Steel Wire Rod from Ukraine OI, Notice of Final Determination, (Exhibit  CHN-164), p. 
55787; Folding Metal Tables and Chairs OI, Notice of Final Determination, (Exhibit  CHN-354), p. 20091; Bags 
OI, Notice of Preliminary Determination, (Exhibit  CHN-267), pp. 3546 -3547;  OCTG OI, Final Determination, 
(Exhibit  CHN-13), p. 20338;  Certain Automotive Replacement Glass Windshields OI, Final Determination, 
(Exhibit  CHN-355), p. 6483; Coated Paper OI, Final Determina tion, (Exhibit  CHN-12), p. 59220; Furniture OI, 
Notice of Preliminary Determination, (Exhibit  CHN-283), p. 35319 -35320;  Certain Frozen and Canned 
Warmwater Shrimp OI, Notice of Preliminary Determination, (Exhibit  CHN-119), pp. 42660 -42661;  Ribbons OI, 
Final Determination, (Exhibit  CHN-33), p. 41810;  Ribbons AR3, Decision Memorandum, (Exhibit  CHN-156), p. 
6; PET Film AR3, Final Results, (Exhibit  CHN-15), p. 35246 -35247;  PET Film AR4, Decision Memorandum, 
(Exhibit  CHN-282), p. 4 -7; PET Film AR5, Decision Memo randum, (Exhibit  CHN-477), pp. 5 -7; Certain Steel 
Nails AR 2011 -2012, Final Results, (Exhibit  CHN-356), p. 19317; Pure Magnesium AR 2011 -2012, Final 
Results, (Exhibit  CHN-357), p. 95; Certain Lined Paper Products AR 2011 -2012, Decision Memorandum, 
(Exhibit  CHN-432), pp. 7 -8; Certain Lined Paper Products AR 2010 -2011, Notice of Final Results, (Exhibit  CHN-
128), p. 61393; Certain Lined Paper Products AR 2006 -2007, Notice of  Final Results, (Exhibit  CHN-375), p. 
17164; Glycine AR 2011 -2012, Decision Memorandum,  (Exhibit  CHN-433), p. 4; Freshwater Crawfish Tail Meat 
AR 2009 -2010, Final Results, (Exhibit  CHN-363), p. 21530; Freshwater Crawfish Tail Meat AR 2002 -2003, 
Notice of Preliminary Results, (Exhibit  CHN-442), p. 32982;  Freshwater Crawfish Tail Meat AR 2000 -2001, 
Notice of Preliminary Results, (Exhibit  CHN-444), p. 63882 -63883; Freshwater Crawfish Tail Meat AR 1999 -
2000, Notice of Final Results, (Exhibit  CHN-402), p. 19549; Tapered Roller Bearings and Parts Thereof AR 
2009-2010, Final Results, (Exhibit  CHN-364), p. 2273; Certain Frozen Warmwater Shrimp From Viet Nam AR 
2009-2010, Final Results, (Exhibit  CHN-365), p. 56160; Circular Welded Austenitic Stainless Pressure Pipe AR 
2008-2010, Final Results, (Exhibit  CHN-366), p. 43982; Laminated Woven Sacks AR 2009 -2010, Final Results, 
(Exhibit  CHN-367), p. 21334; Certain Polyester Staple Fiber AR 2008 -2009, Final Results, (Exhibit  CHN-368), 
p. 2887; Certain Tissue Paper Products AR 200 8-2009, Final Results, (Exhibit  CHN-369), p. 63807; Certain WT/DS471/R  
 
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  involving NME countries, the USDOC begins with a rebuttable presumption that all exporters within 
the country are subject to governmental control, and that in these circumstances, the USDOC 
assigns a single rate to al l exporters of the subject merchandise, unless an exporter can 
demonstrate an absence of governmental control so as to be entitled to a separate rate.582 Similar 
language is found in the Antidumping Manual583, the court decisions on the record584, and the 
templa tes of the separate rate application585 and separate rate certification .586 
                                                                                                                                                  
Tissue Paper Products AR 2006 -2007, Final Results, (Exhibit  CHN-377), p. 58114; Honey  AR 2007 -2008, Final 
Results, (Exhibit  CHN-371), p. 24882; Honey AR 2004 -2005, Final Results, (Exhibit  CHN-382), p. 37716;  
Honey AR 2002-2003, Final Results, (Exhibit  CHN-389), p. 38875; Honey AR 2001 -2002, Final Results, 
(Exhibit  CHN-394), p. 25061;  Magnesium Metal AR 2006 -2007, Final Results, (Exhibit  CHN-378), pp. 40293 -
40294; Tapered Roller Bearings and Parts Thereof AR 2005 -2006, Final Results, (Exhibit  CHN-381), p. 56725; 
Bags AR 2004 -2005, Preliminary Results, (Exhibit  CHN-271), pp. 54023 -54024; Bags AR 2005 -2006, 
Preliminary Results, (Exhibit  CHN-272), p. 51590 -51591; Bags AR 2006 -2007, Preliminary Results, 
(Exhibit  CHN-274), p. 52284; Bags AR3, Final Results, (Exhibit  CHN-54), pp. 6857 -6858; Bags AR4, Final 
Results, (Exhibit  CHN-55), p. 63719; Tapered Roller Bearing and Parts Thereof AR 2003 -2004, Final Results, 
(Exhibit  CHN-387), p. 2519 -2520;  Petroleum Wax Candles AR 2004 -2005, Final Results, (Exhibit  CHN-384), p. 
62417; Porcelain -on-Steel Cooking Ware AR 2003 -2004, Final Results, (Exhibit  CHN-386), p. 24642; Brake 
Rotors AR 2003 -2004, Final Results, (Exhibit  CHN-388), p. 69939; Persulfates AR 2002 -2003, Final Results, 
(Exhibit  CHN-391), p. 6836; Persulfates AR 2001 -2002, Final Results, (Exhibit  CHN-396), p. 68030; Fresh 
Garlic AR 2000 -2001, Final Results, (Exhibit  CHN-399), p. 4759; Sulfanilic Acid AR 1999 -2000, Final Results, 
(Exhibit  CHN-403), p. 1963; Aluminum AR1, Final Results, (Exhibit  CHN-35), p. 98; Aluminum AR2, Decision 
Memoran dum, (Exhibit  CHN-205), pp. 9 -13; Shrimp AR7, Decision Memorandum, (Exhibit  CHN-167), pp. 5 -6; 
Shrimp AR8, Decision Memorandum, (Exhibit  CHN-120), pp. 4 -5; Shrimp AR9, Decision Memorandum, 
(Exhibit  CHN-121), pp. 5 -6; OTR Tires AR3, Decision Memorandum, (Ex hibit CHN-236), pp. 5 -7; OCTG AR1, 
Preliminary Results, (Exhibit  CHN-238), p. 34016; Diamond Sawblades AR1, Final Results, (Exhibit  CHN-46), 
pp. 11144 -11145; Diamond Sawblades AR2, Decision Memorandum, (Exhibit  CHN-137), p. 4 -7; Diamond 
Sawblades AR3, Issu es and Decision Memorandum, (Exhibit  CHN-133), pp. 5 -9; Diamond Sawblades AR4, 
Final Remand Redetermination, (Exhibit  CHN-474), pp. 7 -10; Wood Flooring AR1, Decision Memorandum, 
(Exhibit  CHN-263), pp. 6 -10; Wood Flooring AR2, Decision Memorandum, (Exhibit  CHN-117), pp. 6 -9; Sebacic 
Acid AR 1996 -1997, Preliminary Results, (Exhibit  CHN-126), p. 17368; Solar AR1, Decision Memorandum, 
(Exhibit  CHN-488), pp. 9 -16; Ribbons  AR1, Final Results, (Exhibit  CHN-51), p. 1013 1; Furniture AR7, Issues 
and Decision Memorand um, (Exhibit  CHN-151), pp. 6 -8; Furniture AR8, Decision Memorandum, (Exhibit  CHN-
302), pp. 9 -14; and Furniture AR9, Issues and Decision Memorandum, (Exhibit  CHN-480), pp. 5 -6. 
582 In addition to the determinations China challenges as applied (see fns 485-486 above), China has 
presented a list of 92 anti -dumping determinations, 40 original investigations and 52 administrative reviews, in 
Annex  9 to its first written submission.  
583 The Antidumping Manua l states:  
In proceedings involving NME countries, the [USDOC] begins with a rebuttable presumption that 
all companies within the country are essentially operating units of a single, government -wide 
entity and, thus, should receive a single antidumping duty  rate (i.e., an NME -wide rate).  
… 
Under the [USDOC's] current policy, all exporters seeking a separate rate in an 
investigation/review must complete a separate rate application form.  (Antidumping Manual, 
Chapter 10, (Exhibit  CHN-23), pp. 3 and 5) (emphasis  original ) 
584 The USCAFC upheld the USDOC's presumption  "that NME exporters would be subject to a single, 
countrywide antidumping duty rate unless they could demonstrate legal, financial, and economic independence 
from the Chinese government" . (USCAFC, Tran scom Inc. v. United States, 294 F.3d 1371 ( Fed. Cir. 2002), 
(Exhibit  CHN-130), p. 1373 ). The USCAFC has  also confirmed the USDOC's  "authority to employ a presumption 
of state control for exporters in a [NME country], and to place the burden on the exporter s to demonstrate an 
absence of central government control" . (USCAFC, Sigma Corp. v. United States, 117 F.3d 1401 ( Fed. Cir. 
1997), ( Exhibit  CHN-131), p. 1405). The USCIT has described the "judicially -affirmed practice" as follows: 
"Under the NME presumptio n, a company that fails to demonstrate independence from the NME entity is 
subject to the countrywide rate, while a company that demonstrates its independence is entitled to an 
individual rate as in a market economy" . (USCIT, Jiangsu Changbao Steel Tube Co ., Ltd. v. United States, 884 
F.Supp.2d 1295 ( CIT 2012), ( Exhibit  CHN-123), p p. 1310-1311 (quoting  USCAFC, Transcom Inc. v. United 
States, 294 F.3d 1371 (Fed. Cir. 2002), ( Exhibit  CHN-130), p. 1373 , in turn  quoting  USCAFC, Sigma Corp. v. 
United States, 117  F.3d 1401 ( Fed. Cir. 1997), ( Exhibit  CHN-131), p p. 1405 -1406)). 
585 The separate rate application template reads , in relevant part, as follows:  
 The [USDOC]  assigns separate rates in non -market economy ("NME ") cases only if the applicant 
can demonstrate an absence of both de jure and de facto governmental control over its export 
activities in accordance with th e separate -rates test criteria.  
…  
To establish whether a company 's export activities are sufficiently independent of the 
government to be eligible fo r separate rate status, the [USDOC]  analyzes each exporting entity 
under the test established in ["Sparklers "], and later expanded upon  in ["Silicon Carbide "]. 
(Separate Rate Application, ( Exhibit  CHN-31), pp. 1 -2) (emphasis original)  
586 The separate rate c ertification template reads , in relevant part, as follows:  WT/DS471/R  
 
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  7.311.   On this basis, we conclude that the precise content of the alleged Single Rate Presumption, 
as a norm, is readily ascertainable from the evidence on the record, i.e. that in anti -dumpi ng 
proceedings involving NME countries, exporters are presumed to form part of an NME -wide entity 
and are assigned a single anti -dumping duty rate, unless each exporter demonstrates, through the 
fulfilment of the criteria set out in the Separate Rate Test587, an absence of de jure  and de facto 
governmental control over its export activities.588 
7.4.5.1.3   General and prospective application  of the alleged Single Rate Presumption  
7.312.   Next, we turn to the issue of whether the alleged Single Rate Presumption has general and 
prospective application. In this respect, we note that China describes the alleged measure as a 
"policy"589, which "is used consistently by [the] USDOC in anti -dumping proceedings involving 
NMEs".590 In support of its assertion, China adduces a number of documents  that, in its opinion, 
demonstrate that the Single Rate Presumption constitutes a norm of  general and prospective 
application. We address these in turn.  
Policy Bulletin No. 05.1  
7.313.   China first refers to the Policy Bulletin No. 05.1 where it is stated that "'[ i]n an NME 
antidumping investigation, the [USDOC] presumes …' government control".591 In this connection, 
we observe that the Policy Bulletin No. 05.1, issued in 2005, states that its purpose was not to 
change "the long -established standard for eligibility f or receiving a separate rate", but to "clarif[y ] 
the [USDOC's] previous practice by giving more explicit instructions on how the requirements can 
be fulfilled".592 The parties agree that, prior to the issuance of the Policy Bulletin No. 05.1, NME 
exporters w ere required to present information on the absence of de jure and de facto  
governmental control in Section A of the USDOC's dumping questionnaire. Policy Bulletin No. 05.1, 
however, instituted the separate rate application as a form or template that NME ex porters would 
have to fill out at the beginning of an anti -dumping investigation.593 
                                                                                                                                                  
The [USDOC]  assigns a separate rate in non -market economy ( "NME") cases only if the firm can 
demonstrate an absence of government control, both in law ( de jure ) and in fact ( de facto ), over 
its exp ort activities in accordance with the separate -rate test criteria.  (Separate Rate 
Certification, ( Exhibit  USA-84), p. 2 ) (emphasis original)  
587 Policy Bulletin No. 05.1,  and the Antidumping Manual further lay down the criteria to establish 
"absence of both de jure and de facto governmental control" over the exporters' export activities. With respect 
to de jure  governmental control, the USDOC evaluates the relevant laws, regulations and other enactments in 
order to ascertain whether there is: ( a) an absence o f restrictive stipulations associated with an individual 
exporter's business and export licences; ( b) any legislative enactments decentralizing control of companies; 
and ( c) any other formal measures by the central and/or local government decentralizing co ntrol of companies. 
As for de facto governmental control, the USDOC assesses whether: ( a) the export prices are set by, or subject 
to the approval of, government authority; ( b) the exporter has the authority to negotiate and sign contracts 
and other agreem ents; ( c) the exporter has autonomy from the government in making decisions regarding the 
selection of management; and ( d) the exporter retains the proceeds of its export sales and makes independent 
decisions regarding the disposition of profits or financi ng of losses. ( Policy Bulletin No. 05.1 , (Exhibit  CHN-
109), p. 2. See also Antidumping Manual, Chapter 10, ( Exhibit  CHN-23), p. 4; and Separate Rate Application, 
(Exhibit  CHN-31), p. 2).  
588 We note that, in the context of administrative reviews, the USDOC " has further simplified the 
separate rates process" by allowing exporters "who have already applied for and received a separate rate in a 
previous proceeding to submit a certification that their status has not changed and they continue to meet the 
de jure a nd de facto criteria to qualify for a separate rate". (Antidumping Manual, Chapter 10, (Exhibit  CHN-
23), p. 6). If exporters provide a separate rate certification, they will not be required to file a separate rate 
application in subsequent segments of the proceedings. According to the separate rate certification template 
provided by the United States as Exhibit  USA-84, an exporter must submit the following declaration:  
I certify that (Firm) was previously granted separate rate status as part of the final 
determination/results in the (insert investigation/review and period of investigation/review); 
published in Federal Register (insert citation), that the separate rate status is currently 
applicable, and the separate rate status has not been revoked.  (Separat e Rate Certification, 
(Exhibit  USA-84), p. 6)). (emphasis omitted ) 
589 China's first written submission, para. 328.  
590 China's first written submission, para. 323.  
591 China's first written submission, para. 32 8 (quoting Policy Bulletin No. 05.1,  (Exhibit  CHN-109), 
p. 1). (emphasis added by China)  
592 Policy Bulletin No. 05.1, (Exhibit  CHN-109), p. 4.  
593 China's response to Panel question No. 44, paras. 191 -192; and United States' response to Panel 
question No . 44, paras. 115 -116. WT/DS471/R  
 
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  7.314.   In the Background section, the Policy Bulletin No. 05.1 provides an explanation of the 
"long-established standard" for evaluating whether an exporter can demonstrate an abse nce of de 
jure and de facto  governmental control (as adopted by the USDOC in the Sparklers  (1991) and 
Silicon Carbide  (1994) cases594) and be entitled to receive "a rate that is separate from the NME -
wide rate".595 It is noteworthy that the description of the different components of the USDOC's 
practice in this regard is made in the present tense596, and does not contain nuanced language 
suggesting that the USDOC applies this "long -established standard" in anti -dumping proceedings 
involving NME countries occasion ally, discretionally or under limited circumstances.  
7.315.   The United States argues that China refers to excerpts from the Background section of 
Policy Bulletin No. 05.1, and not from the Statement of Policy section, which "contains the policies 
actually being a nnounced".597 Thus, the United States contends that, because the Policy Bulletin 
No. 05.1 does not announce the Single Rate Presumption as a "policy", it cannot serve as evidence 
to establish the general and prospective application of the alleged measure. We  disagree with the 
United States. The Statement of Policy of the Policy Bulletin No. 05.1 concerns the "application for 
separate rates" and the "combination rates".598 These are operative aspects of the application for a 
separate rate in NME proceedings, whi ch is an element of the Single Rate Presumption. Hence, the 
restatement of the Single Rate Presumption in the Policy Bulletin No. 05.1 explains the background 
within which the Statement of Policy set out in that document  applies . In any event, the placemen t 
of the reference to the Single Rate Presumption cannot, alone, be determinative of the natu re or 
existence of the measure.  
7.316.   The United States further argues that "[d]ocuments like Policy Bulletin [No.] 05.1 … lack 
legally binding force".599 China does not c ontend that the Policy Bulletin No. 05.1 is legally binding 
within the United States legal system. Nor does China claim that the Policy Bulletin No. 05.1, as a 
legal instrument, embodies the Single Rate Presumption as the measure at issue.600 Rather, China 
invokes the relevant excerpts of the Background section of this Bulletin as evidence of the 
recognition, by the USDOC, that in anti -dumping proceedings involving NME countries, the USDOC 
applies the Single Rate Presumption. At any rate, we recall that "the manner in which municipal 
law characterizes a measure is not determinative for its characterization under the covered 
agreements".601 To the extent that the Policy Bulletin No. 05.1 is adduced as evidence of the 
recognition of the Single Rate Presumption as a "long -established standard" or "policy", the 
excerpts from the Policy Bulletin No. 05.1 to which China refers inform our assessment of the 
existence of a norm of general and prospective application.  
7.317.   Turning to whether the Policy Bulletin No. 05.1 provide s evidence that the Single Rate 
Presumption has general and prospective application, we note that this document starts out by 
                                                
594 Policy Bulletin No. 05.1,  (Exhib it CHN-109), p. 2.  
595 Policy Bulletin No. 05.1,  (Exhibit  CHN-109), p. 1 . 
596 The different components of the Single Rate Presumption are described in Policy Bulletin No. 05.1,  as 
follows: "[i] n an NME antidumping investigation, the [USDOC ] presumes  that all c ompanies within the NME 
country are subject to governmental control and should be assigned a single antidumping duty rate unless an 
exporter demonstrates the absence of both de jure and de facto governmental control over its export 
activities"; "[i]f an NM E entity demonstrates  this independence with respect to its export activities, it is eligible 
for a rate that is separate from the NME -wide rate"; "[i]n order to request  and qualify  for separate rate status 
in an investigation, a company must have exported  the subject merchandise to the United States during the 
period of investigation, and it must provide information responsive to" the absence of de jure  and de facto  
governmental control. ( Policy Bulletin No. 05.1,  (Exhibit  CHN-109), pp. 1 -2). (underlining  added ; italics 
original; footnote omitted ) 
597 United States' opening statement at the first meeting of the Panel, para. 44.  
598 The " Combination Rates" section of the Policy Bulletin No. 05.1,  points out that the separate rate 
assigned to an exporter will "ap ply only to merchandise both exported by the firm and produced by a firm that 
supplied the exporter du ring the period of investigation ." This signifies that  the USDOC will assign a separate 
rate to " an exporter and its producers as a group ". (Policy Bullet in No. 05.1,  (Exhibit  CHN-109), pp. 6 -7). 
(emphasis original ) 
599 United States' second written submission, para. 143.  
600 In this regard, we disagree with the United States' argument, presented in paragraph  135 of its 
second written submission, that China see ks to equate the Policy Bulletin No. 05.1 with the Sunset Policy 
Bulletin challenged in US – Oil Country Tubular Goods Sunset Reviews . We are cognizant that, unlike the 
Sunset Policy Bulletin in that dispute, in these proceedings, the Policy Bulletin No. 0 5.1 is not presented by 
China as the measure at issue, but rather as part of the evidentiary basis seeking to demonstrate the existence 
of the measure at issue, namely, the Single Rate Presumption.  
601 Appellate Body Reports, Canada – Renewable Energy / Cana da – Feed-in Tariff Program , 
para. 5.127.  WT/DS471/R  
 
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  explaining the background to the assignment of separate duty rates to exporters in anti -dumping 
proceedings involving  NME countrie s. It then notes the issues with  the previous regime and the 
proposals made by various entities in order to improve it. Importantly, it notes that "the [USDOC] 
also ha[d] concerns regarding the effectiveness of [the then] current test in determining whethe r a 
company is properly eligible for separate rate status ."602 Further, the Policy Bulletin No. 05.1 
clarifies that the new separate rate application "is meant to clarify and streamline the separate 
rates process for both the [USDOC] and for respondents."603 Thereafter, the Policy Bulletin No. 
05.1 explains the new regime that it introduces. In doing so, it uses language that is particularly 
important to our inquiry regarding the general and prospective nature of the alleged Single Rate 
Presumption. For instanc e, it states that when an investigation involving an NME country is 
initiated, "the initiation notice will announce that" the subject exporters " can apply for a separate 
rate by completing an application for separate rates"604; that the application for each investigation 
"will be tailored … on the NME country involved in the investigation"605; and that "mandatory 
respondents will continue to be required to respond to the complete questionnaire ."606 In our view, 
the use of "will" suggests to us  that the Single Rat e Presumption is to be applied generally and 
prospectively in all investig ations involving NME countries.  
7.318.   Finally, the Policy Bulletin No. 05.1 states that "[t]his practice will be effective for all NME 
antidumping investigations initiated on or after the date of publication in the Federal Register of 
the notice announcing this policy ."607 We recall that the Separate Rate Test is an integral 
component of the alleged Single Rate Presumption. If the Single Rate Presumption did not exist, 
the need to clarify the  application for separate rates, as well as the adoption of the combination 
rates approach, would have had no raison d'être . On this basis, we conclude that the text of the 
Policy Bulletin No. 05.1 is evidence that supports China's argument that the allege d Single Rate 
Presumption has general and prospective application concerning anti -dumping investigations 
involving  NME countries.  
Antidumping Manual  
7.319.    China also refers to the Antidumping Manual to show that the Single Rate Presumption 
has general and prosp ective application. Specifically, China posits that the Antidumping Manual 
"provides that '[i]n proceedings involving NME countries, the [USDOC] begins with a rebuttable 
presumption …' of government control ."608 The United States responds that the Antidumpin g 
Manual is insufficient to establish a general and prospective norm609, since the Manual itself  states 
that it "cannot be cited to establish [USDOC] practice"610, and thus "has alerted the world that the 
Manual cannot serve as a basis to argue that [the USDOC ] has adopted an approach that must be 
followed for any particular, future proceeding ."611 
7.320.   We note that Chapter 10 of the Antidumping Manual is titled "Non -Market Economies". One 
of the objectives of this chapter is to explain "how individual companies can o btain duty rates 
separate from that of the NME entity".612 We observe that, u nder the heading "III. Separate Rates; 
B. Practice", the Antidumping Manual describes the constituent elements of the Single Rate 
Presumption  described by China  as follows:  
In proce edings involving NME countries, the [USDOC] begins with a rebuttable 
presumption that all companies within the country are essentially operating units of a 
single, government -wide entity and, thus, should receive a single antidumping duty 
rate ( i.e., an NM E-wide rate) .613 (emphasis original)  
                                                
602 Policy Bulletin No. 05.1,  (Exhibit  CHN-109), p. 3.  
603 Policy Bulletin No. 05.1,  (Exhibit  CHN-109), p. 6.  
604 Policy Bulletin No. 05.1,  (Exhibit  CHN-109), pp. 3 -4. (emphasis added)  
605 Policy Bulletin No. 05.1,  (Exhibi t CHN-109), p. 4. (emphasis added)  
606 Policy Bulletin No. 05.1,  (Exhibit  CHN-109), p. 4. (emphasis added)  
607 Policy Bulletin No. 05.1,  (Exhibit  CHN-109), p. 6. (emphasis omitted)  
608 China's first written submission, para. 328 (quoting Antidumping Manual, Chap ter 10, ( Exhibit  CHN-
23), p. 7). (emphasis added by China)  
609 United States' first written submission, para. 340.  
610 United States' opening statement at the first meeting of the Panel, para. 45.  
611 United States' opening statement at the first meeting of the Panel, para. 45.  
612 Antidumping Manual, Chapter 10, ( Exhibit  CHN-23), p. 2.  
613 Antidumping Manual, Chapter 10, ( Exhibit  CHN-23), p. 3.  WT/DS471/R  
 
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  … 
[T]o establish whether a company's export activities are sufficiently independent of 
the government to be eligible for separate rate status, the [USDOC] analyzes each 
exporting entity under the test established in the Final Determination of Sales at Less 
Than Fair Value: Sparklers from the People's Republic of China , 56 FR 20588 (May 6, 
1991) (Sparklers) , and later expanded upon in Final Determination of Sales at Less 
Than Fair Value: Silicon Carbide from the People 's Republic of China , 59 FR 22585 
(May 2, 1994) ( Silicon Carbide ).614 (emphasis original)  
7.321.   The United States argues that the statements from the Antidumping Manual that China 
relies on cannot serve as evidence of the general and prospective application of the alle ged Single 
Rate Presumption. Specifically, the United States claims that the first page of the Antidumping 
Manual makes it clear that the document is only for internal training and guidance of the Import 
Administration personnel, and that "guidance" in the  Antidumping Manual must be understood as 
providing "education or training rather than administrative guidance".615 For China, the 
Antidumping Manual confirms that those exporters that do not or cannot demonstrate their 
independence from the NME -wide entity receive the NME -wide rate616, and that the Antidumping 
Manual is used for "the internal training and guidance " of the USDOC personnel who conduct 
investigations and administrative reviews.617 
7.322.   As the United States points out, the Antidumping Manual states, on i ts first page, that it 
"cannot be cited to establish [US]DOC practice" .618 The Antidumping Manual is a document 
published by the USDOC,  the purpose of which  is to provide USDOC officials with "internal training 
and guidance" o n the practices or current polic ies set out therein, including the Single Rate 
Presumption. The United States interprets the term "guidance" in the context of the Antidumping 
Manual as "provid[ing] education or training rather than administrative guidance".619 Even 
accepting the United Sta tes' explanation of the purpose of the Antidumping Manual, we have 
difficulty understanding why the USDOC staff would be educated or trained in respect of practices 
or policies that are not intended to be applied in all future anti-dumping proceedings  involving NME 
countries . 
7.323.   Moreover, the United States claims that the practices described in the Antidumping Manual 
are subject to, and do, change.620 We observe  that any legal instrument, including laws and 
regulations, may be subject  to repeal or amendment in t he future. That, however, does not 
necessarily remove the general and prospective nature of such legal instruments at a given point 
in time. Although  the way this measure is applied by the USDOC may change in the future , that 
fact alone  does not lead to  the conclusion that the Single Rate Presumption is not , today , a norm 
of general and prospective application.  
7.324.   Accordingly , we are of the view that, despite the disclaimer found on its first page, the 
Antidumping Manual may be taken into account, together wit h other pieces of evidence that China 
has presented, in determining whether the alleged Single Rate Presumption has general and 
prospective application. Further, taking into account the specific content of the Antidumping 
Manual discussed above, we find th at the Manual, like the Policy Bulletin No. 05.1, supports 
China's argument that the Single Rate Presumption has general and prospective application, as a 
practice or policy with respect to anti -dumping investigations and administrative reviews involving 
NME countries.621 
                                                
614 Antidumping Manual, Chapter 10, ( Exhibit  CHN-23), p. 4.  
615 United States' second written submission, para. 152.  
616 China's response to Panel question No. 32, para. 168 ( citing Antidumping Manual, Chapter 10, 
(Exhibit  CHN-23), p. 3).  
617 China's  opening statement at the first meeting of the Panel, para. 82 (quoting Antidumping Manual, 
Chapter 1, (Exhibit  USA-28)). (emphasis added  by China)  
618 Antidumping Manual, (Exhibit  USA-28), p. 1.  
619 United States' second written submission, para. 152.  
620 United States' second written submission, para. 147.  
621 We underline the fact that the content of the Antidumping Manual applies equally to ori ginal 
investigations and administrative reviews. Notably, in describing the Separate Rate Test through which NME 
exporters can rebut the presumption of governmental control and thus be assigned an individual duty rate, the 
Antidumping Manual states that "[ u]nder the [USDOC's] current policy, all exporters seeking a separate rate in WT/DS471/R  
 
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  Court decisions  
7.325.   China has pointed to a number of court decisions where the USCAFC and the USCIT have 
addressed the Single Rate Presumption. It notes that a s early as 1997, the USCAFC confirmed the 
NME presumption adopted by the USDOC,  noting  that it is "within [the USDOC's] authority to 
employ a presumption of state control for exporters in a nonmarket economy, and to place the 
burden on the exporters to demonstrate an absence of central government control ."622 The 
USCAFC went on to note that p lacing the burden on the exporters to show lack of state control is 
justified because "exporters have the best access to information pertinent to the 'state control' 
issue".623 A few years later, the USCAFC again sanctioned the USDOC's policy to subject NME 
exporters to "a single, countrywide antidumping duty rate unless they could demonstrate legal, 
financial, and economic independence from the Chinese government".624 China relies in addition on  
the USCIT 's recent refer ence to an "established and judicially -affirmed practice", when noting that 
"[u]nder the NME presumption, a company that fails to demonstrate independence from the NME 
entity is subject to the country -wide rate, while a company that demonstrates its independence is 
entitled to an individual rate as in a market economy ."625 This is because, in the USCIT's view, 
"most companies in NME -designated countries like China do not engage in independent pricing 
behavior at all" such that inquiring into an exporter's "separate sales behavior ceases to be 
meanin gful".626 The USCIT has found that the USDOC has consistently applied the presumption of 
government control and the concomitant assignment of a PRC -wide duty rate, and that " [i]t 
appears that the issue of [the USDOC's] reliance upon a presumption of governme nt control for 
respondents from NME -designated countries is settled ".627 
7.326.   The United States alleges that the court decisions referred to by China are insufficient to 
establish that the Single Rate Presumption has general and prospective application because th ey 
"are adjudicating concerns raised by particular private parties in specific determinations – not what 
[the USDOC] will do in the future ."628 We observe, as a general matter, that the use of decisions 
by domestic courts  as relevant evidence  in determining facts and ascertaining the meaning of 
municipal law is not foreign to international dispute resolution.629 Although the court decisions 
submitted by China adjudicate matters pertaining to specific parties and are based on the 
surrounding circumstances of eac h case, the relevant passages of these decisions clearly describe 
the alleged Single Rate Presumption and recognize that all of its features form part of a USDOC 
policy to such an extent that it is considered to be "settled"630, "established and judicially 
affirmed"631, "not in conflict with the Statute"632, "to some extent, sanctioned"633, "upheld"634 or 
                                                                                                                                                  
an investigation/review must complete a separate rate application form. The separate rate application is posted 
for each investigation/review on the IA website upon initiation of  the investigation/review and may be tailored 
to some extent depending, for example, on the NME country involved in the investigation." (Antidumping 
Manual, Chapter 10, (Exhibit  CHN-23), pp. 5 -6). 
622 USCAFC, Sigma Corp. v. United States, 117 F.3d 1401 ( Fed. Cir. 1997), (Exhibit  CHN-131), p. 1405.  
623 USCAFC, Sigma Corp. v. United States, 117 F.3d 1401 ( Fed. Cir. 1997), (Exhibit  CHN-131), p. 1406.  
624 USCAFC, Transcom Inc. v. United States, 294 F.3d 1371 ( Fed. Cir. 2002), (Exhibit  CHN-130), 
p. 1373.  
625 USCIT, Jian gsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), pp. 1310 -1311 (quoting USCAFC, Transcom Inc. v. United States, 294 F.3d 1371 ( Fed. Cir. 
2002), ( Exhibit  CHN-130), p. 1373 , in turn quoting USCAFC, Sigma C orp. v. United States, 117 F.3d 1401 
(Fed. Cir. 1997), ( Exhibit  CHN-131), p p. 1405-1406). 
626 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), p. 1311.  
627 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), pp. 131 1-1312. (emphasis added)  
628 United States' opening statement at the first meeting of the Panel, para. 48.  
629 See Appellate Body Report, US – Countervailing and Anti -Dumping Measu res (China) , para. 4.106. 
See also Permanent Court of International Justice, Merits, Case Concerning the Payment of Various Serbian 
Loans issued in France, (1929) Series A, p. 46; International Court of Justice, Merits, Case Concerning 
Ahmadou Sadio Diallo  (Republic of Guinea v. Democratic Republic of the Congo), (2010) ICJ Reports, para. 70; 
and International Court of Justice, Merits, Case Concerning the Barcelona Traction, Light and Power Company, 
Limited (Belgium v. Spain) (Second Phase) (1970) ICJ Repor ts, para. 50.  
630 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), p . 1312. 
631 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), pp.  1310-1311. 
632 Peer Bearing Co. -Changshan  v. United States  587 F.Supp.2d 1319 ( CIT 2008), ( Exhibit  CHN-163), 
p. 1325. WT/DS471/R  
 
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  "approv[ed by the USCAFC]".635 We are of the view that the courts' statements cited constitute 
evidence of the confirmation by judicial bodies of the existence of a m easure that is generally 
applied in all cases concerning NME countries and that is expected to be applied in the future. 
Hence, we consider that these court decisions also provide relevant evidence that the Single Rate 
Presumption has general and prospecti ve application.  
USDOC's anti -dumping determinations  
7.327.   In addition to the Policy Bulletin No. 05.1, the Antidumping Manual , and United States 
court decisions, China has adduced over 100 USDOC anti -dumping determinations (investigations 
and administrative revi ews) where the USDOC has referred to the presumption that all NME 
exporters are within government control, and should be assigned a single anti -dumping duty rate, 
unless an exporter can affirmatively demonstrate an absence of de jure  and de facto  governmen t 
control with respect to exports .636 Some of those determinations were published during the course 
of the present proceedings.637 We also note in this context that , in response to questioning from 
the Panel, the United States was not able to identify  any anti -dumping proceeding involving an 
NME country where the USDOC did not apply the Single Rate Presumption since the Sparklers case 
in 1991.638 
7.328.   The United States seeks to dismiss the significance of these determinations arguing that, 
even accepting China's chara cterization of these determinations, they "only illustrate what USDOC 
has practiced in particular instances in the past, not what it will generally and prospectively do ."639 
We agree with the United States that prior USDOC anti -dumping determinations are inf ormed by 
the specific facts of each case. Yet, the determinations presented by China demonstrate that the 
USDOC has applied the Single Rate Presumption in anti -dumping proceedings involving NME 
countries since its inception in 1991.640 Indeed , the USDOC has often referred to the presumption 
of governmental control , and the subsequent assignment of an NME -wide duty, as a "long -
standing policy"641, or "standard policy".642 In the determinations that China has placed on the 
record, the USDOC has stated, with similar  wording, that in proceedings involving NME countries, 
the USDOC  operates on the basis of a rebuttable presumption  that all companies within the 
country are subject to government control, and that in these circumstances the USDOC  assign s a 
single rate to a ll exporters of subject merchandise unless an exporter can demonstrate th e 
absence of de jure and de facto government control over its export activities  so as to be entitled to 
a separate rate.643 
7.329.   Accordingly, we consider that the anti -dumping determinations  on the record are evidence 
of the USDOC's consistent application  of a long -standing policy for a period that spans over 24 
                                                                                                                                                  
633 USCIT, East Sea Seafoods LLC v. United States,  703 F.Supp.2d 1336 (CIT 2010), (Exhibit  CHN-134), 
p. 1354 . 
634 USCIT , Jiangsu Changbao Steel  Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), p. 131 1. 
635 USCAFC, Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369 ( Fed. Cir. 2003), 
(Exhibit  CHN-132), p. 1378.  
636 See para. ‎7.310  above.  
637 See para. ‎7.241  above.  
638 The United States identified a determination in an original investigation involving Chinese exporters, 
dating back to 1986, where the USDOC did not apply the presumption of governmenta l control over the 
exporters' export activities. ( Porcelain -on-Steel Cooking Ware  OI, Final Determination , (Exhibit  USA-105)). Yet, 
the United States confirmed that "[m]ore recently, [the] USDOC has not been presented with circumstances 
which resulted in [the] USDOC not applying a rebuttable presumption that the export activities of all Chinese 
exporters are subject to China government control ." (United States' response to Panel question No. 35, 
para. 87). 
639 United States' first written submission, para. 34 2. See also United States' opening statement at the 
first meeting of the Panel, para. 46.  
640 See para. ‎7.310  above.  
641 See, for instance, Bicycles OI, Notice of Final Determination, (Exhibit  CHN-114), p. 1903 6. 
642 See, for instan ce, Sebacic Acid  AR 1996 -1997,  Preliminary Results , (Exhibit  CHN-126), p. 17368; 
Bags AR 2005 -2006, Preliminary Results, (Exhibit  CHN-272), p. 51590;  and Bags AR3, Preliminary Results, 
(Exhibit  CHN-274),  p. 52284. Importantly, the USDOC observed that, purs uant to its "established NME 
methodology, a party's separate rate status must be established in each segment of the proceeding in which 
the party is involved" . (Ribbons  AR1, Final Results, (Exhibit  CHN-51), p. 10132 , referring to USCAFC, Sigma 
Corp. v. Uni ted States, 117 F.3d 1401 ( Fed. Cir. 1997), ( Exhibit  CHN-131), p p. 1405-1406).  
643 See para. ‎7.310  above.  WT/DS471/R  
 
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  years , namely since the inception of the alleged Single Rate Presumption in the Sparklers  case in 
1991. We further  recall that , despite a request from the Panel, the United States has not provided 
examples of USDOC determinations, from 1991 onwards, in which the presumption of 
governmental control, the assignment of a single duty rate, and the concomitant Separate Rate 
Test were not ap plied in cases involving NME countries.644 Additionally, China has presented a 
number of administrative review determinations that the USDOC issued during the course of these 
Panel proceedings in which the Single Rate Presumption was applied. In our opinion,  this shows 
that the USDOC continues to apply consistently the alleged Single Rate Presumption as laid down, 
in general terms, in the Policy Bulletin No. 05.1 and the Antidumping Manual. This, in turn, lends 
support to the view that the Single Rate Presump tion has general and prospective application.  
Separate rate application and separate rate certification templates  
7.330.   In support of its argument that the Single Rate Presumption is of general and prospective 
nature, China has also submitted the template of the  so-called separate rate application, which is 
posted on the USDOC's website upon the initiation of an anti -dumping investigation or an 
administrative review involving an NME country. We recall that the separate rate application came 
into being in 2005 thr ough the adoption of the Policy Bulletin No. 05.1.645 The template submitted 
by China begins by stating that "all exporters seeking a separate rate in an investigation/review 
must complete" this document.646 It further notes that "[t]he [USDOC] assigns separat e rates in 
non-market economy ('NME') cases only if the applicant can demonstrate an absence of both de 
jure and de facto governmental control over its export activities"647; and that "[the USDOC] 
analys es each exporting entity under the test established in"  Sparklers  (1991) and Silicon Carbide 
(1996), whereby exporters must "provide sufficient proof of an absence of government control, 
both in law and in fact, with respect to export activities".648 
7.331.   The separate rate application submitted by China clarifies tha t, in the case of 
administrative reviews, only those firms that have not received separate -rate status in prior 
segments (i.e. the original investigation or a previous administrative review) would be required to 
file this form, whereas "firms that currentl y have separate rate status should complete the 
separate rate Certification form instead ."649 In this respect, the United States has placed on the 
record a separate rate certification template that NME exporters must complete in administrative 
reviews if the y have been granted separate -rate status at an earlier stage. As explained above, the 
filing of the separate rate certification may absolve the exporter concerned from filing a full 
separate rate application.650 The separate rate certification states that th e "[c]ompletion of this 
Certification does not guarantee separate rate status for [the period of review]"; and that 
"[c]ompanies who had changes to corporate structure, ownership, or to the official company name 
may not file a [s]eparate [r]ate [c]ertifica tion but must instead file a Separate Rate Application ."651 
Moreover, firms must certify an absence of  de jure  and de facto  governmental control over their 
export activities.652 
7.332.   On the basis of the information supplied in the separate rate application or the s eparate 
rate certification, the USDOC determines whether the exporter concerned is entitled to a separate 
                                                
644 See para. ‎7.327  above.  
645 United States' response to Panel question No. 32, para. 75. Accor ding to the United States, "prior to 
the issuance of Policy Bulletin [No.] 05.1, companies could provide positive evidence to [the] USDOC that the 
Chinese government did not materially influence their export activities". (Ibid.  (referring to Furniture OI, Notice 
of Preliminary Determination, (Exhibit  CHN-283)). In particular, "exporters were given the opportunity to 
obtain a separate rate by submitting a request for separate rates treatment along with Section A of the 
dumping questionnaire". (United States'  response to Panel question No. 44, para. 116).  
646 Antidumping Manual, Chapter 10, ( Exhibit  CHN-23), p. 5.  
647 Separate Rate Appli cation, (Exhibit  CHN-31), p. 1.  
648 Separate Rate Appli cation, (Exhibit  CHN-31), p. 2.  
649 Separate Rate Application, ( Exhibit  CHN-31), p. 2. The parties have confirmed that NME exporters 
are required to submit the separate rate application in every investigation and administrative review (or a 
separate rate certification if the firm has received separate rate status in a previous segme nt) in order for them 
to be eligible for a separate duty rate. (China's response to Panel question No. 32, para. 168; and United 
States' response to Pan el question No. 44, para. 115).  
650 Separate Rate C ertification, (Exhibit  USA-84). See also para. ‎7.381  below and fns 586 and 588 
above.  
651 Separate Rate Certification, ( Exhibit  USA-84), p. 2.  
652 Separate Rate Certification, ( Exhibit  USA-84), pp. 7 -9. WT/DS471/R  
 
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  dumping margin and a separate duty rate.653 Additionally, the United States has pointed out that 
the separate rate application and the separate rate cer tification templates "are currently available 
to any party, at any time, on [the] USDOC's website".654 In light of these circumstances , we agree 
with China's argument that the very existence of a template or standard form is indicative that the 
information r equired therein will, or is expected to, be required in future cases in order for NME 
exporters to obtain a separate rate. We consider this as further evidence that the Single Rate 
Presumption has general and prospective application with respect to anti -dumping investigations 
and administrative reviews involving NME countries.  
Conclusion on whether the alleged Single Rate Presumption has general and prospective 
application  
7.333.   Having analys ed each piece of evidence presented by China in order to demonstrate tha t 
the alleged Single Rate Presumption represents a measure for purposes of WTO dispute 
settlement, we find it important to offer a holistic assessment of such evidence before reaching a 
conclusion in this regard.  
7.334.   We recall that the parties' disagreement li es in whether the alleged Single Rate 
Presumption has general and prospective application. In this regard, we are mindful that neither 
the Policy Bulletin No. 05.1 nor the Antidumping Manual is a legally binding document under 
United States law. However, g uided by the Appellate Body in US – Oil Country Tubular Goods 
Sunset Reviews , our task is not to determine whether, under municipal law, the Policy Bulletin 
No. 05.1 and the Antidumping Manual are binding legal instruments, but rather, whether these 
consti tute " acts setting forth rules or norms that are intended to have general and prospective 
application".655 Both the Policy Bulletin No. 05.1 and the Antidumping Manual lay down the Single 
Rate Presumption in the single present tense and without qualification s.656 According to these 
documents, the Single Rate Presumption applies to any NME exporter subject to an anti -dumping 
investigation or an administrative review, and is therefore not individualized to a specific exporter. 
This, in our view, indicates that bo th the Policy Bulletin No. 05.1 and the Antidumping Manual lay 
down the Single Rate Presumption in general  terms as a policy or course of action in a normative 
fashion.657 
7.335.   Moreover, the Policy Bulletin No. 05.1, which institutes the separate rate application  as 
part of the Single Rate Presumption, clearly states that it is to be "effective for all NME 
antidumping investigations initiated on or after the date of publication in the Federal Register of 
the notice announcing this policy".658 Along similar lines, th e Antidumping Manual prescribes 
precisely the elements of the Single Rate Presumption. The Antidumping Manual is used to train 
the USDOC staff for the conduct of anti -dumping proceedings. As observed above, we fail to 
comprehend why administrative personne l would need to be educated or trained in respect of a 
certain behaviour that is not intended to be required in the future. Furthermore, t he court 
decisions on the record are also highly relevant inasmuch as they have considered the Single Rate 
Presumption  to be "settled"659, "established and judicially affirmed"660, "not in conflict with the 
Statute"661, "to some extent, sanctioned"662, "upheld"663 or "approv[ed by the USCAFC]".664 
                                                
653 United S tates' response to Panel question No. 32, paras. 73 -74. 
654 United States' response to Panel question No. 32, para. 73.  
655 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 187  (quoting 
Appellate Body Report, US – Corrosion -Resistant  Steel Sunset Review , para. 82).  
656 In this respect, we agree with China that the use of the unqualified simple present tense " can 
express a state that is always true or continues indefinitely". (China's opening statement at the second 
meeting of the Panel,  para. 69 (referring to Martin Hewings, Advanced Grammar in Use , 2nd. ed. (Cambridge 
University Press, 2005), (Exhibit  CHN-518), p. 202 )). 
657 We recall that, w hile the Bulletin Policy No. 05.1 refers exclusively to original investigations, the 
Antidumping M anual refers to both original investigations and administrative reviews.  
658 Policy Bulletin No. 05.1,  (Exhibit  CHN-109), p. 6. (emphasis omitted)  
659 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), pp. 1311 -1312. 
660 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), p. 1310 . 
661 USCIT, Peer Bearing Co. v. Changshan, 587 F.Supp.2d 1319 ( Fed. Cir. 2008), ( Exhibit  CHN-163), 
p. 1325. 
662 USCIT,  East Sea Seafoods LLC v. United States,  703 F.Supp.2d 1336 (CIT 2010), (Exhibit  CHN-134), 
p. 1354 . WT/DS471/R  
 
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  Accordingly, these documents are evidence that the Single Rate Presumption is to be app lied 
prospectively . 
7.336.   In addition, the numerous USDOC determinations on the record show the consistent 
application of the Single Rate Presumption since 1991.665 Such application predates the Policy 
Bulletin No. 05.1 and the Antidumping Manual and has continue d to apply  until at least 14 July 
2015, that is, the date  of the latest administrative review determination that China has placed on 
the record  (the first administrative review in Solar).666 Moreover, despite a specific request from 
the Panel, the United Stat es has not pointed to any anti -dumping proceeding involving NME 
countries where the USDOC did not apply the Single Rate Presumption following its inception in 
1991.667 We also observe that the existence of the separate rate application and the separate rate 
certification templates constitutes yet another indication that the USDOC has set out to apply the 
Single Rate Presumption in all cases involving NME countries , as these documents have to be filed 
by NME exporters in every investigation or review where the y are involved.668 
7.337.   In consequence, we view the different probative elements on the record as complementing 
one another. The evidence, as a whole, leads to the conclusion that the Single Rate Presumption 
has normative content as it  makes clear and explains  the conduct expected from the USDOC. It 
has general application because it is intended to apply to all NME exporters involved in original 
investigations and administrative reviews conducted by the United States. Finally, we are 
persuaded that the Single Rate  Presumption  as a whole  has prospective application , as the 
evidence  demonstrates  a pattern of conduct by the USDOC  that one can reasonably expect will be 
followed in the future . The prospective character of the Single Rate Presumption is confirmed by 
the statements of United States courts, the relevant USDOC determinations on the record , and the 
templates of the separate rate application and the separate rate certification discussed above.  
7.338.   In so concluding, we observe that a ll of the evidence examined abov e, except the separate 
rate certification template and the six determinations introduced at the first substantive meeting, 
was submitted by China as early as in its first written submission. We thus disagree with the 
United States' argument that China did not put forth, in its first written submission, evidence 
concerning the USDOC's requirement to satisfy the Separate Rate Test as a condition for NME 
exporters obtaining an individual dumping margin and duty rate.669 
7.339.   We therefore conclude that the Single Rate  Presumption as described in 
paragraph  ‎7.311  above, is a norm of general and prospective application that can be challenged, 
as such, in WTO dispute settlement.670 On this basis, we proceed to assess China's claims under 
                                                                                                                                                  
663 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), p. 131 1. 
664 USCAFC, Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369 ( Fed. Cir. 2003), 
(Exhibit  CHN-132), p. 1378.  
665 See para. ‎7.310  above.  
666 Solar AR1, Decision Memorandum, (Exhibit  CHN-487), pp. 20 -21. See also Solar AR1, Final Results, 
(Exhibit  CHN-489),  p. 41001.  
667 United States' response to Panel question No. 35, para. 87.  
668 United States' response to Panel question No. 32, para. 73.  
669 United States' second written submission , para s. 124 and  163. We note that the evidence submitted 
by China with respect  to both the presumption of government control and the Separate Rate Test is discussed 
in paragraphs  322-333 of China's first written submission.  
670 Along similar lines, we take note of the findings of the panel in US – Shrimp II (Viet Nam) . In that 
dispute , Viet Nam challenged "USDOC's standard practice" described in terms identical to the Single Rate 
Presumption China challenges in these proceedings. That panel analys ed the relevant excerpts of the 
Antidumping Manual, Policy Bulletin No. 05.1, and a limite d number of anti -dumping determinations where the 
USDOC had applied the Single Rate Presumption and, on the basis of these pieces of evidence, it found that 
"Viet Nam ha[d] established that, in anti -dumping proceedings involving NME countries, the USDOC st arts with 
a rebuttable presumption that all companies within that NME country belong to a single, NME -wide entity and 
that a single rate is assigned to that entity, and, thus, to companies deemed to belong to that entity". (Panel 
Report, US – Shrimp II (Vi et Nam) , para. 7.122). The United States argues that the body of evidence in US – 
Shrimp II (Viet Nam)  and in this dispute is "analogous" (United States' response to Panel question No. 30(b), 
para. 58); while China notes that the evidence before this Panel  includes much of the evidence before the 
panel in that dispute as well as additional evidence. (China's response to Panel question No. 30(b), para. 152). 
Although the analysis of the panel in US – Shrimp II (Viet Nam)  is instructive, our legal analysis is  based on 
the specific evidence and arguments put forward by the parties in these proceedings.  WT/DS471/R  
 
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  Article s 6.10 and 9.2, followed, to the extent necessary, by China's claims under the second 
sentence of 9.4 of the Anti -Dumping Agreement.  
7.4.5.2   Whether the Single Rate Presumption is, as such and as applied in 38 
determinations, inconsistent with Articles  6.10 and 9. 2 of the Anti -Dumping Agreement  
7.340.   In assessing China's claims, we begin with the analysis of the as such claims under 
Articles  6.10 and 9.2 of the Anti -Dumping Agreement, followed by the as applied claims under the 
same provisions with respect to the 38 chal lenged anti -dumping determinations.  
7.4.5.2.1   China's as such claims under Articles  6.10 and 9.2 of the Anti -Dumping 
Agreement  
7.341.   China contends that the Single Rate Presumption is as such inconsistent with Articles  6.10 
and 9.2 of the Anti -Dumping Agreement because it  presumes the existence of an NME -wide entity 
in anti -dumping proceedings involving  NME countries and subjects the individual exporters to a 
single anti -dumping duty rate assigned to that entity, unless each exporter demonstrates an 
absence of de jure  or de facto  governmental control over its export activities.671 The United States 
responds that both Articles  6.10 and 9.2 permit an investigating authority to treat a group of 
companies in close relationship as a single entity, and that China's Accession Protoc ol is evidence 
that NME conditions prevail in China. In the view of the United States, therefore, it is consistent 
with WTO rules to treat Chinese exporting companies as part of a single, government -controlled 
entity in anti -dumping proceedings involving C hina.672 
7.342.   We consider it appropriate to commence our assessment of China's claims by ascertaining 
the meaning of the legal provisions at issue. The first sentence of Article  6.10 establishes that "as 
a rule", an investigating authority "shall" determine an "i ndividual margin of dumping" for "each 
known exporter or producer concerned of the product under consideration". As the Appellate Body 
has observed, "the auxiliary verb 'shall' is commonly used in legal texts to express a mandatory 
rule."673 Thus, the first sentence of Article  6.10 provides for a mandatory rule (that is, a rule of 
"binding nature"674 rather than "a preference"675), to determine individual margins of dumping for 
each known producer or exporter of the product under consideration. At the same time, this 
mandatory rule is qualified by the term "as a rule", which , as clarified by the Appellate Body,  
"indicates that this obligation is not absolute, and foreshadows the possibility of exceptions ."676 Put 
differently, the term "as a rule" in Article  6.10 "an ticipates the possibility of departures from the 
general rule"677, although , as the Appellate Body has indicated,  these exceptions "must be 
provided for in the covered agreements, so as to avoid the circumvention of the obligation to 
determine individual mar gins of dumping in Article  6.10."678 
7.343.   One such exception is found in the second sentence of Article  6.10, which allows an 
investigating authority to depart from the obligation to determine individual margins of dumping in 
cases where the number of exporters i s so large as to make such determinations "impracticable". 
Specifically, Article  6.10 affords investigating authorities "a right to conduct a limited 
examination"679 of either: ( a) a reasonable number of interested parties or products by using 
statistically valid samples; or ( b) the largest percentage of the volume of exports from the country 
in question that can reasonably be investigated.  The Appellate Body has noted that the limited 
                                                
671 China's first written submission, para. 387.  
672 United States' first written submission, para. 371.  
673 Appellate Body Report, EC – Fasteners (China) , para. 316.  
674 Appellate Body Report, EC – Fasteners (China) , para. 327.  
675 Appellate Body Report, EC – Fasteners (China) , para. 329.  
676 Appellate Body Report, EC – Fasteners (China) , para. 317. The Appellate Body held, however, that 
while the term "as a rule" qualifies the obligation to calculate individual margins of dumping, "it does not 
render it a mere preference. Otherwise, the use of 'shall' in the first sentence would be deprived of its ordinary 
meaning ." (Ibid.).  
677 Appellate Body Report, EC – Fasteners (China) , para. 327. As  underlined by  the Appellate Body, the 
use of the words "shall as a rule" indicates that "the drafters of Article  6.10 were careful not to express an 
obligation that would conflict with other provisions in the Anti-Dumping Agreement  permitting derogation from 
the rule to determine individual margins of dumping". (Ibid. para. 320).  (emphasis original)  
678 Appellate Body Report, EC – Fasteners (China) , para. 320. 
679 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 117. See also Appellate Body  
Report, EC – Fasteners (China) (Article 21.5 – China) , para. 5.278 . WT/DS471/R  
 
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  examination that the second sentence of Article  6.10 permits is commonly r eferred to as 
"sampling", even though the selection of exporters based on the largest percentage of volume of 
exports is not "sampling" in the technical sense.680 Importantly, in cases where an investigating 
authority resorts to sampling, it remains bound to  determine individual margins of dumping for 
each sampled exporter681, whereas the rate applicable to the non -sampled (unexamined) 
exporters is governed by Article  9.4 of the Anti -Dumping Agreement.682 
7.344.   For its part, Article  9 of the Anti -Dumping Agreement is e ntitled "Imposition and Collection 
of Anti -Dumping Duties". Article  9.2 consists of three separate but interrelated sentences. The first 
sentence provides that anti -dumping duties "shall" be collected "in the appropriate amounts in 
each case", "on a non -discriminatory basis" , and "from all sources found to be dumped and 
causing injury". The Appellate Body has observed that the term "all sources" refers to "individual 
exporters or producers" subject to the investigation, and "not to the country as a whole".683 
Moreover, an "appropriate amount", when read together with the obligation set out in Article  6.10, 
suggests that "where an individual margin of dumping has been determined … the appropriate  
amount of anti -dumping duty that can be imposed also has to be an  individual one ."684 The second 
sentence of Article  9.2 imposes an obligation on investigating authorities to "name the supplier or 
suppliers of the product concerned". Although Article  9.2 does not clarify the purpose of naming 
suppliers, the Appellate Body  has explained that "the obligation to name individual suppliers in the 
second sentence of paragraph  2 is closely related to the imposition of individual anti -dumping 
duties", and that the "requirement to name suppliers that are subject to imposition and c ollection 
of anti -dumping duties should be interpreted as a requirement to specify duties for each 
supplier ."685 Finally, the third sentence of Article  9.2 provides for an exception which permits 
investigating authorities to name the country concerned in cir cumstances in which "several 
suppliers from the same country are involved, and it is impracticabl e to name all these suppliers".  
7.345.   The Appellate Body has observed that there exists significant parallelism between 
Articles  6.10 and 9.2 of the Anti -Dumping Agr eement. Article  6.10 "requires the determination of 
individual margins of dumping, which corresponds to the obligation to impose anti -dumping duties 
on an individual basis in Article  9.2".686 In addition, both provisions use the term "impracticable"687 
when se tting out an exception for determining individual dumping margins ( Article  6.10) and 
imposing individual anti -dumping duty rates ( Article  9.2). 
7.346.   In the present dispute, the United States does not dispute that, under Articles  6.10 and 
9.2, each exporter or p roducer is entitled to an individual dumping margin and an individual anti -
dumping duty rate. Rather, the United States argues that "the initial question is to identify the 
entity, or group of entities, that constitute each known 'exporter' or the known 'p roducer'"688, and 
relies on paragraph 15  of China's Accession Protocol and China's Accession Working Party Report 
as important context in deciding which entities in China are to be considered as a single entity for 
                                                
680 Appellate Body Report, EC – Fasteners (China) , para. 318 (referring to Panel Report, EC – Fasteners 
(China) , para. 7.85). The Appellate Body clarified that the term "sampling " is commonly used "even where a 
statistically valid sample is not used but the second alternative for limit ing the examination is used". (Ibid.).  
681 Panel Report, Argentina – Ceramic Tiles , para. 6.90.  
682 Panel Report, China – Autos (US) , para. 7.96.  
683 Appellate Body Report, EC – Fasteners (China) , para. 338  (referring to Panel Report, EC – Fasteners 
(China) , para. 7.103) . 
684 Appellate Body Report, EC – Fasteners (China) , para. 339. (emphasis original)  
685 Appellate Body Report, EC – Fasteners (China) , para. 34 1. 
686 Appellate Body Report, EC – Fasteners (China) , para. 344. In like fashion, the panel in EU – 
Footwear (China)  stated that "the similar structure of the two provisions supports the conclusion that they 
concern the same basic principle, that individual exporters and producers in anti -dumping investigations should 
be treated individually in the determination and imposition of anti -dumping duties ." (Panel Report, EU – 
Footwear (China) , para. 7.91).  
687 The adjective "impracticable" has been interpreted as " '[n]ot practicable; unable to be carried out or 
done; impossible in practice '". (Appellate Body Report, EC – Fasteners (China) , para. 34 7 (quoting Shorter 
Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University Press, 2007), Vol. 1, p. 133 2)). The 
Appellate Body noted that "impracticable " connotes different "qualities or characteristics of an action" than the 
term "ineffective", which means something "[n]ot producing any, or the desired effect; ineffectual, inoperative, 
inefficient". (Ibid . (quoting Shorter Oxford English Dictionary , 6th edn, A. Stevenson (ed.) (Oxford University 
Press, 2007), Vol. 1, p. 1363)).  
688 United States' first written submission, para. 348. (footnote omitted)  WT/DS471/R  
 
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  purposes of Article  6.10.689 In this respect,  paragraph 15  of China's Accession Protocol reads in 
relevant parts:  
15. Price Comparability in Determining Subsidies and Dumping  
Article  VI of the GATT 1994, the Agreement on Implementation of Article  VI of the 
General Agreement on Tariffs and Trade 1994 ("Anti -Dumping Agreement") and the 
SCM Agreement shall apply in proceedings involving imports of Chinese origin into a 
WTO Member consistent with the following:  
(a) In determining price comparability under Article  VI of the GATT 1994 and the 
Anti-Dumping A greement, the importing WTO Member shall use either Chinese prices 
or costs for the industry under investigation or a methodology that is not based on a 
strict comparison with domestic prices or costs in China based on the following rules:  
(i) If the produ cers under investigation can clearly show that market 
economy conditions prevail in the industry producing the like product with 
regard to the manufacture, production and sale of that product, the 
importing WTO Member shall use Chinese prices or costs for the industry 
under investigation in determining price comparability;  
(ii) The importing WTO Member may use a methodology that is not 
based on a strict comparison with domestic prices or costs in China if the 
producers under investigation cannot clearly sho w that market economy 
conditions prevail in the industry producing the like product with regard to 
manufacture, production and sale of that product.  
… 
(d) Once China has established, under the national law of the importing WTO 
Member, that it is a market e conomy, the provisions of sub paragraph  (a) shall be 
terminated provided that the importing Member's national law contains market 
economy criteria as of the date of accession. In any event, the provisions of 
subparagraph  (a)(ii) shall expire 15 years after the date of accession.  In addition, 
should China establish, pursuant to the national law of the importing WTO Member, 
that market economy conditions prevail in a particular industry or sector, the 
non-market economy provisions of sub paragraph  (a) shall no  longer apply to that 
industry or sector.  
7.347.   The chapeau of paragraph 15  lays down the general rule that the Anti -Dumping Agreement 
will apply in anti -dumping proceedings involving imports from China. That rule, however, is to be 
applied "consistent[ly]" with  the special provisions set out in paragraphs  (a) through (d) of this 
Section. Subparagraph  (a) prescribes that, in determining price comparability in anti -dumping 
proceedings involving products of Chinese origin, investigating authorities are authorized t o use, "a 
methodology that is not based on a strict comparison with domestic prices or costs". This 
possibility is available to the extent that the producers under investigation "cannot clearly show 
that market economy conditions prevail in the industry pr oducing the like product with regard to 
manufacture, production and sale of that product ." If the Chinese producers under investigation 
can clearly establish that market economy conditions prevail in the relevant industry, the 
investigating authority of an other WTO Member will, in determining price comparability, have to 
use Chinese prices or costs for the industry under consideration. Hence, under paragraph 15  of 
China's Accession Protocol, it is incumbent upon the Chinese producers under investigation to 
clearly show that market conditions prevail in the industry producing the like product. If the 
producers fail to discharge that burden, the importing Member may, in determining price 
                                                
689 United States' first written submission, para. 365.  Notably, the United States asserts that during the 
accession negotiations WTO Members expressed concern  over whether China had transitioned into a market 
economy and that, in response to this concern, China's Accession Protocol "does permit a Member the 
discre tion to presume that either market economy conditions prevail or non -market  economy  conditions prevail 
in the industry in question ." (Ibid.). WT/DS471/R  
 
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  comparability, apply a methodology that is not based on a strict comparis on with domestic prices 
or costs in China.690 
7.348.   Paragraph  15(a) of China's Accession Protocol refers to, but does not define, "price 
comparability". However,  the term is used in Article  2.4 of the Anti -Dumping Agreement, which 
governs the fair comparison betwe en the export price and normal value. Export price is the price 
at which the product under consideration is exported , whereas normal value generally refers to the 
price in the domestic market of the exporting Member.691 Hence, by referring to a methodology 
that is not based on a strict comparison with domestic prices or costs, paragraph  15(a) of China's 
Accession Protocol speaks to the normal value aspect of the price comparison exercise. In other 
words, paragraph  15(a) of China's Accession Protocol governs i ssues relating to the determination 
of normal value (i.e. Chinese prices and costs), but is silent on other aspects of the determination 
of dumping by an investigating authority .692 This understanding is consistent with the Appellate 
Body's statement that paragraph  15 "establishes special rules regarding the domestic price aspect 
of price comparability", but does not contain "an open -ended exception that allows WTO Members 
to treat China differently for other purposes … such as the determination of export pri ces or 
individual versus country -wide margins and duties".693 
7.349.   In EC – Fasteners (China) , the Appellate Body examined a measure which bore close 
resemblance to the Single Rate Presumption. The Appellate Body understood Article  9(5) of the 
European Union's Bas ic Anti -Dumping Regulation as "establish[ing] a presumption that producers 
or exporters that operate in NMEs are not entitled to individual treatment" due to the "close 
relationship" among exporters, and that "in order to qualify for such treatment, NME ex porters 
bear the burden to demonstrate that they satisfy the criteria of the [individual treatment] test ."694 
In the context of that measure,  the Appellate Body found that:  
Placing the burden on NME exporters to rebut a presumption that they are related to 
the State and to demonstrate that they are entitled to individual treatment runs 
counter to Article  6.10, which "as a rule" requires that individual dumping margins be 
determined for each known exporter or producer, and is inconsistent with Article  9.2 
that requires that individual duties be specified by supplier.695 (emphasis omitted)  
7.350.   Moreover, the Appellate Body found no support in the WTO agreements for a presumption 
that requires exporters and producers from NMEs to demonstrate that they are unrelated to t he 
State in order to qualify for individual treatment in the calculation of their dumping margins. Nor 
did the Appellate Body consider that China's Accession Protocol contained a legal basis for such a 
presumption that led to the calculation of country -wide dumping margins and the imposition of 
country -wide duty rates on all Chinese exporters of a product under investigation.696 
7.351.   The Appellate Body also addressed the issue of whether, in NME countries, the State and 
the exporters can be considered as a single entity. It considered that Articles  6.10 and 9.2 "do not 
preclude an investigating authority from determining a single dumping margin and a single anti -
                                                
690 Appellate Body Report, EC – Fasteners (China) , paras. 286 -287. 
691 According to Article  2.1 of the Anti-Dumping Ag reement , normal value is the price of the "like 
product when destined for consump tion in the exporting country".  
692 Appellate Body Report, EC – Fasteners (China) , paras. 287 -288. 
693 Appellate Body Report, EC – Fasteners (China) , para. 290. (footnote omitted)  See also ibid. para. 
366. Along similar lines, the panel in US – Shrimp (Viet Nam)  held that "nothing in paragraphs  254 and 255 of 
the Working Party Report [of Viet Nam], or any other provision thereof, indicat[es] that the interpretation 
and/or applicati on of any other provision of the Anti -Dumping Agreement … should be modified to 
accommodate any special difficulties that might arise in a proceeding involving imports from Viet Nam. " (Panel 
Report, US – Shrimp (Viet Nam) , para. 7.251). As noted above, paragraph  255 of Viet Nam's  Accession  
Working Party Report parallels paragraph  15 of China's Accession Protocol . 
694 Appellate Body Report, EC – Fasteners (China) , para. 363. See also Panel Report, EU – Footwear 
(China) , paras. 7.63 -7.147, where the panel exami ned Article  9(5) of the European Basic Anti -Dumping 
Regulation, that is, the same measure as that challenged by China in EC – Fasteners (China) . Along similar 
lines, the panel in US – Shrimp II (Viet Nam) , found that in the context of the United States' an ti-dumping 
regime, "in anti -dumping proceedings involving NME countries, the USDOC starts with a rebuttable 
presumption that all companies within that NME country belong to a single, NME -wide entity and that a single 
rate is assigned to that entity, and, t hus, to companies deemed to belong to that entity". (Panel Report, US – 
Shrimp II (Viet Nam) , para. 7.122).  
695 Appellate Body Report, EC – Fasteners (China) , para. 364.  
696 Appellate Body Report, EC – Fasteners (China) , para. 365.  WT/DS471/R  
 
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  dumping duty for a number of exporters if it establishes that they constitute a single exporter for 
purposes of Articles  6.10 and 9.2 of the Anti -Dumping Agreement ."697 In particular, the Appellate 
Body noted that the Anti -Dumping Agreement "addresses pricing behaviour by exporters" such 
that "if the State instructs or materially influences the behaviour of se veral exporters in respect of 
prices and output, they could be effectively regarded as one exporter for purposes of the [Anti -
Dumping] Agreement and a single margin and duty could be assigned to that single exporter ."698 
Importantly, the Appellate Body stres sed that, prior to collapsing two or more companies into a 
single entity, an investigating authority "is called upon to make an objective affirmative 
determination" as to whether "one or more exporters have a relationship with the State such that 
they can be considered as a single entity and receive a single dumping margin and a single anti -
dumping duty ."699 This objective affirmative determination is to be conducted "on the basis of the 
evidence that has been submitted or that [the investigating authority ] has gathered in the 
investigation", on whether the subject exporters or producers are separate legal entities, as well as 
any other evidence that "demonstrates that legally distinct exporters or producers are in a 
sufficiently close relationship to constitu te a single entity and should thus receive a single dumping 
margin and anti -dumping duty ."700 
7.352.   The United States criticizes the Appellate Body's findings for dismissing China's  Accession 
Protocol as "a basis by which Members can presume Chinese firms are like ly to be controlled by 
the state ."701 Specifically , the United States asserts that paragraph  15(d) of China's Accession 
Protocol shows that "Members by and large treated China as non -market economy – and believed 
that antidumping measures would have to conti nue to take in[to] account these conditions ."702 As 
noted in paragraph ‎7.346  above, paragraph 15(d) of China's Accession Protocol contains three 
sentences. The first sentence stipulates  that "[o] nce China has established, under the national law 
of the importing WTO Member, that it is a market economy, the provisions of sub paragraph  (a) 
shall be terminated provided that the importing Member's national law contains market economy 
criteria as of the date of accession. " The second sentence states that "[i] n any event, the 
provisions of sub paragraph  (a)(ii) shall expire 15 years after the date of accession. " Finally, the 
third sentence provides  that "[i]n addition, should China establish, pursuant to the national law of 
the importing WTO Member, that market economy conditions prevail in a particular industry or 
sector, the non -market economy provisions of sub paragraph  (a) shall no longer apply to that 
industry or sector. " We also note that paragraph 15(a) of the Protocol stipulates in its chapeau 
that "[i] n determining price comparability under Article  VI of the GATT 1994 and the A nti-Dumping 
Agreement, the importing WTO Member shall use either Chinese prices or costs for the industry 
under investigation or a methodology that is not based on a strict comparison with domestic prices 
or costs in China" based on two rules that are set forth in subparagraphs (a)(i) and (ii). 
Subparagraph (a)(i) s tates that "[i] f the producers under investigation can clearly show that 
                                                
697 Appellate Body Report, EC – Fasteners (China) , para. 376.  (emphasis omitted)  
698 Appellate Body Report, EC – Fasteners (China) , para. 376. (emphasis omitted)  The Appellate Body 
identified a number of "situations" that can signal that, albeit legally distinct, "two or more exporters a re in 
such a relationship that they should be treated as a single entity. These situations may include: (i) the 
existence of corporate and structural links between the exporters, such as common control, shareholding and 
management; (ii) the existence of co rporate and structural links between the State and the exporters, such as 
common control, shareholding and management; and (iii) control or material influence by the State in respect 
of pricing and output ." (Ibid.). In this dispute, China "does not contend  that the Single Rate Presumption, as 
such, prevents [the] USDOC from selecting NME -wide entities for individual examination" . (China's response to 
Panel question No. 46, para. 260).  
699 Appellate Body Report, EC – Fasteners (China) , para. 363.  
700 Appellate B ody Report, EC – Fasteners (China) , para. 363. Similarly, the panel in US – Shrimp II 
(Viet Nam)  recalled the Appellate Body's interpretations of Articles  6.10 and 9.2 in EC – Fasteners (China) , 
which in its view were "highly persuasive as to the correct i nterpretation of these provisions". (Panel Report, 
US – Shrimp II (Viet Nam) , para. 7.149). On that basis, the panel held that although the Anti -Dumping 
Agreement permits the treatment of "nominally distinct exporters" as a single entity, Articles  6.10 and  9.2 
require that such a decision be made on the basis of "an objective affirmative determination", supported by the 
evidence gathered during the proceedings, "as to who is the known exporter or producer of the product 
concerned". (Ibid. paras. 7.154 -7.155  (quoting Appellate Body Report, EC – Fasteners (China) , para. 363)). 
We note, as the United States argues, in paragraph  197 and footnote 333 of its second written submission, 
that the measure at issue in EC – Fasteners (China) was not identical to the mea sure before us and that there 
are differences between the two disputes with respect to the relevant facts and legal arguments. However, like 
the panel in US – Shrimp II (Viet Nam) , we find the underlying legal issue in EC – Fasteners (China)  to be the 
same  as the issue before us, and therefore consider it appropriate to rely on the Appellate Body's reasoning 
and interpretation in that dispute.  
701 United States' response to Panel question No. 40, para. 107.  
702 United States' response to Panel question No. 40, para. 107.  WT/DS471/R  
 
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  market economy conditions prevail in the industry producing the like product with regard to the 
manufacture, production an d sale of that product, the importing WTO Member shall use Chinese 
prices or costs for the industry under investigation in determining price comparability ". 
Subparagraph (a)(ii) stipulates that "[t] he importing WTO Member may use a methodology that is 
not based on a strict comparison with domestic prices or costs in China if the producers under 
investigation cannot clearly show that market economy conditions prevail in the industry producing 
the like product with regard to manufacture, production and sale o f that product. " As noted in 
paragraph ‎7.348  above, paragraph 15(a) of  China's Protocol of Accession concerns exclusively the 
determination of the normal value in the calculation of dumping margins for Chinese producers. 
The issue before us, however, is whether or not it is compatible with Ar ticles 6.10 and 9.2 of the 
Anti-Dumping Agreement to treat multiple exporters from NMEs as part of an NME -wide entity , 
rather than treating them individually , in calculating their dumping margins and in determining 
their duty rates. Therefore, we do not fi nd the United States' reliance on paragraph 15(d) as being 
relevant to the assessment of the claim before us.  
7.353.   The United States further faults the Appellate Body for not addressing China's Accession 
Working Party Report (notably, paragraphs  26703; 43 through  49704; 171 through 176705; and 147 
through 152706), which in its view constitute the underlying foundation of paragraph  15 of the 
Accession Protocol. We observe, as a preliminary matter, that paragraph  1.2 of China's Accession 
Protocol incorporates the paragrap hs listed in paragraph  342 of China's Accession Working Party 
Report as "an integral part of the WTO Agreement". In this connection , we note that s everal of the 
paragraphs of China's Accession Working Party Report to which  the United States refers are list ed 
in paragraph  342707, while others fall outside that list.708 
7.354.   We observe  however  that, in terms of their content, none of the paragraphs that the 
United States cites lends support to its contention that, in anti -dumping proceedings involving 
Chinese products , the USDOC may presume that all Chinese exporters are controlled by the 
government, group them into a PRC -wide entity and subject them to the duty rate assigned to the 
entity, unless such ex porters rebut that presumption.  Specifically, we note that paragr aph 26 of 
China's Accession Working Party Report alludes to aspects of China's fiscal and monetary policies 
and contains no reference to the manner in which anti -dumping proceedings concerning goods of 
Chinese origin are to be conducted.  
7.355.   Paragraphs  43 thro ugh 49 appear under the heading " State -Owned and State -Invested 
Enterprises". These paragraphs reflect China's statement that state -owned enterprises operate on 
the basis of market economy rules, and that decisions by these enterprises, including purchases  
and sales, are to be based on commercial considerations, and not under the influence of the 
government. They also address certain government procurement and transfer of technology 
issues.709 We note, moreover, that paragraph  44 of China's Accession Working Party Report 
reflects the concerns by some  members of China's Accession Working Party "about the continuing 
governmental influence and guidance of the decisions and activities of such enterprises relating to 
the purchase and sale of goods and services".710 This statement by some members of China's 
Accession Working Party does not provide a general recognition among WTO Members that 
Chinese companies generally operate under government control and that, therefore, it would be 
legitimate to group them together i nto a PRC -wide entity for purposes of dumping determinations 
in anti -dumping investigations involving  Chinese products . Accordingly, we are of the view that the 
United States' reliance on paragraph  44 of China's Accession Working Party Report is inapposite . 
7.356.   The United States also invokes paragraphs  171 through 176 of China's Accession Working 
Party Report. These paragraphs appear under the heading "Industrial Policy, including Subsidies" 
and concern subsidy -related issues, such as financial contributions; t he potential for trade -
distorting subsidization in the Chinese economy; the administration of special economic areas; and 
certain subsidy programmes in the steel and high -tech industries. None of these paragraphs, 
                                                
703 United States' first written submission, para. 364 and fn 371 . 
704 United States' first written submission, para. 369 and fn 376 . 
705 United States' first written submission, para. 369 and fn 377 . 
706 United States' first written submission, para. 3 69 and fns 378 and 379.  
707 Paragraphs  46, 47, 49, 148, 152, 171, 172, 173 , and 174 of China's Accession Working Party Report.  
708 Paragraphs  26, 43, 44, 45, 48, 147, 149, 150, 151, 175 , and 176 of China's Accession Working Party 
Report.  
709 China's Accession Wo rking Party Report , paras.  43 and 45 -49. 
710 China's Accession Working Party Report , para.  44. WT/DS471/R  
 
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  however, addresses the manner in which ant i-dumping proceedings involving Chinese products are 
to be conducted. Hence, we consider that these paragraphs are of no assistance in ascertaining 
the meaning of paragraph  15(a) of China's Accession Protocol.  
7.357.   Moreover, the United States refers to paragrap hs 147 through 152 of China's Accession 
Working Party Report, which appear under the heading "Anti -Dumping , Countervailing Duties". 
Paragraphs  147 and 148 address the way China conducts anti -dumping investigations and the 
concerns certain WTO Members expre ssed in that regard; paragraph  149 deals with the 
interpretation of "national law" in paragraph  15(d) of the Accession Protocol; paragraph  151 
relate s to certain concerns the representative of China raised during the WTO accession process 
over the treatmen t of China in anti -dumping proceedings conducted by other WTO Members711; 
and paragraph 152 concerns determinations made by the Chinese authorities in investigations 
initiated pursuant to applications made before China's accession to the WTO. We note that 
paragraph  151(b), in particular, provides that each importing Member "should ensure that it had 
notified its market -economy criteria and its methodology for determining price comparability to the 
Committee on Anti -Dumping Practices before they were applied ." Hence, paragraph  151(b) deals 
with certain notification guarantees that importing Members "should ensure", but does not confer a 
right to depart from the rules of the Anti -Dumping Agreement in anti -dumping proceedings 
involving imports originating in Chin a.712 Accordingly, we are  of the view that the above 
paragraphs of China's Accession Working Party Report do not contain language that informs the 
interpretation of paragraph  15(a) of China's Accession Protocol.  
7.358.   We note that paragraph  150 of China's Accessio n Working Party Report is the only 
paragraph, of those cited by the United States, relevant to the understanding of paragraph  15(a) 
of China's Accession Protocol. It provides:  
Several members of the Working Party noted that China was continuing the process  of 
transition towards a full market economy. Those members noted that under those 
circumstances, in the case of imports of Chinese origin into a WTO Member, special 
difficulties could exist in determining cost and price comparability in the context of 
anti-dumping investigations and countervailing duty investigations. Those members 
stated that in such cases, the importing WTO Member might find it necessary to take 
into account the possibility that a strict comparison with domestic costs and prices in 
China  might not always be appropriate.  
7.359.   Paragraph  150 reflects the recognition by several members of China's Accession Working 
Party that, in order to address the special difficulty in determining cost and price comparability, it 
might sometimes be appropriate t o dispense with domestic costs and prices in China. Thus, like 
paragraph  15(a) of China's Accession Protocol, paragraph  150 of the China's Accession Working 
Party Report concerns exclusively the determination of normal value in calculating dumping 
margins for Chinese companies, and not other aspects of a dumping determination, such as 
whether exporters should be treated individually or as a single entity.  
7.360.   Consequently, we consider that the Appellate Body's interpretation of Articles  6.10 and 9.2 
of the Anti -Dumping Agreement, as well as of paragraph  15 of China's Accession Protocol, in EC – 
Fasteners (China)  is persuasive. Specifically, we agree that China's Accession Protocol contains 
special disciplines regarding the methodologies for determining normal va lue (i.e. comparability 
with domestic prices or costs), but is silent on other aspects, such as export prices or the 
determination of dumping margins and anti -dumping duty rates. We have not been presented with 
compelling arguments as to the specific wordi ng in, or relevant context of, paragraph  15 of China's 
Accession Protocol that would allow the USDOC to adopt a rebuttable presumption that all of the 
Chinese exporters are subject to governmental control, and assign on that basis a single dumping 
                                                
711 More specifically, the representative of China expressed concern that other Members had "treated 
China as a non -market economy and imposed anti -dumping duties on  Chinese companies without identifying or 
publishing the criteria used, without giving Chinese companies sufficient opportunity to present evidence and 
defend their interests in a fair manner, and without explaining the rationale underlying their determina tions, 
including with respect to the method of price comparison in the determinations." ( China's Accession Working 
Party Report , para.  151.). 
712 For this reason, we disagree with the United States that inter alia  paragraph  151(b) is " particularly 
instructiv e in showing that [China's Accession] Working Party Report supports [the] USDOC's treatment of 
certain Chinese companies as part of a single China government entity." ( United States' response to Panel 
question No. 113(b), para. 6 7). WT/DS471/R  
 
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  margin a nd a single anti -dumping duty rate to the PRC -wide entity as a whole. On the contrary, 
paragraph 15  recognizes, at the outset, that the Anti -Dumping Agreement "shall apply in 
proceedings involving imports of Chinese origin" consistent with provisions set o ut in 
subparagraphs  (a) through (d). As explained above, none of these subparagraphs  speak s to, and 
hence foresee s special disciplines on, the singularity of dumping margins and duty rates for 
Chinese exporters or producers . Accordingly , consistent with paragraph 15  of China's Accession 
Protocol , the general obligations under Articles  6.10 and 9.2 of the Anti -Dumping Agreement apply 
in full.713 
7.361.   Like the measure at issue in EC – Fasteners (China) , the Single Rate Presumption 
presumes, from the start, that the NME exporters are controlled by the government; groups them 
within an NME -wide entity; and assigns a single duty rate to the entity as a whole. In order to 
overcome the presumption of governmental control and be eligible for a separate dumping margin 
and d uty rate, the Single Rate Presumption requires individual NME exporters to make a specific 
request to that effect and to pass the Separate Rate Test which contains certain conditions aimed 
to establish de jure and de facto independence from governmental co ntrol. We note, and agree 
with the Appellate Body's statement in EC – Fasteners (China) , that an investigating authority may 
treat multiple exporters as a single entity if it finds, through an objective affirmative 
determination, that there exists a situat ion that would signal that two or more legally distinct 
exporters are in such a relationship that they should be treated as a single entity.714 In these 
circumstances, an investigating authority may calculate a single dumping margin and assign a 
single duty rate to that entity. However,  under the Single Rate Presumption, the USDOC does not 
make such an objective affirmative determination of the existence of a relationship among several 
exporters or between exporters and the government. Rather, in proceedings involving  NME 
countries, the USDOC simply assumes such a relationship, lumps together individual exporters and 
assigns them a single duty rate.  
7.362.   Accordingly, we conclude that the Single Rate Presumption is inconsistent with the general 
rule to calculate an individual dumping margin for each known exporter or producer ( Article  6.10) 
and to assign an individual anti -dumping duty to each supplier ( Article  9.2). We are also of the 
view that, for the reasons outlined above, presuming governmental control in the c ase of Chinese 
exporters and subjecting them to a single, country -wide dumping margin and anti -dumping duty 
rate, unless they demonstrate an absence of de jure and de facto governmental control over their 
export operations, does not find justification in t he Anti -Dumping Agreement or in paragraph 15  of 
China's Accession Protocol.  
7.363.   We turn now to  the United States' argument that, through the separate rate application, 
the USDOC engages in "a comprehensive and particularized review of a particular company's 
relationship with the Chinese government"715, and that "[s]uch an analysis goes beyond the 
criteria that formed the individual treatment test at issue" in EC – Fasteners (China) , which the 
Appellate Body found was inconsistent with Articles  6.10 and 9.2.716 The United States appears to 
allege that the USDOC's decision following the exporters' applications for a separate rate 
constitutes the determination that the Appellate Body in EC – Fasteners (China)  alluded to as 
                                                
713 We take note of the A ppellate Body's statements that "Section 15 of China's Accession Protocol does 
not provide a legal basis for flexibility in respect of export prices and for justifying an exception to the 
requirement to determine individual dumping margins in Article  6.10 of the Anti -Dumping Agreement"; and 
that "Section 15 of China's Accession Protocol does not authorize WTO Members to treat China differently from 
other Members except for the determination of price comparability in respect of domestic prices and costs in 
China, which relates to the determination of normal value." (Appellate Body Report, EC – Fasteners (China) , 
paras. 328 and 290, respectively). Similarly, in assessing paragraph  255 of Viet Nam's Accession Working 
Party Report, which mirrors paragraph  15 of China's Accession Protocol, the panel in US – Shrimp II (Viet 
Nam) noted that this provision does not permit treating Vietnamese exporters differently for purposes other 
than the determination of the normal value. More specifically, paragraph  255 does not authorize "a 
presumption that, in Viet Nam, all companies belong to a single, Viet Nam -wide entity, and should receive a 
single rate." (Panel Report, US – Shrimp II (Viet Nam) , para. 7.181). Consequently, the panel held that under 
Articles  6.10 and 9.2 "'s ingularity' must be determined on the basis of positive evidence in the particular case, 
and cannot be presumed". (Ibid. para. 7.161). The panel concluded that the USDOC's presumption that all 
Vietnamese exporters were part of a single Viet Nam -wide entity , and thus should be assigned a single anti -
dumping rate unless they satisfy the Separate Rate Test, is inconsistent with Articles  6.10 and 9.2 of the Anti -
Dumping Agreement. (Ibid. para. 7.193).  
714 Appellate Body Report, EC – Fasteners (China) , para. 376.  
715 United States' opening statement at the first meeting of the Panel, para. 52.  
716 United States' first written submission, para. 383.  WT/DS471/R  
 
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  being necessary for an investigating authority  to treat two or more companies as a single entity on 
account of their relationship.  
7.364.   However , the nature of the Separate Rate Test is at  odds with the objective affirmative 
determination that the Appellate Body mentioned. As explained above, Articles  6.10 and 9.2 
require that exporters be treated as individual entities unless they are found, based on positive 
evidence, to be related to one another, or to the government. However , by virtue of  the Single 
Rate Presumption, the USDOC does not determine whether an exporter and the Chinese 
government are closely related such that it would be justified to treat them as a single exporter. 
Rather, the USDOC proceeds from the presumption that there is a close relationship  (i.e. 
governmental control)  that warrants trea ting them as a single entity. It is only through the 
examination of the separate rate application or the separate rate certification that the USDOC 
determines whether an exporter is not controlled by the government. That is, the Separate Rate 
Test plays it s role only in the second phase of the process, namely, after the USDOC applies the 
presumption of government control.717 Accordingly, even assuming that the Separate Rate Test  
criteria  effectively addre ss whether two or more exporters are in close relations hip with the 
government so as to be considered as a single entity (which we need not  and do not  decide  in this 
dispute),  such criteria do nothing to ensure that singularity not be presumed, and hence, do  not 
cure the inconsistency of the Single Rate Presum ption with Articles  6.10 and 9.2  of the Anti -
Dumping Agreement.  
7.365.   Finally, we recall t he United States'  argument that China's claim under Article  9.2 
concerning original investigations cannot succeed. Specifically, the United States argues that 
Article  9.2 is "facially inapplicable" to original investigations in retrospective duty assessment 
systems where the cash deposit rate determined is only an estimate of the final duties that may be 
owed by a given importer718, and the actual collection of duties in the a ppropriate amounts does 
not occur until the USDOC conducts an administrative review.719 The parties agree that, under the 
United States retrospective duty assessment system, the USDOC determines in the original 
investigation a weighted -average dumping margin  on the basis of which a cash deposit rate is 
imposed for the subsequent period of, normally, one year.720 In that one -year period, United 
States importers pay the cash deposit rate calculated by the USDOC for their exporters. At the end 
of that period, if a n administrative review is requested for an exporter, the USDOC initiates the 
review and calculates the final duty rate for that exporter based on its shipments made during the 
one-year period. If the final duty rate is greater than the cash deposit, the i mporters pay the 
difference ; if the final duty rate is smaller than the cash deposit rate, the difference is refunded to 
the importers. This suggests that it is only after the completion of an administrative review that 
the USDOC calculates the final anti -dumping duty rate for each exporter for which such a review is 
requested.721 However, if an administrative review is not requested for a given exporter, t he cash 
deposit collected following the original investigation becomes the final duty for that exporter for 
the relevant period .722 
7.366.   We find unconvincing the United States' argument that Article  9.2 does not apply to 
original investigations under the United States retrospective duty assessment system. Where the 
original investigation yields a final determinatio n of sales at less than fair value, the USDOC 
instructs the Customs Border Protection to request a cash deposit, or the posting of a bond from 
the exporters concerned. As such, the USDOC imposes an anti -dumping duty, albeit on a 
                                                
717 For this reason, we disagree with the United States' argument, presented in paragraph  192 of its 
second written submissi on, that China has failed to address why it would be improper for the investigating 
authority to make an inference of lack of independence from the government when an NME exporter fails to 
demonstrate independence from the State through the Separate Rate T est. 
718 United States' first written submission, para. 359. See also United States' second written submission, 
para. 190.  
719 United States' first written submission, para. 359. See also United States' second written submission, 
para. 190.  
720 China's first wri tten submission, para s. 23-25; and United States' first written submission, para. 359.  
721 China's first written submission, paras. 23 -25; and United States' first written submission, para. 359.  
722 United States Code of Federal Regulations , Title 19, ( Exhibit  CHN-28), Section 351.212 (c) . In 
addition, the cash deposit applicable for the following period will be that "previously ordered", i.e. the cash 
deposit determined during the original investigation or the most recent completed administrative review. 
(Ibid.). See also United States' response to Panel question No. 47, para. 124, where the United States point s 
out that "the rate set in the investigation is the cash deposit rate, and the rate ultimately 'imposed' would 
depend on whether the company sought revi ew and further demonstrated that its export activities were 
independent from the Chinese government ." WT/DS471/R  
 
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  preliminary basis, as a res ult of an original investigation. Moreover, the cash deposit rate 
determined during the original investigation may become final if the subject exporters do not 
request an administrative review of the duty. We consider that once the cash deposit is imposed 
under the United States system, there is a duty in place within the meaning of Article  9.2. The fact 
that the duty rate may change where the USDOC determines the final liability in an administrative 
review does not alter the fact that a duty has been impos ed. In our view, therefore, the obligations 
set forth under Article  9.2 apply to original investigations in the United States system.  
7.367.   In sum, we conclude that Article  6.10 of the Anti -Dumping Agreement contains the 
obligation to calculate individual dumpin g margins for each known exporter of the product under 
consideration. Article  9.2, for its part, requires that investigating authorities specify individual anti -
dumping duties and name the individual suppliers of the product concerned. The Single Rate 
Presumption stands in contrast to these obligations because it subjects NME exporters to a single 
dumping margin and duty rate, unless each exporter overcomes the presumption of de jure and de 
facto governmental control over its export operations.723 Although China's Accession Protocol 
contains special disciplines concerning the calculation of normal value in proceedings involving 
products of Chinese origin, these  do not alter the scope of provisions of the Anti -Dumping 
Agreement  addressing  the determination of e xport prices, dumping margins or anti -dumping duty 
rates.  
7.368.   On the basis of the foregoing, we find that the Single Rate Presumption, as described in 
paragraph  ‎7.311  above, is as such inconsistent with Articles  6.10 and 9.2 of the Anti -Dumping 
Agreement.  
7.4.5.2.2   China's as applied claims under Articles  6.10 and 9.2 of the Anti -Dumping 
Agreement  
7.369.   China further claims that the Single Rate Presumption is inconsistent with Articles  6.10 and 
9.2 of the Anti -Dumping Agreement as applied in the 38 challenged determinations. In seeking to 
establish its as applied claims, China has submitted an annex to its written submission, as well as 
Exhibit  CHN-476 (revised), where it presen ts quoted excerpts from the 38 challenged 
determinations, allegedly indicating that the USDOC applied the Single Rate Presumption in each 
of them.  
7.370.   The United States argues that, consistently with Articles  6.10 and 9.2, the USDOC has not 
denied any Chinese exporter of  its proper anti -dumping duty rate, and that China's Accession 
Protocol allows the USDOC to "rightfully presume" that all exporters form part of a PRC -wide entity 
by reason of governmental control or material influence over their activities.724 Moreover, the 
United States contends that the excerpts from 22 determinations that China challenges do not 
contain any language demonstrating that the USDOC actually applied a presumption of 
governmental control and assigned a single dumping margin, unless e ach exporter rebutted that 
presumption through the Separate Rate Test.725 These determinations consist of  one original 
investigation ( the original investigation in Aluminum ) and 21 administrative reviews.726 In addition, 
the United States argues that in eight of these 21 administrative reviews, the PRC -wide entity was 
                                                
723 The panel in US – Shrimp II (Viet Nam) reached a similar finding with respect to the USDOC's 
presumption of governmental control and the Separate Rate Test, noting that the challenged measure in that 
dispute operate d differently from what is prescribed in Articles  6.10 and 9.2. In particular, it considered that 
the USDOC presumes from the start that all exporters belong to the NME -wide entity, unless each  exporter or 
producer "rebut[s] the presumption of affiliation with the State".  (Panel Report, US – Shrimp II (Viet Nam) , 
para. 7.156 ). Only then would an exporter be entitled to a separate dumping margin and anti -dumping duty 
rate. Thus, the panel found t hat the USDOC did not make an "objective affirmative determination" as to who is 
the known exporter or producer, but rather "presume[d] from the start the existence of this exporter or 
producer in the form of a NME -wide entity". ( Ibid. para. 7.156 ). Althou gh the analysis of the panel in US – 
Shrimp II (Viet Nam)  is instructive, our  legal analysis is based on the specific evidence and arguments put 
forward by the parties in these proceedings.  
724 United States' first written submission, para. 328.  
725 United Sta tes' response to Panel question Nos.  43 and 45, paras. 113 and 119.  
726 The 21 administrative review determinations with which the United States takes issue are: Shrimp  
AR7, Shrimp  AR8, Shrimp  AR9, OTR Tires  AR3, OCTG  AR1, Diamond Sawblades  AR1, Diamond Sawb lades AR2, 
Diamond Sawblades  AR3, Wood Flooring  AR1, Wood Flooring  AR2, Ribbons  AR1, Ribbons AR3, Bags AR3, Bags 
AR4, PET Film  AR3, PET Film  AR4, PET Film  AR5, Solar AR1, Furniture AR7, Furniture AR8, and Furniture  AR9. 
(United States' response to Panel qu estion No s. 43 and 45 , para s. 114 and 119 ). WT/DS471/R  
 
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  not under review and therefore the Single Rate Presumption could not have been applied. The 
United States does not contest that, in the remaining 16 determinations , that is,  12 original 
investigat ions727 and four administrative reviews728, the USDOC applied the Single Rate 
Presumption.  
7.371.   We consider it appropriate to begin our assessment of China's as applied claims by 
ascertaining whether in the 13 original investigations and 25 administrative reviews a t issue the 
USDOC applied the Single Rate Presumption. Should this be the case, we will find that the 
application of the Single Rate Presumption in each of the 38 anti -dumping determinations was 
inconsistent with Articles  6.10 and 9.2 of the Anti -Dumping A greement for the same reasons that 
the Presumption itself is inconsistent with these two provisions.  
Original investigations  
7.372.   With respect to the 13 original investigations at issue, China has provided in Annex  2: 
Table SRP to its first written submission q uotations from the relevant determinations under three 
rows, i.e. "Single Rate Presumption", "Practical consequences of the application of the Single Rate 
Presumption", and "Separate rate test". Regarding the Single Rate Presumption, the part of the 
USDOC' s determinations that China quotes states , in almost identical terms , that: 
In proceedings involving NME countries, [the USDOC] begins with a rebuttable 
presumption that all companies/exporters within the NME country are subject to 
government control and, thus, should be assessed/assigned a single antidumping duty 
[deposit] rate.729 
7.373.   Regarding practical consequences of the application of the Single Rate Presumption, the 
part of the USDOC's determinations that China quotes states , in almost identical terms , that: 
Because [the USDOC] begin[s] with the presumption that all companies within a non -
market economy ("NME") country are subject to government control and because only 
the companies listed under the "Final Determination Margins" section below 
[Mandatory res pondents and Separate Rate Applicants] have overcome that 
presumption, [the USDOC is] applying a single antidumping rate —the PRC -wide rate —
to all other exporters of subject merchandise from the PRC.730 
7.374.   Regarding the Separate Rate Test, the part of USDOC's de terminations that China quotes 
states, in almost identical terms , that:  
It is the [USDOC's] policy to assign all exporters of merchandise subject to 
investigation in an NME country this single rate unless an exporter can demonstrate 
that it is sufficiently  independent so as to be entitled to a separate rate.731 
7.375.   These excerpts show that, in each of the determinations issued in these 13 challenged 
original investigations, the USDOC recalled the fact that in proceedings involving NME countries, it 
begins with th e rebuttable presumption of government control, as well as the "policy" to assign a 
single rate to all exporters from the NME country unless they show an absence of government 
control, and thus are entitled to a separate rate. In addition, the quoted passa ges also show the 
USDOC's finding that only the companies "listed under the 'Final Determination Margins' … have 
overcome that presumption" and hence will receive a single anti -dumping duty rate, while the rest 
of the exporters wi ll receive the "PRC -wide r ate". 
7.376.   We recall that, with respect to one original investigation ( the original investigation in 
Aluminum ), the United States argues that China has not demonstrated that the USDOC applied the 
Single Rate Presumption.732 Yet, the final determination in that in vestigation is drafted in almost 
                                                
727 Coated Paper OI, Shrimp OI, OTR Tires  OI, OCTG  OI, Solar OI, Diamond Sawblades  OI, Steel 
Cylinders  OI, Wood Flooring  OI, Ribbons OI, Bags OI, PET Film OI, and Furniture OI. 
728 Aluminum  AR1, Aluminum AR2, Diamond  Sawblades  AR4, and OTR Tires  AR5. 
729 See China's first written submission, Annex  2: Table SRP, pp. 46 -70. 
730 See China's first written submission, Annex  2: Table SRP, pp. 46 -70. 
731 See China's first written submission, Annex  2: Table SRP, pp. 46 -70. 
732 United  States' response to Panel question No. 43, para. 114.  WT/DS471/R  
 
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  identical terms as the passages quoted above.733 It further adds that the reasons for applying a 
PRC-wide entity is "because these other companies did not demonstrate entitlement to a separate 
rate", and that the "PRC -wide ra te applies to all entries of subject merchandise except for entries 
from the companies eligible for separate rate status".734 
7.377.   Given the clarity of the passages quoted above, we conclude that the record shows that 
the Single Rate Presumption was applied in ea ch of the 13 challenged original anti -dumping 
investigations.735 We therefore find that the application of the Single Rate Presumption in those 13 
investigations was inconsistent with Articles  6.10 and 9.2 of the Anti -Dumping Agreement for the 
same reasons t hat the Single Rate Presumption is as such inconsistent with the same provisions.  
Administrative reviews  
7.378.   With respect to the administrative review determinations at issue, we recall our finding 
that the six determinations presented at the first substantive  meeting are within our terms of 
reference and, therefore, this dispute concerns 25 administrative reviews, that is, 19 
determinations listed in China's first written submission and the six determinations presented at 
our first substantive meeting with the  parties.  
7.379.   The United States asserts that, in 21 of the 25 administrative reviews at issue, the 
excerpts quoted by China do not show that the Single Rate Presumption was actually applied.736 In 
this respect, we note that Annex  2: Table SRP, to China's first w ritten submission contains 
quotations from the 25 challenged administrative reviews where the USDOC recalled, in each such 
determination, the Single Rate Presumption and the Separate Rate Test along the same lines of 
the passages quoted in paragraphs  ‎7.372  and ‎7.374  above, respectively, in connection with the 13 
challenged investigations. The only difference is that Annex  2: Table SRP, to China's first written 
submission does not contain, for these  administrative reviews, a column equivalent to the 
"Practical consequences of the application of the Single Rate Presumption" quoted in 
paragraph  ‎7.373  above.  
7.380.   However, the evidence on the record shows that, in each challenged  administrative review, 
the USDOC conditioned the granting of a separate dumping margin and duty rate on the filing and 
fulfilment by each applicant of the separate rate application or certification.737 Additionally, the 
                                                
733 See China's first written submission, Annex  2: Table SRP, pp. 46 -47. 
734 Aluminum OI, Final Determination , (Exhibit  CHN-32), p. 18529.  See also ibid. pp. 18527 -18528.  
735 We also note that the notices of  initiation in 12 of the 13 challenged investigations state that in order 
to receive a separate rate, the Chinese exporters were required to submit a separate rate application. (See 
China's response to Panel question No. 44, paras. 195, 201, 203, 209, 213,  215, 219, 232, 234, 240, 246, and 
250 (citing Aluminum OI, Initiation of Investigation, (Exhibit  CHN-185), p. 22113; Coated Paper OI, Initiation 
of Investigations, (Exhibit  CHN-184), pp. 53714 -53715; Shrimp OI, Notice of Initiation of Investigations, 
(Exhibit CHN-187), p. 3878; OTR Tires OI, Initiation of Investigation, (Exhibit  CHN-183), pp. 43594 -43595; 
OCTG OI, Initiation of Investigation, (Exhibit  CHN-182), p. 20676; Solar OI, Initiation of Investigation, 
(Exhibit  CHN-181), p. 70964; Diamond Sawblades  OI, Initiation of Investigations, (Exhibit  CHN-186), p. 
35629; Steel Cylinders OI, Initiation of Investigation, (Exhibit  CHN-180), pp. 33216 -33217; Wood Flooring OI, 
Initiation of Investigation, (Exhibit  CHN-179), p. 70718; Ribbons OI, Initiation of Invest igations, (Exhibit  CHN-
178), p. 39296; Bags OI, Initiation of Investigations, (Exhibit  CHN-188), p. 42003; and PET Film OI, Initiation 
of Investigations, (Exhibit  CHN-190), p. 60805 .) While the notice of initiation in Furniture OI does not 
specifically men tion this requirement, our findings in paragraphs ‎7.372  through ‎7.376  above provide a 
sufficient basis to conclude that the Single Rate Presumption was applied in this investigation.  
736 These reviews are Shrimp  AR7, Shrimp  AR8, Shrimp  AR9, OTR Tires AR3, OCTG  AR1, Diamond 
Sawblades  AR1, Diamond Sawblades  AR2, Diamond Sawblades  AR3, Wood Flooring  AR1, Ribbons  AR1, Ribbons  
AR3, Bags AR3, Bags AR4, PET Film  AR3, PET Film  AR4, PET Film  AR5, Furniture  AR7, Furniture  AR8, Furniture  
AR9, Solar AR1, and Wood Flooring  AR2. 
737 Aluminum AR1, Final Results,  (Exhibit  CHN-35), pp. 98 -99; Aluminum AR2, Final Results,  
(Exhibit  CHN-36), pp. 78785 -78786; Shrimp AR7, Final Results,  (Exhibit  CHN-38), p. 56210; Shrimp AR8, 
Decision Memorandum, (Exhibit  CHN-120), p p. 4-5; Shrimp  AR9, Final Results,  (Exhibit  CHN-40), pp. 75534 -
75535; OTR Tires AR3, Final Results,  (Exhibit  CHN-42), p. 22514; OTR Tires AR5, Decision Memorandum, 
(Exhibit  CHN-478), pp. 7 -12; OCTG AR1, Final Results,  (Exhibit  CHN-43), p. 74645;  Diamond Sawblades AR1, 
Final Results, (Exhibi t CHN-46), p p. 11144 -11145; Diamond Sawblades AR2, Final Results, (Exhibit  CHN-47), 
p. 36167; Diamond Sawblades AR3, Final Results, (Exhibit  CHN-48), p. 35724; Diamond Sawblades AR4, 
Issues and Decision Memorandum,  (Exhibit  CHN-473), pp. 5 -7; Wood Flooring  AR1, Final Results,  
(Exhibit  CHN-50), p. 26714; Wood Flooring AR2, Decision Memorandum,  (Exhibit  CHN-117), pp. 6 -10; Ribbons 
AR1, Final Results, (Exhibit  CHN-51), p p. 10131 -10132 ; Ribbons AR3, Final Results,  (Exhibit  CHN-52), p. 
61289; Bags AR3, Final Res ults, (Exhibit  CHN-54), p p. 6857 -6858; Bags AR4, Final Results,  (Exhibit  CHN-55), WT/DS471/R  
 
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  United States has explained that, in each of the challenged administrative reviews, "all Chinese 
exporters concerned were notified that to receive a rate separate from that of the China -
government entity, they would need to submit a [s]eparate [r]ate [a]pplication or [s]eparate 
[r]ate [c]erti fication, where appropriate, or complete 'Section A' of the dumping questionnaire ."738 
Accordingly, the exporters concerned in each of the 25 administrative reviews were notified that 
access to a separate rate would be conditioned upon the submission of the separate rate 
application or certification. We are of the opinion that these elements constitute sufficient evidence 
to conclude that, in each of the 25 administrative reviews, the USDOC presumed the existence of 
governmental control and required Chinese e xporters to pass the Separate Rate Test as a 
prerequisite to obtaining a rate separate from that of the PRC -wide entity.  
7.381.   Moreover, the United States argues that, in eight of the challenged administrative reviews 
(which form part of the 21 administrative re views referred to above), the PRC -wide entity was not 
subject to review, and consequently, the USDOC did not determine a rate for the entity.739 The 
United States contends that China has not shown how the USDOC's determinations in these 
administrative review s were inconsistent with Articles  6.10 and 9.2 of the Anti -Dumping 
Agreement.740 We note that, as the United States argues, the PRC -wide entity was not subject to 
review in eight of the challenged administrative reviews. The exporters under review in these e ight 
reviews were those that enjoyed separate -rate status in previous segments of the proceedings. 
Yet, such exporters were required to submit a separate rate certification in order to continue to 
avail themselves of a separate duty rate. As explained abov e, the Separate Rate Test may be 
satisfied in two ways, namely, through the filing of a separate rate application741 or a separate rate 
certification.742 The latter applies to exporters who were granted separate rate status in previous 
segments of an anti -dump ing proceeding. Such a certification is a permutation of the procedure 
that exporters must follow in order to enjoy separate rate status; those exporters who fail to 
submit it will be treated as part of the PRC -wide entity. Thus, in the eight determination s where 
the PRC -wide entity was not subject to review, the USDOC required that th ose exporters that were 
subject to the review file the separate rate certification. Had the subject exporters failed to submit 
the separate rate certification, the USDOC would  have included them in the PRC -wide entity and 
would have assigned the PRC -wide rate to them. Accordingly, we conclude that the Single Rate 
Presumption was applied to the exporters under review in each of the eight determinations where 
the PRC -wide entity was not subject to review.  
7.382.   Having found that the Single Rate Presumption was applied in each of the 38 challenged 
determinations, we conclude that such application was inconsistent with Articles  6.10 and 9.2 of 
the Anti -Dumping Agreement for the same reaso ns that we have found the Single Rate 
Presumption to be as such inconsistent with these two provisions.  Specifically, by applying the 
Single Rate Presumption in these 38 determinations, the USDOC presumed the existence of a PRC -
wide entity from the start a nd, thereby, failed to make an objective affirmative determination that 
the multiple exporters included within the PRC -wide entity were in such a relationship that they 
should be treated as a single entity. Furthermore, by presuming governmental control ov er the 
exporters included within the PRC -wide entity in these determinations, the USDOC subjected them 
to a single, PRC -wide anti-dumping duty rate, which wa s inconsistent with Articles  6.10 and 9.2 of 
the Anti -Dumping Agreement.  
                                                                                                                                                  
p. 63719; PET Film AR3, Final Results, (Exhibit  CHN-15), pp. 35246 -35247; PET Film AR4, Final Results,  
(Exhibit  CHN-57), p. 37716; PET Film AR5, Decision Memorandum,  (Exhibit  CHN-477), pp. 3 and 5 -7; 
Furniture AR7, Final Results,  (Exhibit  CHN-59), pp. 35249 -35251; Furniture AR8, Final Results,  (Exhibit  CHN-
60), p p. 51954 and 51956; Furniture AR9, Issues and Decision Memorandum, (Exhibit  CHN 480), pp. 4 -6; and 
Solar AR1, Decisi on Memorandum,  (Exhibit  CHN-488), p p. 9-16. 
738 United States' response to Panel question No. 44, para. 115.  
739 Specifically, the United States maintains that in Shrimp AR9, OTR Tires AR3, OCTG AR1, Bags AR4, 
Furniture AR9, PET Film AR3, PET Film AR4, and PET Film AR5, "the China -government entity was not under 
review … and, therefore, a rate was not determined for the entity in these reviews ." (United States' response 
to Pan el question No. 46, para. 121 and fn 149).  
740 United States' response to Panel question  No. 46, para. 121.  
741 See fn 587 above.  
742 See fn 588 above.  WT/DS471/R  
 
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  7.4.5.3   China's as such and as app lied claims under the second sentence of Article  9.4 
of the Anti -Dumping Agreement  
7.383.   We recall that the Single Rate Presumption consists of two components, namely, the 
presumption of government control and the requirement to pass the Separate Rate Test, in o rder 
to be entitled to an individual dumping margin and duty rate. The findings of violation of 
Articles  6.10 and 9.2 reached above are based on a holistic assessment of these two components. 
Indeed, these two components complement each other in the sense that the Separate Rate Test 
serves to rebut the presumption of government control. The gist of our legal analysis is that the 
Single Rate Presumption assumes singularity rather than having the USDOC make a positive 
determination to find singularity in ligh t of the circumstances of each anti -dumping proceeding.  
7.384.   In addition to its claims under Articles  6.10 and 9.2 of the Anti -Dumping Agreement, China 
alleges that the Single Rate Presumption is, as such and as applied in the 38 determinations at 
issue, incons istent with the obligation contained in the second sentence of Article  9.4. China 
alleges that there is a violation of that provision because the Single Rate Presumption subjects the 
right to have an individual duty rate or normal value to the completion o f the Separate Rate Test. 
This, in China's view, constitutes an additional condition not found in Articles  9.4 or 6.10.2 of the 
Anti-Dumping Agreement.743 
7.385.   We note that, under its Article  9.4 claim, China challenges the second component of the 
Single Rate Pre sumption, namely, the obligation to pass the Separate Rate Test in order to rebut 
the presumption of governmental control and have an individual duty rate. That is, China's claim 
under the second sentence of Article  9.4 takes issue with a component of the challenged measure 
that we have found to be inconsistent with Articles  6.10 and 9.2 of the Anti -Dumping Agreement. 
This raises the question whether we should proceed to assess China's claim under the second 
sentence of Article  9.4 even if that claim challe nges the same problem, namely, the obligation to 
complete the Separate Rate Test in order to have an individual duty rate.  
7.386.   In this respect, the Appellate Body has repeatedly considered that "[a]  panel need only 
address those claims which must be addressed in order to resolve the matter in issue in the 
dispute ."744 The principle of judicial economy745 stems from the general principle enshrined in 
Article  3.7 of the DSU, namely, that the objective  of the WTO dispute settlement system is to 
resolve the matter at i ssue in order "to secure a positive solution to a dispute".746 However, the 
Appellate Body has also warned against exercising "false judicial economy", which is when a panel 
does not make findings on claims that are "necessary in order to enable the DSB to m ake 
sufficiently precise recommendations and rulings" in order to resolve a dispute.747 
7.387.   In evaluating China's claims under the second sentence of Article  9.4, the relevant 
question is whether the findings on such claims would "add[] anything to the ability o f the DSB to 
make sufficiently precise recommendations and rulings in this dispute".748 In this respect, we recall 
that the Separate Rate Test is part and parcel of the Single Rate Presumption which, as found 
above, is inconsistent with Articles  6.10 and 9.2  of the Anti -Dumping Agreement. Those findings 
entail  that assuming governmental control over the individual exporters in anti -dumping 
proceedings involving NME countries and requiring them to show an absence of such control by 
satisfying the criteria in t he Separate Rate Test violates the rules set forth in Articles  6.10 and 9.2. 
In its claim under the second sentence of Article  9.4, China argues that requiring those exporters 
to pass the Separate Rate T est also violates Article  9.4 because it operates as an additional 
condition for benefiting from the right to have an individual duty rate, as set forth in that 
provision.  It is therefore clear to us that our findings of violation of Articles  6.10 and 9.2 address 
the very concern that underlies China's claim  under the second sentence of Article  9.4. 
Consequently, we do not consider it necessary to make findings under China's Article  9.4 claim in 
                                                
743 China's first written submission, para. 385.  
744 Appellate Body Report, US – Wool Shirts and Blouses , p. 19, DSR 1997:I,  323, at p. 340. See also 
Appellate Body Report, India – Patents (US) , para. 87.  
745 Appellate Body Report, US – Lead and Bismuth II , para. 71.  
746 Appellate Body Report, Australia – Salmon , para. 223.  
747 Appellate Body Report, Australia – Salmon , para. 223.  
748 Appellate Body R eport, US – Wheat Gluten , para. 183. See also Appellate Body Report, Argentina – 
Import Measures , para. 5.194, where the Appellate Body stated that panels are to be guided by "the need to 
address all of those claims whose resolution is necessary to resolve  the dispute so as to avoid a partial 
resolution of the dispute".  WT/DS471/R  
 
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  order to secure a positive solution to the dispute since such findings would add nothing to "the 
ability of the DSB  to make sufficiently precise recommendations and rulings in this dispute".749 
7.4.5.4   Overall conclusion  
7.388.   In the light of the foregoing, we find that the Single Rate Presumption, as described in 
paragraph  ‎7.311  above, is as such inconsistent with Articles  6.10 and 9.2 of the Anti -Dumping 
Agreement. We also find that the application of the Single Rate Presumption in the 38 challenged 
determinations was inconsistent with Articles  6.10 and 9.2 of the Anti -Dumping Agreement. We 
exercise judicial economy with respect to China's as such and as applied claims under the second 
sentence of Article  9.4 of the Anti -Dumping Agreement.  
7.5  China's claims under Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, and the 
first sentence of Article  9.4 of the Anti -Dumping Agreement  
7.5.1   Introduction  
7.389.   China challenges several aspects of the USDOC's methodologies, as such and as applied, 
for determining anti -dumping duty rates for NME -wide entities. China argues that what it refers t o 
as the AFA Norm amounts to a norm of general and prospective application, which is as such 
inconsistent with Article  6.8 and paragraph  7 of Annex  II to the Anti -Dumping Agreement. China 
further claims that the alleged AFA Norm was applied in 28750 of the 3 0 determinations at issue 
(26 determinations explicitly listed in China's first written submission751, plus four of the additional 
determinations introduced at the first substantive meeting752)753, and that the application of this 
Norm was inconsistent with the same provisions of the Anti -Dumping Agreement. In addition, 
China asserts, solely on an as applied basis, that the 30 determinations at issue violate Articles  6.1 
and 6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 of the Anti -Dumping 
Agreement.  
7.5.2   Provisions at issue  
7.390.   Article  6.1 of the Anti -Dumping Agreement reads in relevant part:  
All interested parties in an anti -dumping investigation shall be given notice of the 
information which the authorities require and ample opportunity to p resent in writing 
all evidence which they consider relevant in respect of the investigation in question.  
Article  6.1 provides interested parties with an important right by stipulating that interested parties 
shall be given notice of the information require d and ample opportunity to present in writing 
evidence that they consider relevant to the investigating authority's determinations in a given 
investigation. We recall that this provision, alongside Article  6.2, has been described by the 
Appellate Body as s etting out the fundamental due process rights to which interested parties are 
entitled in anti -dumping investigations and reviews.754 
7.391.   Article  6.8 of the Anti -Dumping Agreement reads:  
                                                
749 Appellate Body Report, US – Lamb , para. 194.  
750 Aluminum OI, Aluminum  AR1, Aluminum  AR2, Coated Paper  OI, Shrimp  OI, Shrimp  AR7, Shrimp  
AR8, OTR Tires  OI, OCTG  OI, Solar OI, Solar AR1, Diamond Sawblades  OI, Diamond Sawblades  AR1, Diamond 
Sawblades  AR2, Diamond Sawblades  AR3, Steel Cylinders  OI, Wood Flooring  OI, Wood Flooring  AR1, Wood 
Flooring  AR2, Ribbons  OI, Ribbons  AR1, Ribbons  AR3, Bags OI, Bags AR3, PET Film  OI, Furniture OI, Furniture  
AR7, and Furniture  AR8. 
751 Aluminum  OI, Aluminum  AR1, Aluminum  AR2, Coated Paper  OI, Shrimp  OI, Shrimp  AR7, Shrimp 
AR8, OTR Tires  OI, OCTG  OI, Solar OI, Diamond Sawblades  OI, Diamond Sawblades  AR1, Diamond Sawblades  
AR2, Diamond Sawblades  AR3, Steel Cylind ers OI, Wood Flooring  OI, Wood Flooring  AR1, Ribbons OI, Ribbons  
AR1, Ribbons  AR3, Bags OI, Bags AR3, PET Film  OI, Furniture OI, Furniture AR7, and Furniture  AR8. 
752 OTR Tires  AR5, Solar AR1, Diamond Sawblades  AR4, and  Wood Flooring  AR2. We have found , in 
paragraph  ‎7.270  above , that the four  determinations introduced at the Panel's  first substantive meeting with 
the parties are within our terms of reference . 
753 These 30 determinations form part of the 38 determinations challenged  by China under its as applied 
claims challenging the Single Rate Presumption. More specifically, these 30 determinations are those of the 38 
determinations in which the USDOC determined an anti -dumping duty rate for the PRC -wide entity.  
754 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 241.  WT/DS471/R  
 
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  In cases in which any interested party refuses access to, or otherwise does  not 
provide, necessary information within a reasonable period or significantly impedes the 
investigation, preliminary and final determinations, affirmative or negative, may be 
made on the basis of the facts available. The provisions of Annex  II shall be o bserved 
in the application of this paragraph.  
Article  6.8 stipulates that where an interested party fails to provide necessary  information or 
significantly impedes the investigation, an investigating authority may base its determinations on 
facts available . It also stipulates that in applying facts available, the investigating authority must 
observe the provisions of Annex  II to the Anti -Dumping Agreement. One of the principal objectives 
of the Anti -Dumping Agreement is to ensure objective decision -making b ased on facts. Article  6.8 
and Annex  II serve this objective by ensuring that even where the requested information is not 
provided, the investigating authority will base its determination on facts, albeit perhaps "second -
best" facts.755 
7.392.   Paragraph  1 of Annex  II to the Anti -Dumping Agreement reads:  
As soon as possible after the initiation of the investigation, the investigating 
authorities should specify in detail the information required from any interested party, 
and the manner in which that information shoul d be structured by the interested party 
in its response. The authorities should also ensure that the party is aware that if 
information is not supplied within a reasonable time, the authorities will be free to 
make determinations on the basis of the facts available, including those contained in 
the application for the initiation of the investigation by the domestic industry.  
Paragraph  1 of Annex  II requires an investigating authority to inform an interested party of three 
aspects before facts available may be used in making determinations concerning such a party. 
First, the investigating authority must specify in detail the information required from the interested 
party. Second, it must explain the manner in which this information should be structured by the  
interested party. Third, the investigating authority must ensure that the interested party at issue is 
aware of the consequences of a failure to provide the required information. Despite being phrased 
in the conditional tense, the provisions of Annex  II are considered mandatory due to the obligation 
to observe these provisions, set out in Article  6.8.756 
7.393.   Paragraph  7 of Annex  II to the Anti -Dumping Agreement reads:  
If the authorities have to base their findings, including those with respect to normal 
value, o n information from a secondary source, including the information supplied in 
the application for the initiation of the investigation, they should do so with special 
circumspection. In such cases, the authorities should, where practicable, check the 
informa tion from other independent sources at their disposal, such as published price 
lists, official import statistics and customs returns, and from the information obtained 
from other interested parties during the investigation. It is clear, however, that if an  
interested party does not cooperate and thus relevant information is being withheld 
from the authorities, this situation could lead to a result which is less favourable to the 
party than if the party did cooperate.  
Paragraph  7 of Annex  II addresses situat ions where an investigating authority uses information 
from secondary sources in the place of information that was requested from an interested party. It 
stipulates that in such situations the investigating authority must exercise special circumspection 
and, where practicable, check such information against information from other independent 
sources. The possibility of an interested party ending up with a less favourable result due to its 
failure to cooperate is, however, explicitly recognized in this provi sion. 
7.394.   The first sentence of Article  9.4 of the Anti -Dumping Agreement reads : 
                                                
755 Panel Report, US – Hot-Rolled Steel, para. 7.55.  
756 Panel Report, US – Steel Plate , para. 7.56.  WT/DS471/R  
 
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  When the authorities have limited their examination in accordance with the second 
sentence of paragraph  10 of Article  6, any anti -dumping duty applied to imports from 
exporters or  producers not included in the examination shall not exceed:  
(i) the weighted average margin of dumping established with respect to 
the selected exporters or producers or,  
(ii) where the liability for payment of anti -dumping duties is calculated on 
the bas is of a prospective normal value, the difference between the 
weighted average normal value of the selected exporters or producers 
and the export prices of exporters or producers not individually examined,  
provided that the authorities shall disregard for t he purpose of this paragraph any 
zero and de minimis margins and margins established under the circumstances 
referred to in paragraph  8 of Article  6. (emphasis original)  
The first sentence of Article  9.4 explains how anti -dumping duty rates have to be calc ulated for 
exporters that were not individually examined in cases where the investigating authority has 
resorted to limited examination in its dumping determinations, as provided for under  the second 
sentence of  Article  6.10 of the Anti -Dumping Agreement. The first sentence of Article  9.4 provides 
that such duty rates shall not go beyond the weighted average of the margins of dumping 
calculated for the exporters or producers included in the limited examination. Further, this 
provision  states that, in the ca lculation of this ceiling, the investigating authority shall disregard 
zero and de minimis  margins as well as margins calculated on the basis of facts available pursuant 
to Article  6.8 of the Anti -Dumping Agreement. In this latter regard, the first sentenc e of Article  9.4 
protects exporters that are not chosen as mandatory respondents, and thus not asked to 
cooperate, from being prejudiced by the failure of mandatory respondents to provide certain 
necessary information.757 
7.5.3   Main arguments of the parties  
7.5.3.1   China  
7.395.   China's first claim  is that  the USDOC acted inconsistently with Article  6.1 of the A nti-
Dumping  Agreement by failing to notify all exporters within the PRC -wide entity of the information 
necessary to calculate a margin of dumping for that entity in the 30 determinations at issue.758 
According to China, Article  6.1 obliges an investigating authority to give notice of the information 
objectively needed to make a determination.759 In the case of a dumping determination, China 
notes that the scope of the required i nformation is informed by Article  2, which governs such 
determinations.760 For entities consisting  of multiple exporters, China refers to the Appellate 
Body's finding in EC – Fasteners (China) that the dumping margin for such entities must be based 
on a weig hted average of the export prices of all individual exporters within the entity. China 
submits that, in the 30 determinations at issue, the USDOC failed to observe this obligation by 
calculating a margin of dumping for the PRC -wide entity without first req uesting the required 
information from the individual exporters within the entity.761 Further, China argues that , in these 
30 determinations,  the USDOC's failure to notify resulted in a failure to give the exporters included 
in the PRC -wide entity ample oppor tunity to present relevant evidence, also in violation of 
Article  6.1.762 
7.396.   China's second claim is  that the USDOC's recourse to facts available in the 30 
determinations at issue was contrary to Article  6.8 of the Anti-Dumping Agreement  and             
paragra ph 1 of its Annex  II because the USDOC failed to specify in detail the information required 
to calculate a margin of dumping for the PRC -wide entity before resorting to facts available to 
                                                
757 Appellate Body Report, US – Hot-Rolled Steel, para. 123.  
758 China's second written submissio n, para. 274.  
759 China's second written submission, paras. 231 -232. 
760 China's second written submission, para. 232.  
761 China's second written submission, paras. 269 -271 and 274 (citing Appellate Body Report, EC – 
Fasteners (China) , para. 384).  
762 China's seco nd written submission, para. 274.  WT/DS471/R  
 
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  replace that information.763 In China's view, these provisions permit recourse to facts available 
only if an interested party fails to provide information that is necessary and that the investigating 
authority has specified in detail, and only to the extent necessary to replace the missing facts.764 
According to China, the USD OC should have specified the information needed by sending a full 
dumping questionnaire to all exporters within the PRC -wide entity.765 In this regard  too, China 
relies on the Appellate Body's finding in EC – Fasteners (China)  that the determination of a 
dumping margin for a single entity must be based on a weighted average of the export prices of all 
individual exporters within the entity.766 
7.397.   China's third claim  is that the USDOC's use of adverse facts available is inconsistent with 
Article  6.8 and paragraph  7 of Annex  II to the Anti-Dumping Agreement . This claim has an as such  
and an as applied  aspect. Under the as such  aspect, China contends that the USDOC's practice 
regarding the use of facts available in anti -dumping proceedings involving NMEs – the alleged  AFA 
Norm – constitutes a norm of general and prospective application that can be challenged as such  
in WTO dispute settlement proceedings.767 China describes the precise content of the alleged AFA 
Norm as follows: w henever the USDOC considers that an NME -wide entity has failed to cooperate 
to the best of its ability, it systematically makes an adverse inference and selects, to determine 
the rate for the NME -wide entity, facts that are adverse  to the interests of that fictional entity and 
each of the producer s or exporters included within it.768 
7.398.   As an initial matter, China considers that the alleged AFA Norm is attributable to the 
United States as it arises from the acts or omissions of the USDOC when it administrates the legal 
framework for the use of adverse f acts available .769 Moreover, China submits several sets of 
evidence with a view to demonstrating the alleged AFA Norm's precise content and its general and 
prospective application . With respect to the Antidumping Manual and the excerpts from the USCIT 
decisi ons in Peer Bearing Co. -Changshan v. United States , East Sea Seafoods LLC v. United States , 
and Hubbel Power Systems, Inc. v. United States , China considers that this evidence confirms its 
understanding of the precise content of the alleged AFA Norm , and s heds light on the rigidity of 
the measure.770 It further argues that this evidence supports the proposition that the alleged A FA 
Norm has general and prospective application.771 Finally, China argues that 86 USDOC anti -
dumping determinations on the record show  the precise content of the alleged AFA Norm772, as 
well as its general and prospective application.773 China submits that an overall assessment of this 
evidence, as well as the fact that the United States has been unable to identify one single USDOC 
determina tion in which the USDOC did not make adverse inferences when a n NME-wide entity was 
found not to cooperate, show that the USDOC's use of adverse inference s and selection of adverse 
facts available with respect to non -cooperating NME -wide entities is not a case-specific approach, 
but rather the application of an underlying norm of general and prospective application.774 
7.399.   China claims that the alleged AFA Norm violates Article  6.8 of the Anti-Dumping 
Agreement  and paragraph  7 of its Annex  II as such  for three re asons: (a) the systematic selection 
of adverse facts available pursuant to the AFA Norm prevents the USDOC from conducting an 
evaluative, comparative assessment of all available evidence in order to determine which facts are 
                                                
763 China's first written submission, paras. 629 and 637.  
764 China's first written submission, paras. 554 -555 and 558 -559 (citing Appellate Body Reports, US – 
Zeroing (EC) (Article 21.5 – EC), para. 459; and US – Carbon Steel  (India) , para. 4.416, in turn citing 
Appellate Body Report, Mexico – Anti-Dumping Measures on Rice , para. 294).  
765 China's response to Panel question No. 61(c), para. 307.  
766 China's first written submission, para. 553 (citing Appellate Body Report, EC – Fasteners (China) , 
para. 384).  
767 China's first written submission, paras. 428 -430 (referring to Appellate Body Report, US – Zeroing 
(EC), paras. 193 and 198).  
768 China's opening statement at the second meeting of the Panel, para. 6 3. See also China's first 
written submission, paras. 15 and 428; response to Panel question  Nos. 66(a), 67(a), 78 , and 115 , paras. 367-
368, 376 , and 127; and second written submission, paras. 342, 346, 358, 404, 407, 409 , and 423.  
769 China's first written submission, para. 431.  
770 China's response to Panel question No. 115(b), paras. 128 -129, 132, and 134 -135. 
771 China's first written submission, paras. 444 -445. 
772 China's first written submission, paras. 436 -442. 
773 China's response to Panel question No. 116, para. 157.  
774 China's second w ritten submission, paras. 366 and 370.  WT/DS471/R  
 
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  "best"775; (b) the AFA Norm requi res the selection of adverse facts available on the basis of the 
procedural circumstance of presumed non-cooperation alone, and thus prevents the USDOC from 
applying special circumspection and taking into account the circumstances of cooperating 
individual  exporters within the NME -wide entity776; and (c) the AFA Norm requires the selection of 
adverse facts available even when the USDOC has failed to request the required information and 
prevents the USDOC from taking into account the fact that such information  was missing due to 
the USDOC's own failure to request it.777 
7.400.   Under the as applied  part of its third claim, China presents two alternative arguments. 
First, China argues that the application of the alleged AFA Norm in 28 of the challenged 30 
determinations r endered such determinations inconsistent with Article  6.8 of the Anti-Dumping 
Agreement  and paragraph  7 of its Annex  II, for the same reasons that the Norm itself is 
inconsistent with these two provisions.778 Second, regardless of whether the USDOC applied a  
WTO-inconsistent norm of general and prospective application, China argues that all 30 
determinations at issue are inconsistent with Article  6.8 and paragraph  7 of Annex  II. In this 
regard, China puts forward four specific arguments779: (a) the USDOC select ed adverse facts 
instead of assessing which were the "best" facts available780; (b) the USDOC made an adverse 
inference on the basis of the procedural circumstance of presumed non -cooperation alone without 
taking into account the circumstances of the coopera ting exporters within the PRC -wide entity781; 
(c) in applying adverse facts available, the USDOC failed to undertake an evaluative, comparative 
assessment of all available information782; and (d) the USDOC failed to provide an adequate 
explanation of how it ex ercised special circumspection and selected the "best" facts available.783 
7.401.   China's fourth claim  is based on the argument that, although the USDOC purported to 
determine an individual margin of dumping for the PRC -wide entity in the 30 challenged 
determinatio ns, the PRC -wide entity was not  individually examined and thus was subject to the 
disciplines set out in Article  9.4 of the Anti-Dumping Agreement .784 China claims that the duty 
rates assigned to the PRC -wide entity violated the first sentence of Article  9.4 for three reasons: 
(a) the USDOC applied a PRC -wide rate exceeding the ceiling set forth in the first sentence of 
Article  9.4785; (b) the USDOC exceeded the discretion provided under the first sentence of 
Article  9.4 by assigning a PRC -wide rate that was hi gher than the rate assigned to separate rate 
respondents also not individually examined786; and (c) the USDOC exceeded the discretion 
provided under the first sentence of Article  9.4 by re -applying a rate calculated in a WTO -
inconsistent manner to the PRC -wide entity.787 
                                                
775 China's first written submission, paras. 642 -644 (citing Appellate Body Reports, Mexico – Anti-
Dumping Measures on Rice , para. 297; and  US – Carbon Steel (India) , paras. 4.426 and 4.468; and Panel 
Report, Mexico – Anti-Dumping Measures on Rice , para. 7.238).  
776 China's first written submission, paras. 645 -646 and 648 (citing  Appellate Body Report, US – Carbon 
Steel (India) , para. 4.422).  
777 China's first written submission, paras. 665 -666; and second written submission , para. 409.  
778 China's first written submission, para. 670; and response to Panel question No. 2(b), paras. 10 -11 
and 15.  
779 With respect to two of the challenged determinations, namely OTR Tires  AR5 and Diamond 
Sawblades  AR4, China bases its claim of incon sistency with Article  6.8 and paragraph  7 of Annex  II on the third 
and fourth arguments only. (China's response to Panel question No. 2(b), para. 18).  
780 China's first written submission, paras. 675 and 678.  
781 China's first written submission, paras. 679 -682; and response to Panel question No. 83(b), paras. 
844 and 846.  
782 China's first written submission, para. 683.  
783 China's first written submission, paras. 701 -702. 
784 China's second written submission, para. 439.  
785 China's second written submission, paras. 468-472 and 478 -480. This argument applies to 24 of the 
challenged determinations, namely Coated Paper  OI, Shrimp  OI, Shrimp  AR7, Shrimp  AR8, OTR Tires  OI, OTR 
Tires AR5, OCTG  OI, Solar OI, Solar AR1, Diamond Sawblades  OI, Diamond Sawblades  AR1, Diamond  
Sawblades  AR2, Diamond Sawblades  AR3, Diamond Sawblades  AR4, Steel Cylinders  OI, Wood Flooring  OI, 
Wood Flooring  AR1, Wood Flooring  AR2, Bags OI, Bags AR3, PET Film  OI, Furniture OI, Furniture  AR7, and 
Furniture  AR8. 
786 China's second written submission, para s. 473 -475, 483 -484, and 490 -491. This argument applies to 
12 of the challenged determinations, namely Aluminum  OI, Aluminum AR1, Aluminum  AR2, Shrimp  OI, Shrimp  
AR7, Shrimp  AR8, Diamond  Sawblades  AR2, Wood Flooring  OI, Ribbons  OI, Ribbons AR1, Ribbons AR3, and 
Furniture  AR7. 
787 China's second written submission, paras. 481 -482 and 488 -489. This argument applies to two of the 
challenged determinations, namely Diamond Sawblades AR2 and Ribbons AR1. WT/DS471/R  
 
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  7.5.3.2   United States  
7.402.   As an initial matter, the United States argues that a number of the arguments put forward 
by China under its third and fourth claims in  its responses to the Panel's questions following the 
first substantive meeting of the Panel wi th the parties are contrary to paragraph  6 of the Panel's 
Working Procedures which, according to the United States, requires the parties to present their 
principal arguments in their respective first written submissions.788 
7.403.   In response to China's first claim , the United States argues that Article  6.1 of the Anti -
Dumping Agreement only deals with the procedural issue of whether proper notice of the 
information required has been given , and not the substantive issue of what information is to be 
required by an in vestigating authority.789 Furthermore, the United States asserts that Article  6.1 
does not require an investigating authority to request further information f rom an interested party 
that has  already failed to provide necessary information.790 Similarly, regard ing the requirement to 
provide ample opportunity to present relevant evidence, the United States argues that an 
investigating authority is not required to continue to allow an interested party further opportunities 
to present evidence when this interested party has failed to respond to a request for 
information.791 
7.404.   In response to China's second claim, the  United States argues, as an initia l matter, that 
ten of the challenged determinations do not fall within the scope of Article  6.8 of the Anti-Dumping 
Agreem ent since the USDOC did not determine a duty rate for the PRC -wide entity based on facts 
available in these determinations, but rather re -applied a rate that had been calculated in a prior 
proceeding792 or accounted for the cooperation of one of the mandator y respondents, ultimately 
included within the PRC -wide entity.793 For the remaining determinations, the United States argues 
generally that the USDOC had to apply a single duty rate to the PRC -wide entity in order to avoid 
circumvention in the form of shipme nts of the subject product th rough the exporter within the 
entity subjected to the lowest duty rate.794 When calculating the single duty rate for the PRC -wide 
entity, the United States considers that the USDOC was permitted to take into account the non -
coope ration of one or more exporters within the entity, and, by extension, that of the PRC -wide 
entity itself, and resort to facts available on that basis.795 
7.405.   Regarding the as such aspect of China's third claim,  the United States contends that China 
has not demon strated that the USDOC's use of facts available in assigning duty rates to NME -wide 
entities represents a norm of general and prospective application.796 Specifically, the United States 
asserts that China has failed to describe the precise content of the AFA  Norm as the Antidumping 
Manual merely describes the non -binding nature of the USDOC's practice, by listing the instances 
in which the USDOC "may" apply adverse inferences in selecting available facts to determine the 
rate for the NME-wide entity. Moreover , the Antidumping Manual clearly states that it is intended 
for the internal training  of USDOC personnel, and cannot be cited to establish the practice of the 
USDOC.797 Furthermore , the United States argues that China has not demonstrated that the 
excerpts f rom three USCIT decisions set forth a rule of general and prospective application, and 
that United States federal courts are limited to deciding the cases before them.798 Along similar 
lines, the United States submits that the USDOC anti -dumping determinatio ns on which China 
relies were based on the specific facts and circumstances of each proceeding and tempered  by the 
                                                
788 United States' second written submission, paras. 123 -125 (r eferring to Appellate Body Reports, US – 
Shrimp (Thailand) / US – Customs Bond Directive , para. 300; and  Thailand – Cigarettes (Philippines) , 
para. 149).  
789 United States' second written submission, para. 247.  
790 United States' first written submission, para s. 577 and 579.  
791 United States' first written submission, para. 577.  
792 United States' first written submission, paras. 534 -536 (referring to Panel Report, US – Shrimp II 
(Viet Nam) , paras. 7.234 -7.235); and second written submission, paras. 258 -259. This argument applies to 
eight determinations, namely Diamond Sawblades  AR1, Diamond Sawblades  AR2, Diamond Sawblades  AR3, 
Wood Flooring  AR1, Wood Flooring  AR2, Ribbons  AR1, Bags AR3, and Furniture  AR8. 
793 United States' second written submission, paras. 266 -269. This argument applies to two 
determinations, namely OTR Tires AR5 and Diamond Sawblades AR4. 
794 United States' first written submission, para. 430.  
795 United States' first written submission, paras. 431 -433 (referring to Panel Reports, US – Shrimp (Viet 
Nam), para. 7.263; and  China – Broiler Products , para 7.306, fn 501).  
796 United States' first written submission, para. 405.  
797 United States' first written submission, para. 415.  
798 United States' comments on China's response to Panel question Nos. 124 and 125 , para. 119.  WT/DS471/R  
 
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  requirement to corroborate selected secondary information.799 The United States argues that the 
evidence provided by China does not demonstrate  that the USDOC's alleged practice is binding on 
its future actions. Rather, it shows that the USDOC has discretion when selecting facts available.800 
7.406.   In response to China's first substantive argument regarding the alleged AFA Norm, the 
United States emphasi zes that the USDOC is permitted to take into account the non -cooperation of 
an exporter within an NME -wide entity, and, by extension, that of the NME -wide entity itself, when 
selecting facts available for that entity.801 The United States contends that the U SDOC's practice is 
in accordance with the Anti-Dumping Agreement  since, in the application of facts available to an 
NME-wide entity, the USDOC considers the universe of information on the record802, corroborates 
the initially -chosen rate if that rate is base d on secondary information , and disregards it if it is 
found to be unreliable or not relevant or if another rate on the record is considered to have greater 
probative value.803 According to the United States, China's second and third substantive arguments 
constitute claims and fall outside the Panel's terms of reference since they challenge the USDOC's 
finding of non -cooperation and decision to resort to facts available, whereas China's panel request 
refers to the alleged AFA Norm only in connection with the selection of facts available by the 
USDOC.804 Even if the Panel finds these claims to be within its terms of reference, the United 
States argues that there is no norm of general and prospective application leading the USDOC to 
make findings of non -cooperatio n based on presumptions or following a failure to request the 
required information.805 
7.407.   Regarding the as applied aspect of China's third claim,  the United States submits that this 
claim is based solely on the existence of the alleged AFA Norm and that the Pan el is prevented 
from examining the WTO  consistency of the challenged 30 determinations on another basis.806 At 
any rate, the United States  repeats its argument that ten  challenged determinations807 fall outside 
the scope of Article  6.8 because the USDOC did no t determine a duty rate based on facts available 
in these determinations808 and notes that the alleged AFA Nor m was not applied in these  
determinations, since the USDOC did not make a finding of non -cooperation.809 With respect to the 
remaining determinations,  the United States argues that the USDOC complied with the 
requirements of Article  6.8 and Annex  II to the Anti-Dumping Agreement  by selecting a rate with a 
factual foundation on the record, which was not contradicted by any substantiated facts or shown 
to be an unreasonable replacement for the missing information , but rather corroborated by 
information on the record.810 According to the United States, the USDOC was permitted to take 
account of the non -cooperation of exporters within the PRC -wide entity and w as not required to 
disregard this non -cooperation simply because one or more exporters within the entity 
cooperated.811 
7.408.   In response to China's fourth claim, the  United States argues, as an initial matter, that the 
duty rates assigned to the PRC -wide entity i n the 30 challenged determinations fall outside the 
scope of Article  9.4 of the Anti -Dumping Agreement either because exporters within the PRC -wide 
entity failed to respond to the USDOC's request for quantity and value ( Q&V) information and 
thereby removed  the entity from the pool of respondents from which the USDOC selects 
                                                
799 United States' first written submission, para. 412.  
800 United States' first written submission, paras. 408 -409 and 412 (referring to Appellate Body Reports, 
US – Zeroing (EC) , para. 198; US – Carbon Steel (India) , paras. 4.467 -4.469; and Argentina – Import 
Measures , paras. 5.137 -5.143)  . 
801 United States' second written submission, paras. 278 and 290.  
802 United States' first written submission, para. 475.  
803 United States' first written submission, para. 470; and second written submission, para. 299. 
804 United States' response to Panel question No. 74, paras. 185 -187 (referring to Appellate Body 
Reports, Guatemala – Cement I , para. 72; and Korea – Dairy , para. 139).  
805 United States' response to Panel question No. 76, paras. 190 -192. 
806 United States ' second written submission, para. 174.  
807 OTR Tires AR5, Diamond Sawblades  AR1, Diamond Sawblades  AR2, Diamond Sawblades  AR3, 
Diamond Sawblades AR4, Wood Flooring  AR1, Wood Flooring  AR2, Ribbons  AR1, Bags AR3, and Furniture  AR8. 
808 United States' second wri tten submission, paras. 259 -262 (referring to Panel Report, US – Shrimp II 
(Viet Nam) , paras . 7.234 -7.235) ; and response to Panel question No. 133, paras. 107 -111 and 116.  
809 United States' second written submission, para. 262.  
810 United States' first writte n submission, para. 540. See also United States' response to Panel question 
Nos. 85 and 133, paras. 212 -315 and 112 -114. 
811 United States' second written submission, paras. 308 and 311 (citing Appellate Body Report, US – 
Carbon Steel (India) , paras. 4.468 -4.469).  WT/DS471/R  
 
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  mandatory respondents812 or by virtue of the fact that one or more exporters that were initially 
chosen as mandatory respondents and individually examined failed the Separate Rate Test and  
were included within the PRC -wide entity.813 For the nine challenged determinations814 in which the 
USDOC re -applied a rate from an earlier segment of the proceedings, the United States submits 
that the USDOC was not obligated to assign a PRC -wide rate differ ent from that assigned to the 
entity in  the earlier segments of the proceedings.815 Even if Article  9.4 was applicable to these 
PRC-wide rates, the United States argues that the first sentence of Article  9.4 only imposes a 
ceiling on the level of "all others " rates and does not prevent an investigating authority from 
applying multiple rates for different exporters within this ceiling, in particular for exporters that 
have failed to cooperate.816 
7.5.4   Main arguments of the third parties  
7.5.4.1   European Union  
7.409.   With respect to  China's first claim, the European Union considers that the close relationship 
necessary for multiple exporters to constitute a single entity will not necessarily imply that such 
exporters are sufficiently related to communicate and coordinate amongst each  other, especially 
for country -wide entities where there is not necessarily one mother company.817 The European 
Union calls on the Panel to strike a balance between conflicting interests by requiring the 
investigating authority to notify all individual expor ters within an entity of basic information about 
the investigation at the outset of the investigation. Provided this is done, the European Union 
considers that the investigating authority can legitimately channel subsequent requests for more 
detailed infor mation through the single entity and that it will be the single entity's task to 
distribute such requests to the individual exporters within the entity.818 
7.410.   With respect to China's second claim, the European Union submits that information for an 
entity consis ting of  multiple exporters is not complete, and that recourse to facts available is thus 
necessary if information pertaining to some individual exporters is missing.819 The European Union 
acknowledges that facts available should only be used to replace infor mation that an interested 
party has failed to provide following the investigating authority's request820 but considers that an 
investigating authority should be permitted to cease communication with interested parties that 
have made it clear that they do not  intend to cooperate and that non -cooperation of some 
exporters within a single entity can be considered as non -cooperation by the entity itself.821 
7.411.   With respect to China's third claim, the European Union argues that the nature of the 
alleged AFA Norm and th e way it is characterized by China determine the evidence required to 
prove its existence. In this regard, the European Union notes that, in addition to a norm of general 
and prospective application, concerted action or practice could also be susceptible t o a challenge in 
WTO dispute settlement.822 On the substantive issue of the selection of facts available, the 
European Union argues that an arbitrary exclusion or choice of certain facts aimed at arriving at a 
                                                
812 United States' second written submission, paras. 229 -230. This argument applies with respect to 14 
of the challenged determinations, namely Aluminum OI, Coated Paper  OI, Shrimp OI, OTR Tires  OI, OCTG  OI, 
Solar OI, Solar AR1, Diamond Sawblades  OI, Steel Cylinders OI, Wood Flooring  OI, Ribbons  OI, Ribbons  AR3, 
Bags OI, and  Furniture OI. 
813 United States' second written submission, para. 231. This argument applies with respect to 14 of the 
challenged determinations, namely Aluminum  OI, Aluminum  AR1, Aluminum  AR2, Coated Paper  OI, Shrimp 
AR7, Shrimp  AR8, OTR Tires  AR5, OCTG OI, Diamond Sawblades  OI, Ribbons OI, Bags OI, PET Film  OI, 
Furniture OI, and Furniture AR7. 
814 Diamond Sawblades  AR1, Diamond Sawblades  AR2, Diamond Sawblades  AR3, Diamond Sawblades 
AR4, Wood Flooring  AR1, Wood Flooring  AR2, Ribbons  AR1, Bags AR3, and Furniture  AR8. 
815 United States' second written submission, paras. 226 and 232.  
816 United States' first written submission, paras. 398 -400 (citing Appellate Body Reports, US – Hot-
Rolled St eel, para. 116; and US – Zeroing (EC) (Article 21.5 – EC), paras. 452 and 459).  
817 European Union's third -party submission, para. 83.  
818 European Union's third -party submission, para. 84; and third -party statement, para. 11.  
819 European Union's third -party su bmission, para. 86.  
820 European Union's third -party submission, para. 89 (referring to Panel Report, China – Autos (US) , 
para. 7.136).  
821 European Union's third -party submission, para. 91.  
822 European Union's third -party submission, para. 78 (referring to Appellate Body Reports,  EC and 
certain member States – Large Civil Aircraft , para. 794; and  Argentina – Import Measures , paras. 5.106, 
5.108 , and 5.110).  WT/DS471/R  
 
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  particularly high, punitive margin is not permis sible.823 For NME -wide entities, the European Union 
submits that the investigating authority should take into account all substantiated facts provided 
by exporters, even if these do not represent all the information requested, but asserts that this 
obligatio n applies only insofar as the failure to provide information by one or more exporters within 
the NME -wide entity does not render the information provided by cooperating exporters 
unusable.824 
7.412.   With respect to China's fourth claim, the European Union argues th at the first sentence of  
Article  9.4 of the Anti -Dumping Agreement does not require the application of a single "all others" 
rate, but rather allows for multiple rates, provided that all such rates remain below the ceiling set 
forth in that provision.825 
7.5.4.2   Brazil 
7.413.   With respect to China's second claim, Brazil agrees with the United States that any 
instance of failure to respond to requests for necessary information, including initial requests for 
the purpose of respondent selection pursuant to Article  6.10 of the  Anti-Dumping Agreement, 
justifies recourse to facts available.826 With respect to China's third claim, Brazil suggests that the 
"best" information is the most reliable information, regardless of whether this information is 
positive or negative to the intere sts of the non -cooperating interested party.827 With respect to 
China's fourth claim, Brazil argues that the ceiling provided for in the first sentence of Article  9.4 of 
the Anti -Dumping Agreement does not apply to exporters that have failed to provide infor mation 
requested for the purpose of sampling.828 
7.5.4.3   Viet Nam  
7.414.   With respect to China's fourth claim, Viet Nam argues that the first sentence of Article  9.4 
of the Anti -Dumping Agreement requires the calculation of a single "all others" rate829 and that this 
provisi on governs exclusively the duty rate assigned to exporters not individually examined and 
does not provide exceptions to the application of the maximum ceiling or impose prerequisites on 
exporters in order to receive this rate.830 
7.5.5   Evaluation by the Panel  
7.415.   In light of the claims and arguments advanced by the parties, we proceed with our analysis 
as follows: We commence by addressing whether the alleged AFA Norm constitutes a norm of 
general and prospective application that can be challenged as such in WTO disput e settlement. If, 
as argued by China, such a norm exists, we will assess China's as such claims under Article  6.8 
and paragraph  7 of Annex  II to the Anti -Dumping Agreement. We will then proceed with our 
analysis of China's as applied claims against the 30 challenged determinations under Articles  6.1 
and 6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 of the Anti -Dumping 
Agreement.  
7.5.5.1   Whether the AFA Norm is inconsistent, as such, with Article  6.8 and paragraph  7 
of Annex  II to the An ti-Dumping Agreement  
7.416.   China claims that, by virtue of the alleged AFA Norm, whenever the USDOC finds that an 
NME-wide entity has failed to cooperate to the best of its ability, it follows a process designed to 
                                                
823 European Union's third -party submission, para. 92 (referring to Appellate Body Reports, Mexico – 
Anti-Dumping Measures on Rice , para. 297; and  US – Carbon Steel (India) , paras. 4.419 and 4.468).  
824 European Union's third -party submission, para. 92 (referring to Appellate Body Report, Mexico – 
Anti-Dumping Measures on Rice , paras. 288 and 294).  
825 European Uni on's third -party submission, para. 68 (referring to Panel Report, US – Shrimp II (Viet 
Nam) , para. 7.217).  
826 Brazil's third -party submission, paras. 26 -27. 
827 Brazil's third -party submission, paras. 23 and 25.  
828 Brazil's third -party submission, para. 27 (re ferring to Panel Report, EC – Salmon (Norway),  
para. 7.431).  
829 Viet Nam's third -party submission, paras. 60 and 63 (citing Appellate Body Report, US – Zeroing 
(EC) (Article 21.5 – EC), para. 459) . 
830 Viet Nam's third-party submission, paras. 56 -57 and 62  (citing Panel Report, US – Shrimp (Viet 
Nam) , para. 7.245).  WT/DS471/R  
 
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  systematically adopt adverse inferences and sel ect facts that are adverse to the interests of the 
NME-wide entity and the exporters or producers within it.831 China argues that the alleged AFA 
Norm constitutes a norm of general and prospective application, which is , as such, inconsistent 
with Article  6.8 of and paragraph  7 of Annex  II to the Anti -Dumping Agreement.  
7.417.   The United States challenges the existence of the alleged AFA Norm , noting that China has 
not met the high burden to show that the measure described amounts to a norm of general and 
prospective  application.832 The United States further argues that the alleged AFA Norm, as 
described by China, was not properly identified in the panel request and is therefore outside the 
terms of reference of the Panel.833 In addition, the United States submits that ev en if such a norm 
exists, it is not inconsistent with its obligations under Article  6.8 of and paragraph  7 of Annex  II to 
the Anti -Dumping Agreement.834 
7.418.   In light of the arguments of the parties, we will first examine whether the alleged AFA 
Norm, as China su bmits, exists. Only if it is found to exist will we address the United States' 
objection that the alleged AFA Norm  falls outside our terms of reference , as well as  China's as such 
claims under Article  6.8 of and paragraph  7 of Annex  II to the Anti -Dumping Agreement.  
7.5.5.1.1   Whether the AFA Norm constitutes a measure that can be challenged as such 
in WTO dispute settlement  
7.419.   We recall that, a s recognized in  previous WTO disputes , WTO Members can challenge, as 
such, norms of general and prospective application not writ ten in legally binding documents.835 The 
Appellate Body has explained that, in such cases, a complaining Member has to demonstrate, at a 
minimum: (a) that the alleged rule or norm is attributable to the responding Member; (b) its 
precise content; and (c) tha t it has general and prospective application.836 
7.420.   With respect to the attribution to the United States, China notes that the alleged AFA Norm 
arises from acts or omissions of the USDOC, an agency of the United States' government tasked 
with implementing U nited States anti-dumping laws and regulations.837 The United States argues 
that, as China has not established the precise content of the alleged AFA Norm, the question of 
whether it is attributable to the United States does not arise.838 Hence, we find it appropr iate to 
start our assessment with the precise content of the alleged AFA Norm. If we find that China has 
established the precise content of the alleged AFA Norm, we will proceed with our assessment of 
whether that Norm is attributable to the United States.  If the answer to this question is also in the 
affirmative, we will analyse whether the alleged AFA Norm has general and prospective 
application.  
7.421.   At the outset of our analysis, we note that China has adduced the same evidence in 
seeking to establish both t he precise content and the general and prospective application of the 
alleged AFA Norm, namely: an excerpt from the Antidumping Manual839, excerpts from three 
USCIT decisions840, and 86 USDOC anti -dumping determinations.841 We will therefore examine 
                                                
831 China's first written submission, paras. 15, 428, 436, 458, 473, 476, 492, 639, and 641; response to 
Panel question Nos. 64, 67, 77, 78, and 83, paras. 316, 375, 412, 416, and 840 ; second written submission,  
paras. 342, 358, 379, and 404; and China's opening statement at the second meeting of the Panel, para. 6 3. 
832 United States' first written submission, para. 419; and second written submission, para. 177.  
833 United States' comments on China's resp onse to Panel question No. 115 , para. 75.  
834 United States' first written submission, paras. 443 -502. 
835 See Appellate Body Report, Argentina – Import Measures , paras. 5.99 -5.111.  
836 Appellate Body Report, US – Zeroing (EC) , para. 198. See also Appellate Body  Report, Argentina – 
Import Measures , para. 5.104.  
837 China's first written submission, para. 431.  
838 United States' response to Panel question No. 73, para. 182.  
839 China's response to Panel question No. 115(b), paras. 128 -131. See also China's first written  
submission, paras. 444 -446. 
840 China's response to Panel question No. 115(c), paras. 132 -138. See also China's first written 
submission, paras. 453 -455. 
841 China's response to Panel question No. 116, para. 157. See also China's first written submission, 
paras. 437 -442, 447 -452, and 456 -472. We note that , in response to Panel question No. 116, China listed 92 
determinations as relevant evidence of the existence of the alleged AFA Norm as a norm of general and 
prospective application. Yet, six of these  determi nations ( Aluminum  OI, Diamond Sawblades  OI, Solar OI, Steel 
Cylinders  OI, Wood Flooring OI, and Ribbons AR3) were included twice in China's list , which brings the number 
of determinations down to 86 . (China's response to Panel question No. 116, para. 157).  WT/DS471/R  
 
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  whether the alleged AFA Norm amounts to a norm of general and prospective application on the 
basis of this evidence.  
7.5.5.1.1.1   The precise content of the alleged AFA Norm  
7.422.   China describes the precise content of the alleged AFA Norm as follows:  
[W]henever [the] USDOC considers th at an NME -wide entity has failed to cooperate to 
the best of its ability, it systematically makes an adverse inference and selects, to 
determine the rate for the NME -wide entity, facts that are adverse  to the interests of 
that fictional entity and each of the producers/exporters included within it.842 
(emphasis original)  
7.423.   We note, and China has made it clear, that the alleged AFA Norm only applies in anti -
dumping proceedings where the USDOC finds that the NME -wide entity failed to cooperate to the 
best of its ability. China states that this finding of non -cooperation is not part of the alleged AFA 
Norm.843 Rather, the finding of non -cooperation delimits the universe of situations in which the 
alleged AFA Norm applies, i.e. whenever the USDOC finds that the NME -wide entity failed to 
cooperate to the best of its ability.  
7.424.   China submits that the alleged AFA Norm consists of a process by which the USDOC 
systematically844, mechanically845, indiscriminately846 or automatically847 adopts adverse 
inferences , and selects adverse fa cts (or unfavourable facts848) from the universe of secondary 
information on the record of the relevant investigation or administrative review , with respect to 
the determination of the duty rate for the NME -wide entity. For China, the adoption of adverse 
inferences and selection of adverse facts are "dictated by the procedural circumstance of non -
cooperation alone", irrespective of the particularities and specific circumstances of the non -
cooperation by the NME -wide entity.849 
7.425.   As for the meaning of the terms "a dverse inferences" and "adverse facts", China argues 
that, when the USDOC finds that the NME -wide entity has not cooperated to the best of its ability, 
it draws an inference that the information missing from the record, if produced, would have been 
                                                
842 China's opening statement at the second meeting of the Panel, para. 6 3. See also China's first 
written submission, paras. 15 and 428; response to Panel question  Nos. 66(a), 67(a), 78 , and 115 , paras. 367, 
368, 376 , and 127; and second written submission , paras. 342, 346, 358, 404, 407, 409 , and 423.  We observe 
that China explained its understanding of the alleged AFA Norm at an early stage of the proceedings. Notably, 
in its first written submission, it presented arguments regarding the precise content o f the alleged measure, 
which, according to China, constitutes a "process" consisting of the following: " whenever USDOC considers that 
an NME -wide entity has failed to cooperate to the best of its ability, it systematically uses inferences that are 
adverse to the interests of the NME -wide entity, and each of the producers/exporters included within that 
fictional entity, by selecting adverse  information from amongst the secondary source information available ." 
(China's first written submission, para. 428. See  also ibid. para. 15). We thus disagree with the United States' 
position that China's arguments relating to the content of the process that forms part of the alleged AFA Norm 
were not presented in China's first written submission. (United States' second wr itten submission, para. 124).  
843 China's response to Panel question No. 67(b), para. 379.  
844 China's first written submission, para. 428; response to Panel question No. 67 (a), para. 375; and 
second written submission, para. 342.  
845 China's second written subm ission, paras. 333, 407, and 412.  
846 China's first written submission, para. 493; and response to Panel question No. 77, para. 415.  
847 China's second written submission, paras. 333, 407, and 414.  
848 China's response  to Panel question Nos. 66(a) and 67(a), par as. 367 , 370,  and 376.  
849 China's response to Panel question No. 67(a), para. 379.  In its first written submission, China argued 
that "adverse facts" may be drawn from:  
(1) Secondary information, such as information derived from:  
(i) The petition;  
(ii) A fi nal determination in a countervailing duty investigation o r an antidumping investigation;  
(iii) Any previous administrative review, new shipper review, expedited antidumping review, section 753 
review, or section 762 review; or  
(2) Any other information pl aced on the record.  
(China's first written submission, para. 434 (quoting  USDOC Regulations, Section 351 -308, 
(Exhibit  CHN-152), Sub paragraph  (c)). See also ibid. paras. 441 -442, and fns 485 and 727 ). 
We thus disagree with the United States' position to th e extent that it suggests that China did not 
explain its understanding of the term "adverse facts" in its first written submission. (United States' second 
written submission, para. 124).  WT/DS471/R  
 
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  unfavou rable to the NME -wide entity and all the exporters in it.850 On the basis of such inference, 
the USDOC selects from the universe of available secondary information, facts "sufficiently 
adverse" to the interests of the NME -wide entity851, including the exporter s within it, in order to 
determine the rate for the entity as a whole.852 According to China, the rate that the USDOC 
applies to the non -cooperating NME -wide entity is "generally"853, "frequently"854 or "typically"855 
the highest rate based on the information from  the petition; the highest calculated rate of any 
respondent; or the highest margin determined for any party in the investigation or any 
administrative review.856 Although China argues that in every case the anti -dumping duty rate 
assigned to the NME -wide entity has been high857, it does not contend that the alleged AFA Norm 
requires the USDOC to impose the highest of the rates available on the record.858 In other words, 
the assignment of the highest possible duty rate to the NME -wide entity is not a necessary fe ature 
of the alleged AFA Norm.  
7.426.   After these brief explanations, we now turn to the sets of evidence that China submitted in 
order to demonstrate the precise content of the alleged AFA Norm, namely, certain passages from 
the USDOC's Antidumping Manual, excer pts from three USCIT decisions , and 86 USDOC anti -
dumping determinations.859 Below, we examine each of these three sets of evidence individually 
and make our conclusion on the basis of a holistic examination thereof.  
Antidumping Manual  
7.427.   China quotes the follo wing passage from the Antidumping Manual:  
In an antidumping investigation, all companies other than those that have been 
determined to be eligible for a separate rate are part of the NME entity and receive 
the NME -wide rate. That rate may be based on adver se facts available  if, for example, 
some exporters that are part of the NME -wide entity do not respond to the 
antidumping questionnaire. In many cases, the [USDOC] concludes that some part of 
the NME -wide entity has not cooperated in the proceeding because  those that have 
responded do not account for all imports of subject merchandise.  
… 
Occasionally , the NME -wide rate may be changed through an administrative review. 
This happens when 1) the [USDOC] is reviewing the NME entity because the [USDOC] 
is reviewi ng an exporter that is part of the NME entity, and 2) one of the calculated 
margins for a respondent is higher than the current NME -wide rate.860 (emphasis 
added; footnotes omitted)  
7.428.   This excerpt appears under the heading "NME -Wide Rate" in the Antidumping Ma nual. The 
first paragraph begins by recalling that all NME companies, other than those eligible for a separate 
rate, receive an NME -wide rate. The second paragraph states that the rate "may" be based on 
"adverse facts available", and gives one example when  this may happen, i.e., if exporters that are 
part of the NME -wide e ntity do not respond to the dumping questionnaire. It goes on to note that, 
"[i]n many cases", the USDOC concludes that some part of the NME -wide entity has not 
cooperated in the proceedin g because those that have responded to the questionnaire do not 
account for all imports of subject merchandise.  
7.429.   In our view, the quoted part of the Antidumping Manual does not support China's 
arguments regarding the precise content of the alleged AFA Norm.  As an initial matter, we note 
that the so -called trigger of the alleged AFA Norm (i.e. a finding by the USDOC that the NME -wide 
                                                
850 China's response to Panel question No. 66(a), para. 366.  
851 China's first written submission, paras. 437 -438. 
852 China's response to Panel question No. 67(a), para. 376.  
853 China's first written submission, para. 448.  
854 China's first written submission, para. 442.  
855 China's response to Panel question No. 67(b), para. 383.  
856 China's response to Panel question No. 65, para. 347; and second written submission, para. 349.  
857 China's response to Panel question No. 65, para. 347.  
858 China's second written submission, para. 350.  
859 China's response to Panel questions No. 123 and 127, p aras. 185 and 213, respectively.  
860 Antidumping Manual, Chapter 10, ( Exhibit  CHN-23), pp. 7 -8. WT/DS471/R  
 
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  entity has failed to cooperate) is not laid down in the Antidumping Manual in the same way it is 
laid down in the description p ut forward by China. We recall that, according to China, the trigger 
condition is not part of the alleged AFA Norm. Yet, such trigger defines the universe of situations in 
which the alleged AFA Norm applies and, hence, is an important element to ascertain when 
seeking to establish the existence of the alleged AFA Norm. In this connection, the Antidumping 
Manual provides an example of non -cooperation, namely, that some exporters which are part of 
the NME -wide ent ity fail to respond to the dumping questionnai re. However, China has observed 
elsewhere that there are other circumstances under which the USDOC applies the alleged AFA 
Norm, including for instance, when the exporters that are part of the NME -wide entity do not 
respond to the Q&V questionnaire.861 Accor dingly, it appears to us that the full spectrum of 
situations in which the alleged AFA Norm applies is not mentioned in the Antidumping Manual.  
7.430.   Moreover, China's definition of the alleged AFA Norm refers to a "process" whereby the 
USDOC, after a finding of  non-cooperation by an NME -wide entity, draws an adverse inference and 
selects facts that are adverse to the interests of the entity and the exporters within it. The quoted 
passage of the Antidumping Manual, however, does not mention such a process althoug h it states 
that the duty rate of an NME -wide entity may be based on adverse facts available where some 
exporters within the entit y do not respond to the dumping questionnaire. Thus, the process that 
informs the alleged AFA Norm does not appear in the Anti dumping Manual in the manner described 
in China's definition of the alleged measure.  
7.431.   Further, we find the use of the modal  verb "may" noteworthy in this particular context 
because it suggests that the USDOC has discretion to use adverse facts available. Ch ina argues 
that, despite the permissive language, the Antidumping Manual gives an example of when the 
NME-wide rate " will be based on adverse facts available".862 In our opinion, however, the use of 
the modal  verb in the first clause of the sentence continue s to qualify the specific example that 
ensues. In other words, we read the quoted passage as stating that in cases where, for example, 
export ers fail to respond to the dumping questionnaire, the USDOC is permitted to (but not 
necessarily will) base the NME -wide rate on adverse facts available. We are therefore not 
convinced that the use of such permissive language somehow gives the cited excerpts of the 
Antidumping Manual normative character, and accordingly, that it demonstrates the precise 
content of the alleged AFA Norm that China seeks to establish.  
7.432.   China further contends that the second paragraph of the quote from the Antidumping 
Manual also demonstrates the existence of the alleged AFA Norm because it shows that in an 
administrative review where the US DOC does not otherwise determine a duty rate for the entity, it 
nonetheless modifies the entity's duty rate solely for the purpose of assigning to it a higher rate.863 
We are not convinced by this argument. We note that this part of the quote starts out by s aying 
that, "[o]ccasionally", the NME -wide "may" be changed, and then describes two situations in which 
such a change is made. The second situation is what China's argument refers to, namely, where 
the USDOC finds that the dumping margin calculated for a r espondent is higher than the duty rate 
assigned to the NME -wide entity. We note, again, that this statement contains the modal  verb 
"may" which gives the USDOC discretion to act in a particular manner, rather than requiring it to 
do so. Further, the statem ent makes no reference to the content of the alleged AFA Norm, namely, 
a process whereby the USDOC draws adverse inferences and selects facts that are adverse to the 
interests of the NME -wide entity and the exporters within it.  
7.433.   In sum, in our view, the Ant idumping Manual does not support China's argument regarding 
the precise content  of the alleged AFA Norm.  
USCIT  decisions  
7.434.   China submits three decisions by the USCIT that, in its view, "have recognized the 
existence of a consistent practice in USDOC determin ations" in relation to the alleged AFA Norm.864 
                                                
861 See, for instance , China's response to Panel question No s. 54, 55, and 78, paras. 280, 281, 284, 
285, 286, and 582.  
862 China's response to question No. 70, para.  408. See also China's response to question No. 115(b), 
para. 128.  (emphasis original)  
863 China's response to question No. 70, para. 4 10. See also China's first written submission, para. 446.  
864 China's first written submission, para. 453.  WT/DS471/R  
 
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  The first is the USCIT decision in Peer Bearing Co. -Changshan v. United States  which reads in 
relevant part:  
In calculating the PRC -wide entity rate, it has been [USDOC's] longstanding practice  
of assigning to respondents who fail to cooperate with [USDOC's] investigation the 
highest margin calculated for any party in the less -than-fair-value investigation or in 
any administrative review.865 (emphasis added)  
7.435.   In our opinion, this excerpt from the USCIT decision doe s not demonstrate the precise 
content of the alleged AFA Norm described by China. As an initial matter, the trigger for the 
application of the alleged AFA Norm (i.e. the USDOC's finding of non -cooperation by the NME -wide 
entity) is not reflected in the quo ted excerpt, which refers to non -cooperating respondents, and 
not to a non -cooperating NME -wide entity. Although China asserts that such trigger is not part of 
the alleged AFA Norm, we believe that it is important to the extent that it defines the universe  of 
situations in which the alleged  AFA Norm  applies (i.e. only in those cases where the USDOC finds 
an NME -wide entity to be non -cooperating). As we see it, the fact that the cited excerpt does not 
specify the circumstances in which the alleged AFA Norm w ill apply undermines China's position 
that this court decision shows the precise content of the alleged measure.  
7.436.   Furthermore, China's description of the precise content of the alleged AFA Norm entails a 
"process" whereby the USDOC draws adverse inferences from the non -cooperation of an NME -wide 
entity and selects adverse facts available in the calculation of the NME -wide anti -dumping duty 
rate. We also recall China's statement that the alleged AFA Norm does not necessarily require the 
assignment of the high est rate on the record to the NME -wide entity.866 Yet, this court decision 
does not mention the process of drawing adverse inferences and the consequent selection of 
adverse facts, but rather refers to the "long -standing practice" of assigning the highest ma rgin in 
either the original investigation or an y prior  administrative review.  
7.437.   The second court decision is the USCIT decision in Hubbel Power Systems, Inc. v. United 
States . The part of this decision that China cites reads : 
Furthermore, in NME reviews, res pondents not individually examined must 
demonstrate independence from state control in order to receive the all -other's rate 
and avoid a prohibitive PRC -wide rate .867 (emphasis added)  
7.438.   This excerpt refers to " respondents not individually examined" as the subj ects of the PRC -
wide "prohibitive" duty rate. However, the alleged AFA Norm, as described by China, applies in the 
determination of the duty rate for the NME -wide entity when the latter is found to have failed to 
cooperate. As we understand from the facts put before us and from the parties' arguments, not all 
unexamined respondents become necessarily part of the NME -wide entity868; nor are all the 
exporters within such an entity necessarily unexamined.869 
7.439.   Moreover, we note that the quoted excerpt appears in a s ection of the decision where the 
USCIT explains the different types of anti -dumping duty rates that the USDOC normally 
determines in NME proceedings. In that context, the decision refers to a n NME-wide rate as 
"prohibitive". Elsewhere in its decision, the USCIT alludes to a prohibitive rate as one that " may 
                                                
865 USCIT, Peer Bear ing Co. -Changshan v. United States, 587 F.Supp.2d 1319 ( CIT 2008), ( Exhibit  CHN-
163), p. 1327 (quoting USCAFC, Sigma Corp v. United States, 117 F.3d 1401 ( Fed. Cir. 1997), ( Exhibit  CHN-
131), p. 1411).  
866 China's second written submission, para. 350.  
867 USCIT , Hubbel Power Systems, Inc. v. United States, 884 F.Supp.2d 1283 ( CIT 2012), ( Exhibit  CHN-
148), p. 1288.  
868 In fact, whenever the USDOC limits its examination to a few respondents, it determines a rate for all 
the unexamined exporters that pass the Separat e Rate Test. This rate is calculated, according to  the USDOC's 
"usual practice" , by averag ing "the margins for the selected companies, excluding margins that are zero, de 
minimis, or based entirely on facts available" . (See, for instance, Diamond Sawblades  AR1, Final Results, 
(Exhibit  CHN-46), p. 11145).  
869 In OTR Tires AR5, for instance, the USDOC selected, as a mandatory respondent, a company that 
was found to be part of the PRC -wide entity . (OTR Tires AR5, Decision Memorandum, (Exhibit  CHN-478), 
p. 11). WT/DS471/R  
 
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  prevent importation entirely".870 Thus, the use of the adjective "prohibitive" seems to pertain to 
the level of a duty, and not to the process of drawing adverse inferences and selecting adverse 
facts, whi ch is the stated precise content of the alleged AFA Norm. Thus, the quoted excerpt from 
this court decision does not appear to describe the precise content of the alleged AFA Norm.  
7.440.   The third court decision is the USCIT decision in East Sea Seafoods LLC v. United States , 
which reads, in the relevant part, as follows : 
[The USCIT] notes that in most, if not all, cases  involving a country -wide NME 
antidumping duty rate, the country -wide margin has been calculated using adverse 
inferences .871 (emphasis added)  
7.441.   This excerpt states that in most , if not all , cases involving an NME -wide entity, the USDOC 
has calculated the duty rate using adverse inferences . It does not, however, reflect  what China 
describes as the trigger  for the application of the alleged AFA Norm (i. e. the USDOC's finding of 
non-cooperation by the NME -wide entity). As explained in paragraph ‎7.435  above, although China 
asserts that this trigger is not part of the a lleged AFA Norm, we believe it  is an important element 
as it defines  the universe of situations in which the alleged AFA Norm applies. Furthermore, the 
excerpt refers to the dumping margin for the NME -wide entity being calculated using adverse 
inferences "in most, if not all, cases involving a country -wide NME ant idumping duty rate". When 
describing the alleged AFA Norm, however , China argues that the USDOC adopts adverse 
inferences  "whenever " it makes a finding of non -cooperation with respect to the NME -wide 
entity .872 The excerpt from the USCIT decision therefore  does not correspond to China's 
description of the USDOC's use of adverse infere nces under the alleged AFA Norm.  We note 
China's argument  that the reference to "'most' cases involving determination of an NME -wide 
entity " in the USCIT decision is consistent w ith China's  description of the alleged AFA Norm  since 
this Norm does not involve the use of adverse inferences or selection of adverse facts available 
when the NME -wide entity is considered to have cooperated.873 We do not find this argument 
convincing. As m entioned above, the excerpt does not mention the trigger for the application of 
the alleged AFA Norm (i.e. the USDOC's finding of non -cooperation by the NME -wide entity) and 
we see nothing in the excerpt that would suggest that the reference to "most" case s was meant as 
a reference to all cases where the USDOC makes a finding of non -cooperation by the NME -wide 
entity. In fact, China's argument only serves to highlight the importance of the lack of a reference 
to the trigger. Therefore, we do not consider th at this USCIT decision supports the description of 
the precise content of the alleged AFA Norm presented by China.  
7.442.   On this basis, we find that none of the three USCIT decisions examined above supports 
China's arguments regarding the precise content  of the alleged AFA Norm.  
USDOC anti-dumping determinations  
7.443.   In addition to the Antidumping Manual and three USCIT decisions, China has submitted 86 
anti-dumping determinations to demonstrate the precise content of the alleged AFA Norm. Of 
these, 47 relate to inves tigations and 39 to administrative reviews. China argues that in all 47 
investigations, the USDOC made a finding that the NME -wide entity failed to cooperate. In 26 of 
the 39 administrative reviews, the USDOC made a finding of non -cooperation by the NME -wide 
entity. In the remaining 13 administrative reviews, the USDOC did not make a finding of non -
cooperation with respect to the NME -wide entity, but re -applied a rate imposed in a previous 
segment of the proceeding after finding that at least one exporter, for which a review was 
requested, had failed to pass the Separate Rate Test and was for that reason included in the NME -
wide entity during the administrative review.874 
                                                
870 USCIT, Hubbel Power Systems, Inc. v. United States, 884 F.Supp.2d 1283 ( CIT 2012), ( Exhibit 
CHN-148), p. 1289.  
871 USCIT, East Sea Seafoods LLC v. United States, 703 F.Supp.2d 1336 ( CIT 2010), ( Exhibit  CHN-134), 
p. 1354, fn 15.  
872 China's opening statement a t the second meeting of the Panel, para. 63.  
873 China's response to Panel question No. 68, para. 393.  
874 Diamond Sawblades AR1, Diamond Sawblades AR2, Diamond Sawblades AR3, Wood Flooring AR1, 
Wood Flooring AR2, Ribbons AR1, Bags AR3, Furniture AR8, Steel Na ils AR 2011 -2012, Warmwater Shrimp WT/DS471/R  
 
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  7.444.   We recall that the alleged AFA Norm is triggered by the USDOC's finding that the NME -
wide entity failed to cooperate in an anti -dumping proceeding. Thus, the 13 administrative reviews 
in which the USDOC did not make such a finding are not relevant to our inquiry into the precise 
content of the alleged AFA Norm. Accordingly, we base our examina tion on the remaining 73 
determinations (47 original investigations875 and 26 administrative reviews876). 
7.445.   In all of these 73 determinations, the USDOC recalled that section 776(b) of the Tariff Act 
of 1930  provides that, if an interested party fails to coopera te, the USDOC may use an inference 
that is adverse to the interests of that party in selecting from  among the facts otherwise 
available.877 Next, the USDOC discussed, in each of the determinations, the specific situation of the 
NME-wide entity and the reason s why it was found not to have cooperated to the best of its ability. 
After making a finding of non -cooperation by the NME -wide entity,  the USDOC explicitly stated 
that the drawing of adverse inferences was "appropriate"878, "necessary"879 or "warranted"880 in 
                                                                                                                                                  
from Vietnam AR 2009 -2010, Polyester Staple Fiber AR 2008 -2009, Cased Pencils  AR 2006-2007, and Cased 
Pencils AR 2007 -2008.  
875 Aluminum OI, Coated Paper OI, OCTG OI, Diamond Sawblades OI, Ribbons  OI, Bags OI, PET Film OI, 
Furniture OI, Grain Oriented Steel  OI, Monosodium Glutamate OI, Silica Bricks OI, Hardwood and Decorative 
Plywood  OI, Polyethylene Retail Carrier Bags from Viet Nam  OI, Kitchen Appliance Shelving and Racks  OI, 
Sodium Nitrite OI, Circular Welded Carbon Qual ity Steel Pipe  OI, Activated Carbon  OI, Lined Paper Products OI, 
Shrimp OI, OTR Tires OI, Solar OI, Wood Flooring  OI, Xanthan Gum  OI, Drawn Stainless Steel Sinks  OI, Steel 
Cylinders OI, Steel Wheels OI, Drill Pipe OI, Copper Pipe and Tube OI, Woven Electri c Blankets  OI, Citric Acids 
and Certain Citr ate Salts OI, Small Diameter Graphite Electrodes OI, Lightweight Thermal Paper OI, Sodium 
Hexametaphosphate OI, Coated Free Sheet Paper OI, Polyester Staple Fiber OI, Artist Canvas OI, Chlorinated 
Isocyanurates OI, Tissue Paper Products  OI, Hand Trucks OI, Color TV Receivers OI, Malleable Iron Pipe 
Fittings OI, Barium Carbonate OI, Lawn and Garden Steel Fence Posts OI, Silicon Metal from Russia OI, Cold-
Rolled Carbon Steel Flat Products OI, Folding Metal Tables an d Chairs  OI, and Automotive Replacement Glass 
Windshields  OI. The determinations pertaining to  these anti -dumping proceedings are listed in China's 
response to Panel question No. 116, para. 157.  
876 Aluminum AR1, Aluminum AR2, Shrimp AR7, Shrimp AR8, Furnitu re AR7, Lined Paper Products AR 
2010-2011, Lined Paper Products AR 2011 -2012, Glycine AR 2011 -2012, Polyester Staple Fiber AR 2010 -2011, 
Laminated Woven Sacks AR 2009 -2010, Honey AR 2001 -2002, Honey AR 2002 -2003, Honey AR 2004 -2005, 
Honey AR 2006 -2007, Honey AR 2007 -2008, Tapered Roller Bearings  AR 2005 -2006, Freshwater Crawfish Tail 
Meat AR 1999 -2000, Freshwater Crawfish Tail Meat AR 2000 -2001, Freshwater Crawfish Tail Meat AR 2002 -
2003, Freshwater Crawfish Tail Meat AR 2004 -2005, Petroleum Wax Candles AR 2004-2005, Cased Pencils AR 
2003-2005, Porcelain -on-Steel Cooking Ware AR 2003 -2004, Brake Rotors AR 2003 -2004, Solar AR1, and 
Ribbons AR3. The determinations pertaining to  these anti -dumping proceedings are listed in China's response 
to Panel question No.  116, para. 157.  
877 See, for instance, Grain Oriented Steel OI, Decision Memorandum, (Exhibit  CHN-404), pp. 16 -17; 
Iron Pipe Fittings OI, Notice of Preliminary Determination, (Exhibit  CHN-423), p. 33915; Barium Carbonate OI, 
Notice of Preliminary Determinat ion, (Exhibit  CHN-424), p. 12667; Lawn and Garden Steel Fence Posts OI, 
Notice of Preliminary Determination, (Exhibit  CHN-425), p. 72143; Cold-Rolled Carbon Steel Flat Products OI, 
Notice of Preliminary Determination, (Exhibit  CHN-427), p. 31237; Polyester  Staple Fiber  AR 2010 -2011, 
Preliminary Results, (Exhibit  CHN-159), p. 39993; Petroleum Wax Candles AR 2004 -2005, Preliminary Results, 
(Exhibit  CHN-440), pp. 35614 -36615; Honey AR 2001 -2002, Preliminary Results, (Exhibit  CHN-443), p. 69991; 
Honey AR 2002 -2003, Final Results, (Exhibit  CHN-389), pp. 38879 -38880; Freshwater Crawfish Tail Meat  AR 
2000-2001, Notice of Preliminary Results, (Exhibit  CHN-444), pp. 63881 -63882; Cased Pencils AR 2003 -2004, 
Preliminary Results, (Exhibit  CHN-322), p. 76761; and Brake R otors AR 2003 -2004, Final Results, 
(Exhibit  CHN-388), p. 69939.  
878 See, for instance, Solar OI, Final Determination, (Exhibit  CHN-44), p. 63794; Aluminum OI, Final 
Determination, (Exhibit  CHN-32), p. 18529; Woven Electric Blankets  OI, Final Determination, (Exhibit  CHN-
334), p. 38461; Lined Paper Products OI, Preliminary Determination, ( Exhibit  CHN-420), p. 1970 1; PET Film 
OI, Preliminary Determination, ( Exhibit  CHN-112), p. 24557; Automotive Replacement Glass Windshields OI, 
Notice of Preliminary Determinati on, (Exhibit  CHN-429), p. 48237; Folding Metal Tables and Chairs OI, Notice 
of Preliminary Determination, (Exhibit  CHN-428), p. 60189; Steel Nails AR 2008 -2009, Issues and Decision 
Memorandum, (Exhibit  CHN-431), p. 28; Honey AR 2002 -2003, Final Results, (Exhibit  CHN-389), p. 388 79; 
and Tapered Roller Bearings  AR 2005 -2006, Preliminary Results, (Exhibit  CHN-438), p. 140 79. 
879 Lined Paper Products AR 2011 -2012, Decision Memorandum, (Exhibit  CHN-432), p. 9; Freshwater 
Crawfish Tail Meat  AR 2004 -2005, Preliminar y Results, (Exhibit  CHN-439), p p. 59435 -59436; Cased Pencils  AR 
2003-2004, Preliminary Results, (Exhibit  CHN-322), p. 76761; and Honey AR 2002 -2003, Final Results, 
(Exhibit  CHN-389), p. 38879.  
880 Citric Acids and Certain Citr ate Salts OI, Final Determinatio n, (Exhibit  CHN-337), p. 16841; Sodium 
Nitrite OI, Final Determination, (Exhibit  CHN-339), p. 38985; Chlorinated Isyocianurates  OI, Notice of 
Preliminary Determination, (Exhibit  CHN-422), p. 75299; Steel Nails  AR 2008 -2009, Issues and Decision 
Memorandum, (Exhibit  CHN-431), p. 28; Glycine AR 2011 -2012, Decision Memorandum, (Exhibit  CHN-433), p. 
6; Laminated Woven Sacks  AR 2009 -2010, Final Results, (Exhibit  CHN-367), p. 21334; Freshwater Crawfish 
Tail Meat  AR 2000 -2001,  Notice of Preliminary Results,  (Exhibi t CHN-444), p. 63881; and Solar AR1, Decision 
Memorandum, (Exhibit  CHN-488), p. 18.  WT/DS471/R  
 
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  view of section 776(b) of the Tariff Act of 1930 . In several of these 73 determinations, the USDOC 
noted that the drawing of adverse inferences aimed at " ensur[ing] that the party d[id] not obtain a 
more favorable result by failing to cooperate than if it h ad cooperated fully".881 In several other 
determinations, the USDOC referred to its "practice" to ensure that the margin is "sufficiently 
adverse as to effectuate the purpose of the facts available role to induce respondents to provide 
the [USDOC] with compl ete and accurate information in a timely manner".882 
7.446.   After having determined that adverse inferences were appropriate, necessary or warranted 
with respect to the non -cooperating NME -wide entity, the USDOC proceeded to determine, in each 
of the 73 determinati ons, the rate applicable to the entity as a whole. The USDOC noted that, in 
selecting available facts as "adverse facts available" or "AFA", section 776(b) of the Tariff Act of 
1930 authorized the USDOC to rely on information derived from the petition; the  final 
determination; a previous administrative review; or other information placed on the record.883 In 
                                                
881 See, for instance, Grain Oriented Steel OI, Decision Memorandum, (Exhibit  CHN-404), p. 17; 
Xanthan Gum OI, Issues and Decision Memorandum, (Exhibit  CHN-410), p. 6; Solar OI, Final Determination, 
(Exhibit  CHN-44), pp. 63794 -63795 ; Wood Flooring OI, Final Determination, (Exhibit  CHN-49), p. 64322; Steel 
Cylinders OI, Preliminary Determination, (Exhibit  CHN-65), p. 7797 1; Aluminum OI, Final Determination, 
(Exhibit  CHN-32), p.  18529; Copper Pipe and Tube OI, Final Determination,  (Exhibit  CHN-333), p. 60729; 
Carrier Bags from Viet Nam  OI, Preliminary Determination, (Exhibit  CHN-416), p. 56818; Thermal Paper  OI, 
Preliminary Determination, (Exhibit  CHN-418), p. 27509; Iron Pipe Fi ttings OI, Notice of Preliminary 
Determination, (Exhibit  CHN-423), p. 33915; Barium Carbonate  OI, Notice of Preliminary Determination,  
(Exhibit  CHN-424), p. 12667; Lawn and Garden Steel Fence Posts  OI, Notice of Preliminary Determination, 
(Exhibit  CHN-425), p. 72143; Silicon Metal  from Russia  OI, Notice of Preliminary Determination, (Exhibit  CHN-
426), p. 59259; Cold-Rolled Carbon Steel Flat Products  OI, Notice of Preliminary Determination, (Exhibit  CHN-
427), p. 31237; Polyester Staple Fiber  AR 2010 -2011,  Preliminary Results,  (Exhibit  CHN-159), p. 39993; 
Glycine  AR 2011 -2012, Decision Memorandum, (Exhibit  CHN-433), p. 7; Honey AR 2007 -2008, Preliminary 
Results, (Exhibit  CHN-313), p. 68252; Honey AR 2002 -2003, Final Results, (Exhibit  CHN-389), p. 388 78; 
Honey AR 2001 -2002, Preliminary Results, (Exhibit  CHN-443), p. 69991; Tapered Roller Bearings AR 2005 -
2006, Preliminary Results, (Exhibit  CHN-438), p. 1408 0; Freshwater Crawfish Tail Meat AR 2004 -2005, 
Preliminary Results,  (Exhibit  CHN-439), p. 59436; Porcelain -on-Steel Cooking Ware  AR 2003 -2004, Notice of 
Preliminary Results, (Exhibit  CHN-441), p. 76029; Brake Rotors AR 2003 -2004,  Final Results,  (Exhibit 
CHN-388), p. 69939; and Solar AR1, Decision Memorandum, (Exhibit  CHN-488), p. 18.  
882 See, for instance, Steel Cylinders OI, Preliminary Determination, (Exhibit  CHN-65), p. 7797 1; 
Xhantan Gum OI, Issues and Decision Memorandum, (Exhibit  CHN-410), p. 6; Grain Oriented Steel OI, 
Decision Memorandum, (Exhibit  CHN-404), pp. 16 -17; Solar OI, Final Determination,  (Exhibi t CHN-44), p. 
63794; Wood Flooring  OI, Final Determination, (Exhibit  CHN-49), p. 64322; Aluminum OI, Final Determination, 
(Exhibit  CHN-32), p. 18529; Copper Pipe and Tube OI, Final Determination, (Exhibit  CHN-333), p. 60729; 
Carrier Bags from Viet Nam  OI, Preliminary Determination,  (Exhibit  CHN-416), p. 65818; Thermal Paper OI, 
Preliminary Determination, (Exhibit  CHN-418), p. 27509; Circular Welded Carbon Quality Steel Pipe  OI, 
Preliminary Determination, (Exhibit  CHN-314), p. 2452; Coated Free Sheet Paper OI, Preliminary 
Determination, (Exhibit  CHN-317), p. 30762; Activated Carbon  OI, Preliminary Determination, (Exhibit  CHN-
321), p. 59731; Lined Paper Products OI, Preliminary Determination,  (Exhibit  CHN-420), p. 1970 1; Diamond 
Sawblades  OI, Preliminary Deter mination, (Exhibit  CHN-135), p. 77128; Folding Metal Tables and Chairs  OI, 
Notice of Preliminary Determination, (Exhibit  CHN-428), p. 30189; Freshwater Crawfish Tail Meat AR 2004 -
2005, Preliminary Results, (Exhibit  CHN-439), p. 59436; Honey AR 2002 -2003, Final Results, (Exhibit  CHN-
389), p. 38880; Honey  AR 2007 -2008, Preliminary Results, (Exhibit  CHN-313), p. 68252; Glycine AR 2011 -
2012, Decision Memorandum, (Exhibit  CHN-433), p. 7; Honey AR 2001 -2002, Preliminary Results, 
(Exhibit  CHN-443), p. 69991; Taper ed Roller Bearings AR 2005 -2006, Preliminary Results, (Exhibit  CHN-438), 
p. 14080; Porcelain -on-Steel Cooking Ware AR 2003 -2004, Notice of Preliminary Results, (Exhibit  CHN-441), p. 
76029; and Solar AR1, Decision Memorandum, (Exhibit  CHN-488), p. 18.  
883 See, for instance, Hardwood OI, Decision Memorandum, (Exhibit  CHN-409), p. 1 9; Steel Cylinders 
OI, Preliminary Determination, (Exhibit  CHN-65), p. 77970; Drill Pipe OI, Preliminary Determination, 
(Exhibit  CHN-413), p. 51008; Kitchen Appliances Shelving and Rac ks OI, Preliminary Determination, 
(Exhibit  CHN-312), p. 9596; Drawn Stainless Steel Sinks OI, Decision Memorandum, (Exhibit  CHN-412), p. 13; 
Steel Wheels OI, Preliminary Determination, (Exhibit  CHN-309), p. 67711; Xhantan Gum OI, Issues and 
Decision Memora ndum,  (Exhibit  CHN-410), pp. 13 -14; Grain Oriented Steel OI, Decision Memorandum,  
(Exhibit  CHN-404), p. 16; Solar OI, Final Determination, (Exhibit  CHN-44), p. 63794; Aluminum OI, Final 
Determination, (Exhibit  CHN-32), p. 18529; Copper Pipe and Tube OI, Final Determination,  (Exhibit  CHN-333), 
p. 60729; Woven Electric Blankets OI, Preliminary Results, (Exhibit  CHN-334), p. 38461; Carrier Bags from 
Viet Nam  OI, Preliminary Determination, (Exhibit  CHN-416), p. 65818; Small Diameter Graphite Electrodes  OI, 
Final Determination, (Exhibit  CHN-338), p. 2053; Thermal Paper OI, Preliminary Determination, (Exhibit  CHN-
418), p. 27509; Circular Welded Carbon Quality Steel Pipe  OI, Preliminary Determination, (Exhibit  CHN-314), 
p. 2452; Coated Free Sheet Paper OI, Prelimin ary Determination, (Exhibit  CHN-317), p. 30762; Activated 
Carbon  OI, Preliminary Determination, (Exhibit  CHN-321), p. 59731; Lined Paper Products OI, Preliminary 
Determination, (Exhibit  CHN-420), pp. 19701 -19702; Diamond Sawblades  OI, Preliminary Determina tion, 
(Exhibit  CHN-135), p. 77128; Folding Metal Tables and Chairs  OI, Notice of Preliminary Determination, 
(Exhibit  CHN-428), p. 30189; Freshwater Crawfish Tail Meat AR 2004 -2005, Preliminary Results, (Exhibit  CHN-WT/DS471/R  
 
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  each of the 47 original investigations included in the pool of 73 determinations , the USDOC 
assigned to the NME -wide entity either a rate alleged in the petition884 or the highest transaction -
specific margin determined for  an individually -examined respondent in the same investigation.885 
In the USDOC's view, selecting the highest margin from any segment of the proceedings "reflects 
a common sense inference tha t the highest prior margin is the most probative evidence of current 
margins, because, if it were not so, the importer, knowing of the rule, would have produced 
current information showing the margin to be less".886 
7.447.   The United States criticizes China's relia nce on these 73 determinations in describing the 
precise content of the alleged AFA Norm on three grounds. First, the United States considers that 
the USDOC's selection of facts available in cases of non -cooperation is case -specific.887 We observe 
in this re spect that, while the nature and magnitude of the rate applied by the USDOC to the non -
cooperating NME -wide entity may vary from case to case, it appears from the review of the 73 
anti-dumping determinations discussed above that the precise content of the alleged AFA Norm 
corresponds to China's description, namely, that, upon a finding of non -cooperation for the NME -
wide entity, the USDOC systematically adopted adverse inferences and selected facts that were 
adverse to the interests of the entity and the ex porters within it. In other words, although the 
rates determined for the NME -wide entity varied in these determinations, the USDOC described the 
process that led to the determination of those rates in the same way, which paralleled China's 
description of t he alleged AFA Norm.  
7.448.   Second, the United States posits that the USDOC's selection of facts available in cases of 
non-cooperation is tempered by the requirement to corroborate the applicable rate if drawn from 
secondary information.888 We observe that, pursuan t to section 776(c) of the Tariff Act of 1930 , 
when the USDOC relies on secondary information rather than on information obtained in the 
course of an investigation or review, the USDOC must, to the extent practicable, corroborate th e 
information  selected  with the information  obtained in the course of an investigation or review.889 
The Statement of Administrative Action accompanying the Uruguay Round Agreements Act890 
stipulates that the statutory requirement to corroborate the secondary information selected aim s 
to ensure that such information has probative value. The USDOC has understood that information 
has probative value insofar as it is both reliable and relevant.891 
                                                                                                                                                  
439), p. 59436; Honey AR 2002 -2003, Final Results, (Exhibit  CHN-389), p. 38880; Glycine AR 2011 -2012, 
Decision Memorandum, (Exhibit  CHN-433), p. 7; Honey AR 2007 -2008, Preliminary Results, (Exhibit  CHN-313), 
p. 68252; Honey AR 2001 -2002, Preliminary Results, (Exhibit  CHN-443), p. 69991; Tapered R oller Bearings AR 
2005-2006, Preliminary Results, (Exhibit  CHN-438), p. 14080; Porcelain -on-Steel Cooking Ware AR 2003 -
2004, Notice of Preliminary Results, (Exhibit  CHN-441), p. 76029; and Solar AR1, Decision Memorandum, 
(Exhibit  CHN-488), p. 18.  
884 See, fo r instance, Grain Oriented Steel OI, Decision Memorandum,  (Exhibit  CHN-404), p. 17; 
Monosodium Glutamate OI, Decision Memorandum, (Exhibit  CHN-407), p. 13; Solar OI, Final Determination, 
(Exhibit  CHN-44), p. 63794; Polyester Staple Fiber OI, Preliminary De termination, (Exhibit  CHN-419), p. 
77377; Lined Paper Products OI, Preliminary Determination,  (Exhibit  CHN-420), p. 19702; Diamond Sawblades 
OI, Preliminary Determination, (Exhibit  CHN-135), p. 7712 9; and Artist Canvas OI, Preliminary Determination, 
(Exhib it CHN-421), p. 67418.  
885 See, for instance, Silica Bricks OI, Decision Memorandum, (Exhibit  CHN-408), p p. 12-13; and Wood 
Flooring OI, Final Determination,  (Exhibit  CHN-49), p. 64322.  
886 Glycine AR 2011 -2012, Decision Memorandum, (Exhibit  CHN-433), p. 7; Honey AR 2007 -2008, 
Preliminary Results, (Exhibit  CHN-313), p. 68252; Porcelain -on-Steel Cooking Ware  AR 2003 -2004, Notice of 
Preliminary Results, (Exhibit  CHN-441), p. 76029;  Tapered Roller Bearings AR 2005 -2006, Preliminary Results, 
(Exhibit  CHN-438), p. 1 4080; and Freshwater Crawfish Tail Meat  AR 2004 -2005,  Preliminary Results,  
(Exhibit  CHN-439), p. 59436.  
887 United States' first written submission, para. 412.  
888 United States' first written submission, para. 412.  
889 United States Tariff Act of 1930, Section 776(c), United States Code , Title 19, Section 1677e, 
(Exhibit  CHN-153).  
890 The Statement of Administrative Action accompanying the Uruguay Round Agreements Act 
"represents an authoritative expression by the Administration regarding the interpretation and ap plication of 
the Uruguay Round agreements, both for purposes of US international obligations and domestic law. It is the 
expectation of the Congress that future Administrations will observe and apply the interpretations and 
commitments set out in this Stat ement". (Appellate Body Report, US – Corrosion -Resistant Steel Sunset 
Review , fn 64; and Panel Reports, US – Export Restraints , para. 2.4; and US – Upland Cotton , fn 701).  
891 See, for instance, Steel Nails AR 2008 -2009, Issues and Decision Memorandum,  (Exhibit CHN-431), 
pp. 29-30; Woven Electric Blankets  OI, Preliminary Results, (Exhibit  CHN-334), p. 38461; Grain Oriented Steel 
OI, Decision Memorandum, (Exhibit  CHN-404), p. 17; Honey AR 2002 -2003, Final Results, (Exhibit  CHN-389), WT/DS471/R  
 
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  7.449.   In the determinations on the record where the USDOC found the NME -wide entity to be 
non-coope rating, the USDOC corroborated the rate selected on the basis of adverse facts available 
only when such rate was chosen from what the USDOC considered to be secondary information. In 
contrast, in certain determinations, the USDOC did not corroborate the fa cts selected because in 
its view such information did not stem from secondary sources. For example, in  the original 
investigation in Wood Flooring , the USDOC considered that because the AFA rate chosen was 
ultimately obtained in the course of that investig ation (i.e. the highest calculated transaction -
specific rate among mandatory respondents), and not from secondary information, corroboration 
of the selected AFA rate was not necessary.892 
7.450.   Importantly, the anti -dumping determinations on the record show that t he corroboration 
exercise was limited to determining whether the fact s selected from a secondary source had a 
basis on the record , and were  both reliable and relevant to the issue at hand, but was not 
concerned with whether the fact s selected were  adverse or not. Hence, regardless of 
corroboration, the facts ultimately selected gave effect to the USDOC's prior decision to draw 
adverse inferences and select facts that were adverse to the interests of the non -cooperating NME -
wide entity. We therefore consider  that corroboration is a constituent part of the selection of facts 
that are adverse to the NME -wide entity and the exporters within it, and does not remove the 
adverse character of the facts selected.  
7.451.   Third, the United States argues that China has not exp lained what it means by "sufficiently 
adverse" facts, a term the United States finds to be subjective and vague.893 For the United States, 
the USDOC selects facts available with respect to a non -cooperating party that has withheld 
certain facts and, conseque ntly, the USDOC does not know whether the information it has selected 
is indeed adverse or potentially unfavourable, since the information requested is missing.894 The 
United States further submits that facts are simply facts and that no fact is inherently a dverse or 
non-adverse.895 
7.452.   We note that in the 73 determinations on the record where the NME -wide entity was found 
to be non -cooperating, the USDOC referred to "adverse facts available", or its acronym "AFA", 
when selecting the rate for the NME -wide entity. W hen describing such adverse facts, the USDOC 
alluded to section 776(b) of the Tariff Act of 1930 , which (a) gives the USDOC the authority to 
employ adverse inferences; and (b) states that, in selecting from among the facts otherwise 
available, the USDOC ma y rely on information from the petition, any segment of the proceeding or 
any other information on the record. Instructive in this regard is the statement by the USCAFC, 
quoted by the USCIT, that "[adverse facts available]  rates must be reasonably accurate  estimates 
of respondents' rates with some built -in increase as a deterrent  for non -compliance".896 The United 
States has also explained to the Panel that, in selecting facts available, the USDOC must take into 
account the party's failure or refusal to provi de necessary information897, and does so in order to 
induce cooperation by respondents.898 
7.453.   Therefore, the USDOC use d the term "adverse facts" in its anti -dumping determinations, 
and, based on section 776(b) of the Tariff Act of 1930 , describe d what those facts  were in every 
determination. Although the USDOC may not have known whether the facts it select ed were 
actually adverse or less favourable than th e missing facts , the USDOC, after finding non -
cooperation, adopt ed "adverse inferences" and select ed, under th e term "adverse facts", those 
facts that s ought  to induce respondents to provide the USDOC with complete and accurate 
information in a timely manner. As such, we are persuaded that the USDOC ascribed a particular 
                                                                                                                                                  
p. 38880; Freshwater Crawfi sh Tail Meat  AR 2004 -2005, Preliminary Results, (Exhibit  CHN-439), p. 59436; 
Porcelain -on-Steel Cooking Ware  AR 2003 -2004,  Notice of Preliminary Results,  (Exhibit  CHN-441), p. 76029; 
Brake Rotors AR 2003 -2004, Final Results, (Exhibit  CHN-388), p. 69940; an d Petroleum Wax Candles  AR 2004 -
2005,  Preliminary Results,  (Exhibit  CHN-440), p. 46615.  
892 Wood Flooring OI, Final Determination,  (Exhibit  CHN-49), p. 64322. See also Silica Bricks OI, 
Decision Memorandum, (Exhibit  CHN-408), p p. 12-13. 
893 United States' firs t written submission, para. 412.  
894 United States' opening statement at the first meeting of the Panel, para. 60.  
895 United States' opening statement at the first meeting of the Panel, para. 6 0. 
896 USCIT, Lifestyle Enterprise, Inc. v United States, 768 F.Supp .2d 1286 ( CIT 2011), ( Exhibit  CHN-
301), p.  1298 (quoting USCAFC, De Cecco Di Filippo Fara. S. Martino v. United States, 216 F.3d 1027 ( Fed. Cir. 
2000), p.  1032).  
897 United States' response to Panel question No. 72, para. 173.  
898 United States' first written submission, paras. 415 and 419.  WT/DS471/R  
 
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  meaning to the term "adverse facts" as refe rring to those facts that would lead to a result that was 
not more favourable than that where the NME -wide entity had cooperated fully, and that operate d 
as a deterrent for non -cooperation. Accordingly, we are of the view that the meaning of "adverse 
facts", as part of the precise content of the alleged AFA Norm, is clear and substantiated by the 
practice of the USDOC.  
7.454.   Based on the foregoing, we conclude that the 73 determinations put on record by China 
suffice to demonstrate the precise content of the alle ged AFA Norm. These determinations show 
that, whenever the USDOC made a finding that an NME -wide entity failed to cooperate to the best 
of its ability, it adopted adverse inferences and, in determining the duty rate for the NME -wide 
entity, selected facts from the record that were adverse to the interests of such entity, and the 
exporters included within it.  
7.455.   In closing, we recall that in our analysis concerning the precise content of the alleged AFA 
Norm, we have examined the parts of the Antidumping Manual  and three USCIT decisions, 
identified by China, in addition to the 73 determinations made by the USDOC. We have found that 
neither the Antidumping Manual nor the court decisions support China's description of the precise 
content of the alleged AFA Norm. B y contrast, we have found that the 73 determinations made by 
the USDOC, also submitted as evidence by China, do support China' s contention regarding the 
precise content  of the alleged AFA Norm . We find that the language in these determinations is 
clear eno ugh to support China's description of the precise content of the alleged AFA Norm. We 
also consider that neither the Antidumping Manual nor the USCIT decisions contain elements that 
would undermine our conclusion that these 73 determinations show the preci se content of the AFA 
Norm as described by China.  
7.5.5.1.1.2   Attribution of the alleged AFA Norm to the United States  
7.456.   With respect to the issue of attribution, we are of the view that, since the USDOC is an 
organ of the United States Government, the acts that give ri se to the alleged AFA Norm are 
attributable to the United States. We also note that this aspect has not been contested by the 
United States.  
7.5.5.1.1.3   General and prospective application of the alleged AFA Norm  
7.457.   In addition to ascertaining the precise content and its  attribution to the United States, we 
recall that the alleged AFA Norm may only be challenged as such, and we can only proceed to 
China's claims with respect to this measure , if we find it to be of a general and prospective nature. 
In this respect, t he App ellate Body in US – Underwear agreed, in the context of Article  X:3(a) of 
the GATT 1994, with the statement of the panel in that dispute that a measure has general 
application to the extent that it "affects an unidentified number of economic operators, inc luding 
domestic and foreign producers".899 Moreover, the Appellate Body has clarified that a measure has 
prospective application if it is intended to apply in "future situations" after its issuance.900 The 
Appellate Body has also noted that, for a measure to h ave prospective character, it must provide 
"the same level of security and predictability of continuation into the future typically associated 
with rules or norms".901 
7.458.   The parties disagree on whether the alleged AFA Norm has general and prospective 
applicati on. China argues that it does  and, to this end, presents the same evidence it submitted to 
establish the precise content of the alleged AFA Norm, namely, an excerpt from the Antidumping 
Manual, excerpts from three USCIT decisions, and 86 USDOC determinatio ns demonstrating the 
"systematic and consistent" application of the Norm in anti -dumping proceedings since 2001.902 
Below, we examine these various pieces of evidence individually and make our conclusion on the 
basis of a holistic assessment thereof.  
                                                
899 Appellate Body Report, US – Underwear , p. 13, DSR 1997:I, p. 21; and Panel Report, US – 
Underwear , para. 7.65. See also Appellate Body Report, EC – Poultry , para. 113; and Panel Reports, EC – 
Poultry , para. 7.65; and EC – IT Products , para. 7.159.  
900 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para 172.  
901 Appellate Body Report, Argentina – Import Measures , para. 5.182.  
902 China's first written submission, para. 443; and second written submission, par a. 362.  WT/DS471/R  
 
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  Antidum ping Manual  
7.459.   We examine first China' s contention that  the Antidumping Manual is evidence of the 
general and prospective application of the alleged AFA Norm.903 We recall our earlier finding that 
the Antidumping Manual does not describe the precise content of the alleged AFA Norm.904 In our 
view, however, that finding does not necessarily preclude us from analysing whether the 
Antidumping Manual provides an indication of the general and prospective nature of the AFA Norm, 
whose precise content we have discerned f rom the 73 USDOC  determinations examined above.  
7.460.   In this respect, we recall that the excerpt from the Antidumping Manual on which China 
relies explains that, in an anti -dumping investigation, all NME companies other than those entitled 
to a separate rate ar e part of the NME -wide entity and receive the NME -wide rate. The excerpt 
then points out that such rate " may be based on adverse facts available if, for example, some 
exporters that are part of the NME -wide entity do not respond to the antidumping 
question naire".905 The excerpt also states that "[i]n many cases" the USDOC finds that a part of 
the NME -wide entity has not cooperated because the exporters that responded do not account for 
all imports of the subject merchandise. Finally, the excerpt states that " [o]cassionally", the NME -
wide rate may be changed in an administrative review if the USDOC is reviewing the NME -wide 
entity because one exporter within such entity is under review , or, one of the calculated margins 
for a respondent is higher than the NME -wide rate.906 
7.461.   In China's view, the auxiliary verb "may" suggests that, if the NME -wide entity is found to 
be cooperating, the USDOC "may not" base the rate on adverse facts available. In contrast, 
according to China, the Antidumping Manual gives an example of  when the rate for the NME -wide 
entity " will be based on adverse facts available", namely, when exporters within the en tity fail to 
respond to the dumping questionnaire.907 We find China's understanding of the text of the 
Antidumping Manual to be unconvincin g. By its terms, the relevant excerpt merely states that a 
single rate will be assigned to the NME -wide entity and that such rate "may"  be based on adverse 
facts available in certain situations. The use of the auxiliary verb "may" when describing the type 
of action that the document lays down (i.e. the selection of adverse facts available in NME cases) 
affords a discretionary, permissive authority to the USDOC to select adverse facts available in 
cases where, for example, some exporters within the en tity fa il to respond to the dumping 
questionnaire. In other words, the use of "may" serves, if anything, as an enabling device; it does 
not express what approach the USDOC will, or should, adopt with respect to the use of adverse 
facts available in NME proceeding s. As we see it, China's suggestion to replace "may" with "will" 
would transform the sentence from a permissive sentence into a normative one. 
7.462.   To us , the permissive language used in the Antidumping Manual recognize s the authority  
of the USDOC to base an NM E-wide rate on adverse facts available. It further provides an example 
of when such authority may (but not necessarily will) be exercised. Contrary to China's position, 
we do not read these excerpts  as supportive of China' s view  that the alleged AFA Norm w ill be 
applied generally and prospectively.  
USCIT  decisions  
7.463.   Relying on the same excerpts from the three USCIT decisions examined in our analysis of 
the precise content of the alleged AFA Norm, China asserts that the USCIT has confirmed and 
endorsed the app lication of this measure  to NME -wide entities908, which strengthens the 
expectations that the USDOC will continue to apply the alleged AFA Norm.909 The United States 
disagrees with the argument that these court decisions are pertinent to the inquiry at hand, n oting 
that such decisions were made in light of the specific circumstances surrounding those 
proceedings, and do not reflect what the USDOC will do generally in the future.910 Moreover, the 
                                                
903 China's first written submission, paras. 444 -446. 
904 See para. ‎7.433  above.  
905 Antidumping Manual, Chapter 10, ( Exhibit  CHN-23), pp. 7 -8. (footnotes omitted ; emphasis added)  
906 Antidumping Manual, Chapter 10, ( Exhibit  CHN-23), p. 8. (footnotes omitted)  
907 China's response to Panel question No. 70, para. 408.  (emphasis original)  
908 China's second written submission, para. 362.  
909 China's response to Panel question No. 125, para. 192.  
910 United States' response to Panel question No. 68, para. 160.  WT/DS471/R  
 
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  United States argues that, in terms of their content, none of these three court decisions weighs in 
favour of the general and prospective character of the alleged AFA Norm.911 
7.464.   We are not persuaded that the quoted excerpts from the three court decisions at issue 
contain language attesting to the general and prospective charac ter of the alleged AFA Norm. First, 
the excerpt from the USCIT's decision in Peer Bearing Co. -Changshan v. United States  refers to 
the USDOC's "longstanding practice" of calculating the rate for a PRC -wide entity based on "the 
highest margin calculated for  any party in the less -than-fair-value investigation or in any 
administrative review'".912 This "longstanding practice" relate s to the nature or magnitude of the 
duty and thus  differs from the precise content of the alleged AFA Norm, which consists of a 
process that leads to the drawing of adverse inferences and the selection of facts that are adverse 
to the interests of the NME -wide entity and the exporters within it.  
7.465.   Along the same lines, the excerpt from the USCIT's decision in Hubbel Power Systems, Inc. 
v. United States  speaks solely of the nature or level of the PRC -wide rate (as being 
"prohibitive"913), but is silent on the process of which the alleged AFA Norm consists. Moreover, we 
fail to see language in the excerpt to the effect that the assignment of prohibitive rates to 
exporters that do not show independence from state control has general and prospective 
application. We observe in particular that t his excerpt does not refer to any statutory, regulatory 
or administrative basis for the assignment of a prohibitive rate to unexamined respondents that do 
not show independence from government control in NME administrative reviews.  
7.466.   Similarly, the excerpt from the USCIT's decision in East Sea Seafoods LLC v. United States  
points out that "in most, if not all,  cases involving a country -wide NME antidumping duty rate, the 
country -wide margin has been calculated using adverse inferences".914 The recognition that, in 
such cases, the NME-wide margin has been calculated using adverse inferences seems to be a 
statement  regarding the basis used for the calculation of such margin up to present, but does not 
shed light on the prospective application of the same method of calculation. Thus, we are of the 
view that this excerpt does not support China's position that the alle ged AFA Norm has general 
and prospective application.  
7.467.   For the foregoing reasons, we conclude that the USCIT excerpts that China relies upon do 
not support its assertion that the alleged AFA Norm has general and prospective application. In so 
holding, we ar e aware that in our analysis of whether the Single Rate Presumption has general and 
prospective application, we relied on a number of court decisions as relevant evidence. In that 
context, both the USCIT and the USCAFC ha d delineated the precise content of  the measure and 
had considered it to be "settled"915, "established and judicially affirmed"916, "not in conflict with the 
Statute"917, "sanctioned"918, "upheld"919 or "approv[ed by the USCAFC] ".920 We found that the 
court decisions on the record reinforced the view t hat the norm, as prescribed in the Policy Bulletin 
No. 05.1 and the Antidumping Manual, had general and prospective application. However, the 
USCIT excerpts cited in the context of the alleged AFA Norm are of a different nature and they do 
not exhibit the general and prospective character of the alleged AFA Norm when viewed either 
singly or conjointly.  
                                                
911 United States' response to Panel question No. 68, paras. 161 -163. 
912 USCIT, Peer Bearing Co. -Changshan v. United States, 587 F.Supp.2d 1319 ( CIT 2008), ( Exhibit  CHN-
163), p. 1327 (quoting USCAFC, Sigma Corp v. United States, 117 F.3d 1401 ( Fed. Cir. 1997), ( Exhibit  CHN-
131), p.  1411).  
913 USCIT, Hubbel Power Systems, Inc. v. United S tates, 884 F.Supp.2d 1283 ( CIT 2012), ( Exhibit  CHN-
148), p. 1288.  
914 USCIT, East Sea Seafoods LLC v. United States, 703 F.Supp.2d 1336 ( CIT 2010), ( Exhibit  CHN-134), 
p. 1354, fn 15.  
915 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp .2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), p. 1312.  
916 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), p. 1310.  
917 USCIT, Peer Bearing Co. -Changshan v. United States, 587 F.Supp.2d 1319 ( CIT 2008) , (Exhibit  CHN-
163), p. 1325.  
918 USCIT, East Sea Seafoods LLC v. United States, 703 F.Supp.2d 1336 ( CIT 2010), ( Exhibit  CHN-134), 
p. 1354.  
919 USCIT, Jiangsu Changbao Steel Tube Co., Ltd. v. United States, 884 F.Supp.2d 1295 ( CIT 2012), 
(Exhibit  CHN-123), p. 1311.  
920 USCAFC, Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369 ( Fed. Cir. 2003), 
(Exhibit  CHN-132), p.1378.  WT/DS471/R  
 
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  USDOC anti-dumping determinations  
7.468.   Finally, with respect to the 73 determinations on the record where the USDOC found that 
the NME -wide entity had failed to c ooperate to the best of its ability, we recall our previous finding 
that such determinations show the precise content of the alleged AFA Norm put forward by China. 
Specifically, we found that in each of these cases the USDOC adopted an invariable approach to its 
treatment of non -cooperating NME -wide entities, namely, whenever it found that the NME -wide 
entity had failed to cooperate to the best of its ability, the USDOC determined that the drawing of 
adverse inferences was appropriate, necessary or warrante d. It then selected adverse facts from 
the body of information available on the record. Such information was, pursuant to section 776(b) 
of the Tariff Act of 1930 , obtained from the petition, a previous administrative review or any other 
information placed  on the record  and corroborated if emanating from secondary sources . 
7.469.   Several of the 73 determinations refer to the USDOC's "practice" o f select ing a rate for the 
non-cooperating NME -wide entity that is "sufficiently adverse" to ensure that it does not obta in a 
result more favourable than if it had fully cooperated.921 The USDOC also described the selection of 
the highest margin alleged in the petition or the highest rate calculated in any of the proceedings 
as a "practice"922, "standard practice"923, or "normal p ractice"924, which according to several of 
these determinations, "ha[s] consistently [been] upheld" by the USCIT and the USCAFC.925 
                                                
921 Grain Oriented Steel OI, Decision Memorandum, (Exhibit  CHN-404), p. 17; Monosodium Glutamate 
OI, Decision Memorandum, (Exhibit  CHN-407), p. 13; Silica Bricks OI, Decision Memorandum, (Exhibit  CHN-
408), p. 12; Hardwood OI, Decision Memorandum, (Exhibit  CHN-409), p. 17; Xanthan Gum OI, Issues and 
Decision Memorandum, (Exhibit  CHN-410), p. 6; Drawn Stainless Steel Sinks OI, Decision Memora ndum,  
(Exhibit  CHN-412), p. 13; Solar OI, Final Determination, (Exhibit  CHN-44), p. 63794; Steel Cylinders OI, 
Preliminary Determination, (Exhibit  CHN-65), p. 77970; Steel Wheels OI, Preliminary Determination, 
(Exhibit  CHN-309), p. 67711; Wood Flooring OI, Final Determination, (Exhibit  CHN-49), p. 64322; Lined Paper 
Products OI, Preliminary Determination, (Exhibit  CHN-420), p. 19702; Activated Carbon OI, Preliminary 
Determination, (Exhibit  CHN-321), p. 59731; Polyester Staple Fiber OI, Preliminary Determina tion, 
(Exhibit  CHN-419), p. 77377; Aluminum OI, Final Determination, (Exhibit  CHN-32), p. 18529; Drill Pipe OI, 
Notice of Preliminary Determination, (Exhibit  CHN-413), p. 51008; Copper Pipe and Tube OI, Final 
Determination, (Exhibit  CHN-333), p. 60729;  Carrier Bags from Viet Nam , Preliminary Determination, 
(Exhibit  CHN-416), p. 56818; Folding Metal Tables and Chairs OI, Notice of Preliminary Determination, 
(Exhibit  CHN-428), p. 60189; Kitchen Appliances Shelving and Racks OI, Preliminary Determination, 
(Exhibit CHN-312), p. 9596; Graphite Electrodes  OI, Final Determination, (Exhibit  CHN-338), p. 2053; 
Diamond Sawblades OI, Preliminary Determination, (Exhibit  CHN-135), p. 77128; Thermal Paper OI, 
Preliminary Determination, (Exhibit  CHN-418), p. 27509; Circula r Welded Carbon Quality Steel Pipe  OI, 
Preliminary Determination, (Exhibit  CHN-314), p. 452; Sodium Hexametaphosphate OI, Preliminary 
Determination, (Exhibit  CHN-318), p. 52548; Coated Free Sheet Paper  OI, Preliminary Determination, 
(Exhibit  CHN-317), p. 3 0762; Glycine AR 2011 -2012, Decision Memorandum, (Exhibit  CHN-433), p. 7; Lined 
Paper Products AR 2010 -2011, Final Results, (Exhibit  CHN-128), p. 61393; Honey AR 2007 -2008, Preliminary 
Results, (Exhibit  CHN-313), p. 68252; Honey AR 2001 -2002, Preliminary R esults, (Exhibit  CHN-443), p. 
69991; Honey AR 2002 -2003, Final Results, (Exhibit  CHN-389), p. 38880; Freshwater Crawfish Tail Meat AR 
2004-2005,  Preliminary Results, (Exhibit  CHN-439), pp. 59435 -59436; Porcelain -on-Steel Cooking Ware  AR 
2003-2004, Notice o f Preliminary Results, (Exhibit  CHN-441), p. 76029; Solar AR1, Decision Memorandum, 
(Exhibit  CHN-488), p. 18; and Polyester Staple Fiber  AR 2010 -2011,  Preliminary Results,  (Exhibit  CHN-159), p. 
39993.  
922 Polyester AR 2010 -2011, Preliminary Results, ( Exhibit  CHN-159), p. 39993; Honey AR 2007 -2008, 
Preliminary Results, ( Exhibit  CHN-313), p. 68 252; Honey AR 2006 -2007, Preliminary Results, ( Exhibit  CHN-
316), p. 66224; Honey AR 2001 -2002, Preliminary Results, ( Exhibit  CHN-443), p. 69991; Tapered Roller 
Bearings AR 2005 -2006, Preliminary Results, ( Exhibit  CHN-438), p. 14080; Case Pencils  AR 2003 -2004, 
Preliminary Results, ( Exhibit  CHN-322), p. 76761; Porcelain -on-Steel Cooking Ware AR 2003 -2004, Notice of 
Preliminary Results, ( Exhibit  CHN-441), p. 76029; and Solar AR1, Decision Memorandum, ( Exhibit  CHN-488), 
p. 18.  
923 Shrimp OI, Notice of Preliminary Determination, ( Exhibit  CHN-119), p. 42662; Tissue Paper Products 
OI, Notice of Preliminary Determinations, ( Exhibit  CHN-324), p. 56413; and Color TV Receivers OI, Notic e of 
Final Determination, ( Exhibit  CHN-323), p. 20596.  
924 Glycine AR 2011 -2012, Decision Memorandum, (Exhibit  CHN-433), p. 6; Freshwater Crawfish Tail 
Meat AR 2004 -2005, Preliminary Results, (Exhibit  CHN-439), p. 59436; Aluminum AR2, Decision Memorandum, 
(Exhibit  CHN-205), p. 17; Shrimp AR7, Decision Memorandum, ( Exhibit  CHN-167), p. 8; Shrimp AR8, Decision 
Memorandum, ( Exhibit  CHN-120), p. 7; and Furniture AR7, Decision Memora ndum, (Exhibit  CHN-298), p. 15.  
925 Glycine AR 2011 -2012, Decision Memorandum, (Exhibit CHN-433), p. 7; Tapered Roller Bearings AR 
2005-2006, Preliminary Results, (Exhibit  CHN-438), pp. 14080 -14081; Freshwater Crawfish Tail Meat AR 2004 -
2005, Preliminary Results, ( Exhibit  CHN-439), pp. 59435 -59436; and Porcelain -on-Steel Cooking Ware AR 
2003-2004, Notice of Preliminary Results, ( Exhibit  CHN-441), p. 76029. See also Grain Oriented Steel OI, 
Decision Memorandum, ( Exhibit  CHN-404), p. 17; Aluminum AR2, Decision Memorandum, ( Exhibit  CHN-205), WT/DS471/R  
 
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  7.470.   Given that the Antidumping Manual and the USCIT decisions referred to by China do not 
support China's assertion that the alleged  AFA Norm has general and prospective application926, 
the question is whether the 73 anti -dumping determinations where the USDOC made a finding of 
non-cooperation by the NME -wide entity provide sufficient evidence that the alleged AFA Norm has 
general and pr ospective application. In this regard, China puts forth three reasons for its assertion 
that they do , namely, (a) the USDOC's anti -dumping determinations are evidence of "invariable 
application" of the alleged AFA Norm over a long period of time927; (b) the USDOC refers to its own 
past practice as a justification and motivation for the decision made in particular cases928; and (c) 
the fact that the USDOC refers to its "practice" further confirms that the 73 determinations on the 
record show considerably more th an a string of cases or repeat action.929 
7.471.   As an initial matter, we note that none of the 73 determinations on the record lays down in 
general terms the full content of the alleged AFA Norm as described by China.930 Rather, it is 
through the assessment of the U SDOC's conduct in every determination that we have been able to 
ascertain the different elements of the alleged AFA Norm. E ach of the 73 determinations shows 
that the USDOC followed the same course of action, namely, that upon finding non -cooperation by 
the NME -wide entity, the USDOC dr ew adverse inferences and, in so doing, selected facts that 
were adverse to the interests of such entity and the exporters within it.  
7.472.   We agree with China that the USDOC's treatment of a non -cooperating NME -wide entity in 
the 73 determinations reflects more than mere repetition of conduct. The sample includes 
determinations covering a peri od of over 12 years, with the most recent determination dating from 
7 July 2015  (the first administrative review in Solar).931 In adopting the same course of action 
when determining the rate appli cable to a non -cooperati ng NME -wide entity, the USDOC refer red 
in several such determinations to its practice of " select[ing] a rate that is sufficiently adverse to 
ensure that the uncooperative party do es not obtain a more favorable result by failing to cooperate 
than if it had fully cooperated" .932 We also find it  significant that there is no evidence of 
determinations made  during that period in which the USDOC did not  follow the process of which 
the alle ged AFA Norm consists, namely, that upon finding that an NME-wide entity had failed to 
cooperate to the best of its ability , the USDOC drew adverse inferences and  select ed adverse 
                                                                                                                                                  
p. 18; Shrimp AR7, Decision Memorandum, ( Exhibit  CHN-167), p. 8; Shrimp AR8, Decision Memorandum, 
(Exhibit  CHN-120), p. 7; and Furniture AR7, Decision Memorandum, ( Exhibit  CHN-298), p. 15. In so stating, 
the USDOC has referred to a number of decisions by the USCIT and the USCAFC. However,  these decisions 
have not been submitted as evidence in this dispute.  
926 We note China's argument that the Antidumping Manual and the USCIT decisions "reinforce the 
normative character ascribed by USDOC to its conduct in the determinations at hand, and have together set 
expectations amongst producers and exporters from NME countries that past is indeed prologue". (China's 
response to Panel question No. 117(a), para. 159). In this respect, we have pointed out that the Antidumping 
Manual does not describe the precise content of  the alleged AFA Norm and that the passages on which China 
relies are couched in permissive, discretionary language. Along similar lines, the excerpts of the USCIT 
decisions fail to describe the alleged AFA Norm and are limited to noting the USDOC practice  without passing 
judgement on the soundness of such practice under United States law. Accordingly, the Antidumping Manual 
and the court decisions do not lend probative force to China's position that the conduct emanating from the 
practice of the USDOC has general and prospective application.  
927 China's response to Panel question No. 117(a), paras. 160 -164. 
928 China's response to Panel question No. 117(a), paras. 165 -171. 
929 China's response to Panel question No. 117(a), paras. 172 -173. 
930 This stands in contras t to the manner in which the USDOC lays down the Single Rate Presumption, in 
general terms, before applying it to the particular fact pattern of each case. Specifically, when assessing 
whether NME exporters are entitled to a separate rate, the USDOC begins  by noting that "[i]n proceedings 
involving NME countries, [the USDOC] begins with a rebuttable presumption that all companies within the NME 
country are subject to government control and, thus, should be assigned a dumping duty [deposit] rate"; and 
that " [i]t is the [USDOC's] policy to assign all exporters of merchandise subject to investigation in an NME 
country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be 
entitled to a separate rate". (S ee China's fi rst written submission, Annex  2: Table SRP, pp. 46 -70). 
931 Solar AR1, Decision Memorandum, (Exhibit CHN -487), pp. 15 -17. 
932 Monosodium Glutamate OI, Decision Memorandum, (Exhibit  CHN-407), p. 13; Silica Bricks and 
Shapes OI, Decision Memorandum, (Exhibit  CHN-408), p. 12; Hardwood and Decorative Plywood OI, Decision 
Memorandum, (Exhibit  CHN-409), p. 19; Drawn Stainless Steel Sinks OI, Decision Memorandum, (Exhibit  CHN-
412), p. 13; Certain Steel Wheels OI, Notice of Preliminary Determination, (Exhibit  CHN-309),  p. 67711; Drill 
Pipe OI, Preliminary Determination, (Exhibit  CHN-413), pp. 51008; Certain Kitchen Appliance Shelving and 
Racks OI, Preliminary Determination, (Exhibit  CHN-312), p. 9596; and Sodium Hexametaphosphate OI, 
Preliminary Determination, (Exhibit  CHN-318), p. 52548  WT/DS471/R  
 
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  facts.933 Finally, in our view, the fact that the USDOC refer red to its practi ce in every 
determination  indicates that the conduct reflect ed a standard approach  whenever USDOC found  
that an NME -wide entity failed to cooperate to the best of its ability. The issue , therefore,  is 
whether th is suffic es to establish that the alleged AFA  Norm has general and prospective 
application.  
7.473.   In addressing this issue, we find the Appellate Body's findings in Argentina – Import 
Measures instructive. To recall, the panel in that dispute found the so -called "TRRs measure" to be 
an unwritten measure co nsisting of several elements, including systematic and continued 
application.934 Based on that characterization, the panel found that the measure was inconsistent 
with Articles  XI:1 and III:4 of the GATT 1994. The panel proceeded to address one of the 
compla inants' alternative arguments, i.e. that the measure also constituted a rule or norm of 
general and prospective application. In agreeing with this proposition, the panel relied on the same 
evidence and arguments used in its analysis of the existence of a m easure with several constituent 
elements, including systematic and continued application.935 
7.474.   The Appellate Body declined  to endorse the panel's finding that the measure constituted a 
rule or norm of general and prospective application.936 In particular, the Ap pellate Body criticis ed 
the fact that the panel had based its finding that the TRRs measure had prospective application on 
"no more than that the TRRs measure will continue to be applied in the future".937 Importantly, the 
Appellate Body stated that "nothing  in the [p]anel's reasoning indicates that it considered the TRRs 
measure to have the same level of security and predictability of continuation into the future 
typically associated with rules or norms".938 As we see it, the reasoning of the Appellate Body 
stands for the proposition that not every norm that may continue to be applied in the future 
amounts, for that reason alone, to a measure of prospective nature. Rather, the future application 
of a measure must achieve a certain degree of security and predict ability typically associated with 
rules or norms.  
7.475.   Applying this guidance to the facts in this dispute, we are not persuaded that the practice 
reflected in the 73 anti -dumping determinations on the record is sufficient to demonstrate that the 
alleged AFA No rm has general and prospective application. What we discern from the 73 relevant 
determinations on the record is a practice that the USDOC has followed in every such 
determination.939 This practice constitutes evidence that the USDOC has invariably engaged i n the 
same conduct ; it may even constitute evidence that the USDOC is likely to engage in that same 
conduct in the future. In our view, however, this does not suffice to show that the alleged AFA 
Norm has prospective application because it does not demonst rate that the USDOC will continue to 
follow the same course of action in the future.940 The USDOC's practice emanating from the se 73 
                                                
933 In response to Panel question No. 69, the United States provided two examples where a party failed 
to cooperate and the USDOC did not apply an adverse inference. Such cases, however, concerned a 
countervailing duty investigation and a countervailing duty administrative review involving products originating 
in Italy and Iran. (United States' response to Panel question No. 69, paras. 166 -167 (referring to Final 
Affirmative Countervailing Duty Determination: Stainless Steel Bar from Italy , Issues and Decision 
Memorandum , (Exhibit  USA-54), and Final Results of Countervailing duty Administrative Review; Certain In -
Shell Pistachios from the Islamic Republic of Iran , (Exhibit  USA-55))). These cases did not involve an NME -wide 
entity and therefo re are not relevant to our assessment.  When asked for examples of anti-dumping  
investigations or administrative reviews involving  NME countries  where the USDOC made a finding of non -
cooperation by the NME-wide entity  and yet did not use  an adverse inferenc e, during the second substantive 
meeting of the Panel with the parties, the United States did not provide any such examples.  
934 Appellate Body Report, Argentina – Import Measures , para. 5.152.  
935 Appellate Body Report, Argentina – Import Measures , para. 5.15 3. 
936 The Appellate Body stated that it "did not wish to be seen as endorsing the Panel's additional 
findings" regarding the  general and prospective application of the  TRRs measure . (Appellate Body Report, 
Argentina – Import Measures , para. 5.181. ) 
937 Appell ate Body Report, Argentina – Import Measures , para. 5.182.  
938 Appellate Body Report, Argentina – Import Measures , para. 5.182.  
939 China agrees that the USDOC statements in the anti -dumping determinations on the record 
demonstrate that the  USDOC has developed  a "practice" with respect to the use of adverse inferences to select 
adverse facts available in individual cases . (China's comments on the United States' response to Panel question 
No. 117(b) , para. 91 ). 
940 We note that the record shows that, in some cases , the USDOC referred to  a certain "practice" , while 
later in the same case it departed from it in light of the attendant circumstances.  For instance, in at least one 
determination  on the record , the USDOC recalled its " practice to select, as AFA, the highe r of the (a) Highest 
margin alleged in the petition, or (b) the highest calculated rate of any respondent in the investigation", and 
referred in a footnote, as support, to a previous anti -dumping determination . (Wood Flooring OI, Preliminary WT/DS471/R  
 
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  determinations  does not  provide  "the [] level of security and predictability of continuation into the 
future typically associ ated with rules or norms."941 
7.476.   China further argues that the "invariable application" of the alleged AFA Norm and the 
reference to previous determinations provides "administrative guidance" and "sets expectations" 
among interested parties.942 We do not exclude that the invariable application of the alleged AFA 
Norm over several years might create the expectation that, in a case where an NME -wide entity is 
found to be non -cooperating, the USDOC may, again, draw adverse inferences and select facts 
that are adverse  to the interests of the entity and the exporters within it. We also do not disagree 
that prior practice may provide the USDOC with administrative guidance for future action. 
However , the fact that  economic operators could reasonably expect the occurrence of certain 
conduct, or that the USDOC may find guidance in previous determinations, is insufficient to 
ascertain with the necessary level of security and predictability the prospective application of the 
alleged AFA Norm.943 The relevant inquiry here is whet her the evidence on the record 
demonstrates  the level of security and predictability described by the Appellate Body that the 
alleged AFA Norm will be applied generally and prospectively  at the level " typically associated with 
rules or norms ".944 As noted ab ove, we are unable to identify in the 73 determinations any 
elements that attest to the requisite level of security and predictability. In our opinion, finding that 
the USDOC's practice at issue has general and prospective application would amount to 
specu lation –albeit well -grounded – about the prospective application of the alleged AFA Norm ; 
certainty thereof, however,  is not supported by record evidence. Accordingly, we consider that the 
evidence on the record does not support China's assertion that the a lleged AFA Norm has 
prospective application. In the light of this finding, we do not consider it necessary to assess 
whether the alleged AFA Norm has general application.  
Conclusion on the general and prospective application of the alleged AFA Norm  
7.477.   Our ana lysis above shows that t he conduct that flows from the alleged AFA Norm has not 
been recognized explicitly, implicitly or by reference as a norm in administrative documents or 
actions of general and prospective nature.945 Nor have the USCIT decisions on the record 
enunciated, let alone endorsed, the alleged AFA Norm in the manner China has described it, 
namely, "whenever [the] USDOC considers that an NME -wide entity has failed to cooperate to the 
best of its ability, it systematically makes an adverse inferen ce and selects, to determine the rate 
for the NME -wide entity, facts that are adverse  to the interests of that fictional entity and each of 
the producers/exporters included within it".946 Similarly, the 73 determinations presented by China 
do not show that t he alleged AFA Norm has prospective application. Although unwritten measures 
that derive exclusively from administrative action could potentially rise to the level of a norm of 
general and prospective application, we are of the view that the underlying adm inistrative action 
must exhibit the general and prospective application of such a norm. China has not demonstrated 
that the alleged AFA Norm exhibits such characteristics.  
                                                                                                                                                  
Determination,  (Exhibit  CHN-158), p. 30662) . On the basis of this practice, it identified the rates in the petition 
of 194.49 and 280.60 % as higher than any of the calculated rates assigned to individually -examined 
companies. Critically, the USDOC stated that, in light of the facts before it, its "practice would be to assign the 
rate of 280.60 percent to the PRC -wide entity", but that, upon corroborating it, the rate ultimately chosen was 
a lower rate of 82.56 %. (Ibid.). In other words, even if the USDOC recalled its pra ctice of imposing the highest  
rate, it moved away from it by assigning a lower rate. While China does not argue that the alleged AFA Norm 
necessarily imposes the highest rate possible, this example shows that it is not uncommon that the USDOC 
adopt a cours e of action that is different from its stated practice.  
941 Appellate Body Report, Argentina – Import Measures , para.  5.182.  
942 China's response to Panel question No. 117(a), paras. 160 -171. 
943 We observe, in this respect, that the Appellate Body in US – Oil Country Tubular Goods Sunset 
Reviews  considered that whether an alleged measure creates expectations and provides administrative 
guidance may be relevant to determining whether such measure has normative value. Next, the Appellate 
Body reasoned,  in the same  paragraph, that the measure at issue in that dispute had general application to the 
extent that  it was intended to "apply to all the sunset reviews conducted in the United States"; and prospective 
application insofar as  it was intended to "apply to sunset  reviews taking place after its issuance" . (Appellate 
Body Report, US – Oil Country Tubular Goods Sunset Reviews , para. 187).  
944 Appellate Body Report, Argentina – Import Measures , para. 5.182. See also Appellate Body Report, 
US – Zeroing (EC) , para.  198. 
945 We recall in this respect that, by contrast, our finding that the Single Rate Presumption is a norm of 
general and prospective application is grounded on, inter alia , the description found in general documents such 
as the Policy Bulletin No. 05.1 and the Antidumping Manual.  
946 China's opening statement at the second meeting of the Panel, para. 6 3. (emphasis original)  WT/DS471/R  
 
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  7.478.   In so concluding, we are mindful of the statement by the Appellate Body that the not ion of 
a "rule or norm of general and prospective application" does not exhaust the universe of potential 
unwritten measures challengeable in WTO dispute settlement947, and that "ongoing conduct"948, 
"concerted action or practice"949, "non -binding administrative  guidance"950, or a measure that "is 
applied systematically and will continue to be applied in the future"951 can also be challenged as 
unwritten measures. At the same time, we also take note of the Appellate Body's statement  that 
"the constituent elements tha t must be substantiated with evidence and arguments in order to 
prove the existence of a measure challenged will be informed by how such measure is described or 
characterized by the complainant".952 In this dispute, China has characterized the alleged AFA 
norm as a norm of general and prospective application953, and is therefore called upon to meet a 
"high threshold" in order to satisfy the legal standard set out in US – Zeroing (EC) .954 However, for 
the reasons explained above, we believe that the evidence on th e record falls short of meeting that 
standard.  
7.5.5.1.1.4   Overall  conclusion  
7.479.   In the light of the foregoing, we find that China has not demonstrated that the alleged AFA 
Norm constitutes a norm of general and prospective application. There is therefore no need to 
exam ine whether it falls within our terms of reference or whether it is as such inconsistent with 
Article  6.8 and paragraph  7 of Annex  II to the Anti -Dumping Agreement.955 
7.5.5.2   China's as applied claims under  Articles  6.1 and 6.8, paragraphs 1 and 7 of 
Annex  II, and the first sentence of Article  9.4 of the Anti -Dumping Agreement  
concerning 30 determinations  
7.480.   At the outset, we recall that the 30 determinations, challenged by China under its as 
applied claims under Articles  6.1 and 6.8, paragraphs 1 and 7 of Annex  II, an d the first sentence 
of Article  9.4 of the Anti -Dumping Agreement, have been found inconsistent with Articles  6.10 and 
9.2 of the Anti -Dumping Agreement.956 We recall that in our findings with respect to the USDOC's 
                                                
947 Appellate Body Report, Argentina  – Import Measures , para. 5.107.  
948 Appellate Body Report, US – Continued Zeroing , para. 181.  
949 Appellate Bod y Report, EC and certain member States – Large Civil Aircraft , para. 794.  
950 Appellate Body Report s, Guatemala – Cement I , fn 47 to para. 69; and US – Corrosion Resistant 
Steel Sunset Review , para. 85 . 
951 Appellate Body Report, Argentina – Import Measures , para. 5.139.  
952 Appellate Body Report, Argentina – Import Measures , para. 5.108.  
953 WT/DS471/5, para. 22 . See also China's first written submission, para. 492. China has confirmed 
that it relies upon the USDOC's practice as evidence of the existence of a norm  of general and prospective 
application and not as a specific measure at issue in itself . (China's comments on the United States' response 
to Panel questions Nos. 117(c) and (d) , para. 104) . 
954 Appellate Body Report, US – Zeroing (EC) , para. 198.  
955 Neverthe less, we note that the precise content of the alleged AFA Norm is premised on the existence 
of a non -cooperating NME-wide entity  (see paragraph  ‎7.454  above). We also observe that the evidence that 
China has put forth to substantiate the existence of the alleged AFA Norm as a norm of general and 
prospective application refers to NME -wide entities as formed through the application of the Single Ra te 
Presumption, a measure which we have found to be inconsistent, as such, with Articles  6.10 and 9.2 of the 
Anti-Dumping Agreement . Although we are aware of this interlinkage between the Single Rate Presumption 
and China's description of the alleged AFA N orm, we have found it more appropriate to evaluate China's claim 
regarding the existence of the alleged AFA Norm before considering whether it would be necessary or useful to 
address China's as such claims with respect to that Norm.  
956 See paras. ‎7.382  and ‎7.388  above.  The 38 determinations, which were found to be inconsistent with 
Articles  6.10 and 9.2 of the Anti -Dumping Agreement due to the USDOC's application of the Single Rate 
Presumption in th ese determinations, consist of: Aluminum OI, Aluminum  AR1, Aluminum  AR2, Coated Paper  
OI, Shrimp  OI, Shrimp  AR7, Shrimp  AR8, Shrimp AR9, OTR Tires  OI, OTR Tires AR3, OTR Tires  AR5, OCTG  OI, 
OCTG AR1, Solar OI, Solar AR1, Diamond Sawblades  OI, Diamond Sawbl ades AR1, Diamond Sawblades  AR2, 
Diamond Sawblades  AR3, Diamond Sawblades AR4, Steel Cylinders  OI, Wood Flooring  OI, Wood Flooring  AR1, 
Wood Flooring  AR2, Ribbons  OI, Ribbons  AR1, Ribbons  AR3, Bags OI, Bags AR3, Bags AR4, PET Film  OI, PET 
Film AR3, PET Fil m AR4, PET Film AR5, Furniture OI, Furniture  AR7, Furniture  AR8, and Furniture AR9. These 
38 determinations thus include the 30 determinations challenged by China under Articles  6.1 and 6.8, 
paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 of the Anti -Dumping Agreement, namely 
Aluminum  OI, Aluminum  AR1, Aluminum  AR2, Coated Paper  OI, Shrimp  OI, Shrimp  AR7, Shrimp AR8, OTR 
Tires OI, OTR Tires  AR5, OCTG  OI, Solar OI, Solar AR1, Diamond Sawblades  OI, Diamond Sawblades  AR1, 
Diamond Sawblade s AR2, Diamond Sawblades  AR3, Diamond Sawblades  AR4, Steel Cylinders  OI, Wood 
Flooring  OI, Wood Flooring  AR1, Wood Flooring  AR2, Ribbons OI, Ribbons  AR1, Ribbons  AR3, Bags OI, Bags 
AR3, PET Film  OI, Furniture OI, Furniture AR7, and Furniture  AR8. WT/DS471/R  
 
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  application of the Single Rate Presumption , these 30 challenged determinations were found to be 
WTO inconsistent since the USDOC did not establish the existence of a PRC -wide entity in a WTO -
consistent manner, and the USDOC was therefore not permitted to assign a single PRC -wide rate 
to the multip le exporters comprising this entity.957 Furthermore, we recall that China's as applied 
claims under Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of 
Article  9.4 of the Anti -Dumping Agreement take issue with the manner in which the USDOC 
determined a single anti -dumping duty rate for the PRC -wide entity and the level of these PRC -
wide rates in the 30 challenged determinations.958 The relevant issue under China's as applied 
claims therefore is whether the USDOC acted in accordance w ith the Anti -Dumping Agreement 
when it determined a single PRC -wide rate for the multiple exporters, with regard to which we 
have already found that the USDOC was not permitted to assign a single PRC -wide rate.  
7.481.   Bearing this in mind, we recall that the func tion of panels is defined in Article  11 of the 
DSU, which reads as follows:  
The function of panels is to assist the DSB in discharging its responsibilities under this 
Understanding and the covered agreements. Accordingly, a panel should make an 
objective a ssessment of the matter before it, including an objective assessment of the 
facts of the case and the applicability of and conformity with the relevant covered 
agreements, and make such other findings as will assist the DSB in making the 
recommendations or  in giving the rulings provided for in the covered agreements.  
7.482.   Furthermore, Article  3.7 of the DSU states that "[t]he aim of the dispute settlement 
mechanism is to secure a positive solution to a dispute." In accordance with this objective, the 
Appellate B ody has clarified that:  
[T]he principle of judicial economy "allows a panel to refrain from making multiple 
findings that the same measure is inconsistent with various provisions when a single, 
or a certain number of findings of inconsistency, would suffic e to resolve the dispute." 
Thus, panels need address only those claims "which must be addressed in order to 
resolve the matter in issue in the dispute", and panels "may refrain from ruling on 
every claim as long as it does not lead to a 'partial resolution  of the matter'."959 
(emphasis original)  
7.483.   In our view, our findings that the USDOC did not establish the existence of the PRC -wide 
entity in a WTO -consistent manner in the 30 challenged determinations and that the USDOC was 
therefore not permitted to assign a  single PRC -wide rate to the multiple exporters comprising this 
entity are intrinsically linked to the question of whether the USDOC determined these PRC -wide 
rates in a WTO -consistent manner and at a WTO -consistent level. More specifically, we do not 
consider that an anti -dumping duty rate is determined or assigned in the abstract. Rather, it is 
determined for or assigned to a specific exporter or an entity consisting  of multiple exporters. The 
issue of whether an anti -dumping duty rate is determined in a WTO-consistent manner therefore 
cannot be assessed in disjunction from the exporter or entity for which it is determined. The 
relevant question is whether, having found that the USDOC was not permitted to assign a single 
PRC-wide rate to the multiple expor ters comprising the PRC -wide entity in the 30 challenged 
determinations, it is necessary for us to consider whether the USDOC determined these PRC -wide 
rates in a WTO -consistent manner and at a WTO -consistent level.  
7.484.   In this regard, we note the as applied n ature of China's claims. The issue is therefore not a 
general one of the conduct required, under Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, 
and the first sentence of Article  9.4 of the Anti -Dumping Agreement, of investigating authorities 
when de termining a single anti -dumping duty rate for any entity consisting  of multiple exporters. 
Rather, the issue is whether the conduct of the USDOC, when assigning the single PRC -wide rate 
to the multiple exporters comprising the PRC -wide entity in the 30 cha llenged determinations, was 
in accordance with these provisions. We note that the Appellate Body has cautioned that:  
                                                
957 See par a. ‎7.382  above.  
958 China's response to Panel question No. 128(a), paras. 215 -216. 
959 Appellate Body Report, Argentina – Import Measures , para. 5.190 (quoting Appellate Body Reports, 
Canada – Wheat Exports and Grain Imports , para. 133; US – Wool Shirts and Blo uses, p. 19, DSR 1997:I, 323, 
at p. 340 ; US – Tuna II (Mexico) , paras. 403 -404; and US – Upland Cotton , para. 732).  WT/DS471/R  
 
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  Given the explicit aim of dispute settlement that permeates the DSU, we do not 
consider that Article  3.2 of the DSU is meant to encourage e ither panels or the 
Appellate Body to "make law" by clarifying existing provisions of the WTO Agreement  
outside the context of resolving a particular dispute.960 (emphasis original)  
7.485.   We agree with this statement and note that the context of this dispute is th e acts of the 
USDOC as they apply to the specific situations involved in the 30 challenged determinations. In 
fact, we do not consider that questions such as how to notify an entity consisting  of multiple 
exporters of required information under Article  6.1; when recourse to facts available is permitted 
with respect to such an entity and how to select among the available facts under Article  6.8 and 
paragraphs  1 and 7 of Annex  II; and whether such an entity can be considered as having been 
individually examin ed under Article  9.4, are questions that can be answered in the abstract. In our 
view, the conduct required, under these provisions, by an investigating authority when 
determining a single anti -dumping duty rate for an entity consisting  of multiple exporte rs will 
depend on the factual circumstances of each case, including the nature and significance of the 
relationship established between the multiple exporters comprising the entity. At any rate, our 
findings under Articles  6.10 and 9.2 of the Anti -Dumping Agreement make clear that, in the 30 
challenged determinations, the USDOC did not establish the existence of a PRC -wide entity 
consisting  of multiple exporters in a WTO -consistent manner and therefore was not permitted to 
assign a single PRC -wide rate to t he multiple exporters comprising this entity.961 
7.486.   In light of our findings that the USDOC did not establish the existence of a PRC -wide entity 
consisting of multiple exporters in the 30 challenged determinations in a WTO -consistent manner 
and therefore was no t permitted to assign a single PRC -wide rate to the multiple exporters 
comprising this entity, as well as the nature and object of China's claims, we do not see how 
additional findings regarding the level of and the manner in which the USDOC determined thi s 
single PRC -wide rate in the same 30 determinations would be necessary or useful for the positive 
resolution of the dispute.  
7.487.   We note, however, that China has argued that it is necessary and essential for the Panel to 
rule on all of China's claims under Articles 6.1 and 6.8, paragraphs  1 and 7 of Annex  II, and the 
first sentence of Article  9.4 of the Anti -Dumping Agreement in order to secure a positive resolution 
of the dispute and avoid a partial resolution, contrary to Article  11 of the DSU.962 We agree wit h 
China that, should the Panel fail to make findings that are necessary to resolve this dispute, it 
would constitute false judicial economy and an error of law.963 Below, we therefore examine each 
of China's arguments with a view to assessing whether finding s on China's as applied claims under 
Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 of the 
Anti-Dumping Agreement are, in fact, necessary for the positive resolution of this dispute.  
7.488.   First, China considers that the "USDOC may seek to maintain a practice of treating multiple 
Chinese exporters as part of an NME -wide entity or similar entity based on asserted State control 
of prices and output, even if the Single Rate Presumption is withdrawn" and that it is "essent ial 
that any rate applied  to an entity maintained in this way, and any process for determining such a 
rate, complies with the disciplines of Articles  6.1, 6.8, the first sentence of Article  9.4 and 
paragraphs  1 and 7 of Annex  II."964 
7.489.   We note that the Appella te Body rejected an argument, which was based on similar 
considerations, in Argentina – Import Measures , stating that:  
We disagree with Japan's argument to the extent that it may be understood as 
suggesting that a finding under Article  X:1 of the GATT 1994  is necessary to ensure 
that Argentina is subject to an obligation to publish promptly any implementing 
measures that may be adopted to bring the TRRs measure into conformity with the 
GATT 1994. In our view, the obligation to publish promptly any new or mo dified laws 
of general application does not stem from the implementation of a finding of 
                                                
960 Appellate Body Report, US – Wool Shirts and Blouses , p. 19, DSR 1997:I, 323, at p. 340.  
961 See para. ‎7.382  above. 
962 China's response to Panel question No. 132, paras. 254 -255. 
963 Appellate Body Report, Canada – Wheat Exports and Grain Imports , para. 133 (referring to Appellate 
Body Report, Australia – Salmon , para. 223).  
964 China's response to Panel question No. 13 2, para. 260. (emphasis original)  WT/DS471/R  
 
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  inconsistency of the current TRRs measure with Article  X:1. Rather, for any new or 
modified implementing measures that fall within the scope of Article  X:1, the 
public ation obligation stems from Article  X:1 itself.965 
7.490.   We consider this reasoning by the Appellate Body pertinent to the situation before us. Any 
new or modified measure that the United States may adopt to implement the Panel's findings 
regarding the application  of the Single Rate Presumption in the 30 challenged determinations must 
accord with Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of 
Article  9.4 of the Anti -Dumping Agreement. These obligations stem from the cited provisions  
themselves and therefore apply regardless of whether we make additional findings on the 
consistency of the 30 current, WTO -inconsistent determinations with these provisions. In fact, we 
note the Appellate Body's statement in Argentina – Import Measures that: 
While the implementation of DSB recommendations and rulings under Articles  III:4 
and XI:1 of the GATT 1994 may require changes to the TRRs measure in order for 
Argentina to bring itself into compliance with those provisions, compliance with a 
finding o f inconsistency under Article  X:1 would lead only to publication of the existing 
measure.966 
7.491.   Similarly, compliance with findings of inconsistency under Articles  6.1 and 6.8, 
paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 of the Anti -Dumping 
Agreement would lead only to the determination of a WTO -consistent anti -dumping duty rate for 
the existing, WTO -inconsistent PRC -wide entity. China's argument, on the other hand, relates to 
any rate determined for any "NME -wide entity or similar enti ty" maintained by the United States 
when implementing our findings regarding the application of the Single Rate Presumption in the 30 
challenged determinations. In this regard, we recall that the Appellate Body has cautioned against 
speculation on the ways  in which a respondent might choose to implement the recommendations 
and rulings of the DSB.967 It was on this basis that the Appellate Body in US – Wheat Gluten 
upheld the panel's exercise of judicial economy with respect to the European Communities' claims  
under Article  I of the GATT 1994 and Article  5 of the Agreement on Safeguards, rejecting the 
argument by the European Communities that "the Panel has not clarified whether the US could 
simply repeat the serious injury determination and then still proceed to apply the measure in the 
same way."968 
7.492.   Moreover, we reiterate our view that the issue of how an anti -dumping duty rate is to be 
determined cannot be assessed in disjunction from the exporter or entity for which this duty rate is 
determined. We are aware o f China's argument that the obligations under Articles  6.1 and 6.8, 
paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 apply "in exactly the same 
way" to the current PRC -wide entity as well as any entity consisting  of multiple exporters that the 
United States may maintain when implementing the Panel's findings on the application of the 
Single Rate Presumption.969 While we agree that these provisions apply to investigating authorities' 
determinations of anti -dumping duty rates for entities consisting  of multiple exporters, China itself 
has argued, and the Panel agreed, that the USDOC did not establish the existence of a WTO -
consistent PRC -wide entity consisting  of multiple exporters in the 30 challenged determinations.970 
Having already found t hat the USDOC did not establish the existence of the PRC -wide entity in a 
WTO-consistent manner, and therefore was not permitted to assign a single anti -dumping duty 
rate to the multiple exporters comprising this entity, we do not see how the fact that Articles 6.1 
and 6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 apply to entities 
consisting  of multiple exporters makes findings under these provisions necessary for purposes of 
resolving this particular dispute. In this respect, we recall that the precise manner of 
implementation is a matter to be determined in the first instance by the Member concerned and 
                                                
965 Appellate Body Report, Argentina – Import Measures , para. 5.198.  
966 Appellate Body Report, Argentina – Import Measures , para. 5.198.  
967 Appellate Body Reports, US – FSC, para. 175; and US – Wheat Gluten , para. 185.  
968 Appel late Body Report, US – Wheat Gluten , para. 185 (quoting European Communities' other 
appellant's submission, para. 108).  
969 China's comments on the United States' response to Panel question No. 119, paras. 145 -148. 
970 See para. ‎7.382 above.  WT/DS471/R  
 
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  that it would not be appropriate for us to speculate on the ways in which the United States might 
choose to implement the DSB 's recommendations and findings in the context of this dispute.971 
7.493.   Second, China argues that "[i]mplementation of findings under Articles  6.10, 9.2 and the 
second sentence of Article  9.4 regarding the Single Rate Presumption would raise questions 
regarding h ow the rights of [the individual producers/exporters that are grouped into the fictional 
PRC-wide entity] should be given effect following withdrawal of the Single Rate Presumption" and 
that "a finding that individual respondents were denied access to indi vidual rates by virtue of the 
Single Rate Presumption provides no clarification of the basis upon which a rate, if any, should be 
determined for such individual respondents during implementation."972 
7.494.   We note that China's argument may be understood to refer t o: (a) how individual rates 
should have been determined for each of the multiple exporters comprising the WTO -inconsistent 
PRC-wide entity in the 30 challenged determinations; or (b) how the rights of the multiple 
exporters comprising the WTO -inconsistent PRC-wide entity in the 30 challenged determinations 
should have been taken into account when determining a single PRC -wide rate for those exporters.  
7.495.   Insofar as China is arguing that the Panel should make findings regarding the manner in 
which individual an ti-dumping duty rates should have been determined for each of the multiple 
exporters comprising the WTO -inconsistent PRC -wide entity, we note that China itself has 
explained that its as applied claims under Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, 
and the first sentence of Article  9.4 of the Anti -Dumping Agreement relate to the PRC -wide entity 
and the PRC -wide rates assigned to this entity.973 While we are aware that China has made 
references to certain individual exporters within the PRC -wide en tity or groups thereof throughout 
its written submissions and responses to Panel questions974, we note that China has clarified that 
such references do not change the thrust of China's as applied claims. Rather, they constitute 
reasons in support of China's assertion that the USDOC acted in a WTO -inconsistent manner when 
determining a PRC -wide rate for the PRC -wide entity in the 30 challenged determinations.975 In 
addition to, and perhaps because of, this, China has not provided the Panel with sufficient facts 
and arguments regarding the manner in which individual anti -dumping duty rates should have 
been determined for each of the multiple exporters comprising the WTO -inconsistent PRC -wide 
entity. We therefore do not consider it necessary or appropriate for the Panel to assess this issue.  
7.496.   To the extent that China's argument should be understood as a reiteration of the assertion, 
set forth on numerous occasions by China, that the rights of the multiple exporters comprising the 
PRC-wide entity are relevant when ass essing whether the USDOC determined the PRC -wide rate 
for this entity in a WTO -consistent manner976, we do not consider that such an argument would 
preclude us from exercising judicial economy with respect to these claims because it too concerns 
the manner i n which the USDOC determined the PRC -wide rates in the 30 challenged 
determinations. It thus does not affect our view that it is not necessary or useful for us to assess 
whether the USDOC determined the PRC -wide rate for the PRC -wide entity in a WTO -consis tent 
manner in the 30 challenged determinations once we have already found that the USDOC was not 
permitted to assign a single PRC -wide rate to the multiple exporters comprising this entity in these 
determinations in the first place.  
7.497.   Third, China notes tha t "during its accession negotiations, China expressed concern that 
there had been 'measures taken by certain WTO Members which had treated China as a non -
market economy and imposed anti -dumping duties on Chinese companies … without giving 
Chinese companies  sufficient opportunity to present evidence and defend their interests in a fair 
                                                
971 Appellate Body Reports, US – FSC, para. 175; and US – Wheat Gluten , para. 185.  
972 China's response to Panel question No. 132, para. 264.  
973 China's response to Panel question No. 128(a), para. 215.  
974 See, e.g. China's second written submission,  para. 291 (regarding the cooperating exporter Double 
Coin in the fifth administrative review in OTR Tires ); second written submission, para. 305 (regarding the 
cooperating exporter AT&M in the Diamond Sawblades investigation and all other exporters than J J New 
Material in the PET Film investigation, which had not been requested to provide any information); second 
written submission, para. 420 (regarding the cooperating exporter AT&M in the Diamond Sawblades 
investigation); and second written submission, pa ras. 453 and 466 -467 (regarding the groups of exporters 
within the PRC -wide entity in the 30 challenged determinations, which were not selected as mandatory 
respondents).  
975 China's response to Panel question No. 128(b), para. 218.  
976 See, e.g. China's respo nse to Panel question No. 128(b), paras. 220 -225. WT/DS471/R  
 
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  manner'"977, and that "Members agreed to address this problem by affirming that importing WTO 
Members should 'give notice of information which it required and provide Chinese pr oducers and 
exporters ample opportunity to present evidence in writing in a particular case' and 'provide 
Chinese producers and exporters a full opportunity for the defense of their interests in a particular 
case'."978 China argues that "[g]iven the manner i n which the US position deviates fundamentally 
from specific requirements that China was assured would apply, resolution of these issues is 
crucial for reaching a positive solution to the dispute."979 
7.498.   In this regard, we note that the fact that certain issues  were discussed during China's 
accession negotiations does not directly relate to the question of whether these issues must be 
addressed in order to resolve this particular dispute and therefore has no bearing on the question 
of whether we should exercise judicial economy. We furthermore reiterate our view that the issue 
before us is not to determine how the USDOC is required to act under Articles  6.1 and 6.8, 
paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 of the Anti -Dumping 
Agreemen t with respect to Chinese exporters, be it individual or in the form of entities consisting  
of multiple exporters. Rather, the issue is whether the USDOC violated these provisions when it 
determined the single PRC -wide rate for the multiple exporters compr ising the PRC -wide entity in 
the 30 challenged determinations.  
7.499.   Thus, we are not persuaded that it is necessary for us to make findings on China's as 
applied claims against the 30 challenged determinations regarding the level of and the manner in 
which the USDOC determined a single PRC -wide rate for the multiple exporters comprising the 
PRC-wide entity, having already found that the USDOC was not permitted to assign a single PRC -
wide rate to these multiple exporters. Bearing this in mind, as well as the obje ctive of "prompt 
settlement" of disputes, contained in Article  3.3 of the DSU, we exercise judicial economy with 
respect to China's as applied claims under Articles  6.1 and 6.8, paragraphs  1 and 7 of Annex  II, 
and the first sentence of Article  9.4 of the A nti-Dumping Agreement.980 In light of our decision to 
exercise judicial economy with respect to China's as applied claims under these provisions, there is 
no need for us to assess the objection of the United States that certain arguments put forward by 
China  are contrary to paragraph  6 of the Panel's Working Procedures.  
7.500.   At the same time, we note that panels have the discretion to make additional findings 
beyond those strictly necessary to resolve a dispute.981 Such additional findings could include, for 
example , alternative factual findings that could serve to assist the Appellate Body in completing 
the legal analysis should it disagree with legal interpretations developed by the panel.982 While we 
note that our findings on the WTO inconsistency of the Single Rate  Presumption and its application 
are based on established jurisprudence983, we have decided to make alternative factual findings in 
order to assist the Appellate Body in completing the legal analysis under Articles  6.1 and 6.8, 
paragraphs  1 and 7 of Annex  II, and the first sentence of Article  9.4 of the Anti -Dumping 
                                                
977 China's response to Panel question No. 132, para. 267 (quoting China's Accession Working Party 
Report, para. 151). (omission by China)  
978 China's response to Panel question No. 132, para. 267 (quoting Chin a's Accession Working Party 
Report, paras. 151(d) and (e)).  
979 China's response to Panel question No. 132, para. 269.  
980 In its comments on China's response to the Panel's question asking whether findings on China's as 
such and as applied claims under Articl es 6.1 and 6.8, paragraphs 1 and 7 of Annex II , and the first sentence 
of Article 9.4  of the Anti -Dumping Agreement would contribute to the positive resolution of the dispute , the 
United States commented:  
At present, significant concerns have been raised r egarding WTO resources and delays in the 
resolution of disputes.  While the conversation to address these concerns is ongoing, clearly one 
long standing  mechanism can be part of the solution: judicial economy. Using judicial economy 
where appropriate – as it is here – promotes parties to have greater focus in considering the 
claims and ensures limited resources are effectively allocated. (United States' comments on 
China's response to Panel question No. 132 , para. 144 ). 
981 Appellate Body Reports, US – Softwoo d Lumber IV , para. 118 ; US – Gambling , para. 344; and US – 
Carbon Steel (India) , para. 4.274.  
982 See, e.g. Appellate Body Reports, US – Softwood Lumber IV , para. 118; Canada – Wheat Exports 
and Grain Imports , para. 126; China – Auto Parts , para. 208; US – Tuna II (Mexico) , para. 405; and  US – 
Carbon Steel (India) , para.  4.274 . 
983 See paras. ‎7.349 -‎7.351  above (referring to Appellate Body Report, EC – Fasteners (China) , paras. 
363-365; and Panel Report s, EU – Footwear (China) , paras. 7.63 -7.147; and US – Shrimp II (Viet Nam) , 
paras. 7.122, 7.149, and 7.154 -7.155).  WT/DS471/R  
 
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  Agreement, should it consider such analysis necessary or useful. In this regard, w e consider the 
following factual aspects to be the relevant ones:  
7.501.   In 20 of the challenged determinations, exporter s within the PRC -wide entity were 
requested to respond to Q&V questionnaires for purposes of mandatory respondent selection.984 In 
the remaining ten challenged determinations, the USDOC selected mandatory respondents based 
on import data from the United Stat es Customs and Border Protection and therefore did not 
request responses to Q&V questionnaires from the exporters within the PRC -wide entity.985 
7.502.   Since one or more mandatory respondents were ultimately included within the PRC -wide 
entity in 17 of the challeng ed determinations, one or more exporters within the PRC -wide entity 
were requested to respond to a full dumping questionnaire in these determinations.986 All 
mandatory respondents passed the Separate Rate T est in the remaining 13 challenged 
determinations an d therefore none of the exporters within the PRC -wide entity were requested to 
respond to a full dumping questionnaire in these determinations.987 
                                                
984 Aluminum OI, Notice  of Preliminary Determination, (Exhibit  CHN-111), p. 69406;  Aluminum AR1, 
Decision Memorandum, (Exhibit  CHN-213), pp. 2 -3; Aluminum AR2, Decision Memorandum, (Exhibit  CHN-
205), pp. 2 -3; Coated Paper OI, Notice  of Preliminary Determination, (Exhibit  CHN-63), p. 24897;  Shrimp OI, 
Notice of Preliminary Determination, (Exhibit  CHN-215), p. 42655; OTR Tires OI, Preliminary Deter mination, 
(Exhibit  CHN-122), p. 9278;  OCTG OI, Notice of Preliminary Determination, (Exhibit  CHN-62), p. 59118; Solar 
OI, Preliminary Determination, (Exhibit  CHN-241), p. 31309; Solar AR1, Decision Memorandum, (Exhibit  CHN-
488), p. 2;  Diamond Sawblades OI, Preliminary Determination, (Exhibit  CHN-135), p. 77121; Steel Cylinders 
OI, Preliminary Determination, (Exhibit  CHN-65), p. 77965; Wood Flooring OI, Preliminary Determination, 
(Exhibit  CHN-158), p. 30657;  Ribbons OI, Preliminary Determination, (Exhibit  CHN-170), p. 7245;  Ribbons 
AR1, Preliminary Results, (Exhibit  CHN-171), p. 47363; Ribbons AR3, Decision Memorandum, (Exhibit  CHN-
156), p. 2; Bags OI, Notice of Preliminary Determination, ( Exhibit  CHN-267), p. 3545; Bags AR3, Preliminary 
Results , (Exhibit  CHN-274), p. 52283;  Furniture OI, Notice of Preliminary Determination, ( Exhibit  CHN-283), p. 
35313;  Furniture AR7, Decision Memorandum, (Exhibit  CHN-298), pp. 6 -7; and Furniture AR8, Decision 
Memorandum, (Exhibit  CHN-302), p. 6. See also China's response to P anel question No. 53, paras. 275 and 
277; and United States' response to Panel question No. 53, para. 140.  
985 Shrimp AR7, Decision Memorandum, (Exhibit  CHN-167), pp. 2 -3; Shrimp AR8, Decision 
Memorandum, (Exhibit  CHN-120), p. 2;  OTR Tires AR5, Respondent Se lection Memorandum, (Exhibit  CHN-
504), pp. 2 and 6 -7; Diamond Sawblades AR1, Initiation  of Administrative Reviews , (Exhibit  CHN-196), 
p. 81566;  Diamond Sawblades AR2, Decision Memorandum, (Exhibit  CHN-252),  p. 5; Diamond Sawblades AR3, 
Respondent Selection  Memorandum, ( Exhibit  CHN-255), p. 4; Diamond Sawblades AR4, Respondent Selection 
Memorandum, (Exhibit  CHN-505), p. 6;  Wood Flooring AR1, Decision Memorandum, (Exhibit  CHN-263), pp. 4 -
5; Wood Flooring AR2, Decision Memorandum, (Exhibit  CHN-117), pp. 4 -5; and PET Film OI, Preliminary 
Determination, (Exhibit  CHN-112), p. 24553. See also China's response to Panel question No. 53, paras. 275 
and 277; and United States' response to Panel question No. 53, para. 140.  
986 Aluminum OI, Notice of Preliminary Determinat ion, (Exhibit  CHN-111), pp. 69406 and 69409;  
Aluminum AR1, Decision Memorandum, (Exhibit  CHN-213), pp. 3 and 14;  Aluminum AR2, Decision 
Memorandum, (Exhibit  CHN-205), pp. 4 and 14 -16; Coated Paper OI, Final Determination, ( Exhibit  CHN-12), 
p. 59220; Shrimp  AR7, Decision Memorandum, (Exhibit  CHN-167), pp. 3 and 7;  Shrimp AR8, Decision 
Memorandum, (Exhibit  CHN-304), p. 1;  OTR Tires AR5, Issues and Decision Memorandum, ( Exhibit  CHN-472), 
p. 12; OCTG OI, Final Determination, ( Exhibit  CHN-13), p. 20339;  Diamo nd Sawblades OI, Final 
Determination, ( Exhibit  CHN-45), p. 29308; Diamond Sawblades AR3, Decision  Memorandum, (Exhibit  CHN-
256), pp. 8 -9; Ribbons OI, Preliminary Determination, (Exhibit  CHN-170), pp. 7245 and 7250 ; Ribbons AR3, 
Decision Memorandum, (Exhibit  CHN-156),  p. 5; Bags OI, Notice of Final Determination, (Exhibit  CHN-53), p. 
34127;  PET Film OI, Preliminary Determination, (Exhibit  CHN-112), pp. 24553 and 24557; Furniture OI, Notice 
of Preliminary Determination, (Exhibit  CHN-283), p. 35313, and Final Det ermination, (Exhibit  CHN-58), p. 
67315;  Furniture AR7, Preliminary Results, (Exhibit  CHN-469), p. 8494;  and Furniture AR8, Decision 
Memorandum, (Exhibit  CHN-302), pp. 1 and 12. See also China's response to Panel question No. 53, paras. 
276-277; and United States' response to Panel question No. 53, para. 140.  
987 Shrimp OI, Notice of Preliminary Determination, (Exhibit  CHN-215), pp. 42656 and 42661;  OTR Tires 
OI, Preliminary Determination, (Exhibit  CHN-122), p. 9283, and Final Determination, (Exhibit  CHN-41), p. 
40487;  Solar OI, Preliminary Determination, (Exhibit  CHN-241), pp. 31309 and 31322 ; Solar AR1, Decision 
Memorandum, ( Exhibit  CHN-488), p. 1 , and Final Results, ( Exhibit  CHN-489), pp. 41001 -41002;  Diamond 
Sawblades AR1, Preliminary Results , (Exhibit  CHN-249), pp. 76135  and 76141 -76142;  Diamond Sawblades 
AR2, Decision Memorandum, (Exhibit  CHN-137), pp. 1, 4 -7, and 14 ; Diamond Sawblades AR4, Decision 
Memorandum, (Exhibit  CHN-481), pp. 1 -2 and 7 -9; Steel Cylinders OI, Preliminary Determination, 
(Exhibit  CHN-65), pp. 77965 and 77970;  Wood Flooring OI, Preliminary Determination, (Exhibit  CHN-158), pp. 
30658 and 30665;  Wood Flooring AR1, Decision  Memorandum, (Exhibit  CHN-263), pp. 6 -8; Wood Flooring 
AR2, Decision Memorandum, (Exhibit  CHN-117), pp. 5 and 8 ; Ribbo ns AR1, Preliminary Results, ( Exhibit  CHN-
171), p. 47364 , and Final Results, ( Exhibit  CHN-51), pp. 101 32-10133 ; and  Bags AR3, Preliminary  Results, WT/DS471/R  
 
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  7.503.   The USDOC made a finding of non -cooperation by the PRC -wide entity in 20 of the 
challenged determinations: In s even of these determinations, the USDOC's finding of non -
cooperation was based solely on the failure of one or more exporters within the PRC -wide entity to 
respond to the Q&V questionnaire.988 In six of the challenged determinations, the USDOC's finding 
of non-cooperation was based solely on the failure of one or more mandatory respondents, 
ultimately included within the PRC -wide entity, to respond to the full dumping questionnaire or 
allow verification of the information provided.989 In seven of the challenged  determinations, the 
USDOC's finding of non -cooperation was based on both the failure of some exporters within the 
PRC-wide entity to respond to the Q&V questionnaire, and the failure of one or more mandatory 
respondents , ultimately included within the PRC -wide entity, to respond to the full dumping 
questionnaire or allow verification of the information provided.990 In addition, in three of the 
challenged determinations, the USDOC's finding of non -cooperation was also based on the failure 
of the Government of  China to respond to requests for information.991 
7.504.   The USDOC did not make an explicit finding of non -cooperation in ten of the challenged 
determinations: The USDOC re -applied a rate, which was determined on the basis of facts 
available in a prior segment of t he proceedings, in eight of the challenged determinations.992 In 
one of the challenged determi nations, the USDOC determined a  rate based on a simple average of 
the previously assigned facts available rate and the margin of dumping calculated for a 
cooperatin g mandatory respondent, which had ultimately been included within the PRC -wide 
entity993, and in yet another of the challenged determinations, the USDOC re -applied a rate 
calculated in this manner.994 
7.505.   In the 20 challenged determinations where the USDOC made a finding of non -cooperation 
by the PRC -wide entity, the USDOC explicitly stated that it was making an adverse inference in 
                                                                                                                                                  
(Exhibit  CHN-274), pp. 52283 -52284 . See also China's response to Panel question No. 53, paras. 276 -277; and 
United States' response to Panel question No. 53, para. 140.  
988 Shrimp OI, Notice of Preliminary Determination, (Exhibit  CHN-215), p. 42661;  OTR Tires OI, 
Preliminary Determination, (Exhibit  CHN-122), p. 9285; Solar OI, Preliminary Determination, ( Exhibit  CHN-
241), p. 31317 ; Solar AR1, Decision Memorandum, (Exhibit  CHN-488), pp. 17 -18; Steel Cylinders OI, 
Preliminary Determination, (Exhibit  CHN-65), p. 77970;  Wood Flooring OI, Preliminary Determination, 
(Exhibit  CHN-158), p. 30662; and Ribbons AR3, Decision  Memorandum, (Exhibit  CHN-156), pp. 6 -7. 
989 Aluminum AR1, Decision Memorandum, (Exhibit  CHN-213), pp. 14 -15; Aluminum AR2, Decision 
Memorandum, (Exhibit  CHN-205), p. 17;  Shrimp AR7, Decision Memorandum, (Exhibit  CHN-167), p. 7;  Shrimp 
AR8, Decision Memorandum , (Exhibit  CHN-120), pp. 6 -7; PET Film OI, Preliminary Determination, 
(Exhibit  CHN-112), p. 24557; and  Furniture AR7, Decision Memorandum, (Exhibit  CHN-298), p. 13.  
990 Aluminum OI, Notice of Preliminary Determination, (Exhibit  CHN-111), p. 69410 ; Coated Pap er OI, 
Notice of Preliminary Determination, ( Exhibit  CHN-63), pp. 24900 -24901 , and Final Determination , 
(Exhibit  CHN-12), pp. 59220 -59221; OCTG OI, Final Determination, (Exhibit  CHN-13), p. 20339;  Diamond 
Sawblades OI, Preliminary Determination, (Exhibit  CHN-135), p. 77128;  Ribbons OI, Preliminary 
Determination, (Exhibit  CHN-170), p. 7251;  Bags OI, Notice of Preliminary Determination, (Exhibit  CHN-267), 
p. 3548; and Furniture OI, Notice of Preliminary Determination , (Exhibit  CHN-283), p. 35321 , and Issues a nd 
Decision Memorandum, ( Exhibit  CHN-463), p. 97.  
991 Shrimp OI, Notice of Preliminary Determination, (Exhibit  CHN-215), p. 42661; Diamond Sawblades 
OI, Preliminary Determination, (Exhibit  CHN-135), p. 77128; and Furniture  OI, Notice of Preliminary 
Determina tion, (Exhibit  CHN-283), p. 35321.  
992 Diamond Sawblades AR1, Final Results, (Exhibit  CHN-46), p. 11145;  Diamond Sawblades AR2, 
Decision Memorandum, (Exhibit  CHN-137), p. 8; Diamond Sawblades AR3, Decision Memorandum , 
(Exhibit  CHN-256), p.  10; Wood Flooring AR1, Decision Memorandum, (Exhibit  CHN-263), p. 11; Wood Flooring 
AR2, Decision Memorandum, ( Exhibit  CHN-117), p. 10 ; Ribbons AR1, Preliminary  Results, (Exhibit  CHN-171), 
p. 47369;  Bags AR3, Final Results, (Exhibit  CHN-54), p. 6858; and Furniture AR8, Decision Memorandum, 
(Exhibit  CHN-302), pp. 2 and 14 . See also China's second written submission, para. 254; and United States' 
second written submission, fn 415 and para. 259.  
993 OTR Tires  AR5, Final Results, (Exhibit  CHN-486), p. 20199. In this respect, the U SDOC stated:  
Because Double Coin [the mandatory respondent ultimately included within the PRC -wide entity] 
provided the [USDOC] with its verified sales and production data, we are able to calculate a 
margin for an unspecified portion of a single PRC -wide e ntity, but cannot do so for the remaining 
unspecified portion of the entity. As the [USDOC] must calculate a single margin for the PRC -
wide government controlled entity and there is insufficient information on the record with respect 
to the composition of the PRC -wide entity, as facts available pursuant to section 776(a)(1) of the 
Act, we calculated a simple average of the previously assigned PRC -wide rate (210.48 percent) 
and Double Coin's calculated margin (0.14 percent) as the rate applicable to the PRC -wide entity. 
Accordingly, the [USDOC] revised the PRC -wide entity rate to 105.31 percent for these final 
results. (Ibid.). (footnotes omitted)  
994 Diamond Sawblades AR4, Issues  and Decision Memorandum, (Exhibit  CHN-473), p. 11.  WT/DS471/R  
 
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  selecting among the facts available.995 In these 20 challenged determinations, the USDOC 
corroborated the initially selected facts avail able by comparing the initially selected rate either to 
transaction -specific or CONNUM -specific dumping margins of mandatory respondents, to 
transaction -specific prices and normal value s for mandatory respondents, or to information 
provided in the petition  or in the petitioners' responses to supplementary requests for information , 
or by referring to its pre -initiation analysis or its corroboration in a prior segment of the 
proceedings .996 
                                                
995 Aluminum  OI, Notice of Preli minary Determination, (Exhibit  CHN-111), p. 69411;  Aluminum AR1, 
Decision Memorandum, (Exhibit  CHN-213), p. 15;  Aluminum  AR2, Decision Memorandum, (Exhibit  CHN-205), 
p. 17; Coated Paper  OI, Final Determination, (Exhibit  CHN-12), p. 59221;  Shrimp  OI, Notice  of Preliminary 
Determination, (Exhibit  CHN-215), p. 42662;  Shrimp  AR7, Decision Memorandum, (Exhibit  CHN-167), p. 7;  
Shrimp  AR8, Decision Memorandum, (Exhibit  CHN-120), p. 7;  OTR Tires OI, Preliminary Determination, 
(Exhibit  CHN-122), p. 9285; OCTG  OI, Notice of Preliminary Determination, (Exhibit  CHN-62), p. 59125 ; Solar 
OI, Final Determination, (Exhibit  CHN-44), p. 63794;  Solar AR1, Decision Memorandum, (Exhibit  CHN-488), p. 
18; Diamond Sawblades  OI, Preliminary Determination, (Exhibit  CHN-135), p. 77128 ; Steel Cylinders OI, 
Preliminary Determination, (Exhibit  CHN-65), p. 77970;  Wood Flooring  OI, Preliminary Determination, 
(Exhibit  CHN-158), p. 30662; Ribbons  OI, Preliminary Determination, (Exhibit  CHN-170), p. 7251 ; Ribbons  
AR3, Decision Memorandum, (Exh ibit CHN-156), p. 7;  Bags OI, Notice of Preliminary Determination, 
(Exhibit  CHN-267), p. 3548;  PET Film  OI, Preliminary Determination, (Exhibit  CHN-112), p. 24557;  Furniture  
OI, Notice of Preliminary Determination, (Exhibit  CHN-283), p. 35321;  and Furnitur e AR7, Decision 
Memorandum, (Exhibit  CHN-298), p. 13 . 
996 Aluminum  OI, Final Determination, (Exhibit  CHN-32), pp. 18529 -18530 (comparing the initially 
selected rate from the petition with CONNUM -specific margins of dumping for mandatory respondents and 
referring to its pre -initiation analysis of information from the petition); Aluminum AR1, Decision Memorandum, 
(Exhibit  CHN-213), p. 16 (comparing the initially selected rate from the petition with transaction -specific 
margins of dumping for a mandatory respond ent); Aluminum AR2, Decision Memorandum, (Exhibit  CHN-205), 
p. 19 (comparing the initially selected rate from the petition with transaction -specific margins of dumping for a 
mandatory respondent); Coated Paper OI, Final Determination, (Exhibit  CHN-12), pp.  59221 -59222 
(comparing the initially selected rate from the petition with transaction -specific margins of dumping for a 
mandatory respondent); Shrimp OI, Corroboration Memorandum, (Exhibit  CHN-157), pp. 2 -3 (comparing the 
initially selected rate from the petition with CONNUM -specific margins of dumping for a mandatory 
respondent); Shrimp AR7, Decision Memorandum, (Exhibit  CHN-209), pp. 20 -23 (comparing the initially 
selected rate from the petition with CONNUM -specific margins of dumping for mandatory respo ndents in the 
original investigation); Shrimp AR8, Decision Memorandum, (Exhibit  CHN-304), pp. 9 -10 (referring to its 
corrobo ration in prior administrative reviews , where the USDOC  compared the initially selected rate from the 
petition with CONNUM -specific  margins of dumping for mandatory respondents in the original investigation ); 
OTR Tires OI, Corroboration Memorandum, (Exhibit  CHN-208), p. 2, and Preliminary Determination, 
(Exhibit  CHN-122), p. 9286 (comparing the initially selected rate from the petitio n with transaction -specific 
prices and normal values and margins of dumping for mandatory respondents); OCTG OI, Final Determination, 
(Exhibit  CHN-13), pp. 20339 -20340 (comparing the initially selected rate from the petition with transaction -
specific margi ns of dumping for mandatory respondents); Solar OI, Preliminary Determination, (Exhibit  CHN-
241), p. 31318 (comparing the initially selected rate from the petition with transaction -specific prices and 
normal values and margins of dumping for mandatory resp ondents); Solar AR1, Decision Memorandum, 
(Exhibit  CHN-487), pp. 16 -17 (referring to its  corroboration in the original investigation and comparing the 
initially selected rate from the petition with transaction -specific margins of dumping for  a mandatory 
respondent in this administrative review ); Diamond Sawblades OI, Final Determination, (Exhibit  CHN-45), p. 
29308 (comparing the initially selected rate from the petition with transaction -specific margins of dumping for 
mandatory respondents); Steel Cylinders  OI, Preliminary Determination, (Exhibit  CHN-65), p. 77971 
(comparing the initially selected transaction -specific rate to other transaction -specific margins of dumping for a 
mandatory respondent); Wood Flooring OI, Preliminary Determination, (Exhibit  CHN-158), p. 30662 
(comparing the initially selected rate from the petition with transaction -specific prices and normal values for 
mandatory respondents, finding that the former did not have probative value and instead selecting the highest 
transaction -specific  rate for a mandatory respondent, which was not considered secondary information and 
therefore not corroborated); Ribbons OI, Final Determination, (Exhibit  CHN-33), p. 41811 (comparing the 
initially selected rate from the petition with CONNUM -specific marg ins of dumping for mandatory respondents); 
Ribbons AR3, Decision Memorandum, (Exhibit  CHN-156), pp. 8 -9 (referring to its pre -initiation analysis, where 
the USDOC compared the rate from the petition with information in the petition and in petitioners' resp onses ); 
Bags OI, Notice of Preliminary Determination, (Exhibit  CHN-267), p. 3549 (comparing the initially selected rate 
from the petition with transaction -specific margins of dumping for mandatory respondents); PET Film OI, 
Preliminary Determination, (Exhi bit CHN-112), pp. 24557 -24558, and Final Determination, (Exhibit  CHN-56), 
p. 55041 ( comparing the initially selected rate from the petition with transaction -specific margins of dumping 
for mandatory respondents and referring to its pre -initiation analysis , where the USDOC compared the rate 
from the petition with information in the petition and in petitioners' responses ); Furniture OI, Final 
Determination, (Exhibit  CHN-58), pp. 67316 -67317 (comparing the initially selected rate from the petition with 
transac tion-specific margins of dumping for mandatory respondents); and Furniture AR7, Issues and Decision 
Memorandum, (Exhibit  CHN-151), pp. 9 -10 (referring to its corroboration in a previous administrative review , 
where the USDOC compared the selected rate, which was based on a weighted average of margins of dumping WT/DS471/R  
 
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  7.506.   In 18 of the challenged determinations, the USDOC determined margins of  dumping for 
one or more of the mandatory respondents that were not zero, de minimis or based on facts 
available.997 The PRC -wide rate, assigned to the PRC -wide entity by the USDOC in these 18 
determinations, was higher than the highest margin of dumping cal culated for a mandatory 
respondent in the same determination.998 
7.507.   In two of the challenged determinations, the USDOC initially determined margins of 
dumping for mandatory respondents that were not zero, de minimis or based on facts available, 
but ultimately a mended these margins  to zero or de minimis .999 In four of the challenged 
determinations, the USDOC did not determine margins of dumping for mandatory respondents that 
were not zero, de minimis or based on facts available, but such margins of dumping were 
determined for mandatory respondents in prior segments of the proceedings.1000 The PRC -wide 
rate, assigned to the PRC -wide entity by the USDOC in these six determinations, was higher than 
the highest margin of dumping initially determined for a mandatory respond ent in the same 
determination or the highest margin of dumping determined for a mandatory respondent in a prior 
segment of the proceedings.1001 
                                                                                                                                                  
for mandatory respondents in prior administrative reviews , with transaction -specific margins of dumping for 
mandatory respondents ). 
997 Coated Paper OI, Amended Final Determination, (Exhibit  CHN-34), p . 70204;  OTR Tires OI, Notice of 
Amended Final Determination, (Exhibit  CHN-231), pp. 51626 -51627;  OTR Tires AR5, Amended  Final Results, 
(Exhibit  CHN-482), p. 26231; OCTG OI, Amended Final Determination, (Exhibit  CHN-237), pp. 28551 -28552;  
Solar OI, Amended  Final Determination, (Exhibit  CHN-242), pp. 73020 -73021;  Solar AR1, Final Results, 
(Exhibit  CHN-489), pp. 41001 -41002; Diamond Sawblades OI, Notice  of Amended Final Determination, 
(Exhibit  CHN-244), p. 35865 ; Diamond Sawblades AR1, Final Results, ( Exhibit  CHN-46), p. 11145; Diamond  
Sawblades AR3, Final Results, (Exhibit  CHN-48), p. 35724; Diamond Sawblades AR4, Final Results, 
(Exhibit  CHN-485), pp. 32344 -32345; Steel Cylinders  OI, Final Determination, (Exhibit  CHN-14), p. 26742;  
Wood Flooring AR1, Amended Final Results, ( Exhibit  CHN-464), p. 35316;  Wood Flooring AR2, Final Results, 
(Exhibit  CHN-490), p. 41478;  Bags OI, Notice of Amended Final Determination, (Exhibit  CHN-306), p. 42420; 
Bags AR3, Final Results, (Exhibit  CHN-54), p. 6858;  PET Film OI, Final D etermination, (Exhibit  CHN-56), p. 
55041;  Furniture OI, Notice of Amended Final Determination, (Exhibit  CHN-288), pp. 67100 -67102;  and 
Furniture AR8, Final Results, (Exhibit  CHN-60), p. 51955 . 
998 Coated Paper OI, Amended Final Determination, (Exhibit  CHN-34), p. 70204; OTR Tires OI, Notice of 
Amended Final Determination, (Exhibit  CHN-231), pp. 51626 -51627;  OTR Tires AR5, Amended  Final Results, 
(Exhibit  CHN-482), p. 26231;  OCTG OI, Amended Final Determination, (Exhibit  CHN-237), pp. 28551 -28552;  
Solar OI, Amended Final Determination, (Exhibit  CHN-242), pp. 73020 -73021;  Solar AR1, Final Results, 
(Exhibit  CHN-489), pp. 41001 -41002; Diamond Sawblades OI, Notice  of Amended Final Determination, 
(Exhibit  CHN-244), p. 35865; Diamond Sawblades AR1, Final Results, (Exh ibit CHN-46), p. 11145; Diamond 
Sawblades AR3, Final Results, (Exhibit  CHN-48), p. 35724; Diamond Sawblades AR4, Final  Results, 
(Exhibit  CHN-485), pp. 32344 -32345;  Steel Cylinders OI, Final Determination, (Exhibit  CHN-14), p. 26742;  
Wood Flooring AR1, Amen ded Final Results, (Exhibit  CHN-464), p. 35316 ; Wood Flooring AR2, Final Results, 
(Exhibit  CHN-490), p. 41478;  Bags OI, Notice of Amended Final Determination, (Exhibit  CHN-306), p. 42420;  
Bags AR3, Final Results, (Exhibit  CHN-54), p. 6858;  PET Film OI, Final Determination, (Exhibit  CHN-56), p. 
55041;  Furniture OI, Notice of Amended Final Determination, (Exhibit  CHN-288), pp. 67100 -67102;  and 
Furniture AR8, Final Results, (Exhibit  CHN-60), p . 51955.  
999 Shrimp OI, Notice of Amended Final Determination, (Exhibi t CHN-216), p. 5151, and Notice of 
Implementation of Determinations, (Exhibit  CHN-220), p. 18959; and Wood Flooring OI, Final Determination, 
(Exhibit  CHN-49), pp. 64323 -64324, Amended Final Determination, (Exhibit  CHN-150), pp. 76692 -76693, and 
Amended Fin al Determination, (Exhibit  CHN-258), p. 25110.  
1000 Shrimp AR7: compare Shrimp AR7, Final Results, (Exhibit  CHN-38), p. 56210 with  Shrimp AR3, 
Final Results , (Exhibit  CHN-223), p. 46568; Shrimp AR8: compare Shrimp AR8, Final Results, (Exhibit  CHN-
39), p. 5787 2 with  Shrimp AR3, Final Results , (Exhibit  CHN-223), p. 46568; Diamond Sawblades AR2: 
compare Diamond Sawblades AR2, Final Results, (CHN -47), p. 36167 with  Diamond Sawblades  OI, Notice of 
Amended Final Determination, (Exhibit  CHN-247), p. 65290, and Diamon d Sawblades AR1, Final Results, 
(Exhibit  CHN-46), p. 11145; and Furniture AR7: compare Furniture AR7, Final Results, (Exhibit  CHN-59), p. 
35250 with Furniture OI, Notice of Amended Final Determination, (Exhibit  CHN-288), pp. 67100 -67102 , 
Furniture AR1, Ame nded Final Results, (Exhibit  CHN-290), p. 46964,  Furniture  AR2, Final Results, 
(Exhibit  CHN-291), pp. 49166 -49167 , Furniture AR3, Notice of Amended Final Results, (Exhibit  CHN-509), pp. 
68410 -68411, Furniture AR4, Notice of Amended Final Results, (Exhibit  CHN-510), p. 4871 , and Furniture  AR5, 
Final Results,  (Exhibit  CHN-294), pp. 49733 -49734 . 
1001 Shrimp OI, Notice of Amended Final Determination, (Exhibit  CHN-216), p. 5151;  Shrimp AR7: 
compare Shrimp AR7, Final Results, (Exhibit  CHN-38), p. 56210 with  Shrimp AR3, Final Results , (Exhibit  CHN-
223), p. 46568; Shrimp AR8: compare Shrimp AR8, Final Results, (Exhibit  CHN-39), p. 57872 with  Shrimp 
AR3, Final Results , (Exhibit  CHN-223), p. 46568; Diamond Sawblades AR2: compare Diamond Sawblades AR2, 
Final Results, (CHN -47), p. 36167 with  Diamond Sawblades  OI, Notice of Amended Final Determination, 
(Exhibit  CHN-247), p. 65290, and Diamond Sawblades AR1, Final Results, ( Exhibit  CHN-46), p. 11145;  Wood WT/DS471/R  
 
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  7.508.   The USDOC assigned a so -called "all others" rate to exporters that passed the Separate 
Rate Test but were not indiv idually examined in 25 of the challenged determinations.1002 The PRC -
wide rate, assigned to the PRC -wide entity by the USDOC in these 25 determinations, was higher 
than the "all others" rate in the same determination.1003 
8  CONCLUSIONS AND RECO MMENDATIONS  
8.1.  For the reasons set forth in th is Report, we conclude  as follows:  
a. With respect to the USDOC's use of the WA -T methodology in the OCTG , Coated Paper  
and Steel Cylinders  investigations:  
i. The United States acted inconsistently with Article 2.4.2 of the Anti -Dumping 
Agreement in the OCTG  and Coated Paper  investigations because of the fourth 
quantitative fl aw with the Nails test which le d the USDOC to disregard  non-target 
prices below the alleged target price under the price gap test and because of the first 
SAS programm ing error that occurred in the application of the price gap t est; 
ii. The United States acted inconsistently with Article 2.4.2 of the Anti -Dumping 
Agreement in the OCTG , Coated Paper  and Steel Cylinders  investigations  because of 
the USDOC's explanations which  were premised on the use of the WA -T methodology 
with zeroing  and because of its failure to provide an explanation as to why the T-T 
                                                                                                                                                  
Flooring OI, Final Determination, (Exhibit  CHN-49), pp. 64323 -64324;  and Furniture AR7: compare Furniture 
AR7, Final Results, (Exhibit  CHN-59), p. 35250 with Furniture OI, Notice of Amended Final Determination, 
(Exhibit  CHN-288), pp. 67100 -67102 , Furniture AR1, Amended Final Results, (Exhibit  CHN-290), p. 46964,  
Furniture  AR2, Final Results, (Exhibit  CHN-291), pp. 49166 -49167 , Furniture AR3, Notice of Amended Final 
Results, (Exhibit  CHN-509), pp. 68410 -68411, Furniture AR4, Notice of Amended Final Results, (Exhibit  CHN-
510), p. 4871 , and Furniture  AR5, Final Results,  (Exhibit  CHN-294), pp. 49733 -49734 . 
1002 Aluminum OI, Final Determination, (Exhibit  CHN-32), pp. 18530 -18531; Aluminum AR1, Final 
Results, (Exhibit  CHN-35), p. 100;  Aluminum AR2, Final Results, (Exhibit  CHN-36), pp. 78786 -78787;  Coated 
Paper OI, Amended Final Determin ation, (Exhibit  CHN-34), p. 70204; Shrimp OI, Notice of Amended Final 
Determination, (Exhibit  CHN-216), p. 5151, and Amended Final Determination, (Exhibit  CHN-221), p. 13039; 
OTR Tires OI, Notice of Amended Final Determination, (Exhibit  CHN-231), pp. 51626 -51627; OTR Tires AR5, 
Amended Final Result s, (Exhibit  CHN-482), p. 26231; OCTG OI, Amended Final Determination, (Exhibit  CHN-
237), pp. 28551 -28552; Solar OI, Amended Final Determination, (Exhibit  CHN-242), pp. 73020 -73021;  Solar 
AR1, Final Results , (Exhib it CHN-489),  pp. 41001 -41002; Diamond Sawblades OI, Final Determination, 
(Exhibit  CHN-45), p. 29309; Diamond Sawblades AR1, Final Results, (Exhibit  CHN-46), p. 11145; Diamond 
Sawblades AR2, Final Results, (Exhibit  CHN-47), p. 36167, and Amended Final Resul ts, (Exhibit  CHN-253), p. 
42931;  Diamond Sawblades AR3, Final Results, (Exhibit  CHN-48), p. 35724 ; Diamond Sawblades AR4, Final 
Results, ( Exhibit  CHN-485), pp. 32344 -32345 ; Steel Cylinders OI, Final Determination, (Exhibit  CHN-14), p. 
26742;  Wood Flooring OI, Amended Final Determination, (Exhibit  CHN-150), pp. 76692 -76693, and Notice of 
Amended Final Determination, (Exhibit  CHN-258), p. 25110;  Wood Flooring AR1, Amended Final Results, 
(Exhibit  CHN-464), p. 35316 ; Wood Flooring AR2, Final Results, (Exhibit  CHN-490), pp. 41477 -41478; Ribbons 
OI, Final Determination, (Exhibit  CHN-33), p. 41812;  Ribbons AR1, Final Results, (Exhibit  CHN-51), p. 10133;  
Bags OI, Notice of Amended Final Determination, (Exhibit  CHN-306), p. 42420; PET Film OI, Final 
Determination, (E xhibit  CHN-56), p. 55041; Furniture OI, Notice of Amended Final Determination, 
(Exhibit  CHN-288), pp. 67100 -67102; and Furniture AR7, Final Results, (Exhibit  CHN-59), p. 35250.  
1003 Aluminum OI, Final Determination, (Exhibit  CHN-32), pp. 18530 -18531;  Aluminum  AR1, Final 
Results, (Exhibit  CHN-35), p. 100; Aluminum AR2, Final Results, (Exhibit  CHN-36), pp. 78786 -78787; Coated 
Paper OI, Amended Final Determination, (Exhibit  CHN-34), p. 70204; Shrimp OI, Notice of Amended Final 
Determination, (Exhibit  CHN-216), p.  5151, and Amended Final Determination, (Exhibit  CHN-221), p. 13039;  
OTR Tires OI, Notice of Amended Final Determination, (Exhibit  CHN-231), pp. 51626 -51627; OTR Tires AR5, 
Amended Final Result s, (Exhibit  CHN-482), p. 26231; OCTG OI, Amended Final Determin ation, (Exhibit  CHN-
237), pp. 28551 -28552; Solar OI, Amended Final Determination, (Exhibit  CHN-242), pp. 73020 -73021; Solar 
AR1, Final Results , (Exhibit  CHN-489),  pp. 41001 -41002; Diamond Sawblades OI, Final Determination, 
(Exhibit  CHN-45), p. 29309; Diamo nd Sawblades AR1, Final Results, (Exhibit  CHN-46), p. 11145; Diamond 
Sawblades AR2, Final Results, (Exhibit  CHN-47), p. 36167, and Amended Final Results, (Exhibit  CHN-253), p. 
42931;  Diamond Sawblades AR3, Final Results, (Exhibit  CHN-48), p. 35724 ; Diamond  Sawblades AR4, Final 
Results, ( Exhibit  CHN-485), pp. 32344 -32345 ; Steel Cylinders OI, Final Determination, (Exhibit  CHN-14), p. 
26742;  Wood Flooring OI, Amended Final Determination, (Exhibit  CHN-150), pp. 76692 -76693, and Notice of 
Amended Final Determination, (Exhibit  CHN-258), p. 25110;  Wood Flooring AR1, Amended Final Results, 
(Exhibit  CHN-464), p. 35316 ; Wood Flooring AR2, Final Results, (Exhibit  CHN-490), pp. 41477 -41478; Ribbons 
OI, Final Determination, (Exhibit  CHN-33), p. 41812; Ribbons AR1, Final Results, (Exhibit  CHN-51), p. 10133;  
Bags OI, Notice of Amended Final Determination, (Exhibit  CHN-306), p. 42420; PET Film OI, Final 
Determination, (Exhi bit CHN-56), p. 55041; Furniture OI, Notice of Amended Final Determination, 
(Exhibit  CHN-288), pp. 67100 -67102; and Furniture AR7, Final Results, (Exhibit  CHN-59), p. 35250.  WT/DS471/R  
 
- 164 - 
 
  methodology could not take into account appropriately the significant differences in 
the relevant export prices ; 
iii. The Unite d States acted inconsistently with Article 2.4.2 of the Anti -Dumping 
Agreement in the OCTG , Coated Paper  and Steel Cylinders  investigations by applying 
the WA -T methodology to all export transactions ; 
iv. The United States acted inconsistently with Article 2.4 .2 of the Anti -Dumping 
Agreement in the OCTG , Coated Paper  and Steel Cylinders  investigations  because of 
the use of zeroing in the dumping margin calculations made through the WA -T 
methodology;  
v. China has not established that the United States acted inconsi stently with 
Article  2.4.2 of the Anti -Dumping Agreement in the Steel Cylinders  investigation by 
reason  of the fourth quantitative flaw with th e Nails test which allegedly le d the 
USDOC to disregard non -target prices below the alleged target price under th e price 
gap test;  
vi. China has not established that the United States acted inconsistently with 
Article  2.4.2 of the Anti -Dumping Agreement  in the OCTG , Coated Paper  and Steel 
Cylinders  investigations by reason of the first, second and third alleged quantit ative 
flaws with the Nails test;  
vii. China has not established that the United States acted inconsistently with 
Article  2.4.2 of the Anti -Dumping Agreement by reason of the second alleged SAS 
programming error that occurred in the application of the price gap te st in the OCTG  
and Coated Paper  investigations ; 
viii. China has not established that the United States acted inconsistently with Article 
2.4.2 of the Anti -Dumping Agreement in the OCTG , Coated Paper  and Steel Cylinders  
investigations because of the alleged quali tative issues with the Nails test ; and 
ix. China has not established that the United States acted inconsistently with 
Article  2.4.2 of the Anti -Dumping Agreement in the OCTG , Coated Paper  and Steel 
Cylinders  investigations by finding the relevant pattern on th e basis of purchaser or 
time period averages as opposed to individual export transaction prices . 
b. With respect to the USDOC's use of zeroing in the  third administrative review in PET 
Film: 
i. The United States acted inconsistently with Article 9.3 of the Anti -Dumping 
Agreement and Article VI :2 of the GATT 1994 because of the use of zeroing in the 
dumping margin calculations made through the WA -T methodology.  
c. With respect to the Single Rate Presumption:  
i. The six administrative review determinations introduced  at the Panel's first 
substantive meeting with the parties are within the Panel's term s of reference;  
ii. The Single Rate Presumption constitutes a measure of general and prospective 
application, which is, as such, inconsistent with Articles 6.10 and 9.2 of the An ti-
Dumping Agreement;  
iii. The United States acted inconsistently with Articles 6.10 and 9.2 of the Anti -
Dumping Agreement as a result of the application of the Single Rate Presumption  in 
the 38 determinations challenged by China under these provisions ; and  
iv. In light of the findings set out in paragraphs  ‎8.1c.ii  and ‎8.1c.iii , we make no findings, 
based on judicial economy , with respect to China's as such and as applied claims 
under the second sentence of Article 9.4 of the Anti -Dumping Agreement concerning 
the Single Rate Pr esumption . WT/DS471/R  
 
- 165 - 
 
  d. With respect to China's claims under Articles 6.1 and 6.8, paragraphs  1 and 7 of 
Annex  II, and the first sentence of Article 9.4 of the Anti -Dumping Agreement:  
i. The four of t he six administrative review determinations introduced  at the Panel's 
first substantive meeting with the parties, which are relevant to these claims, are 
within the Panel's term s of reference ; 
ii. China has not demonstrated that the alleged AFA Norm constitutes a norm of general 
and prospective application and there is therefore n o need to examine whether that 
Norm falls within the Panel's terms of reference nor to address China's as such 
claims under Article 6.8 of the Anti -Dumping Agreement and paragraph  7 of its 
Annex  II against that Norm ; and 
iii. In light of the findings set out in  paragraph  ‎8.1c.iii , we make no findings, based on 
judicial economy , with respect to China's as applied claims under Articles 6.1 and 
6.8, paragraphs  1 and 7 of Annex  II, and the first sentence of Article 9.4 of the Anti -
Dumping Agreement concerning the 30 determin ations challenged by China under 
these provisions . 
8.2.  Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations 
assumed under a covered agreement, the action is considered prima facie  to constitute a case of 
nullification or imp airment. Thus, we conclude that, to the extent that the measures at issue are 
inconsistent with the Anti -Dumping Agreement and the GATT 1994, they have nullified or impaired 
benefits accruing to China under those Agreements. On this basis, pursuant to Arti cle 19.1 of the 
DSU, we recommend that the United States bring its measures into conformity with its obligations 
under the Anti -Dumping Agreement and the GATT 1994.  
 
 
_________