WT/DS473/AB/R  
 
6 October 2016  
(16-5348) Page: 1/101 
  Original: English  
 
 EUROPEAN UNION – ANTI -DUMPING MEASURES ON BIODIESEL  
FROM ARGENTINA  
AB-2016-4 
Report of the Appellate Body  
 
 WT/DS473/A B/R 
 
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  Table of Contents  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  12 
2   ARGUMENTS OF THE PAR TICIPANTS  ................................ ................................ .........  17 
3   ARGUMENTS OF THE THI RD PARTICIPANTS  ................................ ..............................  17 
4   ISSUES RAIS ED ................................ ................................ ................................ .........  17 
5   BACKGROUND AND OVERV IEW OF THE MEASURES AT ISSUE  ................................ .... 18 
5.1   The EU anti -dumping measure on biodiesel from Argentina  ................................ .............. 19 
5.2   The second subparagraph of Article 2(5) of the Basic Regulation  ................................ ......21 
6   ANALYSIS OF THE APPE LLATE BODY  ................................ ................................ .........  24 
6.1   Claims concerning the EU anti -dumping measure on imports of biodiesel from 
Argentina  ................................ ................................ ................................ .......................... 24 
6.1.1    Determination of dumping  ................................ ................................ ........................ 24 
6.1.1.1    Article  2.2.1.1 of the Anti -Dumping  Agreement  ................................ ......................... 24 
6.1.1.1.1    Introduction  ................................ ................................ ................................ ......24 
6.1.1.1.2    The Panel's findings  ................................ ................................ ............................ 25 
6.1.1.1.3    The second condition in the first sentence of Article  2.2.1.1 of the 
Anti-Dumping  Agreement  ................................ ................................ ................................ ....27 
6.1.1.1.4    Whether the Panel erred in its interpretation and application of Article  2.2.1.1 
of the Anti -Dumping  Agreement  ................................ ................................ .......................... 31 
6.1.1.1.5    Conclusions  ................................ ................................ ................................ .......38 
6.1.1.2    Article  2.2 of the Anti -Dumping  Agreement and Article VI:1(b)(ii) of the 
GATT  1994 ................................ ................................ ................................ ........................ 39 
6.1.1.2.1    Introduction  ................................ ................................ ................................ ......39 
6.1.1.2.2    The Panel's findings  ................................ ................................ ............................ 40 
6.1.1.2.3    Whether the Panel erred in its interpretation of Article  2.2 of the 
Anti-Dumping  Agreement and Articl e VI:1(b)(ii) of the GATT  1994 ................................ ........... 41 
6.1.1.2.4    Whether the Panel erred in its application of Article  2.2 of the 
Anti-Dumping  Agreement to the anti -dumping measure at issue  ................................ .............. 44 
6.1.1.2.5    Conclusions  ................................ ................................ ................................ .......45 
6.1.1.3    Article 2.4 of the Anti -Dumping Agreement  ................................ .............................. 45 
6.1.2    Imposition of anti -dumping duties: Article 9.3 of the Anti -Dumping Agreement 
and Article VI:2 of the GATT 1994  ................................ ................................ ........................ 48 
6.1.2.1    The Panel's findings  ................................ ................................ ............................... 48 
6.1.2.2    Whether the Panel erred in its interpretation of Article 9.3 of the Anti -Dumping 
Agreement  ................................ ................................ ................................ ........................ 49 
6.1.2.3    Whether the Panel erred in its application of Arti cle 9.3 of the Anti -Dumping 
Agreement  ................................ ................................ ................................ ........................ 52 
6.1.2.4    Conclusions  ................................ ................................ ................................ .......... 53 
6.1.3    Non-attribution analysis in causation determination: A rticles 3.1 and 3.5 of the 
Anti-Dumping Agreement  ................................ ................................ ................................ ....54 
6.1.3.1    Relevant background and the Panel's findings  ................................ ........................... 54 
6.1.3.2    Relevan t provisions  ................................ ................................ ............................... 57 WT/DS473/AB/R  
 
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  6.1.3.3    Whether the Panel erred in its interpretation of Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement  ................................ ................................ ................................ ....58 
6.1.3.4    Whether the Panel erred in concluding that the EU authorities did not rely on the 
revised data  ................................ ................................ ................................ ...................... 59 
6.1.3.5    Whether the Panel erred in failing to distinguish overcapacity from capac ity 
utilization and in failing to note the inconsistency of the EU authorities' conclusion in light 
of the evidence before them  ................................ ................................ ................................ 61 
6.1.3.6    Conclusions  ................................ ................................ ................................ .......... 62 
6.2   Claims concerning the second subparagraph of Article  2(5) of the Basic  Regulation  ............ 63 
6.2.1    Introduction  ................................ ................................ ................................ ............ 63 
6.2.2    The assessment of the meaning of municipal law  ................................ ......................... 64 
6.2.3    Article  2.2.1.1 of the Anti -Dumping  Agreement  ................................ ........................... 65 
6.2.3.1    The Panel's findings  ................................ ................................ ............................... 66 
6.2.3.2    Whether the Panel erred in ascertaining the meaning of the 
second  subparagraph of Article  2(5) of the Basic Regulation  ................................ .................... 67 
6.2.3.3    Whether the Panel acted inconsistently with Article  11 of the DSU  .............................. 75 
6.2.3.4    Conclusions  ................................ ................................ ................................ .......... 78 
6.2.4    Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994 ................................ ................................ ................................ ........................ 78 
6.2.4.1    The Panel's findings  ................................ ................................ ............................... 79 
6.2.4.2    The assessment of a complaint that a measure is inconsistent "as such" with 
WTO obligations  ................................ ................................ ................................ ................. 81 
6.2.4.3    Whether the Panel erred in ascertaining the meaning of the 
second subparagraph of Article  2(5) of the Basic Regulation  ................................ .................... 83 
6.2.4.4    Whether the Panel acted inconsistently with Article  11 of the DSU  .............................. 90 
6.2.4.5    Whether the Panel erred by employing an erroneous legal standard to find that 
Argentina had not established that the second subparagraph of Article  2(5) of the 
Basic Regulation is inconsistent "as such" with Article  2.2 of the Anti -Dumping  Agreement 
and Article  VI:1(b)(ii) of the GATT  1994 ................................ ................................ ............... 91 
6.2.4.6    Conclusions  ................................ ................................ ................................ .......... 95 
6.2.5    Article  XVI:4 of the WTO  Agreement and Article  18.4 of the 
Anti-Dumping  Agreement  ................................ ................................ ................................ ....96 
7   FINDINGS AND CONCLUS IONS  ................................ ................................ ..................  96 
7.1   Claims concerning the EU anti -dumping me asure on imports of biodiesel from 
Argentina  ................................ ................................ ................................ .......................... 96 
7.1.1    Determination of dumping  ................................ ................................ ........................ 97 
7.1.1.1    Article  2.2.1.1 of the Anti -Dumpin g Agreement  ................................ ......................... 97 
7.1.1.2    Article  2.2 of the Anti -Dumping  Agreement and Article VI:1(b)(ii) of the 
GATT  1994 ................................ ................................ ................................ ........................ 97 
7.1.1.3    Article  2.4 of the Anti -Dumping Agreement  ................................ .............................. 97 
7.1.2    Imposition of anti -dumping duties: Article 9.3 of the Anti -Dumping Agreement 
and Article VI:2 of the GATT 1994  ................................ ................................ ........................ 98 
7.1.3    Non-attribution analysis in causation determination: Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement  ................................ ................................ ................................ ....98 
7.2   Claims concerning the second subparagra ph of Article  2(5) of the Basic  Regulation  ............ 99 
7.2.1    Article  2.2.1.1 of the Anti -Dumping  Agreement  ................................ ........................... 99 WT/DS473/A B/R 
 
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  7.2.2    Article  2.2 of th e Anti -Dumping  Agreement and Article VI:1(b)(ii) of the 
GATT  1994 ................................ ................................ ................................ ........................ 99 
7.2.3    Article  XVI:4 of the WTO  Agreement and Article  18.4 of the 
Anti-Dumping  Agreement  ................................ ................................ ................................ .. 100 
7.3   Recommendation  ................................ ................................ ................................ ...... 100 
 
 WT/DS473/AB/R  
 
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ABBREVIATIONS USED I N THIS REPORT  
Abbreviation  Description  
Anti-Dumping Agreement  Agreement on Implementation of Article VI of th e General Agreement on Tariffs  
and Trade 1994  
Basic Regulation  Council Regulation (EC) No. 1225/2009 of 30 November 2009 on protection 
against dumped imports from countries not members of the European 
Community  (codified version), Official Journal of the European Union , L Series, 
No. 343 (22 December 2009), pp.  51-73, and corrigendum thereto, L Series, 
No. 7 (12 January 2010), pp.  22-23 (Panel Exhibit ARG -1) 
CARBIO  Cámara Argentina de Biocombustibles ( Association of Argentine Biodiesel 
Producers)  
Council Regulation (EC) 
No. 384/96  Council Regulation (EC) No. 384/96 of 22 December 1995 on protection against 
dumped imports from countries not members of the European Community, 
Official Journal of the European Communities, L Series, No. 56 (6 March 1996), 
p.1 (Panel Exhibit ARG -4) 
Counci l Regulation (EC) 
No. 1972/2002  Council Regulation (EC) No.  1972/2002 of 5 November 2002 amending 
Regulation (EC) No.  384/96 on the protection against dumped imports from 
countries not members of the European Community, Official Journal of the 
European Com munities , L Series, No.  305 (7 November 2002), pp.  1-3 (Panel 
Exhibit ARG -5) 
Definitive Disclosure  General Disclosure Document (Annex 1), AD593 – Anti-dumping proceeding 
concerning imports of biodiesel originating in Argentina and Indonesia, Proposal 
to impose definitive measures, 1 October 2013  (Panel Exhibit ARG-35) 
Definitive Regulation  Council Implementing Regulation (EU) No.  1194/2013 of 19  November 2013 
imposing a definitive anti -dumping duty and collecting definitively the 
provisional duty imposed on imports of biodiesel originating in Argentina and 
Indonesia, Official Journal of the European Union , L Series, No.  315 (26 
November 2013), pp.  2-26 (Panel Exhibit ARG -22) 
DET Differential Export Tax  
DSB Dispute Settlement Body  
DSU Understanding on Ru les and Procedures Governing the Settlement of Disputes  
EBB European Biodiesel Board  
EU authorities  European Commission and the Council  of the European Union  
FOB  free on board  
GAAP  generally accepted accounting principles  
GATT 1994  General Agreement  on Tariffs and Trade 1994  
IP investigation period  
Provisional Regulation  Commission Regulation (EU) No . 490/2013 of 27 May 2013 imposing a 
provisional anti -dumping duty on imports of biodiesel originating in Argentina 
and Indonesia, Official journal of the European  Union , L Series, No. 141 (28 May 
2013), pp. 6 -25 (Panel Exhibit ARG -30)  
SCM Agreement  Agreement on Subsidies and Countervailing Measures  
surrogate price for 
soybeans  The average of the reference prices of soybeans published by the Argentine  
Ministry of Agriculture for export FOB Argentina during the investigation period, 
minus fobbing costs  
USDOC  United States Department of Commerce  
Vienna Convention  Vienna Convention on the Law of Treaties, Done at Vienna, 23 May 1969, 
UN Treat Series, V ol. 1155, p. 331  
WTO World Trade Organization  
WTO Agreement  Marrakesh Agreement Establishing the World Trade Organization  WT/DS473/A B/R 
 
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  PANEL EXHIBITS CITED  IN THIS REPORT  
Panel Exhibit  Description  
ARG-1 Council Regulation (EC) No. 1225/2009 of 30 November 2009 on p rotection against 
dumped imports from countries not members of the European Community (codified 
version), Official Journal of the European Union , L Series, No. 343 (22 December 2009), 
pp. 51-73, and corrigendum thereto, L Series, No. 7 (12 January 2010), p p. 22-23 
ARG-3 Council Regulation (EC) No . 3283/94 of 22 December 1994 on protection against 
dumped imports from countries not members of the European Community, Official 
Journal of the European Communities, L Series, No. 349 (31 December 1994), p. 1  
ARG-4 Council Regulation (EC) No . 384/96 of 22 December 1995 on protection against dumped 
imports from countries not members of the European Community, Official Journal of the 
European Communities, L Series, No. 56 (6 March 1996), p.1  
ARG-5 Council Regulatio n (EC) No. 1972/2002 of 5 November 2002 amending Regulation (EC) 
No. 384/96 on the protection against dumped imports from countries not members of 
the European Community, Official Journal of the European Communities , L Series, 
No. 305 (7 November 2002), pp . 1-3 
ARG-6 E. Borovikov and B.  Evtimov, "EC's Treatment of Non -Market Economies in Anti -
Dumping Law: Its History: An Evolving Disregard of International Trade Rules; Its State 
of Play: Inconsistent with the GATT/WTO?", Revue des Affaires Européennes  (2001-
2002) (Kluwer, 2002), pp. 875 -896 
ARG-7 Olesia Engelbutzeder, "EU Anti -Dumping Measures Against Russian Exporters – In View 
of Russian Accession to the WTO and the EU  Enlargement 2004 " (Peter Lang AG, 2004), 
(excerpt) pp.  159-160 
ARG-8 Council Regulati on (EC) No. 1891/2005 of 14 November 2005 amending Regulation 
(EEC) No. 3068/92 imposing a definitive anti -dumping duty on imports of potassium 
chloride originating in Belarus, Russia or Ukraine, Official Journal of the European Union , 
L Series, No. 302 (1 9 November 2005), pp.  14-21  
ARG-9 Council Regulation (EC) No. 1050/2006 of 11 July 2006 imposing a definitive 
anti-dumping duty on imports of potassium chloride originating in Belarus and Russia, 
Official Journal of the European Union , L Series, No. 191 (12 July 2006), pp.  1-25 
ARG-10 Council Regulation (EC) No. 954/2006 of 27 June 2006 imposing definitive anti -dumping 
duty on imports of certain seamless pipes and tubes, or iron or steel originating in 
Croatia, Romania, Russia and Ukraine, repealing Coun cil Regulations (EC) No. 2320/97 
and (EC) No. 348/2000, terminating the interim and expiry reviews of the anti -dumping 
duties on imports of certain seamless pipes and tubes of iron or non -alloy steel 
originating, inter alia , in Russia and Romania and termi nating the interim reviews of the 
anti-dumping duties on imports of certain seamless pipes and tubes of iron or non -alloy 
steel originating, inter alia , in Russia and Romania and in Croatia and Ukraine, Official 
Journal of the European Union , L Series, No. 175 (29 June 2006), pp.  4-38 
ARG-11 Council Regulation (EC) No. 812/2008 of 11 August 2008 amending Regulation (EC) 
No. 954/2006 imposing a definitive anti -dumping duty on imports of certain seamless 
pipes and tubes of iron or steel originating, inter al ia, in Russia, Official Journal of the 
European Union , L Series, No. 220 (15 August 2008), pp.  1-5 
ARG-12 Council Implementing Regulation (EU) No. 1269/2012 of 21 December 2012 amending 
Implementing Regulation (EU) No. 585/2012 imposing a definitive anti -dumping duty on 
imports of certain seamless pipes, of iron or steel, originating, inter alia, in Russia, 
following a partial interim review pursuant to Article 11(3) of Regulation (EC) 
No. 1225/2009, Official Journal of the European Union , L Series, No. 357 (28 December 
2012), pp.  1-6 
ARG-13 Council Regulation (EC) No. 1911/2006 of 19 December 2006 imposing a definitive 
anti-dumping duty on imports of solutions of urea and ammonium nitrate originating in 
Algeria, Belarus, Russia and Ukraine following an ex piry review pursuant to Article 11(2) 
of Regulation (EC)  No. 384/96, Official Journal of the European Union , L Series, No. 365 
(21 December 2006), pp.  26-49 
ARG-14 Council Regulation (EC) No. 238/2008 of 10 March 2008 terminating the partial interim 
review pursuant to Article 11(3) of Regulation (EC) No. 384/96 of the anti -dumping duty 
on imports of solutions of urea and ammonium nitrate originating in Russia, Official 
Journal of the European Union , L Series, No. 75 (18  March 2008), pp.  14-21 WT/DS473/AB/R  
 
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  Panel Exhibit  Description  
ARG-15 Counc il Implementing Regulation (EU) No. 1251/2009 of 18  December 2009 amending 
Regulation (EC) No. 1911/2006 imposing a definitive anti -dumping duty on imports of 
solutions of urea and ammonium nitrate originating, inter alia, in Russia, Official Journal 
of the European Union , L Series, No. 338 (19 December 2009), pp.  5-11 
ARG-16 Council Regulation (EC) No. 236/2008 of 10 March 2008 terminating the partial interim 
review pursuant to Article 11(3) of Regulation (EC) No. 384/96 of the anti -dumping duty 
on import s of ammonium nitrate originating in Russia, Official Journal of the European 
Union , L Series, No. 75 (18  March 2008), pp.  1-7 
ARG-17 Council Regulation (EC) No. 661/2008 of 8 July 2008 imposing a definitive anti -dumping 
duty on imports of ammonium nitrat e originating in Russia following an expiry review 
pursuant to Article  11(2) and a partial interim review pursuant to Article 11(3) of 
Regulation (EC) No. 384/96, Official Journal of the European Union , L Series, No. 185 
(12 July 2008), pp.  1-34 
ARG-18 Council Regulation (EC) No. 237/2008 of 10 March 2008 terminating the partial interim 
review pursuant to Article 11(3) of Regulation (EC) No. 384/96 of the anti -dumping duty 
on imports of ammonium nitrate originating, inter alia , in Ukraine, Official Journal  of the 
European Union , L Series, No. 75 (18 March 2008), pp.  8-13 
ARG-19 Council Regulation (EC) No. 907/2007 of 23 July 2007 repealing the anti -dumping duty 
on imports of urea originating in Russia, following an ex piry review pursuant to 
Article  11(2) o f Regulation (EC) No. 384/96, and terminating the partial interim reviews 
pursuant to Article 11(3) of such imports originating in Russia, Official Journal of the 
European Union , L Series, No. 198 (31 July 2007), pp.  4-19 
ARG-20 Council Regulation (EC) No. 240/2008 of 17 March 2008 repealing the anti -dumping 
duty on imports of urea originating in Belarus, Croatia, Libya and Ukraine, following an 
expiry review pursuant to Article 11(2) of Regulation (EC) No. 384/96, Official Journal of 
the European Union , L Series, No. 75 (18 March 2008), pp.  33-48 
ARG-21 Council Regulation (EC) No. 1256/2008 of 16 December 2008 imposing a definitive 
anti-dumping duty on imports of certain welded tubes and pipes of iron or non -alloy 
steel originating in Belarus, the People' s Republic of China and Russia following a 
proceeding pursuant to Article 5 of Regulation (EC) No. 384/96, originating in Thailand 
following an expiry review pursuant to Article 11(2) of the same Regulation, originating 
in Ukraine following an expiry revie w pursuant to Article 11(2) and an interim review 
pursuant to Article 11(3) of the same Regulation, and terminating the proceedings in 
respect of imports of the same product originating in Bosnia and Herzegovina and 
Turkey, Official Journal of the European  Union , L Series, No. 343 (19 December 2008), 
pp. 1-38 
ARG-22 Council Implementing Regulation (EU) No. 1194/2013 of 19  November 2013 imposing a 
definitive anti -dumping duty and collecting definitively the provisional duty imposed on 
imports of biodiesel o riginating in Argentina and Indonesia, Official Journal of the 
European Union , L Series, No. 315 (26 November 2013), pp.  2-26 
ARG-23 Judgment of the General Court of the European Union  (Eight h Chamber) of 7 February 
2013, Case T -235/08, Acron OAO and Doro gobuzh OAO v Council of the European Union  
ARG-30 Commission Regulation (EU) No. 490/2013 of 27 May 2013 imposing a provisional 
anti-dumping duty on imports of biodiesel originating in Argentina and Indonesia, 
Official Journal of the European Union , L Series, No. 141 (28 May 2013), pp.  6-25 
ARG-31 Consolidated version of the new anti -dumping complaint concerning imports of biodiesel 
originating in Argentina and Indonesia – Complaint to the Commission of the European 
Union under Council Regulation (EC) No. 1225/2009  
ARG-32 Notice of initiation of an anti -dumping proceeding concerning imports of biodiesel 
originating in Argentina and Indonesia, Official Journal of the European Union , C Series, 
No. 260 (29 August 2012), pp.  8-16 
ARG-33 Notice of initiation of an anti -subsidy proceeding concerning imports of biodiesel 
originating in Argentina and Indonesia, Official Journal of the European Union , C Series, 
No. 342 (10 November 2012), pp.  12-20 
ARG-35 General Disclosure Document (Annex 1), AD593 – Anti-dumpin g proceeding concerning 
imports of biodiesel originating in Argentina and Indonesia, Proposal to impose definitive 
measures, 1 October 2013  WT/DS473/A B/R 
 
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  Panel Exhibit  Description  
ARG-36 Commission Regulation (EU) No. 1198/2013 of 25 Nov ember 2013 terminating the 
anti-subsidy proceeding concern ing imports of biodiesel originating in Argentina and 
Indonesia and repealing Regulation (EU) No. 330/2013 making such imports subject to 
registration, Official Journal of the European Union , L Series, No. 315 (26 November 
2013), pp.  67-68 
ARG-37 Written Submission by CARBIO of 5 November 2012 in AD593 – Anti-dumping 
investigation concerning imports of biodiesel originating in, inter alia , Argentina  
ARG-39 Letter dated 17  October 2013 from CARBIO and its members providing comments on 
the Definitive Disclo sure  
ARG-43 CARBIO and its Members, PowerPoint presentation on AD593 – Anti-dumping 
investigation concerning imports of biodiesel originating in, inter alia , Argentina, 
presented at the hearing held on 14 December 2012  
ARG-46 CARBIO, Power Point presenta tion on AD593 – Biodiesel originating in Argentina, 
presented at the hearing held on 8 July 2013  
ARG-51 Letter dated 1 July 2013 from CARBIO providing comments on the Provisional Disclosure  
ARG-52 Judgment of the General Court of the European Union (Eig hth Chamber) of 7 February 
2013, Case T -118/10, Acron OAO v Council of the European Union  
ARG-53 Judgment of the General Court of the European Union (Eighth Chamber) of 7 February 
2013, Case T -459/08, EuroChem Mineral and Chemical Company OAO  (Eurochem MC C) 
v Council of the European Union  
ARG-54 Judgment of the General Court of the European Union (Eighth Chamber) of 7 February 
2013, Case T -84/07, EuroChem Mineral and Chemical Company OAO (Eurochem M CC) v 
Council of the European Union  
EU-3 Commission Deci sion of 13 February 2013 terminating the anti -dumping proceeding 
concerning imports of white phosphorus, also called elemental or yellow phosphorus, 
originating in the Republic of Kazakhstan, Official Journal of the European Union , 
L Series, No. 43 (14 Feb ruary 2013), pp. 38 -58 
EU-4 Commission Regulation (EC) No. 988/2004 of 17 May  2004 imposing provisional 
anti-dumping duties on imports of okoumé plywood originating in the People's Republic 
of China, Official Journal of the European Union , L Series, No. 181 (18 May 2004), 
pp. 5-23 
EU-8 Tietje et al., "Cost of Production Adjustments in Anti -dumping Proceedings: Challenging 
Raw Material Inputs Dual Pricing Systems in EU Anti -dumping Law and Practice" (2011) 
45(5) Journal of World Trade , pp. 1071-1102 
EU-24 Commission Regulation (EC) No. 1235/2003 of 10 July 2 003 imposing a provisional 
anti-dumping duty on imports of silicon originating in Russia, Official Journal of the 
European  Union , L Series, No. 173 (11  July 2003), pp.  14-34 
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  CASES CITED IN THIS REPOR T 
Short Title  Full Case Title and Citation  
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 – Textiles and 
Apparel  Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, 
Textiles, Apparel and Other Items , WT/DS56/AB/R  and Corr.1, adopted 22 April 
1998, DSR 1998:III, p. 1003  
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 – GOES Appellate Body Report, China – Countervailing and Anti -Dumping Duties on Grain 
Oriented Flat -Rolled Electrical Steel from the United States , WT/DS414/AB/R , 
adopted 16 November 2012, D SR 2012:XII, p. 6251  
China – HP-SSST (Japan)  
/ China – HP-SSST (EU)  Appellate Body Reports, China – Measures Imposing Anti -Dumping Duties on 
High-Performance Stainless Steel Seamless Tubes ("HP -SSST") from Japan / 
China – Measures Imposing Anti -Dumping Du ties on High -Performance Stainless 
Steel Seamless Tubes ("HP -SSST") from the European Union , WT/DS454/AB/R  
and Add.1 / WT/DS460/AB/R  and Add.1 , adopted 28 October 2015  
China – Rare Earths  Appellate Body Reports, China – Measures Related to the Exportation of Rare 
Earths, Tungsten, and Molybdenum , WT/DS431/AB/R  / WT/DS432/AB/R  / 
WT/DS433/AB/R , adopte d 29 August 2014, DSR 2014:III, p. 805  
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 to Article  21.5 of the DSU  by 
India, WT/DS141/AB/RW , adopted 24 April 2003 , DSR 200 3:III, p. 965 
EC — Fasteners (China)  Appel late 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 – Fasteners (China) 
(Article 21.5  – China)  Appellate Body Report, European Communities – Definitive Anti -Dumping Measures 
on Certain Iron or St eel Fasteners from China – Recourse to Article 21.5 of the 
DSU by China , WT/DS397/AB/RW  and Add.1 , adopted 12 February 2016  
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/DS 377/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 Sal mon 
from Norway , WT/DS337/R , adopted 15 January 2008, and Corr.1, DSR 2008 :I, 
p. 3 
EC – Tube or Pipe Fittings  Appellate Body Report, European Communities – Anti-Dumping Duties on 
Malleable Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/AB/R , adopted 
18 August 2003, DSR 2003:VI, p. 2613  
EC – Tube or Pipe Fittings  Panel Report, European Communities – Anti-Dumping Duties on Malleable Cast 
Iron Tube or Pipe Fittings from Brazil , WT/DS219/R , adopted 18 August 2003, as 
modified by Appellate Body Report WT/DS219/AB/R, DSR 2003:VII, p. 2701  
EC and certain member 
States – Large Civil 
Aircraft  Appellate Body Report, European Communities and Certain Member States – 
Measures Affecting Trade in Large Civil Aircraft , WT/DS316/AB/R , adopted 1 June 
2011, DSR 2011:I, p. 7  
Egypt – Steel Rebar  Panel Rep ort, Egypt – Definitive Anti -Dumping Measures on Steel Rebar from 
Turkey , WT/DS211/R , adopted 1 October 2002, DSR 2002:VII, p. 2667  
India – Patents (US)  Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R , adopted 16 January 1998, 
DSR 1998:I, p. 9  
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/A B/R, adopted 20 December 
2005, DSR 2005:XXII, p. 10853  WT/DS473/A B/R 
 
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  Short Title  Full Case Title and Citation  
Thailand – H-Beams  Appellate Body Report, Thailand – Anti-Dumping Duties on Angles, Shapes and 
Sections of Iron or Non -Alloy Steel and H -Beams from Poland , WT/DS122/AB/R , 
adopted 5 April 2001, DSR 2001:VII, p. 2701  
Thailand – H-Beams  Panel Report, Thailand – Anti-Dumping  Duties on Angles, Shapes and Sections of 
Iron or Non -Alloy Steel and H -Beams from Poland , WT/DS122/R , adopted 5 April 
2001, as modified by Appellate Body Report WT/DS122/AB/R, DSR 2001:VII, 
p. 2741 
US — 1916 Act  Appellate Body Report, United States – Anti-Dumping Act of 1916 , 
WT/DS136/AB/R , WT/DS162/AB/R , adopted 26 September 2000, DSR 2000:X, 
p. 4793 
US – Carbon Steel  Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion -Resistant Carbon S teel Flat Products from Germany , WT/DS213/AB/R  
and Corr.1, adopted 19 D ecember 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, DSR 2014:V, p. 1727  
US – Continued Zeroing  Appellate Body Report, United States – Continued Existenc e and Application of 
Zeroing Methodology , WT/DS350/AB/R , adopted 19 Febr uary 2009, DSR 2009:III, 
p. 1291  
US – Continued Zeroing  Panel Report, United States – Continued Existence and Application of Zeroing 
Methodology , WT/DS350/R , adopted 19 February 2009, as modified as 
Appellate  Body Report WT/DS350/AB/R, DSR 2009:III, p. 1481  
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 – Countervailing and 
Anti-Dumping Measures 
(China)  Appellate Body Report, United States – Countervailing and Anti -Dumping 
Measures on Certain Products from C hina, WT/DS449/AB/R  and Corr.1, adopted 
22 July 2014, DSR 2014:VIII, p.  3027 
US – FSC (Article 21.5 – 
EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations" – Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS108/AB/RW , adopted 29 January 2002, DSR 2002:I, p. 55  
US – Hot-Rolled Steel  Appellate Body Report, United States – Anti-Dumping Measu res on Certain 
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R , adop ted 23 August 2001, 
DSR 2001:X, p. 4697  
US – Oil Country Tubular 
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 – Section 211 
Appropriations Act  Appellate Body Re port, United States – Section 211 Omnibus Appropriations Act of 
1998, WT/DS176/AB/R , adopted 1 February 2002, DSR 2002:II, p. 589  
US – Section 301 Trade 
Act Panel Report, United States – Sections 301 -310 of the Trade Act of 1974 , 
WT/DS152/R , adopted 27 January 2000, DSR 2000:II, p. 815  
US – Shrimp II 
(Viet Nam)  Appellate Body Report, United States – Anti-Dumping Measures on Certain Shrimp 
from Viet Nam, WT/DS429/AB/R , and Corr.1, adopted 22 April 2015  
US – Softwood Lum ber V  Panel Report, United States – Final Dumping Determination on Softwood Lumber 
from Canada , WT/DS264/R , adopted 31 August 2004, as modified by 
Appellate  Body Report WT/DS264/AB/R, DSR 2004:V, p. 1937  
US – Softwood Lumber V 
(Article 21.5 – Canada)  Appellate Body Report, United States – Final Dumping Determination on Softwood 
Lumber from Canada – Recourse to Article 21.5 of the DSU  by Canada , 
WT/DS2 64/AB/RW , adopted 1 September 2006, DSR  2006:XII, p.  5087 
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 – Washing Machines  Appellate Body Report, United States – Anti-Dumping and Coun tervailing 
Measures on Large Residential Washers from Korea, WT/DS464/AB/ R and Add.1, 
adopted 26 September 2016  WT/DS473/AB/R  
 
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  Short Title  Full Case Title and Citation  
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 Me thodology for 
Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R , adopted 9 May 2006, 
and Corr.1, DSR 2006:II, p. 417  
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  WT/DS473/A B/R 
 
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  WORLD TRADE ORGANIZATION  
APPELLATE BODY 
 
 
European Union – Anti-Dumping Measures 
on Biodiesel from Argentina  
 
European Union, Appellant/Appellee  
Argentina, Other Appellant/Appellee  
 
Australia, Third Participant  
China, Third Participant  
Colombia, Third Participant  
Indonesia, Third Participant  
Mexico, Third Participant  
Norway, Third Participant  
Russia, Third Parti cipant  
Saudi Arabia, Third Participant  
Turkey, Third Participant  
United States, Third Participant  
 AB-2016-4 
 
 
Appellate Body Division:  
 
Bhatia, Presiding Member  
Van den Bossche, Member  
Zhang, Member  
 
 
 
1  INTRODUCTION  
1.1.  The European Union and Argentina each appeals certain issues of law and legal 
interpretations developed in the Panel Report, European Union – Anti-Dumping Measures on 
Biodiesel from Argentina1 (Panel Report). The Panel was established on 25 April 2014 to consider a 
complaint by Argentina with respect to two measures of the European Union2: (i) the anti -dumping 
measure imposed by the European Union on imports of biodiesel originating in Argentina3; and 
(ii) the second  subparagraph of Article 2(5) of Council Regulation (EC) No. 1225/2009 of 
30 November 2009 on protection against dumped imports from countries not members of the 
European  Community4 (Basic Regulation).5  
1.2.  The anti -dumping measure on biodiesel challenged by Argentina was adopted upon 
conclusion of an investigation on imports of biodies el originating in Argentina and Indonesia.6 The 
European  Commission initiated the investigation on 29 August 2012, following a complaint 
submitted by the European Biodiesel Board (EBB).7 Provisional anti -dumping duties were imposed 
                                                
1 WT/DS473/R , 29 March 2016.  
2 Panel Report, para. 2.1. See also Request f or the Establishment of a Panel by Argentina, WT/DS473/5.  
3 Panel Report, para. 2.3 (referring to Commission Regulation (EU) No.  490/2013 of 27 May 2013 
imposing a provisional anti -dumping duty on imports of biodiesel originating in Argentina and Indonesia , 
Official Journal of the European Union , L Series, No.  141 (28 May 2013), pp.  6-25 (Provisional Regulation) 
(Panel Exhibit ARG -30); and Council Implementing Regulation (EU) No.  1194/2013 of 19 November 2013 
imposing a definitive anti -dumping duty and coll ecting definitively the provisional duty imposed on imports of 
biodiesel originating in Argentina and Indonesia, Official Journal of the European Union , L Series, No.  315 
(26 November 2013), pp.  2-26 (Definitive Regulation) (Panel Exhibit ARG -22)). In this  Report, we refer to both 
the Provisional Regulation and Definitive Regulation collectively as the "anti -dumping measure on biodiesel".  
4 Council Regulation (EC) No.  1225/2009 of 30 November 2009 on protection against dumped imports 
from countries not memb ers of the European Community (codified version), Official Journal of the 
European  Union , L Series, No.  343 (22 December 2009), pp.  51-73, and corrigendum thereto, L Series, No. 7 
(12 January 2010), pp.  22-23 (Panel Exhibit ARG -1). 
5 Panel Report, para. 2. 2 (referring to Basic Regulation (Panel Exhibit ARG -1)). 
6 Panel Report, para. 2.3.  
7 Panel Report, para. 2.3 (referring to Notice of initiation of an anti -dumping proceeding concerning 
imports of biodiesel originating in Argentina and Indonesia, Official Journal of the European Union , C Series, 
No. 260 (29 August 2012), pp.  8-16 (Notice of initiation of the anti -dumping investigation) (Panel Exhibit 
ARG-32); and Consolidated version of the new  anti-dumping complaint concerning imports of biodiesel 
originat ing in Argentina and Indonesia – Complaint to the Commission of the European Union under Council 
Regulation (EC) No. 1225/2009 ( Consolidated version of the complaint) (Panel Exhibit ARG -31)). In addition, 
and also following a complaint by the EBB, on 10 No vember 2012, the EU authorities initiated a countervailing 
duty investigation with regard to imports of biodiesel from Argentina and Indonesia. The EU authorities WT/DS473/AB/R  
 
- 13 - 
 
  on 29  May 2013 through t he Provisional Regulation , and definitive anti -dumping duties on 
27 November  2013 through the Definitive Regulation .8 With regard to the 
Argentine  producers/exporters, the rates of the provisional anti -dumping duties applied were equal 
to the dumping margi ns ranging from  6.8% to 10.6%.9 In the Definitive Regulation, the 
EU authorities10 confirmed the provisional findings of dumping and injury, and calculated dumping 
margins ranging from 41.9% to 49.2%. As the se dumping margins exceeded the inju ry margins 
calculated by the EU  authorities, which ranged from 22% to 25.7%, the EU  authorities applied 
duties corresponding to the injury margins.11  
1.3.  Argentina claimed before the Panel that the anti -dumping measure on biodiesel is 
inconsistent with several provisions of  the Agreement on Implementation of Article VI of the 
General Agreement on Tariffs and Trade 1994 ( Anti-Dumping Agreement ) and the 
General  Agreement on Tariffs and Trade 1994 ( GATT 1994 ) relating to the dumping margin 
determination, the injury and causatio n determinations, and the imposition of duties. Specifically, 
Argentina  alleged that the European Union  acted inconsistently with: (i)  Article  2.2.1.1 of the 
Anti-Dumping Agreement by failing to calculate the cost of production of the product under 
investi gation on the basis of records kept by the Argentine producers12, and by including costs not 
associated with the production and sale of biodiesel in the calculation of the cost of production; 
(ii) Article 2.2 of the Anti -Dumping Agreement and Article VI:1(b )(ii) of the GATT 1994 by failing 
to construct the normal value of the exports of biodiesel on the basis of the cost of production in 
the country of origin13; (iii) Articles  2.2 and 2.2.2(iii) of the Anti -Dumping Agreement by failing to 
base the profit -margin component of the constructed normal value on a reasonable method within 
the meaning of Article  2.2.2(iii); (iv)  Article 2.4 of the Anti -Dumping Agreement by failing to make 
due allowance for differences affecting price comparability and thus precluding a fair comparison 
between the normal value and the export price; (v) Article 9.3 of the Anti -Dumping Agreement 
and Article  VI:2 of the GATT  1994 by imposing anti -dumping duties in excess of the margins of 
dumping that should have been established under Art icle 2 of the Anti -Dumping Agreement; 
(vi) Articles 3.1 and  3.4 of the Anti -Dumping Agreement with regard to the EU authorities' injury 
determination; and (vii)  Articles  3.1 and 3.5 of the Anti -Dumping Agreement with regard to the 
EU authorities' non -attribution analysis and finding that the injury suffered by the EU domestic 
industry did not result from factors other than dumped imports.14 
1.4.  Furthermore, Argentina claimed before the Panel that the second subparagraph of 
Article  2(5) of the Basic  Regulation is  inconsistent "as such" with: (i) Article 2.2.1.1 and, as a 
consequence, Article  2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 
by providing that the authorities shall reject or adjust the cost data in the records of producers o r 
exporters under investigation when those costs reflect prices that are "abnormally or 
                                                                                                                                                  
terminated that investigation on 27  November 2013 following the withdrawal of the complaint b y the domestic 
industry. (Panel Report, fn 15 to para. 2.3 (referring to Notice of initiation of an anti -subsidy proceeding 
concerning imports of biodiesel originating in Argentina and Indonesia, Official Journal of the European Union , 
C Series, No.  342 (1 0 November 2012), pp.  12-20 (Notice of initiation of the countervailing duty investigation) 
(Panel Exhibit ARG -33); and Commission Regulation (EU) No.  1198/2013 of 25 November 2013, terminating 
the anti -subsidy proceeding concerning imports of biodiesel or iginating in Argentina and Indonesia and 
repealing Regulation (EU) No.  330/2013 making such imports subject to registration, Official Journal of the 
European Union , L Series, No.  315 (26 November 2013), pp.  67-68 (Notice of termination of the countervailin g 
duty investigation) (Panel Exhibit ARG -36)) 
8 Panel Report, para. 2.3 (referring to Provisional Regulation (Panel Exhibit ARG -30); and Definitive 
Regulation (Panel Exhibit ARG -22)). 
9 Panel Report, para. 7.179 (referring to Provisional Regulation (Panel Exhibit ARG -30), Recital 179).  
10 The European Commission conducts investigations and adopts preliminary determinations; the 
Council of the European Union adopts final determinations on the basis of proposals from the 
European  Commission. (Panel Report, fn 17 to para. 2.3) We refer to both collectively as the "EU authorities".  
11 Panel Report, para. 7.179. The factual aspects of this dispute are set forth in greater detail in 
paragraphs  2.1-2.3, 7.72 -7.73, 7.179 -7.184, 7.279 -7.281, 7.311 -7.316, 7.374 -7.379, 7 .441-7.448, 7.473 -
7.476, 7.491 -7.496, and 7.512 -7.517 of the Panel Report, and in section 5 and paragraphs 6.117 -6.118  of this 
Report.  
12 Argentina claimed that, as a consequence of this inconsistenc y, the European Union also acted 
inconsistently with Article 2.2 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994. 
(Panel  Report, paras. 3.1.b.i, 7.193, and 7.250)  
13 Argentina claimed that, as a result of the inconsistencies in (i) to  (ii) above, the EU authorities also 
acted inconsistently with Article 2.1 of the Anti -Dumping Agreement and Article VI:1 of the  GATT 1994. 
(Panel  Report, para . 3.1.b.iv)  
14 Panel Report, para. 3.1.b.  WT/DS473/A B/R 
 
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  artificially  low" as a result of an alleged market distortion15; (ii) Article 2.2 of the Anti -Dumping 
Agreement and Article VI:1(b)(ii) of the GATT  1994 by providing tha t the costs shall be adjusted 
or established in certain cases "on any other reasonable basis, including information from other 
representative markets"16; and, as a consequence, (iii) Article XVI:4 of the Marrakesh Agreement 
Establishing the World Trade Orga nization ( WTO Agreement ) and Article 18.4 of the Anti -Dumping 
Agreement.17 
1.5.  The European Union requested the Panel to reject Argentina's claims in their entirety.18 In 
addition, the European Union submitted a request for a preliminary ruling, arguing that cer tain 
claims in Argentina's panel request fell outside the Panel's terms of reference because: (i)  the 
panel request failed to identify the specific measures at issue; (ii) the panel request failed to meet 
the requirement in Article 6.2 of the Understanding  on Rules and Procedures Governing the 
Settlement of Disputes ( DSU) to "provide a brief summary of the legal basis of the complaint 
sufficient to present the problem clearly"; and/or (iii) they were not included in Argentina's request 
for consultations.19 The Panel declined to issue the ruling requested by the European Union; 
finding, instead, that Argentina's panel request fulfils the requirements of Article 6.2 of the DSU20, 
and that "the claims in the panel request may reasonably be said to have evolved fr om those in 
the request for consultations".21 The Panel therefore ruled that the claims subject to the 
European  Union's request for a preliminary ruling fell within the Panel's terms of reference.22 
1.6.  In the Panel Report, circulated to Members of the World Tra de Organization (WTO) on 
29 March 2016, the Panel found that:  
a. With respect to Argentina's claims concerning the anti -dumping measure imposed by the 
European Union on imports of biodiesel from Argentina:  
i. The European Union acted inconsistently with Article 2.2.1.1 of the Anti -Dumping 
Agreement by failing to calculate the cost of production of the product under 
investigation on the basis of the records kept by the producers23; 
ii. The European Union acted inconsistently with Article 2.2 of the Anti -Dumping 
Agreeme nt and Article VI:1(b)(ii) of the GATT 1994 by using a "cost" for inputs that 
was not the cost prevailing "in the country of origin", namely, Argentina24; 
iii. Argentina had not established that the European Union acted inconsistently with the 
requirement under Article 2.4 of the Anti -Dumping Agreement to make a "fair 
comparison"25;  
                                                
15 Panel Report, para. 3.1.a.i.  
16 Panel Report, para. 3.1 .a.ii. 
17 Panel Report, para. 3.1.a.iii.  
18 Panel Report, para. 3.3.  
19 Panel Report, paras. 7.9 -7.10. See also paras. 7.17, 7.35, and 7.58; and Executive summary of the 
European Union's request for a preliminary ruling, Panel Report, Annex C -5. 
20 Panel Repor t, para. 7.34. See also paras. 7.32 -7.33. 
21 Panel Report, para. 7.54. See also paras. 7.62 -7.64. 
22 These claims include: (i) the claim under Article 9.3 of the Anti -Dumping Agreement; and (ii) claims 
concerning the consistency of the second subparagraph of  Article 2(5) of the Basic Regulation with Article 2.2 
of the Anti -Dumping Agreement and Article VI:1 of the GATT 1994. (See Panel Report, paras. 7.34, 7.55, 7.64, 
and 8.1.a.i -8.1.a.iii) With respect to the other claims subject to the European Union's prel iminary ruling 
request, the Panel noted that Argentina had not pursued those claims. The Panel therefore considered the 
aspects of the European Union's request regarding those claims to be moot, and made no findings on them. 
(Ibid., paras.  7.12-7.14 and 8. 1.a.iv)  
23 Panel Report, para. 8.1.c.i. See also para. 7.249. The Panel did not reach findings as to whether, as a 
consequence, the European Union acted inconsistently with Article 2.2 of the Anti -Dumping Agreement and 
Article VI:1(b)(ii) of the GATT  1994. (Ibid., para. 8.1.c.i; see also para. 7.250)  
24 Panel Report, para. 8.1.c.ii. See also para. 7.260. The Panel did not find it necessary, for the effective 
resolution of this dispute, to reach findings as to: (i) whether the European Union acted inconsistent ly with 
Article 2.2.1.1 of the Anti -Dumping Agreement because it included costs not associated with the production 
and sale of biodiesel in the calculation of the cost of production; or (ii) whether the European Union acted 
inconsistently with Article 2.1 of the Anti -Dumping Agreement and Article VI:1 of the GATT 1994 as a result of 
inconsistencies with Articles 2.2 and 2.2.1.1 of the Anti -Dumping Agreement and Article VI:1(b)(ii) of the 
GATT  1994. (Ibid., paras. 8.1.c.iii and 8.1.c.iv; see also paras. 7.26 9 and 7.276)  WT/DS473/AB/R  
 
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  iv. Argentina had not established that the European Union acted inconsistently with 
Articles 2.2.2(iii) and 2.2 of the Anti -Dumping Agreement in its determination of the 
amount for profit s applied in the construction of the Argentine producers' normal 
value26; 
v. The European Union acted inconsistently with Article 9.3 of the Anti -Dumping 
Agreement and Article VI:2 of the GATT 1994 by imposing anti -dumping duties in 
excess of the margins of du mping that should have been established under Article 2 
of the Anti -Dumping Agreement and Article VI:1 of the GATT 1994, respectively27;  
vi. The European Union acted inconsistently with Articles 3.1 and 3.4 of the 
Anti-Dumping Agreement in its examination of t he impact of the dumped imports on 
the domestic industry, insofar as such examination related to production capacity 
and capacity utilization28; and  
vii. Argentina had not established that the European Union's non -attribution analysis was 
inconsistent with Artic les 3.1 and 3.5 of the Anti -Dumping Agreement.29 
b. With respect to Argentina's claims concerning the EU Basic Regulation:  
i. Argentina had not established that the second subparagraph of Article 2(5) is 
inconsistent "as such" with Article 2.2.1.1 of the Anti -Dumping Agreement and, as a 
consequence, Article 2.2 of the Anti -Dumping Agreement and Article  VI:1(b)(ii) of 
the GATT 199430; 
ii. Argentina had not established that the second subparagraph of Article 2(5) is 
inconsistent "as such" with Article 2.2 of the Anti -Dumping Agreement and with 
Article VI:1(b)(ii) of the GATT 199431; and, therefore  
iii. Argentina had not established that the second subparagraph of Article 2(5) is 
inconsistent "as such" with Article XVI:4 of the WTO Agreement and Article  18.4 of 
the Anti -Dumping  Agreement.32 
1.7.  On 20 May 2016 , the European Union notified the Dispute Settlement Body ( DSB), pursuant 
to Articles  16.4 and 17 of the DSU, of its intention to appeal certain issues of law covered in the 
Panel Report and certain legal interpretations develope d by the Panel, and filed a Notice of 
Appeal33 and an appellant's submission pursuant to Rule  20 and Rule 21, respectively, of the 
Working Procedures for Appellate  Review34 (Working Procedures). On 25 May 2016 , 
Argentina  notified the DSB, pursuant to Article s 16.4 and 17 of the DSU, of its intention to appeal 
certain issues of law covered in the Panel Report and certain legal interpretations developed by the 
Panel, and filed a Notice of Other Appeal35 and an other appellant's submission pursuant to Rule 23 
of the Working  Procedures . On 7  June 2016, the European Union and Argentina each filed an 
appellee's submission.36 On 10 June 2016, Australia, China, Colombia, Indonesia, Mexico, Russia, 
                                                                                                                                                  
25 Panel Report, para. 8.1.c.v. See also para. 7.306.  
26 Panel Report, para. 8.1.c.vi. See also para. 7.351.  
27 Panel Report, para. 8.1.c.vii. See also para. 7.367.  
28 Panel Report, para. 8.1.c.viii. See also para. 7.431. The Panel found that Arge ntina's claims under 
Articles 3.1 and 3.4 of the Anti -Dumping Agreement concerning the EU authorities' evaluation of return on 
investments fell outside the Panel's terms of reference. (Ibid., para. 8.1.c.ix; see also para. 7.429)  
29 Panel Report, para. 8.1. c.x. See also para. 7.529.  
30 Panel Report, para. 8.1.b.i. See also paras. 7.153 -7.154.  
31 Panel Report, para. 8.1.b.ii. See also paras. 7.169 -7.174.  
32 Panel Report, para. 8.1.b.iii. See also para. 7.175.  
33 Notification of an Appeal by the European Union, WT /DS473/10.  
34 WT/AB/WP/6 , 16 August 2010.  
35 Notification of an Other Appeal by Argentina, WT/DS473/11.  
36 Pursuant to Rules 22 and 23(4) of the Working Procedures.  WT/DS473/A B/R 
 
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  Saudi  Arabia, and the United States each filed a third participant's subm ission.37 On the same day, 
Norway and Turkey each notified its intention to appear at the oral hearing as a third participant.38  
1.8.  By letter of 1 June 2016, the participants and third participants were informed that, in 
accordance with Rule 15 of the Working Procedures, the Appellate Body had notified the Chair of 
the DSB of its decision to authorize Appellate Body Member Mrs Yuejiao Zhang to complete the 
disposition of this appeal, even though her second term was due to expire before the completion of 
the app ellate proceedings.  
1.9.  On 30 June 2016, the Appellate Body Division hearing th is appeal  received two letters from 
the European Union. In the first letter, the European Union requested a period of 50 minutes to 
deliver its oral statement at the hearing. The Eu ropean Union expressed the view that there is "an 
unusual volume of third participant submissions in this appeal", and that these submissions "refer 
to a number of points that have not been raised by Argentina". The European Union asserted that 
it needed t o have a full opportunity to address these additional points on its "own motion" and "in 
an appropriately structured way". In the second letter, the European Union requested that 
additional procedures be adopted for: (i) public observation of the oral hear ing; and (ii) viewing of 
a recording of the oral hearing by third  participants. On 1 July 2016, the Division  invited Argentina 
and the third participants to comment on these requests by 12 noon on Tuesday, 5 July 2016. In 
response, Argentina, China, Mexico , and the United States submitted comments.  
1.10.   Having received comments on the request made by the European Union in its first letter39, 
on 6 July 2016, pursuant to Rule 28(1) of the Working Procedures, the Division  invited the 
European Union to submit an addi tional memorandum by 11 July 2016 to identify the precise 
points referred to by the third  participants that allegedly had not been raised by Argentina, and to 
explain the reasons for its concerns with these points. In the same letter, the Division  also inv ited 
Argentina and the third participants to respond in writing, if they so wished, by 14 July 2016.40 By 
the deadlines set out above, the European Union submitted a "non -exhaustive list" of arguments 
raised by certain third participants that it claimed had  not been developed in Argentina's written 
submissions, and Argentina and China each provided a written response.41 By letter 
dated  15 July 2016, the Division  informed the participants and third  participants that they would 
be accorded, respectively, 35  minutes each and 7  minutes each for their oral statements at the 
hearing. With respect to the requests made by the European Union in its second letter, the 
Division  received comments from Argentina, China, Mexico, and the United States.42 On 11 July 
                                                
37 Pursuant to Rule 24(1) of the Working Procedures.  
38 Pursuant to Rule 24(2) of the Working  Procedures. Malaysia, which was a third party before the Panel, 
neither filed a third participant's submission nor notified its intention to appear at the oral hearing.  
39 Argentina argued that the length of the third participants' submissions in these pro ceedings did not 
appear exceptionally long, and that it was unable to identify any issue in these submissions that had not been 
raised by the participants. In Argentina's view, the request to extend the time for the opening statements to 
50 minutes was unw arranted, and an extension of five to ten minutes to the time usually allocated to each 
participant would suffice. Mexico expressed support for retaining sufficient flexibility to ensure that the 
participants and third participants could make their stateme nts.  
40 On 8 July 2016, the European Union and China each requested an extension of the time period for 
filing, respectively, the additional memorandum, and the response thereto. T he Division declined these 
requests in a Procedural Ruling issued on 9 July 2016. The Procedural Ruling can be found in Annex D -1 of the 
Addendum to this Report, contained in document WT/DS473/AB/R/Add.1.  
41 Argentina argued that the points identified in the non -exhaustive list of the European Union either 
were addressed by Argenti na or were points that responded to the European Union's own arguments. 
Therefore, Argentina considered that an additional five -minute period would suffice to allow the 
European  Union to respond to these points in its oral statement. China  stated that thir d participants frequently 
raise points not developed by the participants, and that the European Union had not identified any 
extraordinary circumstances in this dispute that would justify an extension of time for its oral statement.  
42 Regarding the reques t to open the oral hearing to public observation, Argentina expressed regret that 
the European Union chose to make this request on a unilateral basis, and indicated that it would prefer not to 
have the hearing open to public observation in these proceeding s. Mexico indicated that it would not object to 
the request, while China stated that it wished to keep its statements and answers to questions confidential 
should the hearing be opened to public observation. Both China and Mexico emphasized that their posi tions in 
this dispute are without prejudice to their systemic positions on this issue. The United States confirmed its 
support for the European Union's request, as well as its wish to make its statements and answers to questions 
public. Regarding the Europ ean Union's request to adopt additional procedures for viewing a video recording of 
the oral hearing by the third participants, Argentina questioned the purposes to be served by such procedures 
and expressed concerns as to the administrative burden such pr ocedures would entail. None of the 
third participants supported this request. Further details regarding the comments by Argentina and the WT/DS473/AB/R  
 
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  2016, the Division  issued a Procedural Ruling in which the Division  declined the European Union's 
request to adopt additional procedures: (i) to allow public observation of the oral hearing, and 
(ii) to enable the third  participants to view a video recording of the oral hearing. The Procedural 
Ruling can be found in Annex D-2 of the Addendum to this Report.  
1.11.   By letter of 19 July 2016, the Chair of the Appellate Body notified the Chair of the DSB that 
the Appellate Body would not be able to circulate its Report within  the 60 -day period pursuant to 
Article  17.5 of the DSU, or within the 90 -day period pursuant to the same provision.43 The Chair of 
the Appellate Body explained that this was due to a number of factors, including the number and 
complexity of the issues raise d in this and concurrent appellate proceedings, the demands on the 
WTO Secretariat's translation services, the shortage of staff in the Appellate Body Secretariat, as 
well as the scheduling difficulties arising from a substantial workload of the Appellate Body, with 
several appeals proceeding in parallel, and overlap in the composition of the Divisions hearing the 
different appeals. On 9 August 2016, the Chair of the Appellate Body informed the Chair of the 
DSB that the Report in these proceedings would be circulated no later than 6 October 2016.44 
1.12.   The oral hearing in these appellate proceedings was held on 21 -22 July 2016.45 The 
participants and nine third participants (Australia, China, Colombia, Indonesia, Mexico, Norway, 
Russia, Saudi Arabia, and the Unite d States) made oral statements and/or responded to questions 
posed by the Members of the Appellate Body Division hearing the appeal.  
2  ARGUMENTS OF THE PAR TICIPANTS  
2.1.  The claims and arguments of the participants are reflected in the executive summaries of 
their written submissions provided to the Appellate  Body.46 The Notices of Appeal and 
Other  Appeal, and the executive summaries of the participants' claims and arguments, are 
contained in Annexes A and B of the Addendum to this Report, WT/DS473/AB/R/Add.1.   
3  ARGUMENTS OF THE THIR D PARTICIPANTS  
3.1.  The arguments of the third participants that filed a written submission are reflected in the 
executive summaries of those submissions provided to the Appellate  Body47, and are contained in 
Annex  C of the Addendum to this R eport, WT/DS473/AB/R/Add.1.   
4  ISSUES RAISED  
4.1.  The following issues are raised in this appeal with respect to the anti -dumping measure on 
biodiesel:  
a. in respect of the determination of dumping:  
i. whether the Panel erred in its interpretation and application of th e second condition 
in the first sentence of Article  2.2.1.1 of the Anti -Dumping Agreement in finding that 
the European Union acted inconsistently with th is provision when constructing the 
normal value by failing to calculate the cost of production of the p roduct under 
investigation on the basis of the records kept by the investigated producers (raised 
by the European Union);  
                                                                                                                                                  
third participants can be found in Annex D -2 of the Addendum to this Report, contained in document 
WT/DS473/AB/R/Add.1 . 
43 WT/DS473/12.  
44 WT/DS473/13.  
45 The oral hearing in this appeal was originally scheduled to commence in the afternoon of 21 July 
2016. By letter of 6 July 2016, the participants and third participants were informed that, in view of the size 
and complexit y of the submissions by the participants and third participants, the start of  the oral hearing would 
be advanced by half a day.  
46 Pursuant to the Appellate  Body communication on "Executive Summaries of Written Submissions in 
Appellate Proceedings" and "Gui delines in Respect of Executive Summaries of Written Submissions in 
Appellate  Proceedings" (WT/AB/23, 11 March 2015).  
47 Pursuant to the Appellate  Body communication on "Executive Summaries of Written Submissions in 
Appellate Proceedings" and "Guidelines in  Respect of Executive  Summaries of Written Submissions in 
Appellate  Proceedings" (WT/AB/23, 11 March 2015).  WT/DS473/A B/R 
 
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  ii. whether the Panel erred in its interpretation and application of Article 2.2 of the 
Anti-Dumping Agreement in finding that the Europea n Union acted inconsistently 
with Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994 by not using the cost of production in Argentina (raised by the 
European  Union);  and 
iii. whether the Panel erred in its interpretation and appl ication of Article 2.4 of the 
Anti-Dumping Agreement in finding that Argentina ha d not established that the 
European  Union failed to make a "fair comparison" between the normal value and the 
export price within the meaning of th is provision (raised by Arge ntina);  
b. whether the Panel erred in its interpretation and application of Article 9.3 of the 
Anti-Dumping Agreement in finding that the European Union acted inconsistently 
with Article  9.3 of the Anti -Dumping Agreement and, consequently, Article VI:2 of the  
GATT  1994 by imposing anti -dumping duties in excess of the margins of dumping that 
should have been established under Article 2 of the Anti -Dumping Agreement and 
Article  VI:1 of the GATT 1994, respectively (raised by the European  Union); and  
c. whether the P anel erred in its interpretation and application of Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement in finding that Argentina had not established that the 
EU authorities' non -attribution analysis, insofar as it related to the allegation of 
"overcapacity " as an "other factor" causing injury to the EU domestic industry, is 
inconsistent with these provisions (raised by Argentina).  
4.2.  The following issues are raised in this appeal with respect to the second subparagraph of 
Article 2(5) of the EU Basic Regulatio n: 
a. whether, in finding that Argentina had not established that the second subparagraph of 
Article  2(5) of the Basic  Regulation is inconsistent "as such" with Article  2.2.1.1 of the 
Anti-Dumping  Agreement, the Panel erred in ascertaining the scope and meani ng of the 
second subparagraph of Article  2(5) and thereby erred in its application of Article  2.2.1.1 
of the Anti -Dumping  Agreement, and acted inconsistently with Article  11 of the DSU 
(raised by Argentina);  
b. whether, in finding that Argentina had not estab lished that the second subparagraph of 
Article  2(5) of the Basic  Regulation is inconsistent "as such" with Article  2.2 of the 
Anti-Dumping  Agreement and Article VI:1(b)(ii) of the GATT 1994, the Panel:  
i. erred in its interpretation of Article 2.2 of the Anti -Dumping Agreement and 
Article  VI:1(b)(ii) of the GATT 1994 in finding that these provisions do not "prohibit 
an authority resorting to sources of information other than producers' costs in the 
country of origin" (raised by Argentina);  
ii. erred in ascertainin g the meaning of the second subparagraph of Article 2(5) and 
thereby erred in its application of Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994, and acted inconsistently with Article  11 of the 
DSU (raised by Argentina);  and 
iii. applied an erroneous legal standard for assessing whether the second  subparagraph 
of Article 2(5) is inconsistent "as such" with the relevant provisions of the covered 
agreements (raised by Argentina);  and 
c. whether the Panel erred in finding that Argent ina had not established that the 
second  subparagraph of Article  2(5) of the Basic  Regulation is inconsistent "as such" with 
Article  XVI:4 of the WTO  Agreement and Article  18:4 of the Anti -Dumping  Agreement 
(raised by Argentina).  
5  BACKGROUND AND OVERV IEW OF THE MEASURES AT ISSU E 
5.1.  Before addressing the issues of law and legal interpretation raised in this dispute, we provide 
an overview of the measures challenged by Argentina, as well as certain background information. WT/DS473/AB/R  
 
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  We begin by summarizing the aspects of the  anti-dumping measure on biodiesel from Argentina 
that are relevant to these appellate proceedings, before briefly describing the 
second  subparagraph of Article 2(5) of the Basic Regulation and other relevant aspects of th is 
Regulation.  
5.1  The EU anti -dumping  measure on biodiesel from Argentina  
5.2.  The investigation underlying the anti -dumping measure on biodiesel was initiated by the 
EU authorities on 29  August  201248, following a complaint lodged on 16 July 2012 by the EBB.49 
The European Union published the Provi sional Regulation on 28  May 2013, imposing provisional 
anti-dumping duties on imports of biodiesel originating in Argentina.50 On 1 October 2013, the 
EU authorities issued a Definitive Disclosure and proposal for definitive anti -dumping duties, and 
invited comments from the interested parties.51 On 26  November 2013, the Definitive Regulation 
was published in the Official Journal of the European Union .52  
5.3.  The investigation o n dumping and injury covered the period from 1 July 2011 to 30 June 
2012 (investigation period , or IP ), and the examination of trends relevant for the assessment of 
injury covered the period from 1  January 2009 to 30 June 2012 (period considered).53 The 
EU authorities defined the product concerned as biodiesel originating in, inter alia , Argen tina, and 
found that soybeans are "the main raw material  purchased  and used in the production of biodiesel" 
in Argentina.54 It is undisputed that the cost of raw materials is the largest cost component in 
producing biodiesel.55 
5.4.  In the Provisional Regulation , the EU authorities found that the biodiesel market in Argentina 
was heavily regulated by the State, and considered that, under these circumstances, domestic 
sales of biodiesel were not made in the ordinary course of trade.56 As this meant that the prices 
paid for biodiesel in domestic sales could not form the basis for the determination of the normal 
value, the EU authorities decided to construct the normal value for the investigation period on the 
basis of the Argentine producers' own production costs in t heir records57, the selling, general and 
administrative expenses incurred, and a profit margin of 15% based on turnover.58  
5.5.  In constructing the normal value  in the Provisional Regulation , the EU authorities noted the 
allegation by the EBB in relation to the Differential Export Tax (DET) system. Under this system, 
Argentina imposes differential taxes on exports of soybeans, soybean oil, and biodiesel, and the 
taxes imposed on exports of raw materials are higher than the taxes imposed on exports of the  
                                                
48 Panel Report, para. 7.179 (referring to Notice of initiation of the anti -dumping investigation 
(Panel  Exhibit ARG -32)). 
49 Panel Report, para. 7.17 9 (referring to Consolidated version of the complaint (Panel Exhibit ARG -31)). 
50 Panel Report, para. 7.179 (referring to Provisional Regulation (Panel Exhibit ARG -30), Recital 179).  
51 Panel Report, para. 7.179 (referring to General Disclosure Document (An nex 1), AD593 – 
Anti-dumping proceeding concerning imports of biodiesel originating in Argentina and Indonesia, Proposal to 
impose definitive measures (1 October 2013) (Definitive Disclosure)  (Panel Exhibit ARG -35)). 
52 Panel Report, para. 7.179 (referring to Definitive Regulation (Panel Exhibit ARG -22)). 
53 Panel Report, para. 7.375. See also Provisional Regulation (Panel Exhibit ARG -30), Recital 5; and 
Definitive Regulation (Panel Exhibit ARG -22), Recital 3.  
54 Panel Report, para. 7.182 (quoting Definitive Disclosure (Panel Exhibit ARG -35), para. 35). See also 
Definitive Regulation (Panel Exhibit ARG -22), Recital 39. Before the Panel, Argentina explained that soybeans 
are not a direct input in the production of biodiesel, but must be "crush[ed]" to obtain so ybean oil before 
biodiesel can be obtained from the oil by way of transesterification. (Panel Report, fn 265 to para.  7.185) Like 
the Panel, we refer to both soybean and soybean oil when describing the relevant findings in the Provisional 
and Definitive Re gulations.  
55 Evidence on the Panel record suggests that the costs of raw materials account for 75% –85% of the 
total cost of production of biodiesel. (Consolidated version of the complaint (Panel Exhibit ARG -31), para. 137)  
56 See Panel Report, para. 7.180 (referring to Provisional Regulation (Panel Exhibit ARG -30), 
Recitals  44-45). Specifically, blending fossil diesel and biodiesel is mandatory in Argentina (at 7% biodiesel), 
and the total amount of biodiesel needed to meet this blending requirement is appo rtioned among a select 
number of Argentine biodiesel producers. Oil companies are obliged to purchase biodiesel from these producers 
at prices fixed by the State and published by Argentina's Ministry of Energy. (See Provisional Regulation (Panel 
Exhibit  ARG-30), Recital 44)  
57 Panel Report, para. 7.364. See also Provisional Regulation (Panel Exhibit ARG -30), Recital 45.  
58 Panel Report, para. 7.312 (referring to Provisional Regulation (Panel Exhibit ARG -30), Recitals 44 
and 46).  WT/DS473/A B/R 
 
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  finished  product.59 The EBB alleged that the DET system depresses the domestic price of soybeans 
and soybean oil , and therefore distorts the costs of production of biodiesel producers in 
Argentina.60 The EU authorities considered, however, that , due to a lack of inf ormation for 
purposes of deciding the most appropriate way to address this allegation, the question as to 
whether the Argentine biodiesel producers' records reasonably reflect the costs associated with the 
production of biodiesel would be further examined at the definitive stage, as well as in the parallel 
countervailing duty investigation.61 Thus, despite the EBB's allegation, the EU authorities used the 
actual costs of soybeans reported in the Argentine producers' records in calculating the 
constructed nor mal value in the Provisional Regulation.62 On the basis of the constructed normal 
value and the relevant export price, the EU authorities established dumping margins ranging 
from 6.8% to 10.6% for the Argentine producers/exporters.63 Having concluded that th e dumped 
imports had caused material injury to the domestic biodiesel industry of the European Union, and 
that the injury margins  exceeded the dumping margins64, the EU authorities imposed provisional 
duties at rates equal to the above dumping margins.65  
5.6.  Subsequently, in both the Definitive Disclosure and Definitive Regulation, the EU authorities 
found that the DET system in Argentina depressed the domestic price of soybeans and soybean oil 
to an artificially low level that, as a consequence, affected the co sts of the Argentine biodiesel 
producers.66 The EU authorities noted that, on the one hand, the amount of the export tax on 
soybeans and soybean oil was calculated on the basis of a "reference price" that "reflect [ed] the 
level of international prices"67, namely, the daily FOB price for soybeans and soybean oil published 
by the Argentine Ministry of Agriculture, Livestock and Fisheries.68 On the other hand, the 
domestic prices of soybeans and soybean oil reflected the prevailing conditions in the 
Argentine  domestic market, and followed the trends of the international prices.69 The 
EU authorities established that  "the difference between the international and the domestic price of 
soya beans and soya bean oil is the export tax on the product and other expenses inc urred for 
exporting it."70 In other words, the domestic prices of soybeans and soybean oil, albeit set 
according to supply and demand in the Argentine market, were essentially equivalent to the 
international prices minus exporting expenses and the amount of  the export tax.   
                                                
59 As the EU authorities found : 
[E]xport taxes on raw material (35% on soya beans and 32% on soybean oil) were significantly 
higher than the export taxes on the finished product (nominal rate of 20% on biodiesel, with an 
effective rate of 14.58% taking into account a tax rebate)  
(Pane l Report, para. 7.181 (quoting Definitive Disclosure (Panel Exhibit ARG -35), para. 31))  
60 Panel Report, para. 7.180 (referring to Provisional Regulation (Panel Exhibit ARG -30), Recital 45). We 
note that, in the context of the non -attribution analysis regar ding imports of biodiesel by the EU domestic 
industry, the EU authorities found that "during some months of the [investigation period] the import price of 
soybean oil from Argentina was higher than the import price of [biodiesel]." (Ibid., para. 7.473 (quo ting 
Provisional Regulation (Panel Exhibit ARG -30), Recital 135)  
61 Panel Report, para. 7.180 (referring to Provisional Regulation (Panel Exhibit ARG -30), Recital 45). As 
noted above, the EU authorities conducted a parallel countervailing duty investigation  on imports of biodiesel 
from Argentina and Indonesia, which was initiated on 10 November 2012 following a complaint by the EBB. In 
the case of Argentina, the alleged subsidies consisted of the provision of inputs (i.e. soybeans or soybean oil) 
at below ma rket prices, by means of a government policy of DET that obliges input producers to sell on the 
domestic market, creating an excess of supply, depressing prices to a below -market level, and artificially 
reducing the costs of the biodiesel producers. The co untervailing duty inv estigation was terminated on 
25 November 2013, following the EBB's withdrawal of its complaint on 7 Octobe r 2013. (Ibid., fn  252 to 
para. 7.180 (referring to Notice of initiation of the countervailing duty investigation (Panel Exhibit  ARG-33); 
and Notice of termination of the countervailing duty investigation (Panel Exhibit ARG -36))) 
62 Panel Report, para. 7.364. See also Provisional Regulation (Panel Exhibit ARG -30), Recital 45.  
63 Panel Report, para. 7.179 (referring to Provisional Reg ulation (Panel Exhibit ARG -30), Recital 179).  
64 Injury margins in the Provisional Regulation ranged from 27.8% to 31.8%. (Provisional Regulation 
(Panel Exhibit ARG -30), Recital 179, referred to in Panel Report, para. 7.179)  
65 Panel Report, para. 7.179 (ref erring to Provisional Regulation (Panel Exhibit ARG -30), Recital 179).   
66 Panel Report, para. 7.181 (referring to Definitive Disclosure (Panel Exhibit ARG -35), para. 26). 
See also Definitive Regulation (Panel Exhibit ARG -22), Recital 30.  
67 Definitive Disc losure (Panel Exhibit ARG -35), para. 32; Definitive Regulation (Panel Exhibit ARG -22), 
Recital 36. The EU authorities indicated that the Chicago Board of Trade is the main source for such 
international prices. (Definitive Regulation (Panel Exhibit ARG -22), fn 2 to Recital 36)  
68 Definitive Disclosure (Panel Exhibit ARG -35), para. 32; Definitive Regulation (Panel Exhibit ARG -22), 
Recital 36. See also Panel Report, paras. 7.182, 7.184, 7.257, and 7.299, and fn 441 to para. 7.259.  
69 Panel Report, para. 7.181 (q uoting Definitive Disclosure (Panel Exhibit ARG -35), para. 33).  
70 Panel Report, para. 7.181 (quoting Definitive Disclosure (Panel Exhibit ARG -35), para. 33). See also 
Definitive Regulation (Panel Exhibit ARG -22), Recital 37.  WT/DS473/AB/R  
 
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  5.7.  The EU authorities concluded that "the domestic prices of the main raw material used by 
biodiesel producers in Argentina were … lower than the international prices due to the distortion 
created by the Argentine export tax system and, cons equently, the costs of the main raw material 
were not reasonably reflected in the records kept by the Argentinean producers under 
investigation in the meaning of Article 2(5)" of the Basic Regulation.71 The EU authorities therefore 
decided to revise the con struction of the normal value in the Provisional Regulation and "disregard 
the actual costs of soya beans (the main raw material purchased  and used in the production of 
biodiesel)  as recorded by the companies concerned in their accounts".72 Instead, such ac tual costs 
were replaced by "the average of the reference prices of soya beans published by the 
Argentine  Ministry of Agriculture for export FOB Argentina"73, "minus fobbing costs"74, during the 
investigation period . In this Report, we refer to th is replacem ent used by the EU  authorities in the 
Definitive Regulation as the "surrogate price for soybeans".75 
5.8.  As the Panel found, the surrogate price for soybeans used by the EU authorities as part of its 
construction of the normal value was based on "the reference price used by the 
Argentine  government for the calculation of the export tax on soybeans"76, that is, a "reference 
price" that "reflect ed the level of international prices".77 At the same time, the EU authorities 
considered that this surrogate price for soyb eans "would have been the price paid by the 
Argentine  producers in the absence of the export tax system" .78 On the basis of, inter alia , the 
revised constructed normal value, the EU  authorities calculated dumping margins ranging from 
41.9% to 49.2% for the Argentine  exporters/producers.79 
5.9.  The Definitive Regulation confirmed the provisional findings of injury and causation80, 
although certain aspects of the findings were modified. In particular, the figures relating to two of 
the macroeconomic indicators examin ed by the EU authorities – the production capacity and 
capacity utilization rate of the EU industry – were modified in light of revised data submitted by 
the EBB subsequent to the Provisional Regulation. The EBB claimed that the data previously 
submitted r egarding the total EU production capacity included "idle capacity" and should therefore 
be reduced.81 The EU authorities accepted the revised data on production capacity submitted by 
the EBB, which led to a downward adjustment to the production capacity fig ures and an upward 
adjustment to the capacity utilization rates in the Definitive Regulation.82  
5.10.   Finally, the EU authorities found that the injury margins, at rates ranging from 22% 
to 25.7%, were lower than the dumping margins. The EU authorities applied t he "lesser duty rule ", 
and imposed definitive anti -dumping duties on imports of biodiesel from Argentina at rates equal 
to the injury margins.83  
5.2  The second subparagraph of Article 2(5) of the Basic Regulation  
5.11.   The Basic Regulation is the basic EU legal inst rument on the protection against dumped 
imports from countries that are not member States of the European Union.84 It contains language 
identical or similar to that used in the Anti -Dumping Agreement, together with additional 
                                                
71 Panel Report, para. 7.181 ( quoting Definitive Disclosure (Panel Exhibit ARG -35), para. 34). See also 
Definitive Regulation (Panel Exhibit ARG -22), Recital 38.  
72 Definitive Regulation (Panel Exhibit ARG -22), Recital 39. See also Panel Report, para. 7.182 (referring 
to Definitive Disc losure (Panel Exhibit ARG -35), para. 35).  
73 Definitive Regulation (Panel Exhibit ARG -22), Recitals 39 -40. See also Panel Report, para. 7.182 
(referring to Definitive Disclosure (Panel Exhibit ARG -35), para. 35).  
74 Panel Report, para. 7.257 .  
75 See infra, para. 6.63. See also Panel Report, para. 7.364.  
76 Panel Report, fn 441 to para. 7.259. See also paras. 7.182, 7.184, and 7.299.  
77 Panel Report, para. 7.257. See also Definitive Disclosure (Panel Exhibit ARG -35), para. 32; 
Definitive Regulation (Panel Exhibit ARG -22), Recital 36.  
78 Panel Report, para. 7.257 (referring to Definitive Disclosure (Panel Exhibit ARG -35), para. 32). 
See also Definitive Regulation (Panel Exhibit ARG -22), Recital 42, quoted in Panel Report, para. 7.184.  
79 Panel Report, para. 7.179. See also Definitive Regulation (Panel Exhibit ARG -22), Recital 65.  
80 Panel Report, para. 7.179.  
81 Panel Report, para. 7.376.  
82 Panel  Report, para. 7.379 (quoting Definitive Regulation (Panel Exhibit ARG -22), Recitals 131 -133).  
See also Definitive Disclosure (Panel Exhibit ARG -35), paras. 105 -106; and infra, para. 6.117 . 
83 Panel Report, para. 7.365 and fn 616 thereto (referring to Definitive Regulation (Panel 
Exhibit  ARG-22), Recital 215).  
84 See Eur opean Union's first written submission to the Panel, para. 29.  WT/DS473/A B/R 
 
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  provisions and details that hav e no direct counterpart in the Anti -Dumping Agreement.85 
Article  2 of the Basic Regulation , entitled "Determination of dumping", contains provisions setting 
out rules relating to normal value, export price, comparison between normal value and export 
price, and dumping margin. The rules relating to normal value are set out in Articles 2(1) 
through  2(7). Of particular relevance to this dispute are Articles 2(3) and 2(5). The 
second  subparagraph of the latter provision is the only provision of the Basic  Regulat ion that 
Argentina has challenged "as such" in this dispute.  
5.12.   The first subparagraph of Article 2(3) of the Basic Regulation, which contains language 
similar to Article 2.2 of the Anti -Dumping Agreement, sets out two methods for determining the 
normal valu e "[w]hen there are no or insufficient sales of the like product in the ordinary course of 
trade, or where because of the particular market situation such sales do not permit a proper 
comparison".86 In such circumstances, "the normal value of the like produ ct shall be calculated on 
the basis of the cost of production in the country of origin plus a reasonable amount for selling, 
general and administrative costs and for profits, or on the basis of the export prices, in the 
ordinary course of trade, to an appr opriate third country, provided that those prices are 
representative."87  
5.13.   Article 2(5) of the Basic Regulation contains four subparagraphs. It begins with a 
subparagraph that largely replicates the language in the first sentence of Article 2.2.1.1 of the 
Anti-Dumping Agreement, providing that "[c]osts shall normally be calculated on the basis of 
records kept by the party under investigation, provided that such records are in accordance with 
the generally accepted accounting principles of the country concerne d and that it is shown that the 
records reasonably reflect the costs associated with the production and sale of the product under 
consideration."88 The text of the second  subparagraph of Article 2(5) does not directly correspond 
to any specific provision of  the Anti -Dumping Agreement. It provides that, "[i]f costs associated 
with the production and sale of the product under investigation are not reasonably reflected in the 
records of the party concerned, they shall be adjusted or established on the basis of the costs of 
other producers or exporters in the same country or, where such information is not available or 
cannot be used, on any other reasonable basis, including information from other representative 
markets."89  
5.14.   The following table juxtaposes the above -mentioned provisions of the Anti -Dumping 
Agreement and the Basic Regulation, with the provision subject to Argentina's challenge – the 
second subparagraph of Article 2(5) of the Basic Regulation – underlined.  
                                                
85 The preamble of the Basic Regulation explicitly refers to the GATT 1994 as well as the Anti -Dumping 
Agreement, and states that, "[i]n order to ensure a proper and transparent application of [ the detailed rules 
set out in the Anti -Dumping Agreement], the language of the agreement should be brought into Community 
legislation as far as possible". (Basic Regulation (Panel Exhibit ARG -1), 3rd preambular recital)  
86 Article 2(3) of the Basic Regulati on (Panel Exhibit ARG -1). See also Panel Report, para. 7.72.  
87 Article 2(3) of the Basic Regulation (Panel Exhibit ARG -1). See also Panel Report, para. 7.72. The 
second subparagraph of Article 2(3) goes on to provide the definition of "[a] particular marke t situation", which 
is not contained in the Anti -Dumping Agreement. The determination of a reasonable amount for selling, general 
and administrative costs and for profits is set out in Article 2(6) of the Basic Regulation.  
88 Article 2(5) of the Basic Regul ation (Panel Exhibit ARG -1). See also Panel Report, para. 7.72.  
89 Article 2(5) of the Basic Regulation (Panel Exhibit ARG -1). See also Panel Report, para. 7.72. The 
other subparagraphs of Article 2(5) are not pertinent for purposes of this dispute.  WT/DS473/AB/R  
 
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  Table 1  Juxtaposition of certain provisions o f the Anti -Dumping Agreement and the 
EU Basic Regulation  
Article  Anti-Dumping Agreement  Article  EU Basic Regulation  
2.2 When there are no sales of the like 
product in the ordinary course of 
trade in the domestic market of the 
exporting country or when, be cause 
of the particular market situation or 
the low volume of the sales in the 
domestic market of the exporting 
country [footnote omitted], such 
sales do not permit a proper 
comparison, the margin of dumping 
shall be determined by comparison 
with a compara ble price of the like 
product when exported to an 
appropriate third country, provided 
that this price is representative, or 
with the cost of production in the 
country of origin plus a reasonable 
amount for administrative, selling 
and general costs and for profits.  2(3) 
 When there are no or insufficient sales 
of the like product in the ordinary 
course of trade, or where because of 
the particular market situation such 
sales do not permit a proper 
comparison, the normal value of the 
like product shall be calc ulated on the 
basis of the cost of production in the 
country of origin plus a reasonable 
amount for selling, general and 
administrative costs and for profits, or 
on the basis of the export prices, in the 
ordinary course of trade, to an 
appropriate third co untry, provided that 
those prices are representative.  
A particular market situation for the 
product concerned within the meaning 
of the first subparagraph may be 
deemed to exist, inter alia, when prices 
are artificially low, when there is 
significant barte r trade, or when there 
are non -commercial processing 
arrangements.  
2.2.1.1  For the purpose of paragraph  2, costs 
shall normally be calculated on the 
basis of records kept by the exporter 
or producer under investigation, 
provided that such records are in 
accordance with the generally 
accepted accounting principles of the 
exporting country and reasonably 
reflect the costs associated with the 
production and sale of the product 
under consideration. …  
 2(5) Costs shall normally be calculated on 
the basis of rec ords kept by the party 
under investigation, provided that such 
records are in accordance with the 
generally accepted accounting 
principles of the country concerned and 
that it is shown that the records 
reasonably reflect the costs associated 
with the produ ction and sale of the 
product under consideration.  
If costs associated with the production 
and sale of the product under 
investigation are not reasonably 
reflected in the records of the party 
concerned, they shall be adjusted or 
established on the basis of  the costs of 
other producers or exporters in the 
same country or, where such 
information is not available or cannot 
be used, on any other reasonable 
basis, including information from other 
representative markets . 
… 
Source : Anti -Dumping Agreement and Basi c Regulation (Panel Exhibit ARG -1). (underlining  added)  
 
 WT/DS473/A B/R 
 
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  6  ANALYSIS OF THE APPE LLATE BODY  
6.1  Claims concerning the EU anti -dumping measure on imports of biodiesel from 
Argentina  
6.1.1   Determination of dumping  
6.1.  In this section, we address the claims of error raised by  both the European Union and 
Argentina relating to the determination of dumping under Article  2 of the Anti -Dumping  Agreement  
and Article VI of the GATT 1994 . These claims of error are closely related and concern the 
Panel's  findings under Articles  2.2.1.1  and 2.2 of the Anti -Dumping  Agreement regarding the 
EU authorities' calculation of the cost of production in constructing the normal value of biodiesel , 
and under Article  2.4 of the Anti -Dumping  Agreement  regarding the comparison between that 
normal value  and the export price of biodiesel. The European Union and Argentina disagree on 
whether Article  2.2.1.1 allows an investigating authority to disregard the records of a producer 
under investigation if the authority determines that the costs in such records  are not "reasonable". 
The European Union and Argentina also disagree on whether Article  2.2 of the Anti -Dumping 
Agreement and Article  VI:1(b)(ii) of the GATT 1994  allow an investigating authorit y to use certain 
evidence other than the records kept by the investigated producer, in particular information from 
outside the country of origin, when determining the cost of production in the country of origin 
under Article  2.2. Finally, the European Union and Argentina disagree on the circumstances in 
which Article 2.4 requires due allowance to be made where the investigating authority has 
constructed the normal value on the basis of costs that are not those in the records kept by the 
investigated producer.  
6.2.  We begin by examining the European Union's and Argentina's  claims of error regarding the 
Panel's findings under Article  2.2.1.1 of the Anti -Dumping  Agreement. We then turn to the 
European Union's claims of error under Article  2.2 of the Anti -Dumping  Agreement. In that section,  
we also examine Argentina's  claim of  error regarding the Panel's interpretation of Article  2.2 of the 
Anti-Dumping Agreement and Article VI:1(b)(ii) of the GATT 1994 .90 Finally, we examine 
Argentina's claims of error under Article  2.4 of the Anti -Dumping  Agreement.  
6.1.1.1   Article  2.2.1.1 of the Anti -Dumping  Agreement  
6.1.1.1.1   Introduction  
6.3.  The European Union appeals the Panel 's finding that "the European Union acted inconsistently 
with Article  2.2.1.1 of the Anti -Dumping Agreement by failing to calculate the cost of production of 
the product under investigatio n on the basis of the records kept by the producers".91 In the view of 
the European Union, the Panel erred in its interpretation and application of the second condition in 
the first sentence of Article 2.2.1.1, in particular by finding that this condition r efers to the actual 
costs incurred by the specific exporter or producer under investigation92, and that this condition 
does not include a general standard of "reasonableness".93 The European Union requests us to 
reverse the findings in paragraphs  7.247 -7.249  and 8.1 .c.i of the Panel Report, and further argues 
that we should not complete the analysis.94 In contrast, Argentina requests us to uphold the 
Panel 's findings at issue. In the event that we reverse the Panel 's findings under Article  2.2.1.1, 
                                                
90 Argen tina raises this claim of error in connection with the Panel's finding on the second subparagraph 
of Article  2(5) of the Basic Regulation. Given that, however, this claim of error also concerns the Panel's 
interpretation of Article  2.2 of the Anti -Dumping  Agreement, we address this aspect of Argentina's appeal in 
this section together with the European Union's claims concerning the Panel's finding under Article  2.2. See 
also infra, para.  6.58. 
91 Panel Report, para.  7.249. (fn om itted) See also European Union's appellant's submission, para.  55 
(referring to Panel Report, paras.  7.247 -7.249 and 8.1.c.i).  
92 European Union's appellant's submission, paras. 96, 114, 126, 128 -130, 135, 165 -166, 169, 
172-173, 175 -176, 179, 187 -189, and 2 09. 
93 See European Union's appellant's submission, paras.  84, 87 -92, 95, 105 -107, 110 -111, 126 -127, 
131, 133, 135, 137 -138, 153, 159 -160 and 210 -211. 
94 European Union's appellant's submission, paras.  55, 153, and 211 -212. WT/DS473/AB/R  
 
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  Argentina r equests us to complete the legal analysis and find that the European  Union acted 
inconsistently with Article  2.2.1.1.95 
6.4.  Before examining the European Union's claim of error on appeal, we summarize the relevant 
Panel findings with respect to Article  2.2.1.1 of the Anti -Dumping  Agreement. We then set out our 
understanding of the second condition in the first sentence of Article  2.2.1.1. Thereafter, we turn 
to examine the merits of the European Union's claim that the Panel erred in its interpretation and 
applic ation of this provision.  
6.1.1.1.2   The Panel 's findings  
6.5.  The Panel first recalled that, in certain situations where domestic sales do not permit a proper 
comparison, the normal value may be constructed on the basis of the "cost of production in the 
country of origin plus a reasonable amount for administrative, selling and general costs and for 
profits".96 To the Panel, the opening phrase in Article  2.2.1.1 of the Anti -Dumping  Agreement  —
 "For the purpose of paragraph  2" – indicates that Article  2.2.1.1 elaborates on ho w the "cost of 
production in the country of origin" referred to in Article  2.2 is to be determined in constructing the 
normal value. Moreover, the first sentence of Article  2.2.1.1 establishes the records of the 
investigated exporter or producer  as the pre ferred source of information for determining the costs 
of production. The Panel noted that the term "shall" in the first sentence of Article  2.2.1.1 indicates 
that it establishes a mandatory rule in this respect, whereas the term "normally" suggests that t his 
rule may be derogated from under certain conditions. In th is regard, the Panel considered that, in 
the two conditions that it sets out, the first  sentence of Article  2.2.1.1 expressly provides for 
two circumstances in which an investigating  authority n eed not follow the general rule to calculate 
costs on the basis of the records kept by the exporter or producer under investigation.97 
6.6.  Regarding the second of these conditions – that the records kept by the exporter or producer 
under investigation reasonabl y reflect the costs associated with the production and sale of the 
product under consideration – the Panel observed that the focus of this condition is on the specific 
exporter  or producer under investigation, and what is contained in its records.98 Since i t is the 
"records" that must reasonably reflect the costs of production and sale of the product, and given 
that "reflect" connotes the faithful and accurate depiction of information and that "reasonably 
reflect" concerns the degree or manner of reflection of costs in the records, the Panel  considered  
that "reasonably reflect" in Article  2.2.1.1 mean s that the records of a n exporter  or producer must 
depict all the costs it has incurred in a manner that is – within acceptable limits – accurate and 
reliable.99 
6.7.  To the Panel , the context provided by the first condition in the first sentence of 
Article  2.2.1.1, namely , that the records be "in accordance with the generally accepted accounting 
principles of the exporting country", suggests that the first  sentence of Article  2.2.1.1 is concerned 
with the reasonable reflection of the costs that producers actually incur in the production of the 
product at issue.100 In addition, the Panel took the view that , under Article  2.2 of the 
Anti-Dumping  Agreement, the purpose of ca lculating the cost of production and constructing the 
normal value on the basis of the cost is to identify an appropriate proxy for the price of the like 
product in the ordinary course of trade in the domestic market of the exporting country when such 
price cannot be used. It flows from this purpose that the "costs associated with the production and 
sale of the product under consideration" are those that a producer actually incurred, "since these 
would yield such a proxy more accurately ".101 The Panel did not  consider that the arguments made 
                                                
95 Argentina makes this request wit h respect to both of its claims of inconsistency before the Panel, 
namely, that the European Union acted inconsistently with Article  2.2.1.1 because, in the anti -dumping 
measure at issue, the EU authorities: (i)  failed to calculate the cost of production o f biodiesel on the basis of 
the records kept by the Argentine  producers ( Argentina's appellee's submission, paras.  95 and 118 -119); and 
(ii) included costs not associated with the production and sale of biodiesel in the calculation of the cost of 
productio n. (Argentina's other appellant's submission, paras.  373-374, 378 -379, and 390 -391) 
96 Panel Report, para.  7.225 (quoting Article  2.2 of the Anti -Dumping  Agreement).  
97 Panel Report, para.  7.227.  
98 Panel Report, para.  7.228.  
99 Panel Report, paras.  7.230 -7.231. 
100 Panel Report, para.  7.232.  
101 Panel Report, para.  7.233.  WT/DS473/A B/R 
 
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  by the parties pertaining to the object and purpose of the Anti -Dumping  Agreement shed light on 
the interpretative question before it, and thus did not examine those arguments in detail.102 
6.8.  On this basis, the Panel understoo d that the second condition in the first sentence of 
Article  2.2.1.1 relates to whether the costs set out in a producer's or exporter's records 
"correspond – within acceptable limits – in an accurate and reliable manner[] to all the actual costs 
incurred b y the particular producer or exporter for the product under consideration".103 In its view, 
this calls for a comparison between, on the one hand, the costs as reported in the records kept by 
the producer or exporter and, on the other hand, the costs actually  incurred by that producer or 
exporter. T o the Panel , this does not mean that an investigating authorit y must automatically 
accept whatever is reflected in the records . Rather, it is free to examine the reliability and 
accuracy of the costs reported in the  records and , thus, whether those records reasonably reflect 
the costs associated with the production and sale of the product under consideration. In the 
Panel's view, however, the examination of the records for purposes of determining whether they 
"reason ably reflect" costs within the meaning of Article  2.2.1.1 does not involve an examination of 
the "reasonableness" of the reported costs themselves, as proposed by the European Union. The 
Panel considered that the object of the comparison is to establish wh ether the records reasonably 
reflect the costs actually incurred, and not whether they reasonably reflect some hypothetical costs 
that might have been incurred under a different set of conditions or circumstances and which the 
investigating authority consi ders more "reasonable" than the costs actually incurred.104 
6.9.  The Panel found support for its understanding in previous panel reports. After conducting a 
detailed examination of the findings of the panels in US – Softwood Lumber V105, Egypt  – Steel 
Rebar106, and EC – Salmon (Norway)107, the Panel considered that the reasoning in each of those 
reports suggest s that Article  2.2.1.1 focuses on the actual costs of production of the exporter or 
producer under investigation.  
6.10.   Turning to the anti -dumping measure at issue, th e Panel noted that the EU  authorities 
decided not to use the cost of soybeans in the production of biodiesel in Argentina because "the 
domestic prices of the main raw material used by biodiesel producers in Argentina were found to 
be artificially lower tha n the international prices due to the distortion created by the 
Argentine  export tax system".108 The Panel considered that this did not constitute a sufficient basis 
under Article  2.2.1.1 for concluding that the producers' records do not reasonably reflect t he costs 
                                                
102 Panel Report, para.  7.238.  
103 Panel Report, para.  7.247. See also para. 7.242.  
104 Panel Report, para.  7.242 and fn  400 thereto.  
105 The Panel noted that, in US – Softwood Lumber V , the panel examin ed whether the records of the 
producers of softwood lumber "reasonably reflected" the level of profit derived from selling a by -product 
generated in the production of softwood lumber that, in turn, offset the cost of production of softwood lumber. 
The Pane l considered that, by assessing the extent to which the profits derived from the sales of the by -
product reduced the cost of production of softwood lumber, that panel sought to ascertain the actual cost of 
production to the producer in question. ( Panel Rep ort, para.  7.243 (referring to Panel Report, US – Softwood 
Lumber V , para.  7.312) ) 
106 The Panel explained that the panel in Egypt  – Steel Rebar  was faced with the question of whether 
certain short -term interest income was related to the production and sale of rebar, such that it could be used 
to offset the cost of production of rebar. Since none of the investigated companies had provided sufficient 
evidence that the interest income was related to their cost of production of rebar, that panel found that 
Turke y had not demonstrated that the investigating authority acted inconsistently with Article  2.2.1.1 of the 
Anti-Dumping  Agreement in deciding not to factor this income as an offset in its calculation of the cost of 
production of rebar. The Panel considered t hat this approach calls for an assessment of each producer's actual 
cost of production, and whether the evidence on the record of the investigation demonstrates that those costs 
were offset by a certain income. ( Panel Report, para.  7.245 (referring to Pane l Report, Egypt – Steel Rebar , 
paras.  7.422 -7.426) ) 
107 In the Panel's view, the panel in EC – Salmon (Norway) faulted the investigating authority for 
allocating, and thus associating, the full amount of certain non -recurring costs to the cost of production of 
farmed salmon despite the fact that these non -recurring costs did not relate exclusively to the farming -related 
activities for a given salmon generation. That panel considered that, to comply with Article  2.2.1.1, the 
allocation methodology to determine  the cost of production must reflect the relationship that exists between 
the costs being allocated and the production activities to which they are "associated". The Panel considered 
that panel's approach to be focused on the actual costs of production inc urred by producers, because it tested 
whether a rational relationship existed between the costs allocated and the production activities in order to 
yield an accurate outcome. ( Panel Report, para.  7.246 (referring to Panel Report, EC – Salmon (Norway) , 
paras. 7.506 -7.507 and 7.514) ) 
108 Panel Report, para.  7.248 (quoting Definitive Regulation (Panel  Exhibit ARG -22), Recital  38). WT/DS473/AB/R  
 
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  associated with the production and sale of biodiesel.109 Thus, the Panel found that the 
European  Union acted inconsistently with Article  2.2.1.1 of the Anti -Dumping  Agreement by failing 
to calculate the cost of production of the product under invest igation on the basis of the records 
kept by the producers.110 
6.1.1.1.3   The second condition in the first sentence of Article  2.2.1.1 of the 
Anti-Dumping  Agreement  
6.11.   The European Union's appeal calls for us to examine the second condition in the 
first sentence of Articl e 2.2.1.1 of the Anti -Dumping  Agreement. The European Union claims that 
the Panel erred in considering that this condition calls for an assessment of costs actually incurred 
by the producer at issue.111 The European Union contends  that this condition permits  an 
examination of the "reasonableness" of the reported costs themselves.112 The European  Union's 
arguments highlight the interconnected nature of the various provisions of Article  2 of the 
Anti-Dumping  Agreement as a whole. In its view , these provisions are  imbued with a general 
standard of "reasonableness", which endows an investigating authority with discretion, under 
Article  2.2.1.1,  to disregard  the records kept by the exporter or producer when the authority 
considers that the costs recorded therein are not reasonable.113 Argentina's arguments focus on 
the constraints that the text of Article  2.2.1.1 places on an investigating authority's 
determinations . Argentina  also emphasiz es that other interpretative elements do not support the 
general  standard of "rea sonableness" posited by the European Union.114 
6.12.   We observe that Article  2.2.1.1 of the Anti -Dumping  Agreement forms part of the disciplines 
concerning the determination of dumping in Article  2 of the Anti -Dumping  Agreement. Article  2.1 
of the Anti -Dumping  Agreement provides that a product is being dumped when it is "introduced 
into the commerce of another country" at an export price that is "less than its normal value".115 
The other provisions of Article 2 then set out the rules regarding the determination of no rmal value 
and export price, and the comparison to be made between the two for purposes of determining the 
margin of dumping.  
6.13.   Article 2.2 of the Anti -Dumping  Agreement identifies the circumstances in which an 
investigating authority need not determine the normal value on the basis of domestic sales.116 
Article  2.2 further provides that, in such circumstances, the margin of dumping shall be 
determined by comparison with a comparable price of the like product when exported to an 
appropriate third  country, "or w ith the cost of production in the country of origin plus a reasonable 
amount for administrative, selling and general costs and for profits".  
6.14.   Articles  2.2.1, 2.2.1.1, and 2.2.2 of the Anti -Dumping  Agreement, in turn, further elaborate 
on various aspects of  Article 2.2. Article  2.2.1 sets forth rules concerning when sales of the like 
product in the domestic market or to a third country may be treated as not being in the ordinary 
course of trade and disregarded in determining the normal value. Article  2.2.2 r egulates the 
determination of the amounts for administrative, selling and general costs and for profits.  
                                                
109 The Panel noted that it had neither been alleged that the costs of soybeans in the records kept by 
the producers do not represent t he actual price paid by those producers, nor that the records themselves are 
inconsistent with the GAAP. (Panel Report, para.  7.222)  
110 Panel Report, paras.  7.248 -7.249.  
111 European Union's appellant's submission, paras.  96, 114, 126, 128 -130, 135, 165 -166, 169, 172 -
173, 175 -176, 179, 187 -189, and 209.  
112 European Union's appellant's submission, paras.  153, 158 -159 (referring to Panel Report, fn  400 to 
para. 7.242), and 211.  
113 See European Union's appellant's submission, paras.  84, 87 -92, 95, 105 -107, 110 -111, 126-127, 
131, 133, 135, 137 -138, 153, 159 -160, and 210 -211. 
114 Argentina's appellee's submission, paras.  10, 14 -16, 32 -34, 95, and 118.  
115 Pursuant to Article 2.1, the normal value of the product refers to "the comparable price, in the 
ordinary course of tr ade, for the like product when destined for consumption in the exporting country".  
116 One circumstance identified in Article 2.2 of the Anti -Dumping  Agreement is "[w]hen there are no 
sales of the like product in the ordinary course of trade in the domestic market of the exporting country". The 
other circumstance outlined in Article 2.2 is "when … such sales do not permit a proper comparison", either 
because of "the particular market situation" or "the low volume of the sales in the domestic market of the 
exporting country".  WT/DS473/A B/R 
 
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  6.15.   Article 2.2.1.1 and footnote 6 of the Anti -Dumping  Agreement provide:  
For the purpose of paragraph  2, costs shall normally be calculated on the basis o f 
records kept by the exporter or producer under investigation, provided that such 
records  are in accordance with the generally accepted accounting principles of the 
exporting country and reasonably reflect the costs associated with the production and 
sale of the product under consideration . Authorities shall consider all available 
evidence on the proper allocation of costs, including that which is made available by 
the exporter or producer in the course of the investigation provided that such 
allocations h ave been historically utilized by the exporter or producer, in particular in 
relation to establishing appropriate amortization and depreciation periods and 
allowances for capital expenditures and other development costs. Unless already 
reflected in the cos t allocations under this sub -paragraph, costs shall be adjusted 
appropriately for those non -recurring items of cost which benefit future and/or current 
production, or for circumstances in which costs during the period of investigation are 
affected by start -up operations. [*]117 
_______________  
[*fn original]6 The adjustment made for start -up operations shall reflect the costs at the end of 
the start -up period or, if that period extends beyond the period of investigation, the most recent 
costs which can reasona bly be taken into account by the authorities during the investigation.  
6.16.   In examining the second condition in the first sentence of Article  2.2.1.1, we first analyse 
the structure of that sentence and the obligation contained therein. Thereafter, we examine the 
specific wording of the second condition in the first sentence, which is italicized in the above 
quotation and is at issue in this dispute. Subsequently, we turn to the other relevant interpretative 
elements.  
6.17.   Article  2.2.1.1 of the Anti -Dumping  Agreeme nt begins with the phrase: "For the purpose of 
paragraph  2". "[P]aragraph 2" refers to Article 2.2 of the Anti -Dumping Agreement, which provides 
that, where the normal value cannot be determined on the basis of domestic sales, it shall instead 
be determine d using one of two alternative bases, one of which is the cost of production in the 
country of origin plus a reasonable amount for administrative, selling and general costs and for 
profits.118 Accordingly, Article  2.2.1.1 includes rules pertaining to the cal culation of the "cost of 
production" for purposes of determining the normal value under Article  2.2. The first  sentence of 
Article 2.2.1.1 further provides that "costs shall normally" be calculated on the basis of records 
kept by the exporter or producer u nder investigation , provided that such records meet 
two conditions. The reference to the records kept by the exporter or producer under investigation 
indicates that this sentence is concerned with establishing the cost for the specific exporter or 
producer  under investigation. This is confirmed by the fact that the subject of both conditions in 
the first sentence of Article  2.2.1.1 is the records kept by the exporter or producer.  
6.18.   Article  2.2.1.1 thus identifies the records of the investigated exporter or p roducer as the 
preferred source for cost of production data119, and directs the investigating authorit y to base its 
calculations of costs on such records when the two conditions are met.120 The second condition 
that triggers the obligation in the first sentenc e of Article  2.2.1.1 is that the records  "reasonably 
reflect the costs associated with the production and sale of the product under consideration". On 
the basis of the relevant dictionary definitions121, we understand that the term "records" refers to 
                                                
117 Emphasis added.  
118 We recall that Article  2.2.2 of the Anti -Dumping  Agreement concerns the determination of the 
amounts for administrative, selling and general costs and for profits.  
119 Appellate Body Report, EC – Tube or Pipe Fittings , para. 99. 
120 As the Panel noted, the EU  authorities relied explicitly on the second condition in the first  sentence of 
Article  2.2.1.1 of the Anti -Dumping  Agreement to discard the records kept by the Argentine  producers under 
investigation insofar as they per tained to the cost of soybeans. (See Panel Report, paras.  7.221 and 7.227; 
and Definitive Regulation (Panel Exhibit ARG -22), Recital 38) Thus, for purposes of resolving this dispute, it is 
the meaning of this condition that must be ascertained, and not whe ther there are other circumstances in 
which the obligation in the first  sentence of Article  2.2.1.1 "normally" to base the calculation of costs on the 
records kept by the exporter or producer under investigation would not apply.  
121 The definition of the wor d "record" includes: "[a]n account of the past; a piece of evidence about the 
past; … a written or otherwise permanently recorded account of a fact or event; … a document … on which 
such an account is recorded". ( Shorter Oxford English Dictionary , 6th edn (Oxford University Press, 2007), 
Vol. 2, p. 2491) The definition of the word  "cost" includes: "[w]hat must be given in order to acquire, produce, WT/DS473/AB/R  
 
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  a writ ten or documented account of facts or past events, and that the term "costs" refers to the 
price paid or to be paid to acquire or produce something.  
6.19.   The term "costs" in the second condition in the first sentence of Article  2.2.1.1 is followed 
by the phrase  "associated with the production and sale of the product under consideration". From 
the relevant dictionary definitions122, the phrase "associated with" can be understood as connected 
to, or united with. In the first sentence of Article  2.2.1.1, the phrase " associated with" thus makes 
a connection, and recognizes a relationship, between the "costs", on the one hand, and the 
"production and sale of the product under consideration", on the other hand. We see the phrase 
"product under consideration" as a referen ce to the product at issue in the anti -dumping 
investigation.123 Thus, the phrase "costs associated with the production and sale of the product 
under consideration" refers to the costs that have a relationship with the production and sale of 
the specific pro duct from the exporting Member with respect to which dumping is being assessed. 
In our view, when this text is read together with the reference to "records kept by the exporter or 
producer under investigation", it is clear that this condition refers to tho se costs  incurred by the 
investigated exporter or producer that have a relationship with the production and sale of the 
product under consideration.  
6.20.   The phrase "costs associated with the production and sale of the product under 
consideration" in the first sentence of Article  2.2.1.1 is preceded by the phrase "reasonably 
reflect". Relevant dictionary definitions124 suggest that the term "reasonably reflect" means to 
mirror, reproduce, or correspond to something suitably and sufficiently. In Article  2.2.1.1, th e term 
"reasonably" qualifies the reproduction or correspondence of the costs. Given the structure of the 
first sentence of Article  2.2.1.1, and in particular the fact that "reasonably reflect" refers to "such 
records", it is clear that it is the "records"  of the individual exporters or producers under 
investigation that are subject to the condition to "reasonably reflect" the "costs".  
6.21.   Turning to the relevant context for the interpretation of th e second condition in the 
first sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement, we note that the first condition 
specified in that sentence is that the " records [be] in accordance with the generally accepted 
accounting principles of the exporting country". The generally accepted accounting principles 
(GAAP)  refer to  principles,  standards, and procedures that are commonly used, within a specific 
jurisdiction, for financial accounting and reporting purposes. Thus, the first condition in the 
first sentence of Article  2.2.1.1 relates to whether the records of a specific exporter or producer 
conform to the accounting principles,  standards and procedures that are generally accepted and 
apply to such records in the relevant jurisdiction – i.e. the exporting country. This is a condition 
that concerns the general acco unting and reporting practices  of the exporter or producer. In 
contrast, the second  condition in the first sentence of Article  2.2.1.1 concerns the records' 
reasonable reflection of the costs  associated with the production and sale of the product under 
consideration in a specific anti -dumping proceeding .125 Indeed, conformity with the GAAP does not 
necessarily ensure that the records "reasonably reflect the costs associated with the production 
and sale of the product under consideration "126 because the manner i n which costs are recorded in 
                                                                                                                                                  
or effect something; the price (to be) paid for a thing", and "[c]harges, expenses". ( Shorter Oxford English 
Dictionary , 6th edn (Oxford University Press, 2007), Vol.  1, p. 531) 
122 The term "associated with" may be defined as "join[ed], unite[d]", "combine[d]", and "[c]onnect[ed] 
as an idea". ( Shorter Oxford English Dictionary , 6th edn (Oxford University Press, 200 7), Vol.  1, p. 137) 
123 This is consistent with the way in which the same phrase is used in footnote  2 and Article  2.6 of the 
Anti-Dumping  Agreement. Footnote  2 provides that sales of the like product in the domestic market shall be 
considered of a sufficien t quantity for the determination of the normal value if such sales constitute a certain 
percentage of the sales of the "product under consideration to the importing Member". Article  2.6 defines "like 
product" in relation to the "product under consideration ". This suggests that the "product under consideration" 
is the specific product from the exporting Member with respect to which dumping is being assessed.  
124 The word "reasonably" is defined as "sufficiently, suitably", and "at a reasonable rate; to a 
reaso nable extent". ( Shorter Oxford English Dictionary , 6th edn (Oxford University Press, 2007), Vol.  2, 
p. 2481) The word "reflect" is defined as "[r]eproduce or display after the fashion of a mirror; correspond in 
appearance or effect to; have as a cause or s ource". ( Shorter Oxford English Dictionary , 6th edn (Oxford 
University Press, 2007), Vol.  2, p. 2506) 
125 In our view, the panel report in US – Softwood Lumber V  also stands for the understanding that the 
second condition in the first sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement concerns the 
reasonable reflection of the costs associated with the production and sale of the product under consideration in 
a specific anti -dumping investigation. See supra , fn 105. 
126 Empha sis added.  WT/DS473/A B/R 
 
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  financial statements in general may not necessarily correspond to how the product under 
consideration is defined for purposes of a specific anti -dumping investigation.127 
6.22.   Our understanding of the second condition in the first se ntence of Article  2.2.1.1 is 
confirmed by the second and third sentences of Article  2.2.1.1, and footnote  6 of the 
Anti-Dumping  Agreement. These provisions set out rules for an investigating authorit y's allocation 
and adjustment of costs. These rules recog nize that certain types of expenses have effects beyond 
the period in which the costs are incurred. They also imply that it may be inappropriate to attribute 
certain company costs entirely to the production and sale of the product under consideration.128 
These provisions reinforce the understanding that the inquiry envisaged under Article  2.2.1.1 is 
one relating to the circumstances of each investigated exporter or producer in the exporting 
country. The cost allocations and adjustments contemplated in the sec ond and third sentences of 
Article  2.2.1.1 and footnote  6 allow an investigating authority to obtain a more precise calculation 
of the costs associated with the product under consideration for the specific exporter or producer 
by ensuring or verifying that  there is a genuine relationship between the costs reflected in the 
exporter's or producer's records and the costs associated with the production and sale of the 
specific product under consideration. This context supports the understanding that the 
second  condition in the first sentence of Article  2.2.1.1 relates to whether the records of the 
exporter or producer suitably and sufficiently correspond to or reproduce the costs that have a 
genuine  relationship with the production and sale of the specific produ ct under consideration.  
6.23.   Furthermore, Article  2.2 of the Anti -Dumping  Agreement refers to "the cost of production in 
the country of origin". In our view, given the fact that Article  2.2.1.1 starts with the phrase "[f]or 
the purpose of paragraph  2", the inte rpretation of the term "costs" in Article  2.2.1.1, for purposes 
of calculating the costs of production, must be consistent with how the term "cost" is understood in 
Article 2.2. Thus, insofar as the cost of production is concerned, the costs "calculated on  the basis 
of records kept by the exporter or producer" under Article  2.2.1.1 must lead to a cost "in the 
country of origin". The context provided by Article  2.2 suggests that the second condition in the 
first sentence of Article  2.2.1.1 should not be inte rpreted in a way that would allow an 
investigating authority to evaluate the costs reported in the records kept by the exporter or 
producer pursuant to a benchmark unrelated to the cost of production in the country of origin.  
6.24.   In addition, in our view, Art icle 2.2 of the Anti -Dumping  Agreement concerns the 
establishment of the normal value through an appropriate proxy for the price of the like product in 
the ordinary course of trade in the domestic market of the exporting country when the normal 
value canno t be determined on the basis of domestic sales.129 The costs calculated pursuant to 
Article  2.2.1.1 of the Anti -Dumping  Agreement must be capable of generating such a proxy. This 
supports the view that the "costs associated with the production and sale of th e product under 
consideration" in Article 2.2.1.1 are those costs that have a genuine relationship with the 
production and sale of the product under consideration. This is because these are the costs that, 
together with other elements, would otherwise form  the basis for the price of the like product if it 
were sold in the ordinary course of trade in the domestic market.  
6.25.    Looking beyond the relevant context, we turn to the object and purpose of the 
Anti-Dumping  Agreement. We first note that the Anti -Dumping  Agreement does not contain a 
preamble to guide the inquiry into its object and purpose. The object and purpose of this 
                                                
127 While the product under consideration in a particular anti -dumping investigation may be limited to a 
single model, size, type or specification of a product, the exporter or producer under investigation may export 
or produce a number of differ ent products. The records of such exporter or producer may include costs that 
concern multiple products without allocating them on a product -by-product or model -by-model basis. Thus, the 
manner in which an exporter or producer registers its costs may not r easonably reflect the costs associated 
with the production and sale of the product under consideration in a specific anti -dumping investigation.  
128 The second sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement requires an investigating 
authority to c onsider "all available evidence on the proper allocation of costs" including, specifically, evidence 
provided by the relevant exporter or producer, provided that the allocation is one that the exporter or producer 
has historically utilized. The third sente nce of Article  2.2.1.1 requires an investigating authority, to the extent 
not already accomplished by applying the second  sentence, to make appropriate adjustments to take account 
of non -recurring items of cost which benefit future and/or current productio n, and of costs affected by start -up 
operations. Footnote  6 provides that adjustments made by an investigating authority for start -up operations 
shall reflect the costs at the end of the start -up period or, if that period extends beyond the period of 
investigation, the most recent costs which can reasonably be taken into account by the authority during the 
investigation.  
129 See Panel Reports, Thailand – H-Beams , para. 7.112; and US – Softwood Lumber V , para. 7.278.  WT/DS473/AB/R  
 
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  Agreement can, nonetheless, be discerned from its content and structure. 
The Anti-Dumping  Agreement defines the concept of "dumping"130 and the remedies available to 
Members whose domestic industries are injured by such "dumping".131 At the same time, the 
Anti-Dumping  Agreement conditions the right to apply such remedies to counteract dumping on 
the demonstrated existence of three substantive c onditions — dumping, injury, and a causal link 
between the two132 — as well as on compliance with certain procedural and additional substantive 
rules. Taken as a whole, the object and purpose of the Anti -Dumping  Agreement is to recognize 
the right of Members  to take anti -dumping measures to counteract injurious dumping while, at the 
same time, imposing substantive conditions and detailed procedural rules on anti -dumping 
investigations and on the imposition of anti -dumping measures.133 The understanding we have 
derived from the text and context of the second condition in the first sentence of Article  2.2.1.1 of 
the Anti -Dumping  Agreement is, in our view, consistent with such object and purpose.  
6.26.   Thus, interpreting the condition in the first sentence of Article  2.2.1.1 of the 
Anti-Dumping  Agreement that the "records … reasonably reflect the costs associated with the 
production and sale of the product under consideration" , in accordance with the ordinary meaning 
of the terms in their context and in light of the objec t and purpose of the 
Anti-Dumping  Agreement, we understand this condition as referring to whether the records kept 
by the exporter or producer suitably and sufficiently correspond to or reproduce those costs 
incurred by the investigated exporter or produce r that have a genuine relationship with the 
production and sale of the specific product under consideration. With this understanding in mind, 
we turn to examine the European Union's claim that the Panel erred in its interpretation and 
application of Articl e 2.2.1.1 of the Anti -Dumping  Agreement.  
6.1.1.1.4   Whether the Panel erred in its interpretation and application of Article  2.2.1.1 
of the Anti -Dumping  Agreement  
6.27.   The European Union contends that, in finding the biodiesel anti -dumping measure at issue 
to be inconsist ent with Article 2.2.1.1 of the Anti -Dumping  Agreement, the Panel erred in its 
interpretation and application of the second condition in the first sentence of th is provision.134 The 
European Union submits that the Panel failed to conduct a holistic and prope r interpretation of 
Article  2.2.1.1 consistent with Article  31 of the Vienna Convention on the Law of Treaties135 
(Vienna Convention ). The European Union alleges multiple discrete errors by the Panel and 
contends that e ach of them amounts to error requiring reversal of the Panel's ultimate finding of 
inconsistency.136 We first examine the two main arguments of the European Union, namely, that 
the Panel erred in finding that the second condition in the first sentence of Article 2.2.1.1 refers to 
the "actual" cos ts incurred by the specific exporter or producer under investigation, and that this 
condition does not include a general standard of "reasonableness".137 Thereafter, we turn to the 
European Union's remaining arguments.  
6.28.   The first main argument made by the Eur opean Union is that the Panel erred in finding that 
the second condition in the first sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement refers 
to the actual  costs incurred by the specific exporter or producer under investigation.138 The 
European  Union submits that the phrase "associated with the production and sale" in this condition 
is drafted in relatively general and abstract terms, and cannot be interpreted to mean "actual" 
costs of production and sale.139 The European Union adds that the Panel  erred by failing properly 
                                                
130 Pursuant to Article  2.1 of the Anti -Dumpi ng Agreement, a product is to be considered "dumped" 
when it is "introduced into the commerce of another country" at an export price that is "less than its normal 
value". The Appellate Body has explained that dumping is the result of the pricing behaviour of individual 
exporters or foreign producers. (See Appellate Body Reports, US – Zeroing (Japan) , paras.  111 and 156; US – 
Zeroing (EC) , para.  129; and US – Stainless Steel (Mexico) , para.  95 and fn  208 to para.  94) 
131 See Articles  2, 3, 4, 7, 8, and 9 of th e Anti -Dumping  Agreement.  
132 See Articles  2 and 3 of the Anti -Dumping  Agreement.  
133 See Appellate Body Report, US – Washing Machines , para.  5.52. 
134 European Union's appellant's submission, paras.  55, 113, and 154.  
135 Done at Vienna, 23 May 1969, UN Treaty Ser ies, Vol. 1155, p. 331.  
136 European Union's appellant's submission, paras.  113, 156, and 190.  
137 See European Union's appellant's submission, paras.  84, 87 -92, 95, 105 -107, 110 -111, 126 -127, 
131, 133, 135, 137 -138, 153, 159 -160, and 210 -211. 
138 See European U nion's appellant's submission, paras.  96, 114, 126, 128 -130, 135, 165 -166, 169, 
172-173, 175 -176, 179, 187 -189, and 209.  
139 European Union's appellant's submission, para.  96. In the European Union's view, the term 
"associated" has a broader meaning than the  phrase "actually incurred". ( Ibid., para.  165) WT/DS473/A B/R 
 
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  to interpret the term "associated".140 In the European Union's view, a proper interpretation of the 
term "associated" leads to the conclusion that "the European Union was fully entitled to consider 
which costs would pertain [or relate] to the production and sale of biodiesel in normal 
circumstances, i.e. in the absence of the distortion caused by Argentina's differential export tax 
system ."141 In their third participant's submissions, Australia and the United States express views 
similar t o that of the European Union, and consider that the condition at issue should not be 
interpreted as referring to the actual costs incurred by the producer or exporter under 
investigation.142 
6.29.   Argentina submits that the term "costs" in the second condition in the first sentence of 
Article  2.2.1.1 of the Anti -Dumping  Agreement refers to charges or expenses that have actually 
been incurred by a given producer for the production and sale of the product under consideration. 
To Argentina, the Panel correctly conclud ed that this condition is concerned with the reasonable 
reflection of the costs that producers actually incur in the production of the product at issue.143 In 
their third participant's submissions, China, Indonesia,  and Saudi Arabia also argue that the 
condi tion at issue refers to an investigated producer 's actual costs of producing  the product under 
consideration.144 
6.30.   As explained above, we understand the phrase "costs associated with the production and 
sale of the product under consideration" in the first sent ence of Article  2.2.1.1 of the 
Anti-Dumping  Agreement to refer to costs incurred by the investigated exporter or producer that 
are genuinely related to the production and sale of the product under consideration. We do not 
consider that the Panel's interpre tation conflicts with our understanding of this phrase. Although 
Article  2.2.1.1 does not explicitly refer to "actual" costs, the Panel stated that the condition at 
issue relates to whether the costs set out in a producer's or exporter's records "correspon d – 
within acceptable limits – in an accurate and reliable manner[] to all the actual costs incurred by 
the particular producer or exporter for the product under consideration".145 To the Panel, this "calls 
for a comparison between, on the one hand, the cost s as they are reported in the 
producer['s]/exporter's records and, on the other, the costs actually incurred by that producer."146 
When comparing the two  conditions in the first sentence of Article  2.2.1.1, the Panel considered 
that, "while the costs in the records might be consistent with GAAP, they may still not accord with 
how they would need to be considered in the context of an anti -dumping investigation, such as in 
respect of the proper allocation of costs for depreciation or amortization or the relevan t time 
periods."147 In addition, when examining the panel findings in EC – Salmon (Norway) , the 
Panel  noted that the panel in that case focused on the actual  costs of production incurred by the 
producers , "because the panel tested whether there existed, in a ctuality, a rational relationship 
between the costs allocated and the production activities".148 Reading the Panel's use of the 
word actual  in light of the broader reasoning of the Panel findings, we understand the Panel to 
have considered that the second  condition in the first sentence of Article  2.2.1.1 concerns the 
costs incurred by the producer under investigation that are genuinely related to the production and 
sale of the product under consideration in a particular anti -dumping investigation. Thus, we d o not 
consider that the Panel's use of the word "actual" is in error. Nor do we consider, as the 
European  Union argues, that the condition at issue allow s the EU authorities to consider which 
costs would pertain to the production and sale of biodiesel in n ormal circumstances, i.e.  in the 
absence of the alleged distortion caused by Argentina's export tax system. Rather, we agree with 
Argentina that such interpretation would add words to the condition at issue that are not present 
in Article  2.2.1.1, namely , the costs that " would  pertain" and " in normal circumstances ".149 
6.31.   The European Union also submits that, because the first condition in the first sentence of 
Article  2.2.1.1 of the Anti -Dumping  Agreement already instructs companies to record costs that 
                                                
140 European Union's appellant's submission, paras.  164-166. 
141 European Union's appellant's submission, para.  170. (emphasis omitted)  
142 Australia's third participant's submission, paras.  9 and 11; United States ' third participant's 
submission, paras. 11 and 19 -20. 
143 Argentina's appellee's submission, paras.  28-30 (referring to Panel Report, paras.  7.232 -7.233).  
144 China's third participant's submission, paras.  36, 40, and 70; Indonesia's third participant's 
submi ssion, paras.  23 and 27 -28; Saudi Arabia's third participant's submission, para.  16. 
145 Panel Report, para.  7.247. See also para. 7.242.  
146 Panel Report, para.  7.242.  
147 Panel Report, para.  7.232.  
148 Panel Report, para.  7.246 (referring to Panel Report, EC – Salmon (Norway) , para.  7.514).  
149 Argentina's appellee's submission, para.  26. (emphasis original; underlining omitted)  WT/DS473/AB/R  
 
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  they ha ve actually incurred, the second condition in that sentence must be interpreted to mean 
something more than  that.150 
6.32.   Argentina submits that the GAAP are merely a set of rules for accounting and financial 
reporting, and that, even when records conform to such  rules, those records may not reasonably 
reflect the costs incurred by the producer or exporter in relation to the product under consideration 
in a particular anti -dumping investigation.151 
6.33.   We do not consider that the first condition in the first sentence  of Article  2.2.1.1 of the 
Anti-Dumping  Agreement renders the second condition in that sentence152 superfluous or 
meaningless because, as noted above, while the first condition concerns the activity of the 
exporter or producer generally, the second condition is  specific to the costs associated with the 
production and sale of the product under consideration. In this regard, we agree with the Panel 
that records that are GAAP -consistent153 may nonetheless be found not to reasonably reflect the 
costs associated with t he production and sale of the product under consideration. This may occur, 
for example, if certain costs relate to the production both of the product under consideration and 
of other products, or where the exporter or producer under investigation is part o f a group of 
companies in which the costs of certain inputs associated with the production and sale of the 
product under consideration are spread across different companies' records, or where transactions 
involving such inputs are not at arm's length.154 Thus, we do not consider that the Panel erred in 
this respect.  
6.34.   The European Union also takes issue with the Panel's statement that "the context provided 
by Article  2.2.2 [of the Anti -Dumping  Agreement] suggests to [it] that, as a general principle, the 
actual  data of producers/exporters is to be preferred in constructing the normal value"155, and 
disputes that this supports the Panel's interpretation of Article  2.2.1.1. The European Union 
suggests that the Panel erroneously imported the word "actual" from Articl e 2.2.2 without 
considering that this provision refers to "actual data" pertaining to production and sale "in the 
ordinary course of trade" of the like product. To the European Union, it would be arbitrary to 
import the word "actual" while at the same time  excluding the phrase "in the ordinary course of 
trade".156 To us, however, it is clear from the Panel Report that, in making this statement, the 
Panel was addressing, and rejecting, the European Union's reliance on Article 2.2.2 as context to 
argue that "th e express reference to the 'actual data' of the producer/exporter in that provision 
relates only to production and sales in the ordinary course of trade , and a contrario , their actual 
data need not be used where the like product is not sold in the ordinary  course of trade."157 In the 
Panel's view, contrary to the European Union's argument, "the structure of Article  2.2.2 indicates a 
preference for the actual data of the exporter and like product in question, with an incremental 
progression away from these pri nciples before reaching 'any other reasonable method' in 
Article  2.2.2(iii)".158 In our view, the Panel's reading of Article  2.2.2 is consistent with the overall 
structure and logic of this provision.  
6.35.   The second main argument raised by the European Union is that the Panel erred in finding 
that the second condition in the first sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement 
                                                
150 European Union's appellant's submission, para.  176. See also para.  128. The United States submits 
similar views in paragraph  16 of its t hird participant's submission.  
151 Argentina's appellee's submission, paras.  36-37 and 102 -104. China and Indonesia submit similar 
views in their third participant's submission. (See China's third participant's submission, paras.  44-49, and 70; 
and Indonesia 's third participant's submission, para.  27) 
152 As set out above, the first sentence of Article  2.2.1.1 provides:  
For the purpose of paragraph  2, costs shall normally be calculated on the basis of records kept 
by the exporter or producer under investigatio n, provided that such records are in accordance 
with the generally accepted accounting principles of the exporting country and reasonably reflect 
the costs associated with the production and sale of the product under consideration.  
153 As the Panel pointed o ut, it is undisputed between the parties that GAAP generally instruct 
companies truly to record all the costs that have actually been incurred in the production of the items. 
(Panel  Report, para.  7.232) 
154 Panel Report, para.  7.232.  
155 Panel Report, para.  7.236. 
156 European Union's appellant's submission, para.  135. 
157 Panel Report, para.  7.236 (referring to European Union's first written submission to the Panel, 
paras.  247-248). (emphasis original)  
158 Panel Report, para.  7.236.  WT/DS473/A B/R 
 
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  does not include a general standard of "reasonableness".159 The European Union submits that the 
Panel failed to recognize that Ar ticle 2.2.1.1 is informed by a standard of "reasonableness" that 
permits an investigating authority to disregard the records kept by the exporter or producer if the 
authority determines that the costs in such records are not reasonable.160 The European  Union  
argues that the costs referred to in the second condition in the first sentence of Article  2.2.1.1 
"must themselves be 'reasonable' if the records are to reasonably reflect them".161 The 
European  Union considers that a standard of "reasonableness " informs n ot only the term "reflect", 
but also the determination of the costs associated with the production and sale of the product 
under consideration.162 In its third participant's submission, Australia submits that an investigating 
authority should be permitted to  consider whether the costs in the records are reasonable and, 
where they are not, to adjust or replace those costs in an appropriate manner.163 
6.36.   Argentina submits that there is no textual basis for the European Union's argument that a 
standard of "reasonable ness" informs the determination of the costs associated with the 
production and sale of the product under consideration under Article  2.2.1.1 . Argentina also notes 
that the word "reasonably" is an adverb that qualifies the verb "reflect" and not the 
word "costs".164 Similarly, in their third participant's submissions, China, Indonesia, and 
Saudi  Arabia contend that Article  2.2.1.1 does not allow an investigating authority to assess 
whether the recorded costs meet some general standard of "reasonableness " through a 
comparison with hypothetical costs that might prevail in a hypothetical market, free from 
government regulation.165 
6.37.   We fail to see any textual support in Article  2.2.1.1 of the Anti -Dumping  Agreement for the 
argument made by the European Union. Indeed,  we observe that the European Union itself accepts 
that the adverb "reasonably" modifies the verb "reflect" in a phrase where the subject of the 
sentence is the producer's or exporter's "records".166 In our view, the plain meaning of the terms 
used in the co ndition at issue, as well as the structure of the first sentence of Article  2.2.1.1, do 
not support the European Union's reading of the term "costs" in the second condition of this 
provision. To the extent that costs are genuinely related to the production  and sale of the product 
under consideration in a particular anti -dumping investigation, we do not consider that there is an 
additional or abstract standard of "reasonableness " that governs the meaning of "costs" in the 
second condition in the first senten ce of Article  2.2.1.1.  
6.38.   The European Union further contends that the relationship among Articles  2.2, 2.2.1, 
and 2.2.1.1 of the Anti -Dumping  Agreement supports its interpretation of the second condition in 
the first sentence of Article  2.2.1.1 as containing  a standard of "reasonableness" that informs the 
determination of "costs". Specifically, the European Union contends that the calculation of costs 
pursuant to Article 2.2.1.1 is relevant not only for constructing the normal value under Article  2.2, 
but als o in determining whether domestic sales or sales to a third country are not in the ordinary 
course of trade by reason of price under Article  2.2.1. The European Union submits that, in order 
to determine whether, under Article  2.2.1, sales of the like produ ct are "below per unit … costs of 
production plus administrative, selling and general costs", an authority must first establish the 
"costs" pursuant to Article 2.2.1.1.167 Thus, in the European Union's view, the word "costs" in the 
first sentence of Article  2.2.1.1 refers to "all costs"168, which includes not only the cost of 
production but also administrative, selling and general costs. Given that the amount of 
                                                
159 European Union's appellant's su bmission, paras.  84, 87 -92, 95, 105 -107, 110 -111, 126 -127, 131, 
133, 135, 137 -138, 153, 159 -160, and 210 -211. 
160 European Union's appellant's submission, paras.  105, 111, 126, 153, 159, and 210 -211. 
161 European Union's appellant's submission, para.  159. 
162 European Union's appellant's submission, paras.  153, 159, and 210. Australia and the United States 
express a similar view. (Australia's third participant's submission, para.  9; United States' third participant's 
submission, para.  21) 
163 Australia's third part icipant's submission, para.  22. 
164 Argentina's appellee's submission, paras.  17-19, 22 -23, and 32. China, Indonesia, and Saudi Arabia 
express a similar view. (China's third  participant's submission, para.  34; Indonesia's third participant's 
submission, para . 20; Saudi Arabia's third participant's submission, para.  24) 
165 China's third participant's submission, paras.  24 and 35 -36. See also Indonesia's third participant's 
submission, paras.  19, 26, 32 -34, and 36; Saudi Arabia's third participant's submission, paras.  16, 21, 26, 30, 
33, and 48.  
166 European Union's appellant's submission, para.  159. 
167 European Union's appellant's submission, paras.  69, 72, and 74 -75. 
168 European Union's appellant's submission, para.  76. (emphasis omitted)  WT/DS473/AB/R  
 
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  "administrative, selling  and general costs"169 must, pursuant to Article  2.2, be "reasonable", the 
European Union contends that it would be internally inconsistent to interpret the second condition 
in the first sentence of Article  2.2.1.1 as meaning that a standard of "reasonableness" informs the 
determination of the costs associated with sales, but not th ose associated with production.170 In 
this respect, the European Union notes the "repeated use" of the term "reasonable" in Articles  2.2, 
2.2.1, 2.2.1.1, 2.2.2, 2.3, and 2.4, and footnote  6 of the Anti -Dumping  Agreement, which, in the 
European  Union's view, supports its interpretation of the second condition in the first sentence of 
Article  2.2.1.1.171 
6.39.   We understand the European Union to contend that Article  2.2.1.1 contains a standard of 
"reasonableness" pertaining to "administrative, selling and general costs " that is present more 
generally in the Anti -Dumping  Agreement , and in particular in Articles  2.2, 2.2.1, and 2.2.2. Again, 
we do not find support in these provisions for the European  Union's argument that Article 2.2.1.1 
contains a general standard of "re asonableness" that informs not only the reflection of the costs in 
a producer's records, but also the "costs" themselves. The adverb "reasonably" in the 
second  condition of the first  sentence of Article  2.2.1.1 modifies the verb "reflect", rather than the 
word "costs". Moreover, none of the references to "reasonable" in the provisions cited by the 
European Union suggests that the investigating authority enjoys unfettered discretion to define 
subjectively, and to apply, a benchmark of "reasonableness" for pu rposes of assessing whether the 
costs in a producer's or exporter's records are "unreasonable".172 
6.40.   The European Union also characterizes the Panel as having found that " no matter how 
unreasonable the production (or sale) costs in the records kept by the inve stigated firm would be 
when compared to a proxy or benchmark consistent with a normal market situation, there is 
nothing an investigating authority can do ."173 
6.41.   We do not subscribe to the European Union's reading of the Panel Report. We note that, to 
the Pane l, the second condition in the first sentence of Article  2.2.1.1 of the 
Anti-Dumping  Agreement requires a comparison between the costs in the producer's or exporter's 
records and the costs incurred by such producer or exporter. The Panel emphasized that "t he 
object of the comparison is to establish whether the records reasonably reflect the costs actually 
incurred, and not whether they reasonably reflect some hypothetical costs that might have been 
incurred under a different set of conditions or circumstanc es and which the investigating authority 
considers more 'reasonable' than the costs actually incurred."174 In this connection, the 
Panel  explained that its understanding of this condition does not imply that "whatever is recorded 
in the records of the produc er or exporter must be automatically accepted ."175 To the Panel, an 
investigating authorit y is "certainly free to examine the reliability and accuracy of the costs 
recorded in the records of the producers/exporters" to determine, in particular, whether all 
costs incurred are captured; whether the costs incurred have been over - or understated; and 
whether non -arms-length transactions or other practices affect the reliability of the reported 
costs.176 The Panel further stated that "Article  2.2.1.1 does not involv e an examination of the 
'reasonableness' of the reported costs themselves, when the actual costs recorded in the records 
of the producer or exporter are otherwise found, within acceptable limits, to be accurate and 
faithful."177 In light of these statements,  we consider the Panel's interpretation of Article  2.2.1.1 to 
be more nuanced than the European Union's argument suggests.  
                                                
169 Emphasis added.  
170 Europe an Union's appellant's submission, paras.  73-76 and 78.  
171 European Union's appellant's submission, paras.  77-78 and 90.  
172 For instance, what may constitute the "reasonable" amount for administrative, selling and general 
costs and for profit, referred to in  Article  2.2, is further elaborated pursuant to the concrete rules set out in 
Article  2.2.2. In this regard, we agree with Argentina that this is not tantamount to a general and abstract 
"reasonableness" test. ( Argentina's appellee's submission, paras.  50 and 105 ) Similarly, where the term 
"reasonable" is used in Article  2.2.1, it refers to something concrete, i.e. a "period of time". In footnote  6 of 
the Anti -Dumping  Agreement, where the term "reasonably" is less directly connected to a specific 
determinat ion, it refers to the phrase "be taken into account by the authorities during the investigation", and 
not to "costs", much less to "costs" in the second  condition in the first sentence of Article  2.2.1.1.  
173 European Union's appellant's submission, para.  84. 
174 Panel Report, para.  7.242. (emphasis omitted)  
175 Panel Report, fn  400 to para.  7.242.  
176 Panel Report, fn  400 to para.  7.242.  
177 Panel Report, fn  400 to para.  7.242. At the end of its interpretative analysis, the Panel concluded 
that the second condition in the first sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement "calls for an WT/DS473/A B/R 
 
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  6.42.   We now turn to address the multiple discrete errors that the European Union alleges that 
the Panel made in interpreting the first se ntence of Article  2.2.1.1 of the Anti -Dumping  Agreement. 
The European Union claims that the Panel erred in stating that the opening phrase — "For the 
purpose of paragraph  2" — in Article  2.2.1.1 makes clear that this provision elaborates on how the 
cost of  production in the country of origin in Article  2.2 is to be determined in constructing the 
normal value.178 The European Union submits that the purpose of Article  2.2 is to "elaborate rules 
for determining a value that is normal, or a normal value".179 The Eu ropean Union argues that the 
Panel's statement erroneously narrows the purpose of Article  2.2, arbitrarily excluding the other 
aspects of th is provision.180 
6.43.   Argentina underlines that the claim it raised before the Panel concerned the determination 
of the "co st of production" for the purpose of constructing the normal value for the 
Argentine  producers in the anti -dumping measure on biodiesel. Argentina considers that the 
Panel's statement is correct in view of the claim that Argentina raised in this dispute.181 
6.44.   We do not consider that the Panel statement challenged by the European Union erroneously 
narrows the purpose of Article  2.2 of the Anti -Dumping  Agreement. In our view, this statement 
does not address what other costs, in addition to costs of production, ma y also be governed by 
Article  2.2.1.1. Rather, the Panel's statement comports with our understanding, explained above, 
that the calculation of "cost of production", for purposes of determining the normal value under 
Article  2.2, is subject to Article  2.2.1.1 of the Anti -Dumping Agreement. Thus, we do not consider 
that the Panel erred in making this statement.  
6.45.   The European Union also takes issue with the Panel's observation that "[t]he first  sentence 
of Article  2.2.1.1 … establishes the records of the invest igated producer as the preferred source of 
information for the establishment of the costs of production."182 The European  Union points out 
that this language is not used in the first sentence of Article  2.2.1.1.183 Argentina submits that the 
Panel did not err in its description of the first sentence of Article  2.2.1.1, and that the 
Panel's  observation reflects the fact that the records of the producer shall normally be used, 
provided that the conditions in the first  sentence are fulfilled.184 
6.46.   We agree with this o bservation by the Panel. By requiring that costs normally be calculated 
on the basis of the records kept by the exporter or producer under investigation, "Article  2.2.1.1 
identifies the 'records kept by the exporter or producer under investigation' to be t he preferred 
source for cost of production data", as the Appellate Body explained in EC – Tube or Pipe 
Fittings .185  
6.47.   The European Union points to the contextual significance of Article 2.4 of the 
Anti-Dumping  Agreement for interpreting Article 2.2.1.1 of the  Anti-Dumping  Agreement. 
According to the European Union, there is an overlap between Articles  2.2 and 2.4 in the sense 
that adjustments will be justified pursuant to the latter provision only to the extent that they have 
not already been made pursuant to the former provision. Thus, the European Union argues that, if 
a tax adjustment would be justified under Article  2.4, such adjustment could, alternatively, be 
made under Article  2.2.186 
                                                                                                                                                  
assessment of whether the costs set out in a producer's records correspond – within acceptable limits – in an 
accurate and reliable manner, to all the actual costs incurre d by the particular producer or exporter for the 
product under consideration". (Ibid., para.  7.247)  
178 European Union's appellant's submission, para.  115 (referring to Panel Report, para.  7.227). The 
European Union contends that the Panel also made the same  error later in paragraph  7.233 of its Report. 
(See European Union's appellant's submission, para.  133) 
179 European Union's appellant's submission, para.  115. 
180 European Union's appellant's submission, para.  115. 
181 Argentina's appellee's submission, para.  98. 
182 Panel Report, para.  7.227.  
183 European Union's appellant's submission, para.  116. 
184 Argentina's appellee's submission, para.  99. 
185 See Appellate Body Report, EC – Tube or Pipe Fittings , para.  99. 
186 European Union's appellant's submission, para.  101. WT/DS473/AB/R  
 
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  6.48.   To us, the European Union's argument risks conflating the obligations in  Article  2.2.1.1 and 
Article  2.4 of the Anti -Dumping  Agreement.187 The manner in which the normal value is calculated 
pursuant to Article  2.2 of the Anti -Dumping  Agreement may inform the types of adjustments 
required under Article  2.4. This, however, does no t mean that any adjustment envisaged under 
Article  2.4 – in particular adjustments for taxation – may instead be taken into account in 
determining the normal value pursuant to Article  2.2. Rather, Article  2.2.1.1 and Article  2.4 serve 
different functions i n the context of determinations of dumping: the former assists an investigating 
authorit y in the calculation of costs for purposes of constructing the normal value ; whereas the 
latter concerns the fair comparison between the normal value and the export pri ce. Thus, we do 
not consider that Article  2.4 supports the European Union's interpretation of the first sentence of 
Article  2.2.1.1.  
6.49.   Referring to Article  XI of the GATT  1994, the European Union also argues that, because 
export taxes are not covered by th is provision, other disciplines must be interpreted so as to 
permit a reasonable and appropriately calibrated response to the existence of such discriminatory 
and highly trade -distorting measures.188 We do not see the European Union's argument that 
export taxe s are not prohibited by Article  XI of the GATT 1994 to be contextually relevant to the 
interpretation of Article  2.2.1.1 of the Anti -Dumping  Agreement.  
6.50.   Finally, the European Union submits that the Panel made certain erroneous statements as to 
the object an d purpose of the Anti -Dumping  Agreement.189 After briefly summarizing the 
arguments made by Argentina and the European Union pertaining to the object and purpose of the 
Anti-Dumping  Agreement, the Panel stated:  
The Anti -Dumping Agreement does not contain a p reamble or an explicit indication of 
its object and purpose. Moreover, we do not consider that an interpretation of the text 
of Article 2.2.1.1 in context leaves its meaning equivocal or ambiguous. We therefore 
do not consider that arguments pertaining to the object and purpose of the 
Anti-Dumping Agreement shed light on the meaning of the particular question of 
interpretation before us, and we therefore do not examine those arguments in 
detail.190 
6.51.   The European Union reads these sentences as a statement by th e Panel that, because the 
Anti-Dumping  Agreement contains no preamble, considerations of the object and purpose of the 
Anti-Dumping Agreement are not relevant.191 We note, however, that the Panel stated only that 
"[t]he Anti -Dumping Agreement does not contai n a preamble or an explicit indication of its object 
and purpose", referring to an Appellate Body report where the same statement is found.192  
6.52.   The European Union also reads the above sentences as embodying the view that, because 
the interpretation of Articl e 2.2.1.1 does not leave the meaning of the condition at issue equivocal 
or ambiguous, the object and purpose of the Agreement at issue is irrelevant. The European Union 
submits that , in adopting such a view,  the Panel erroneously relegated the object and purpose to a 
supplementary means of interpretation.193  
6.53.   It is true that it would be incorrect to treat the object and purpose of an agreement as a 
supplementary means of interpretation. Rather, examining the terms of a treaty in light of the 
object and purpo se of that treaty is part of the interpretative exercise under Article  31(1) of the 
Vienna  Convention. This is because Article  31(1) provides that "[a] treaty shall be interpreted in 
good faith in accordance with the ordinary meaning to be given to the ter ms of the treaty in their 
context and in the light of its object and purpose ."194 We, however, do not share the 
European  Union's reading of the sentences of the Panel Report quoted above. The Panel simply 
                                                
187 Article  2.4 provides that a fair comparison shall be made between the export price and the normal 
value. Article  2.4 also provides that due allowance shall be made for differences which affect price 
comparability, and includes an illustrative list of the f actors for which such allowance shall be made.  
188 European Union's appellant's submission, para.  108. 
189 European Union's appellant's submission, para.  136. See also paras.  190-208. 
190 Panel Report, para.  7.238. (fns omitted)  
191 European Union's appellant's su bmission, para.  136. 
192 Panel Report, para.  7.238 (referring to Appellate Body Report, US – Softwood Lumber V (Article 21.5 
– Canada) , para. 118).  
193 European Union's appellant's submission, para.  136. 
194 Emphasis added.  WT/DS473/A B/R 
 
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  made the observation that it "[did] not consider that  an interpretation of the text of Article  2.2.1.1 
in context leaves its meaning equivocal or ambiguous".195 The Panel further stated that the 
"arguments  pertaining to the object and purpose of the Anti -Dumping Agreement" did not shed 
light on the particular interpretative question before it.196 The Panel then concluded that, for this 
reason, it was not necessary to engage in an in-depth  analysis of those arguments.197  
6.54.   We now turn to the European Union's claim that the Panel erred in its application of the 
second  condition in the first sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement to the 
anti-dumping measure on biodiesel.198 The Panel noted that the EU  authorities determined not to 
use the cost of soybeans in the production of biodiesel because "the dome stic prices of the main 
raw material used by biodiesel producers in Argentina were found to be artificially lower than the 
international prices due to the dist ortion created by the Argentine  export tax system".199 To the 
Panel, this was not a sufficient basi s under Article  2.2.1.1 for concluding that the producers' 
records do not reasonably reflect the costs associated with the production and sale of biodiesel. 
For this reason, the Panel found that the European Union acted inconsistently with Article  2.2.1.1 
by failing to calculate the cost of production of the product under investigation on the basis of the 
records kept by the producers.200 
6.55.   Concerning its claim that the Panel erred in applying Article  2.2.1.1, the European Union 
does not advance any argument th at is separate and different from its arguments concerning the 
alleged errors in the Panel's interpretation of Article  2.2.1.1 of the Anti -Dumping  Agreement. In 
light of our understanding of Article  2.2.1.1, explained above, we agree wit h the Panel's  statement 
that the EU  authorities' determination that domestic prices of soybeans in Argentina were lower 
than international prices due to the Argentine export tax system was not, in itself, a sufficient 
basis under Article  2.2.1.1 for concluding that the produ cers' records do not reasonably reflect the 
costs of soybeans associated with the production and sale of biodiesel, or for disregarding those 
costs when constructing the normal value of biodiesel. For this reason, we agree with the 
Panel 's finding that the  European Union acted inconsistently with Article  2.2.1.1 by failing to 
calculate the cost of production of the product under investigation on the basis of the records kept 
by the producers.201 
6.1.1.1.5   Conclusions  
6.56.   In sum, we consider that the second condition in the  first sentence of Article  2.2.1.1 of the 
Anti-Dumping  Agreement – that the records kept by the exporter or producer under investigation 
reasonably reflect the costs associated with the production and sale of the product under 
consideration – relates to wh ether the records kept by the exporter or producer under 
investigation suitably and sufficiently correspond to or reproduce those costs incurred by the 
investigated exporter or producer that have a genuine relationship with the production and sale of 
the specific product under consideration. The Panel's interpretation, which is more nuanced than 
the European Union's arguments on appeal suggest, does not conflict with our understanding of 
this provision. In our view, the Panel did not err in rejecting the Eu ropean Union's argument that 
the second condition in the first sentence of Article  2.2.1.1 includes a general standard of 
"reasonableness". With respect to the application of Article 2.2.1.1 to the anti -dumping measure 
on biodiesel, we agree with the Panel  that the EU authorities' determination that domestic prices of 
soybeans in Argentina were lower than international prices due to the Argentine  export tax system 
was not, in itself, a sufficient basis for concluding that the producers' records did not reas onably 
reflect the costs of soybeans associated with the production and sale of biodiesel, or for 
disregarding the relevant costs in those records when constructing the normal value of biodiesel.  
6.57.   We therefore find that the Panel did not err in its interpre tation and application of the 
second condition in the first sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement. 
Consequently, we uphold  the Panel's finding, in paragraphs  7.249 and 8.1.c. i of its Report, that the 
European Union acted inconsistently with Article 2.2.1.1 of the Anti -Dumping Agreement by failing 
                                                
195 Panel Report, para.  7.238. (fn omitt ed) 
196 Panel Report, para.  7.238. (emphasis added)  
197 Panel Report, para.  7.238.  
198 European Union's appellant's submission, paras.  55, 113, and 154.  
199 Panel Report, para.  7.248 (quoting Definitive Regulation (Panel  Exhibit ARG -22), Recital  38). 
200 Panel Repor t, paras.  7.248 -7.249.  
201 Panel Report, paras.  7.248 -7.249.  WT/DS473/AB/R  
 
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  to calculate the cost of production of the product under investigation on the basis of the records 
kept by the producers. Having upheld this Panel finding , the condition for Argentina's request for 
completion of the legal analysis is not fulfilled. Thus, we do not examine this request.  
6.1.1.2   Article  2.2 of the Anti -Dumping  Agreement and Article VI:1(b)(ii) of the 
GATT  1994  
6.1.1.2.1   Introduction  
6.58.   We now turn to the Panel's interpretation and application of Articl e 2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994. The European Union and 
Argentina202 each appeals different aspects of the Panel's interpretation of these provisions. The 
European Union also appeals the Panel's application of the se provisions to the anti -dumping 
measure on biodiesel. Argentina, for its part, appeals the Panel's application of Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 to the second subparagraph of 
Article 2(5) of the Basic R egulation.203 We deal with this latter part of Argentina's appeal in 
section  6.2 below.  
6.59.   The European Union claims that the Panel erred in its interpretation of Article  2.2 of the 
Anti-Dumping  Agreement and, in particular, in its understanding of the phrase " cost of production 
in the country of origin" in th is provision.204 The European Union further claims that the 
Panel  erred in finding that the European Union acted inconsistently with Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GA TT 1994 by not using the cost of 
production in Argentina when constructing the normal value in the anti -dumping measure on 
biodiesel .205 The European Union contends that the soybean prices used by the EU  authorities 
reflected the soybean costs that the produ cers of biodiesel would pay in Argentina absent the 
distortion caused by the Argentine DET system. For this reason, the European Union argues that 
these prices were costs "in the country of origin" within the meaning of Article  2.2.206 The 
European Union req uests us to reverse the Panel finding at issue207, but maintain s that we should 
not complete the analysis.208 In contrast, Argentina requests us to uphold the Panel's application 
of Article  2.2 to the anti -dumping measure on biodiesel, contending that the Pane l correctly found 
that the EU  authorities did not rely on the cost of production in Argentina when constructing the 
normal value.209 Should we reverse the Panel 's finding under Article  2.2, Argentina  requests us to 
complete the legal analysis and find that t he European Union acted inconsistently with Article  2.2 
of the  Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 with respect to the 
anti-dumping measure on biodiesel.210 
6.60.   Argentina claims that the Panel erred in its interpretation of Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 when stating  that these 
provisions neither " limit the sources of information that may be used in establishing the costs of 
production ", nor " prohibit an authority [from] resorting to sources of information other than 
producers' costs in the country of origin", but do "require that the costs of production established 
by the authority reflect conditions prevailing in the country of origin".211 Argentina requests us to 
reverse the Panel's i nterpretation.212 In Argentina's view, these provisions do not permit the use of 
                                                
202 See supra  fn 90. 
203 In this context, Argentina claims that the Panel erred: (i) in ascertaining the scope and meaning of 
the second subparagraph of Ar ticle 2(5) of the Basic Regulation; and (ii) in rejecting Argentina's alternative 
claim and finding that Argentina had not demonstrated that the second subparagraph of Article 2(5) cannot be 
applied in a WTO -consistent manner. (Argentina's other appellant' s submission, paras.  194 and 196 -197)  
204 European Union's appellant's submission, paras.  218 and 227. The European Union has not advanced 
specific arguments regarding the Panel's finding under Article  VI:1(b)(ii) of the GATT 1994.  
205 European Union's appell ant's submission, paras.  213, 227, and 240.  
206 European Union's appellant's submission, paras.  229-230. For the factual aspects of the 
anti-dumping measure on biodiesel from Argentina, see section 5.1 of this Report.  
207 European Union's appellant's submissi on, paras.  213, 240, and 263 (referring to Panel Report, 
paras.  7.260 and 8.1.c.ii).  
208 European Union's appellant's submission, para.  241. 
209 Argentina's appellee's submission, paras.  121, 152, and 179.  
210 Argentina's appellee's submission, para.  153. 
211 Argentina's other appellant's submission, para.  195 (referring to Panel Report, para.  7.171).  
212 Argentina's other appellant's submission, paras.  234 and 391.  WT/DS473/A B/R 
 
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  any information other than the producers' costs in the country of origin.213 The European Union 
submits that we should reject Argentina's  claim because Argentina has not demonstra ted that the 
Panel erred in its interpretation of Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994 in making the above statements .214 
6.61.   Before examining the claims of error on appeal,  we first summarize the 
Panel's  interpretat ion and application of Article  2.2 of the Ant i-Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994. We then examine the participants' claims that the Panel erred 
in its interpretation of these provisions. Subsequently, we turn to consider the Europe an Union's 
claim that the Panel erred in its application of Article  2.2 of the Ant i-Dumping  Agreement to the 
anti-dumping measure on biodiesel. Thereafter, we consider Argentina's request for us to complete 
the legal analysis.  
6.1.1.2.2   The Panel 's findings  
6.62.   In asses sing Argentina's claim that the second subparagraph of Article  2(5) of the 
Basic Regulation is inconsistent "as such" with Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994, the Panel made certain statements expressing its 
understanding of these provisions. The Panel noted that it was not in dispute between the parties 
that Article  2.2 of the Anti -Dumping Agreement and Article  VI:1(b)(ii) of the GATT 1994 require 
the construction of the normal value on the basis of the "cost  of production" "in the country of 
origin". The parties disagreed, however, as to whether these provisions permit the use of 
information  from outside the country of origin in constructing the cost of production. The Panel 
explained:  
Article 2.2 of the Anti -Dumping Agreement and Article  VI:1(b)(ii) of the GATT 1994 do 
not limit the sources of information that may be used in establishing the costs of 
production; what they do require, however, is that the authority construct the normal 
value on the basis of th e "cost of production" "in the country of origin". While this 
would, in our view, require that the costs of production established by the authority 
reflect conditions prevailing in the country of origin, we do not consider that the 
two provisions prohibit an authority resorting to sources of information other than 
producers' costs in the country of origin.215 
6.63.   Later in its Report, the Panel addressed Argentina's claim that the European Union acted 
inconsistently with Article  2.2 of the Anti -Dumping  Agreement a nd Article  VI:1(b)(ii) of the 
GATT  1994 in the anti -dumping measure on bio diesel by failing to construct the normal value on 
the basis of the cost of production in Argentina. The Panel recalled that the EU  authorities had 
found domestic prices of soybeans in Argentina to be "artificially lower" than international prices 
due to the distortion created by the Argentine DET system. For this reason, the EU  authorities did 
not use the "average actual purchase price of soybeans during the [investigation period]"216, 
i.e. the cost of soybeans as reflected in the producers' records. Instead, the EU  authorities 
replaced this cost with the average reference price of soybeans for export published by the 
Argentine Ministry of Agriculture, minus fobbing costs217 (which we hav e defined above as the 
surrogate price for soybeans).218 The Panel also noted that the EU  authorities considered that the 
surrogate price for soybeans reflected the level of international prices and that the 
Argentine  producers would have paid prices at that  level in the absence of the DET system.219 In 
the view of the Panel, however, the surrogate  price for soybeans used by the EU  authorities did 
not represent the cost of soybeans in Argentina for domestic purchasers of soybeans, including the 
Argentine produc ers and exporters of biodiesel  under investigation .220 For these reasons, the 
                                                
213 Argentina's other appellant's submission, paras.  195, 205, and 234 (referring to Panel Report, 
para. 7.171).  
214 European Union's appellee's submission, paras.  6, 67, 70 -71, and 171.  
215 Panel Report, para.  7.171.  
216 Panel Report, para.  7.257.  
217 Panel Report, para.  7.257.  
218 See supra , para. 5.7. 
219 Panel Report, paras.  7.257 (refe rring to Definitive Disclosure (Panel Exhibit ARG -35), para.  32) and 
7.259 (referring to European Union's response to Panel question No. 45, para. 60).  
220 Panel Report, paras.  7.258 -7.259. The Panel considered that the EU  authorities selected the 
surrogate price for soybeans precisely because it was not the cost of soybeans in Argentina. (Ibid., 
para. 7.258)  WT/DS473/AB/R  
 
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  Panel  found that the European Union acted inconsistently with Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 by using , in the construction of 
the normal value , a "cost" that was not the cost prevailing "in the country of origin", namely, 
Argentina.221 
6.1.1.2.3   Whether the Panel erred in its interpretation of Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994  
6.64.   Like the Panel fin ding at issue, the European Union's arguments before the Panel and on 
appeal distinguish between "cost", on the one hand, and "information" or "evidence", on the other  
hand.222 To the European Union, the cost of production to be determined under Article  2.2 of the 
Anti-Dumping  Agreement is that of the country of origin, but this provision does not forbid the use 
of information from countries other than the country of origin in the calculation of such cost of 
production.223 
6.65.   Argentina submits, however, that the d istinction made by the European Union and the Panel 
is artificial, given that "cost of production" refers to expenses incurred in the production of the 
product concerned in the country of origin, which necessarily implies that the information and 
evidence used are those from the country of origin. Argentina thus argues that Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 do not permit the use of 
information other than the producers' costs in the country of origin.224 
6.66.   The int erpretative question on appeal concerns the phrases "cost of production in the 
country of origin" in Article  2.2 of the Anti -Dumping  Agreement and "cost of production of the 
product in the country of origin" in Article  VI:1(b)(ii) of the GATT  1994. Specifi cally, the 
participants disagree as to whether these phrases encompass information or evidence from outside 
the country of origin.  
6.67.   Article 2.2 of the Anti -Dumping  Agreement provides:  
When there are no sales of the like product in the ordinary course of tra de in the 
domestic market of the exporting country or when, because of the particular market 
situation or the low volume of the sales in the domestic market of the exporting 
country, such sales do not permit a proper comparison, the margin of dumping shall  
be determined by comparison with a comparable price of the like product when 
exported to an appropriate third  country, provided that this price is representative, or 
with the cost of production in the country of origin plus a reasonable amount for 
adminis trative, selling and general costs and for profits.  225 
6.68.   Article VI:1(b)(ii) of the GATT 1994 provides:  
1. The Members recognize that dumping, by which products of one country are 
introduced into the commerce of another country at less than the normal value o f the 
products, is to be condemned if it causes or threatens material injury to an 
established industry in the territory of a Member or materially retards the 
establishment of a domestic industry. For the purposes of this Article, a product is to 
be consid ered as being introduced into the commerce of an importing country at less 
than its normal value, if the price of the product exported from one country to another  
 … 
(b)  in the absence of such domestic price, is less than either  
                                                
221 Panel Report, para.  7.260.  
222 Panel Report, paras.  7.95-7.96 and 7.171; European Union's appellee's submission, paras.  67-70; 
appellant's submission, p ara. 222. 
223 European Union's appellant's submission, paras.  222-223 and 238 -239; appellee's  submission, 
paras.  67 and 70.  
224 Argentina's other appellant's submission, paras.  205, 212, and 234; appellee's submission, 
paras.  129-130 and 148 -149. See also Pane l Report, para.  7.83. 
225 Fn omitted.  WT/DS473/A B/R 
 
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   … 
(ii) the cost of produc tion of the product in the country of origin plus a 
reasonable addition for selling cost and profit.  
6.69.    As noted above, the definition of the term "cost" refers to the expenses paid or to be paid 
for something. This definition does not include a reference to  information or evidence. The term 
"cost" in both Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 
is followed by "of production" and then by "in the country of origin". On the basis of the text of 
Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994, the phrase  
"cost of production  […] in the country of origin" may be understood as a reference to the pri ce 
paid or to be paid to produce something within the country of origin.  
6.70.   We observe that Art icle 2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994 do not contain additional words or qualifying language specifying the type of evidence 
that must be used, or limiting the sources of information or evidence to only those sourc es inside 
the country of origin. An investigating authority will naturally look for information on the cost of 
production "in the country of origin" from sources inside the country. At the same time, these 
provisions do not preclude the possibility that th e authority may also need to look for such 
information from sources outside the country. The reference to "in the country of origin", however, 
indicates that, whatever information or evidence is used to determine the "cost of production", it 
must be apt to  or capable of yielding a cost of production in the country of origin. This, in turn, 
suggests that information or evidence from outside the country of origin may need to be adapted 
in order to ensure that it is suitable to determine a "cost of production"  "in the country of 
origin".226 
6.71.   Turning to the relevant context, we recall that Article  2.2.1.1 of the Anti -Dumping 
Agreement identifies the "records kept by the exporter or producer under investigation" as the 
preferred source for cost of production data to  be used in such calculation.227 We do not see, 
however, that the first sentence of Article  2.2.1.1 precludes information or evidence from other 
sources from being used in certain circumstances. Indeed, it is clear to us that , in some 
circumstances , the info rmation in the records kept by the exporter or producer under investigation 
may need to be analysed or verified using documents, information, or evidence from other 
sources, including from sources outside the "country of origin".228 While such documents, 
information, or evidence are from outside the country of origin, they would, nonetheless, be 
relevant to the calculation of the cost of production in the country of origin . These considerations 
support the understanding that the determination of the "cost of production in the country of 
origin" may take account of evidence from outside the country of origin.  
6.72.   The second sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement provides that the 
authorities "shall consider all available evidence on the proper al location of costs". 
Argentina  considers that this sentence does not assist in understanding the meaning of "cost" in 
Article  2.2, because the evidence referred to in this sentence relates only to the "proper allocation 
of costs" and not to the costs themse lves.229 We, however, read the sentence above as suggesting 
that the "evidence" used to establish a "cost" can be different from that cost itself. This is because 
this sentence refers separately to "evidence" and to "cost".  
6.73.   We further observe that, while bot h obligations apply harmoniously when an investigating 
authorit y construct s the normal value, the scope of the obligation to calculate the costs on the 
basis of the records in the first  sentence in Article  2.2.1.1 is narrower than the scope of the 
obligati on to determine the cost of production in the country of origin in Article  2.2. In 
circumstances where the obligation in the first sentence of Article  2.2.1.1 to calculate the costs on 
the basis of the records kept by the exporter or producer under investi gation does not apply, or 
                                                
226 China expresses a similar view in paragraph  89 of its third participant's submission.  
227 Appellate Body Report, EC – Tube or Pipe Fittings , para.  99. 
228 This may be so e.g. where the producer under investigation purchase s inputs from outside the 
country of origin to produce the product under consideration. We note, in this regard, that Article  6.6 of the 
Anti-Dumping  Agreement provides that authorities shall satisfy themselves as to the accuracy of the 
information supplie d by interested parties upon which their findings are based.  
229 Argentina's appellee's submission, paras.  130-131. See also Indonesia's third participant's 
submission, para.  43. WT/DS473/AB/R  
 
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  where relevant information from the exporter or producer under investigation is not available230, 
an investigating authority may have recourse to alternative bases to calculate some or all such 
costs. Yet, Article  2.2 does not speci fy precisely to what evidence an authority may resort. This 
suggests that, in such circumstances, the authority is not prohibited from relying on information 
other than that contained in the records kept by the exporter or producer, including in -country an d 
out-of-country evidence. This, however, does not mean that an investigating authority may simply 
substitute the costs from outside the country of origin for the "cost of production in the country of 
origin". Indeed, Article  2.2 of the Anti -Dumping  Agreem ent and Article  VI:1(b)(ii) of the 
GATT  1994 make clear that the determination is of the "cost of production […] in the country of 
origin". Thus, whatever the information that it uses, an investigating authority has to ensure that 
such information is used to arrive at the "cost of production in the country of origin". Compliance 
with this obligation may require the investigating authority to adapt the information that it 
collects.231 It is in this sense that we understand the Panel to have stated that Article  2.2 of the 
Anti-Dumping Agreement and Article  VI:1(b)(ii) of the GATT 1994 "require that the costs of 
production established by the authority reflect conditions prevailing in the country of origin".232 
6.74.   In light of our examination above of the phrases "cost of production in the country of origin" 
in Article  2.2 of the Anti -Dumping  Agreement and "cost of production … in the country of origin" in 
Article  VI:1(b)(ii) of the GATT  1994, we consider that these provisions do not limit the sources of 
information or e vidence that may be used in establishing the costs of production in the country of 
origin to sources inside the country of origin.233 For this reason, we do not consider that Argentina 
has demonstrated that the Panel erred in stating that these provisions "d o not limit the sources of 
information that may be used in establishing the costs of production", and do not "prohibit an 
authority [from] resorting to sources of information other than producers' costs in the country of 
origin" but do "require that the co sts of production established by the authority reflect conditions 
prevailing in the country of origin".234 
6.75.   In its appeal, although it "partially agrees" with the Panel's interpretation of Article  2.2 of 
the Anti -Dumping  Agreement235, the European Union neverth eless claims that the Panel erred in 
its interpretation of this provision. This is because, according to the European Union, the 
Panel  failed to recognize that "Article  2.2.1.1 does not preclude an investigating authority from 
having regard to evidence rel ating to matters outside the country of origin, if to do so would be 
helpful in determining the costs associated with the production and sale of the product under 
consideration; and in then determining what data to use to reject/replace/adjust the records kept 
by the investigated firm".236 The European Union does not identify any particular passage in the 
Panel Report that reveals the  Panel's alleged error in interpreting Article  2.2. Nor do we see that 
the European  Union's argument accurately describes the P anel's analysis and understanding of 
Article  2.2.1.1. In any event, we understand the European  Union's argument to mean that its 
claim of error under Article  2.2 is dependent upon its claim that the Panel erred in its 
interpretation of Article 2.2.1.1. As we have found  that the Panel did not err in its interpretation of 
Article  2.2.1.1, we reject the European Union's claim challenging  the Panel's interpretation of 
Article  2.2 of the Anti -Dumping Agreement . 
                                                
230 This may occur e.g. where the producer under investigation refuses access to and does not provide 
information concerning costs, and the investigating authority relies on "best information available" under 
Article  6.8 and Annex  II to the Anti -Dumping  Agreement.  
231 Pursuant to Articles  12.2.1(iii) and 12.2.2 of the Anti -Dumping  Agreem ent, a public notice of the 
imposition of provisional or final measures shall contain, inter alia , a full explanation of the reasons for the 
methodology used in the establishment and comparison of the export price and the normal value under 
Article  2 of th e Anti -Dumping  Agreement. Thus, we understand that, with respect to any information or 
evidence used to determine the cost of production in the country of origin, an investigating authority is 
required to explain how the information or evidence informed th e calculation of the cost of production.  
232 Panel Report, para.  7.171. Accordingly, we disagree with Argentina's assertion that, in making this 
statement, the Panel was reading words into the provisions at issue. (See Argentina's other appellant's 
submissio n, para.  212 (referring to Panel Report, para.  7.171))  
233 This interpretation of Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994 is without prejudice to our interpretation of Article  2.2.1.1 of the Anti -Dumping  Agreement.  
234 Argentina's other appellant's submission, para.  195 (quoting Panel Report, para.  7.171).  
235 European Union's appellant's submission, para.  231 (referring to Panel Report, para.  7.171).  
236 European Union's appellant's submission, para.  227. WT/DS473/A B/R 
 
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  6.1.1.2.4   Whether the Panel erred in its application of Artic le 2.2 of the 
Anti-Dumping  Agreement to the anti -dumping measure at issue  
6.76.   We now turn to the European Union's claim that the Panel erred in its application of 
Article  2.2 of the Anti -Dumping  Agreement to the anti -dumping measure at issue in finding that 
the European Union acted inconsistently with this provision by not using the cost of production in 
Argentina when constructing the normal value of biodiesel.237 
6.77.   The Panel observed that the EU authorities replaced the "average actual purchase price of 
soybeans during the [investigation period], as reflected in the producers' records" with the 
surrogate price for soybeans.238 The Panel also noted that the EU authorities considered that the 
surrogate price for soybeans reflected the level of international prices and  that this would have 
been the price paid by the Argentine  producers in the absence of the DET system.239 The Panel, 
however, was not persuaded that the surrogate price for soybeans used by the EU authorities 
represented the cost of soybeans in Argentina for  producers or exporters of biodiesel, and 
highlighted that "the EU  authorities selected this cost precisely because it was not the cost of 
soybeans in Argentina. "240 For these reasons, the Panel found that the European Union acted 
inconsistently with Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994 by using a "cost" that was not the cost prevailing in Argentina when constructing the 
normal value of biodiesel.241 
6.78.   In challenging these Panel findings on appeal, the European Union first argues that they 
"are based upon and vitiated by [the Panel's] legally erroneous findings with respect to 
Article  2.2.1.1, and for this reason alone, with the reversal of the latter, the former should also be 
reversed".242 Given, however, that we have already found that the European Union has not 
established that the Panel erred in its interpretation or application of the second condition in the 
first sentence of Article  2.2.1.1  of the Anti -Dumping Agreement , we reject this argument by the 
European Unio n. 
6.79.   The European Union further argues that the Panel failed to recognize that: (i)  a price 
derived from a price at the border can, by definition, be characterized as both an international 
price and a price in Argentina; and (ii)  the subtraction of the fobbi ng costs from the published 
reference price renders the surrogate price for soybeans used by the EU  authorities a reasonable 
proxy for the undistorted price of soybeans in Argentina.243 The European Union contends that the 
surrogate price for soybeans used b y the EU  authorities reflected the soybean costs that would 
have existed  in Argentina in the absence of the distortion  caused by the Argentine  DET system , 
and thus constituted the "cost of production in the country of origin" within the meaning of 
Article  2.2 of the Anti -Dumping  Agreement.244 
6.80.   Argentina emphasizes that the European Union itself considered that the reference price for 
soybeans, which was the basis for the surrogate price for soybeans used by the EU  authorities, 
reflected the level of internatio nal prices. It follows, for Argentina, that the Panel  correctly 
concluded that the surrogate price for soybeans was not "the cost of production in the country of 
origin" because it was not the cost of soybeans in Argentina.245 Argentina contends that the 
European Union cannot argue that the surrogate price for soybeans used by the EU  authorities 
constituted the "cost of production" in Argentina merely by claiming that this would be the price 
that Argentine producers of biodiesel "would pay domestically" in th e absence of the 
Argentine  DET system.246 
6.81.   As noted earlier, when relying on any out -of-country information to determine the "cost of 
production in the country of origin" under Article  2.2 of the Anti -Dumping  Agreement, an 
                                                
237 European Union 's appellant's submission, paras.  213 and 240 (referring to Panel Report, 
paras.  7.260 and 8.1.c.ii).  
238 Panel Report, para.  7.257.  
239 Panel Report, para.  7.257 (referring to Definitive Disclosure (Panel Exhibit  ARG-35), para.  32). 
240 Panel Report, para.  7.258. (emphasis original) See also para. 7.259.  
241 Panel Report, para.  7.260.  
242 European Union's appellant's submission, para.  225. 
243 European Union's appellant's submission, para.  226. 
244 European Union's appellant's submission, para.  230. 
245 Argentina's appell ee's submission, para.  146. 
246 Argentina's appellee's submission, para.  150. (emphasis omitted ) WT/DS473/AB/R  
 
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  investigating authority has to ensur e that such information is used to arrive at the "cost of 
production in the country of origin", and this may require the investigating authority to adapt that 
information.247 In our view, domestic prices may reflect world prices and, in such circumstances, a  
price at the border could, as the European Union argues, be simultaneously characterized as both 
an international and a domestic price. We do not consider, however, that the Panel failed to take 
such considerations into account. Rather, the Panel's analys is focused on the EU  authorities' 
understanding of the surrogate price for soybeans. In line with the Panel's understanding, we 
consider that the mere fact that a reference price is published by the Argentine Ministry of 
Agriculture does not necessarily ma ke this price a domestic price in Argentina.248 In addition, we 
note, as the Panel did, that the EU  authorities considered that the reference price published by the 
Argentine Ministry of Agriculture reflected the level of international prices of soybeans.249 Other 
than pointing to the deduction of fobbing costs, the European Union has not asserted, either 
before the Panel or before us, that the EU  authorities adapted, or even considered adapting, the 
information used in their calculation in order to ensure that  it represented the cost of production 
in Argentina . On the contrary, the EU  authorities specifically selected the surrogate price for 
soybeans to remove the perceived distortion in the cost of soybeans in Argentina. As the Panel 
stated, the EU authorities  selected and used this particular information precisely because it did not 
represent the cost of soybeans in Argentina.250 Thus, we agree with the Panel that the surrogate 
price for soybeans  used by the EU  authorities did not represent the cost of soybeans in Argentina 
for producers or exporters of biodiesel.251 Accordingly, we do not consider that the European Union 
has established that the Panel erred in its application of Article  2.2 of the Anti -Dumping  Agreement 
in finding that the European Union acted inc onsistent ly with Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 by not using the cost of 
production in Argentina when constructing the normal value of biodiesel.  
6.1.1.2.5   Conclusions  
6.82.   In sum, we consider that the phrases "cost of production in the country of origin" in 
Article  2.2 of the Anti -Dumping  Agreement and "cost of production  … in the country of origin" in 
Article  VI:1(b)(ii) of the GATT  1994 do not limit the sources of information or evidence that may 
be used in establishi ng the cost of production in the country of origin to sources inside the country 
of origin. When relying on any out -of-country information to determine the "cost of production in 
the country of origin" under Article  2.2, an investigating authority has to e nsure that such 
information is used to arrive at the "cost of production in the country of origin", and this may 
require the investigating authority to adapt that information. In this case, like the Panel, we 
consider that the surrogate price for soybeans used by the EU  authorities to calculate the cost of 
production of biodiesel in Argentina did not represent the cost of soybeans in Argentina for 
producers or exporters of biodiesel.  
6.83.   We therefore find that the Panel did not err in its interpretation of Arti cle 2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994, and that the European Union 
has not established that the Panel erred  in its application of these provisions to the biodiesel 
measure at issue. Consequently, we uphold  the Panel 's finding , in paragraphs 7.260 and 8.1.c.ii of 
its Report,  that the European Union acted inconsistently with Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 by not using the cost of 
production in Argentina when construct ing the normal value of biodiesel. Having upheld th is 
finding , the condition for Argentina's request for completion of the legal analysis is not fulfilled. 
Thus, we do not examine this request.  
6.1.1.3   Article 2.4 of the Anti -Dumping Agreement  
6.84.   Argentina appeals th e Panel's finding that Argentina did not establish that the 
European  Union acted inconsistently with the requirement to make a "fair comparison" under 
Article 2.4 of the Anti -Dumping Agreement by failing to make "[d]ue allowance" for "differences 
                                                
247 See supra , para. 6.73. 
248 Panel Report, para.  7.259.  
249 Panel Report, para.  7.257 (referring to Definitive Disclosure (Panel Exhibit  ARG-35), para.  32). 
250 Panel Report, para.  7.258.  
251 Panel Report, para.  7.259.  WT/DS473/A B/R 
 
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  which aff ect price comparability" within the meaning of th is provision.252 Argentina alleges that the 
Panel erred in its interpretation and application of Article  2.4.253 According to Argentina, the 
Panel's "general proposition" – that "differences arising from the met hodology applied for 
establishing the normal value cannot, in principle, be challenged under Article  2.4 as 'differences 
affecting price comparability'" – is not s upported by the text of Article  2.4 or relevant 
Appellate  Body findings in past disputes.254 Argentina further contends that the Panel erred in 
finding that the "difference" identified by Argent ina, which resulted from the EU  authorities' use of 
the surrogate price for soybeans in constructing the normal value, was not a difference affecting 
price c omparability within the meaning of Article  2.4.255 On this basis, Argentina requests us to 
reverse the Panel's finding under Article 2.4 of the Anti -Dumping Agreement, and to find, instead, 
that the difference at issue is a "difference[] affecting price comp arability" under Article  2.4, and 
that the European  Union acted inconsistently with this provision.256 The European  Union considers 
that the Panel did not err in its analysis, and requests us to uphold the relevant Panel  findings.257  
6.85.   We recall that, in constr ucting the normal value, the EU authorities replaced the actual costs 
of soybeans in the Argentine producers' records with the surrogate price of soybeans.258 As a 
result, "the level of distortion mitigated by the [EU] authorities more or less amounted to th e level 
of the export tax" on soybeans, given that the difference between the surrogate price of soybeans 
and actual costs of soybeans "roughly equalled the export tax" .259 In its comments on the 
Definitive Disclosure, the Association of Argentine Biodiesel Producers  (CARBIO ) argued that  the 
EU authorities effectively compared a normal value that reflected the inclusion of the export tax on 
soybeans with an export price that did not take into account such tax, and hence did not make a  
fair comparison between the normal value and the export price.260 The EU authorities rejected this 
argument by CARBIO, finding, instead, that "[t]he fact that from a pure numerical point of view 
the result is similar does not mean that the methodology applied by the Commission cons isted in 
simply adding the export taxes to the costs of the raw material."261 Before the Panel, 
Argentina  alleged that, by constructing the normal value on the basis of the surrogate price for 
soybeans, the EU authorities introduced a difference between the normal value and export price 
that affected price comparability within the meaning of Article 2.4 of the Anti -Dumping Agreement, 
for which "due allowance" should have been made.262  
6.86.   In analysing Argentina's claim, the Panel began by noting that the third sen tence of 
Article  2.4 of the Anti -Dumping Agreement elaborates on the means of ensuring that the 
"comparison" between the normal value and the export price is "fair" by requiring "[d]ue 
allowance" to be made "for differences which affect price comparability ".263 In the Panel's view, 
such "differences" are those in the characteristics of the compared transactions that have an 
impact, or are likely to have an impact, on the prices involved in the transactions.264 Turning to 
the anti -dumping measure on biodiesel, t he Panel  considered that the "difference" alleged by 
Argentina under Article 2.4 arose from the decision of the EU authorities to construct the normal 
value by, inter alia , using what it considered to be the undistorted price for the main raw material 
input.265 In the Panel's view, this difference is not a difference which  affects price comparability 
within the mea ning of Article  2.4 because it does not "represent[] a tax – or some other 
                                                
252 Argentina's other appellant's submission, para. 294 (referring to Panel Report, paras. 7.292 -7.306 
and 8.1.c.v).  
253 Argentina's other appellant's submission, paras.  294, 298, 3 00, and 308.  
254 Argentina's other appellant's submission, paras. 298 and 300 (referring to Panel Report, 
para. 7.304).  
255 Argentina's other appellant's submission, para.  300.  
256 Argentina's other appellant's submission, paras.  318 and 324 -325. 
257 European Uni on's appellee's submission, paras.  6 and 171.  
258 Panel Report, para. 7.299 (referring to Definitive Disclosure (Panel Ex hibit ARG -35), paras. 32 
and 35-36; and Definitive Regulation (Panel Exhibit ARG -22), Recitals 36 and 39 -40). 
259 Panel Report, para. 7.29 9 (referring to European Union's first written submission to the Panel, 
para. 284; and Argentina's first written submission to the Panel, paras. 302 -304).  
260 Panel Report, para. 7.280 (referring to Letter dated 17  October 2013 from CARBIO and its members 
providing comments on the Definitive Disclosure  (Panel  Exhibit  ARG-39), p. 12). See also Definitive  Regulation 
(Panel Exhibit ARG -22), Recital 41.  
261 Panel Report, para. 7.281 (quoting Definitive Regulation (Panel Exhibit ARG -22), Recital 42).  
262 Panel Report , paras. 7.282 -7.283.  
263 Panel Report, para. 7.294.  
264 Panel Report, para.  7.295 (referring to Appellate Body Report, US – Zeroing (EC) , para.  157 and 
Panel Report, US – Stainless Steel (Korea) , para. 6.77).  
265 Panel Report, para.  7.300. WT/DS473/AB/R  
 
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  identifiable characteristic – that was incorporated into the constructed  normal value ; by the 
EU authorities".266 Rather, "the alleged 'difference' is one that arose exclusively from the 
methodology used to construct the normal value … a matter that is primarily governed by 
Article  2.2 of the Anti -Dumping Agreement."267 The Panel then stated that its conclusion , in this 
respect , is consistent with the view of the Appellate Body in EC – Fasteners (China) (Article 21.5 – 
China) .268 Specifically, the Panel read the Appellate Body's findings in that dispute "as consistent 
with the genera l proposition  that differences arising from the methodology applied for establishing 
the normal value cannot, in principle, be challenged under Article  2.4 as 'differences affecting price 
comparability'".269 
6.87.   We observe that, in referring to the "general prop osition" after having reached its conclusion 
under Article 2.4 , the Panel was supplementing its earlier analysis as to why the difference at issue 
does not fall within the scope of the "differences" under  Article  2.4 of the Anti -Dumping 
Agreement. The Pane l's statement, in which it referred to the "general proposition", merely 
expresses its understanding of the Appellate  Body's findings in EC – Fasteners (China) 
(Article  21.5 — China) . We do not share this understanding. The Appellate Body report in EC – 
Fasteners (China) (Article 21.5 – China) does not contain any such "general proposition". The 
reasoning in that report is tailored to the circumstances of that dispute, in which the analogue 
country methodology was used. The Appellate Body explained that Art icle 2.4 of the Anti -Dumping 
Agreement had to be read in the context of the second Ad Note to Article VI:1 of the GATT 1994 
and Section 15(a) of China's  Accession Protocol.270 Neither of those provisions is relevant for 
purposes of this dispute. Moreover, we  would have serious reserv ations regarding what the 
Panel  referred to as the "general proposition". The text of Article  2.4 itself makes clear that "[d]ue 
allowance shall be made in each case , on its merits ".271 This indicates that the need to make due 
allowance must be assessed in light of the specific circumstances of each case.  
6.88.   In any event, we recall the Panel's findings that, in constructing the normal value,  the 
EU authorities acted inconsistently with Articles 2.2.1.1 and 2.2 of the Anti -Dumping 
Agree ment.272 At the oral hearing, the European Union expressed the view that, should we uphold 
the Panel's findings under Articles  2.2.1.1 and 2.2 of the Anti -Dumping Agreement, there would be 
no need to further examine the Panel's finding under Article 2.4 of t he Anti -Dumping 
Agreement.273 In contrast, Argentina contended that the errors it alleged under Article 2.4 of the 
Anti-Dumping Agreement would remain relevant even if we were to uphold the Panel's findings 
under Articles 2.2.1.1 and 2.2.  
6.89.   We have upheld the  Panel 's findings that the EU authorities acted inconsistently with 
Articles  2.2.1.1 and 2.2 of the Anti -Dumping Agreement in constructing the normal value for the 
reasons set out above.274 Given these findings, and notwithstanding our reservations about cer tain 
aspects of the Panel's analysis under Article 2.4 of the Anti -Dumping Agreement, we do not 
consider it fruitful, in the particular circumstances of this dispute, to examine further whether the 
EU authorities also failed to conduct a "fair comparison" in comparing the constructed normal value 
to the export price. We therefore find it unnecessary to rule on Argentina's claim on appeal 
regarding the Panel's finding under Article 2.4 of the Anti -Dumping Agreement.  
                                                
266 Panel Report, para.  7.301. See also para.7.302.  
267 Panel Report, para.  7.301.  
268 Panel Report, paras.  7.303 -7.304 (referring to Appellate Body Report, EC – Fasteners (China) 
(Article  21.5 – China) , paras. 5.207, 5.214, and 5.231).  
269 Panel Report, para.  7.304. (emphasis added)  
270 Appellate Body Report, EC – Fasteners (China) (Article 21.5 – China) , para. 5.2 and fn 46 thereto 
and para.  5.207.  In that context, the Appellate  Body noted that "an investigating authority has to 'take steps 
to achieve clarity as to the adjustment claim ed' and determine whether, on its merits, the adjustment is 
warranted  because it reflects a difference affecting price comparability or whether it would lead to adjusting 
back to costs or prices that were found to be distorted  in the exporting country." (Ibid., para. 5.207 
(quoting  Appellate  Body Report, EC – Fasteners (China) , paras. 488 and 519, in turn quoting Panel Report, 
EC – Tube or Pipe Fittings , para.  7.158) (emphasis added))  
271 Emphasis added.  
272 Panel Report, paras.  7.249 and 7.260.  
273 As a third p articipant, China expressed a similar view, stating that we  could declare moot the 
Panel's  findings under Article 2.4 of the Anti -Dumping Agreement. (China's third participant's submission, 
para. 109 (referring to European Union's appellee's submission, pa ra. 124))  
274 See supra , paras. 6.56-6.57 and 6.82-6.83. WT/DS473/A B/R 
 
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  6.1.2   Imposition of anti -dumping duties: Article  9.3 of the Anti -Dumping Agreement and 
Article VI:2 of the GATT 1994  
6.90.   The European Union requests us to reverse the Panel's finding that " [t]he European Union 
acted inconsistently with Article 9.3 of the Anti -Dumping Agreement and Article VI:2 of the 
GATT  1994 by imposing anti -dumping duties in excess of the margins of dumping that should have 
been established under Article 2 of the Anti -Dumping Agreement and Article VI:1 of the 
GATT  1994, respectively".275 The European Union contends that the Panel erred in i ts 
interpretation and application of Article 9.3 of the Anti -Dumping Agreement by: (i) considering 
that Article 9.3 of the Anti -Dumping Agreement calls for a comparison between the amount of 
duties and the dumping margins that should have been calculated c onsistently with Article 2 of 
that Agreement276, and that a violation of Article 2 automatically results in a violation of 
Article  9.3277; and (ii) relying on the margins of dumping calculated in the Provisional Regulation in 
applying Article 9.3 to the facts of this dispute.278 Argentina maintains that the European  Union's 
appeal of the Panel's finding s under Article 9.3 of the Anti -Dumping Agreement and Article VI:2 of 
the GATT 1994 is without merit and should be dismissed.279  
6.91.   We begin with a brief overview of t he relevant Panel findings before considering the 
interpretation of Article 9.3 of the Anti -Dumping Agreement and whether the Panel erred in 
reaching its finding s. 
6.1.2.1   The Panel 's findings  
6.92.   Argentina alleged before the Panel that, as a result of its erroneous c onstruction of the 
normal value and the consequent unduly high margin of dumping, the European Union imposed 
and levied anti -dumping duties in excess of the margin of dumping that should have been 
established in accordance with Article 2 of the Anti -Dumpin g Agreement, and thereby acted 
inconsistently with Article 9.3 of the Anti -Dumping Agreement and Article VI:2 of the 
GATT  1994.280  
6.93.   In addressing Argentina's claim, the Panel considered that the question before it was 
whether the phrase "margin of dumping as  established under Article 2" in Article 9.3 of the 
Anti-Dumping Agreement "refers to the margin of dumping that an investigating authority would 
have established in the absence of any errors or inconsistencies with [Article 2]".281 Analysing the 
text of Art icle 9.3, the Panel considered that the term "margin of dumping" in Article 9.3 "relates 
to a margin that is established in a manner subject to the disciplines of Article 2 and which is 
therefore consistent with those disciplines".282 The Panel added that an  error or inconsistency 
under Article 2 "does not necessarily or automatically mean that the anti -dumping duty actually 
applied will exceed the correct margin of dumping" , and hence be inconsistent with Article 9.3.283 
This is because, even in situations in which the dumping margin is not determined consistently 
with Article 2, the actual anti -dumping duty rate could still be lower than the correct margin of 
dumping, for example, due to the application of the lesser duty rule.284 
6.94.   The Panel recalled its finding that the European Union acted inconsistently with 
Articles  2.2.1.1 and 2.2 of the Anti -Dumping Agreement and with Article VI:1(b)(ii) of the 
GATT  1994 in establishing the dumping margins in the Definitive Regulation due to the "use of 
                                                
275 Panel Report, para. 8.1.c.vii. See also para. 7.367; and European Union's appellant 's submission, 
para. 262.  
276 European Union's appellant's submission, paras. 253 and 255 -256. 
277 European Union's appellant's submission, para. 248.  
278 European Union's appellant's submission, para. 260. The European Union has not advanced specific 
arguments  in support of its claim under Article VI:2 of the GATT 1994.  
279 Argentina's appellee's submission, para. 157.  
280 Panel Report, paras. 7.355 and 7.357. The Panel noted the European Union's argument that 
Argentina's claims under Article 9.3 of the Anti -Dumpin g Agreement and Article VI:2 of the GATT  1994 are 
"entirely consequential on the [Article 2] claims", and recalled that it had sustained some of Argentina's claims 
under Article 2 of the Anti -Dumping Agreement. (Ibid., fn  606 to para. 7.357 (quoting Europe an Union' s 
first written submission to the Panel, para.  288))  
281 Panel Report, para. 7.358.  
282 Panel Report, para. 7.359.  
283 Panel Report, para. 7.363. (fn omitted)  
284 Panel Report, para. 7.363.  WT/DS473/AB/R  
 
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  surrogate input price s in the construction of each investigated Argentine producer's normal 
value".285 The Panel contrasted this with the EU authorities' use of actual input prices when 
constructing the normal value and calculating dumping margins at the provisional stage. The P anel 
also noted that Argentina highlighted that the duties imposed in the Definitive Regulation are 
"two to three times higher " than the dumping margins calculated in the Provisional Regulation.286 
While acknowledging that it could not "infer the exact dumpi ng margins that would have been 
established had the determinations been done in accordance with Article 2", the Panel 
nevertheless expressed the view that "the dumping margins established in the Provisional 
Regulation provide a reasonable approximation of what margins calculated in accordance with 
Article 2 of the Anti -Dumping Agreement might have been ."287 To the Panel, the fact that the 
anti-dumping duties imposed in the Definitive Regulation were substantially higher than the 
dumping margins calculated in the Provisional Regulation suggested that the definitive 
anti-dumping duties "exceeded what the dumping margins could have been had they been 
established in accordance with Article  2".288  
6.95.   The Panel therefore concluded that Argentina had made a prima facie  case that the 
European Union had acted inconsistently with Article 9.3 of the Anti -Dumping Agreement. Applying 
its reasoning under Article  9.3 of the Anti -Dumping Agreement, mutatis mutandis , to 
Argentina's  claim under Article  VI:2 of the GATT 1994, the Pan el found that the European Union 
also acted inconsistently with the latter provision. On the basis of the foregoing, the Panel found 
that the European Union acted inconsistently with Article 9.3 of the Anti -Dumping Agreement and 
Article VI:2 of the GATT 19 94 by imposing anti -dumping duties in excess of the margin  of dumping 
that should have been established under Article 2 of the Anti -Dumping Agreement.289 
6.1.2.2   Whether the Panel erred in its interpretation of Article 9.3 of the Anti -Dumping 
Agreement  
6.96.   Article 9 of the Anti -Dumping Agreement contains several provisions relating to the 
imposition and collection of anti -dumping duties. Article 9.3, in particular, provides that "[t]he  
amount of the anti -dumping duty shall not exceed the margin of dumping as established under 
Article  2." The words "shall not exceed" indicate that Article 9.3 sets a ceiling for the maximum 
amount of the anti -dumping duty that may be imposed and collected. This maximum level is "the 
margin of dumping as established under  Article  2".290 The ph rase "as established under" is 
immediately followed by the reference to " Article  2". Article 2, in turn, sets out detailed rules that 
govern various aspects of a dumping determination, including the determination of the normal 
value and the export price an d their comparison, for purposes of calculating the margin of 
dumping. R ead in light of the detailed rules on dumping determinations set out in Article 2, the 
phrase "as established under Article 2" indicates that the "margin of dumping" in Article 9.3 is a 
margin that is established in a manner consistent with th ese rules. We therefore share the Panel's 
understanding that the "'margin of dumping' referred to in Article 9.3 relates to a margin that is 
established in a manner subject to the disciplines of Ar ticle 2 and which is therefore consistent 
with those disciplines".291  
6.97.   Furthermore, we note that Article  9.3 is the chapeau to three provisions concerning the 
assessment and collection of anti -dumping duties.292 All three provisions are "subject to the 
overarc hing requirement in Article  9.3 that the amount of anti -dumping duty 'shall not exceed the 
margin of dumping as established under Article  2'" of the Anti -Dumping Agreement.293 The 
"margin of dumping" referred to in Article 9.3 thus provides the benchmark aga inst which the 
consistency of the amount of the anti -dumping duty with Article 9.3 must be examined under any 
                                                
285 Panel Report, para. 7.364.  
286 Panel Report, para. 7.365 (referr ing to Provisional Regulation (Panel Exhibit ARG -30), Recitals 59 
and 179; and Definitive Regulation (Panel Exhibit ARG -22), Recital 215).  
287 Panel Report, para. 7.365.  
288 Panel Report, para. 7.365.  
289 Panel Report, paras. 7.365 -7.367.  
290 Emphasis added.  
291 Panel Report, para. 7.359.  
292 Articles 9.3.1 and 9.3.2 provide, respectively, rules specific to duties assessed on a retrospective and 
a prospective basis, and Article  9.3.3 sets out rules for determining " whether and to what extent a 
reimbursement should be m ade when the export price is constructed in accordance with" Article 2.3 of the 
Anti-Dumping Agreement.  
293 Appellate Body Report, US – Stainless Steel (Mexico) , para. 102.  WT/DS473/A B/R 
 
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  of the duty assessment systems envisaged in Articles 9.3.1 to 9.3.3. In our view, it would frustrate 
the benchmark function of Article 9.3 if the margin of dumping were itself inconsistent with the 
Anti-Dumping Agreement. We also note that, pursuant to Article 9.2 of the Anti -Dumping 
Agreement, "[w] hen an anti -dumping duty is imposed in respect of any product, such 
anti-dumping duty shall be collect ed in the appropriate amounts  in each case".294 Read in light of 
Article 9.2, the benchmark provided by Article 9.3 is one specific demarcation of when the 
amounts of anti -dumping duties will be appropriate . 
6.98.   Our understanding of the phrase "margin of dumping  as established under Article 2" is 
supported by the context provided by Article VI:2 of the GATT 1994. This Article provides that a 
WTO Member "may levy on any dumped product an anti -dumping duty not greater in amount than 
the margin of dumping in respect  of such product". It further states that, "[f]or the purposes of 
this Article, the margin of dumping is the price difference determined in accordance with  
[Article  VI:1]."295 As the Panel correctly pointed out, the term "in accordance with" in the 
second  sentence of this provision "makes it clear … that Article VI:2 prohibits the levying of 
anti-dumping duties in excess of the dumping margin determined consistently  with Article VI:1 of 
the GATT 1994 in the same way as the phrase 'as established under Article  2' does in 
Article  9.3."296 
6.99.   The Appellate Body's findings in past disputes under Article 9.3 of the Anti -Dumping 
Agreement further support the interpretation above. In US — Zeroing (EC) , the Appellate  Body 
took note of the reference  in Article  9.3 to Articl e 2. The Appellate Body considered that it followed 
from this reference that, under Article  9.3, the amount of the assessed anti -dumping duties may 
not exceed the relevant margin of dumping, namely, a margin that has been established 
consistently with Arti cle 2.297  
6.100.   Similarly, in US – Zeroing (Japan) , having found that margins of dumping calculated using 
zeroing in original investigations are margins of dumping inconsis tent with Article 2 of the 
Anti-Dumping Agreement298, the Appellate Body disagreed with that panel's view that the term 
"margins of dumping" can have different meanings under different provisions of the Anti -Dumping 
Agreement.299 That panel had relied, in support of its view, on the differences between the 
retrospective and prospective duty assessme nt systems referred to under Article 9.3. The 
Appellate Body, however, noted that "the introductory clause of Article 9.3 applies equally to 
prospective and retroactive duty assessment systems ."300 The Appellate Body emphasized that, 
under either system, "th e authority is required to ensure that the total amount of anti -dumping 
duties collected … does not exceed the total amount of dumping … calculated according to the 
margin of dumping established for that exporter or foreign producer without zeroing"301 and 
that, "[u]nder any system of duty collection, the margin of dumping established in accordance with 
Article 2  operates as a ceiling for the amount of anti -dumping duties that could be collected in 
respect of the sales made by an exporter. "302 
6.101.   In our view, ther efore, the Panel properly considered that the Appellate Body's findings in 
US – Zeroing (EC)  and US – Zeroing (Japan)  confirm that Article  9.3 prohibits the amount of the 
                                                
294 Emphasis added.  
295 Emphasis added.  
296 Panel Report, para. 7.366. (emphasis original)  
297 Appellate Body Report, US – Zeroing (EC) , para. 127. Specifically, the Appellate Body found that, 
because Article 2.1 defines dumping in relation to the product as a whole, and because "Article 9.3 refers to 
Article 2", it "follows" that the "margin of d umping" referred to in Article 9.3 of the Anti -Dumping Agreement 
must also be established "for the product as a whole". (Ibid.)  This chain of reasoning is built on the premise 
that the "margin of dumping" referred to in Article 9.3 must be one that is esta blished consistently with the 
requirements of Article 2.  
298 Specifically, the Appellate Body found the use of zeroing, when calculating margins of dumping on 
the basis of transaction -to-transaction comparisons in original investigations, to be inconsistent with 
Article  2.4.2 and Article 2.4 of the Anti -Dumping Agreement. ( Appellate Body Report, US – Zeroing (Japan) , 
paras.  138 and 147, respectively)  
299 Appellate Body Report, US – Zeroing (Japan) , para. 151.  
300 Appellate Body Report, US – Zeroing  (Japan) , para. 156.  
301 Appellate Body Report, US – Zeroing  (Japan) , para. 156.  
302 Appellate Body Report, US – Zeroing (Japan) , para. 162. (emphasis added) See also Appellate Body 
Report,  US – Stainless Steel (Mexico) , para. 102.  WT/DS473/AB/R  
 
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  anti-dumping duties from exceeding a dumping margin that is determined consistently w ith 
Article  2 of the Anti -Dumping Agreement.303  
6.102.   The European Union acknowledges that "[i]t is undisputed that the ordinary meaning of 
the phrase 'the margin of dumping as established under Article 2' is that of a margin of dumping 
established in accordance with the provisions of Article 2 ."304 The European Union nonetheless 
asserts that, contrary to the Panel's interpretation, "what the text of Article 9.3 requires is merely 
a comparison between the anti -dumping duties actually imposed and the dumping margin a ctually 
calculated by the investigating authority , irrespective of the investigating authority's possible 
errors  when calculating the dumping margin."305 We have difficulty reconciling these 
two statements of the European Union. We fail to see how a dumping margin "actually calculated" 
by the investigating authority, which nonetheless contains "errors" in light of the requirements of 
Article 2, could at the same time be a margin "established in accordance with the provisions of 
Article 2".  
6.103.   The European Union  contends that the WTO -consistency of the calculation of the margin of 
dumping under Article 2, on the one hand, and the comparison called for in Article  9.3, on the 
other hand, are "two different stages in the analysis", and the finding of a WTO -inconsist ency in 
one stage should not automatically lead to a finding of WTO -inconsistency in the other stage.306 At 
the oral hearing, the European Union further clarified that it takes issue with the 
Panel's  understanding that an inconsistency with Article 2 automat ically leads to an inconsistency 
with Article 9.3.307 The Panel, however, did not interpret Article 9.3 in this way. To the contrary, 
the Panel explicitly made clear that "[a]n error or inconsistency under Article 2 does not 
necessarily or automatically mean  that the anti -dumping duty actually applied will exceed the 
correct margin of dumping."308 According to the Panel, "it is possible that an anti -dumping duty 
could be applied at a rate that is lower than the WTO -inconsistent dumping margin ."309 The Panel 
referred, by way of example, to the lesser duty rule under Article  9.1 of the Anti -Dumping 
Agreement.310 According to the Panel, where the lesser duty rule is applied, it is conceivable that 
the final duties imposed will " not only be lower than the WTO -inconsiste nt dumping margin, but 
also lower than the dumping margin that would have been established in accordance with 
Article  2"311, and hence not inconsistent with Article 9.3 of the Anti -Dumping Agreement.  
6.104.   We agree with the above analysis of the Panel. Indeed, un derstanding the "margin of 
dumping" referred to in Article 9.3 as one established consistently with Article 2 of the 
Anti-Dumping Agreement does not mean that any error  in the calculation of the dumping margin 
will necessarily  lead to a violation of Articl e 9.3. The application of the lesser duty rule provides 
one example of when this may not be the case. Moreover, because Article 9.3 is concerned with 
the maximum amount of anti -dumping duties that may be collected, the errors under Article 2 that 
matter fo r purposes of Article 9.3 are those that result in a higher  dumping margin than the 
one that would have been calculated had the authority acted consistently with Article 2. Not all 
breaches of Article 2 will invariably or predictably entail such a result. In this respect, we also 
share the European Union's understanding that a complainant "must show something more than a 
simple erroneous calculation of normal value" in order to succeed with a claim under Article 9.3.312 
In our view, the complainant must show that anti -dumping duties are imposed at a rate that is 
higher than the dumping margin that would have been established had the authority acted 
consistently with Article 2.  
6.105.   In some cases, such a showing may be straightforward. For example, in the disputes 
concerning "zeroing" discussed above, it was clear that the use of zeroing, which is inconsistent 
with Article 2 of the Anti -Dumping Agreement, led to higher margins of dumping. Furthermore, the 
lesser duty rule was not applied in the anti -dumping proceedin gs at issue in those disputes. Under 
                                                
303 Panel Report, para. 7.361.  
304 Europea n Union's appellant's submission, para. 250. (emphasis original)  
305 European Union's appellant's submission, para. 255. (emphasis added)  
306 European Union's appellant's submission, para. 256.  
307 European Union's response to questioning at the oral hearing.  
308 Panel Report, para. 7.363. (fn omitted; emphasis added)  
309 Panel Report, para. 7.363.  
310 Article 9.1 of the Anti -Dumping Agreement provides that "[i]t is  desirable … that the duty be less 
than the margin if such lesser duty would be adequate to remove the i njury to the domestic industry".  
311 Panel Report, para. 7.363.  
312 European Union's appellant's submission, para. 256.  WT/DS473/A B/R 
 
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  such circumstances, the fact that the duties were imposed at rates equal to the margins of 
dumping established with the use of zeroing necessarily meant that those duties were in excess of 
the margins that would have be en established had the margins been calculated consistently with 
Article 2 (i.e. without "zeroing"), and hence inconsistent with Article 9.3 of the Anti -Dumping 
Agreement. We emphasize, however, that what is required for a complainant to meet its burden of  
proof under Article 9.3 will depend on the specific circumstances of each dispute.  
6.1.2.3   Whether the Panel erred in its application of Article 9.3 of the Anti -Dumping 
Agreement  
6.106.   The European Union advances two sets of arguments alleging that the Panel erred in i ts 
application of Article 9.3 of the Anti -Dumping Agreement. First, the European Union contends that 
the Panel "erred when it inferred from its previous findings" under Articles 2.2.1.1 and 2.2 of the 
Anti-Dumping Agreement that the European Union also bre ached Article 9.3 of that Agreement.313 
In the European  Union's view, because the Panel's interpretations of Articles  2.2.1.1 and 2.2 are 
flawed and should be reversed, we should also reverse the Panel's finding under Article 9.3. As we 
have upheld the Panel 's findings under Articles 2.2.1.1 and 2.2 of the Anti -Dumping Agreement314, 
we reject the European Union's contention that the Panel erred under Article 9.3 as a consequence 
of the alleged errors in its findings under Articles  2.2.1.1 and 2.2.  
6.107.   Second, the European Union maintains that the Panel erred by seeking to rely on the 
dumping margins calculated in the Provisional Regulation, "effectively implying that this is what 
the [dumping margin] determination should have been".315 In doing so, the European Union  
argues, the Panel exceeded "the authority vested in it pursuant to the DSU and the special or 
additional rules" under Article 17.6(i) of the Anti -Dumping Agreement, pursuant to which "the 
Panel should have limited itself to determining if the investigatin g authority's evaluation of the 
facts was unbiased and objective".316 
6.108.   As noted above317, in applying Article 9.3 to the facts of the case, the Panel began by 
recalling its findings that "the EU authorities acted inconsistently with Articles 2.2.1.1 and 2.2 of 
the Anti -Dumping Agreement … in their establishment of the dumping margins in the 
Definitive  Regulation due to their use of surrogate input prices in the construction of each 
investigated Argentine producer's normal value ."318 The Panel further recalled that , "[b]y contrast, 
at the provisional stage, the EU authorities had used each Argentine producer's actual input prices 
when constructing the normal value used in calculating that producer's dumping margin."319 The 
Panel then noted that "Argentina contrast[ed]  the margins calculated in the Provisional Regulation, 
ranging from 6.8% to 10.6% , with the duties imposed by the EU authorities in the 
Definitive  Regulation, which ranged from 22.0% to 25.7%, i.e. two to three times higher."320  
6.109.   Contrary to the European Uni on's argument, the Panel did not "effectively imply []" that the 
dumping margins calculated in the Provisional Regulation constituted "what the determination 
should have been".321 Rather, the Panel was careful not to draw such a conclusion, observing that 
"[w]e cannot infer the exact dumping margins that would have been established had the 
determinations been done in accordance with Article 2."322 Rather, the Panel considered that the 
dumping margins in the Provisional Regulation served as a "reasonable approxim ation" for what 
the margins "might have been".323 The Panel further stated that "[t ]he substantial difference 
between the margins calculated at the provisional stage and the duties imposed in the 
                                                
313 European Union's appellant's submission, para. 259.  
314 See supra , paras. 6.56-6.57 and 6.82-6.83. 
315 European Union's appellant's submission, para. 260 (referring to Panel Report, paras. 7.364 -7.365).  
316 European Unio n's appellant's submission, para. 260.  
317 See supra , para. 6.94. 
318 Panel Report, para. 7.364.  
319 Panel Report, para. 7.364.  
320 Panel Report, para. 7.365 (referring to Provisional Regulation (Panel Exhibit ARG -30), Recitals 59 
and 179; and Definitive Regulation (Panel Exhibit ARG -22), Recital 215). The Panel further noted that, "[i]n 
application of the 'lesser duty rule', these duty rates corresponded to the injury margins calculated by the 
EU authorities; the dumping margins calcul ated by the EU authorities in the Definitive Regulation were 
significantly higher, ranging from 41.9% to 49.2%." (Ibid., fn 616 thereto)  
321 European Union's appellant's submission, para. 260.  
322 Panel Report, para. 7.365.  
323 Panel Report, para. 7.365.  WT/DS473/AB/R  
 
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  Definitive  Regulation suggests that the [definitive anti -dumpi ng duties ] exceeded what the 
dumping margins could have been  had they been established in accordance with Article 2."324 
6.110.   In our view, the Panel's reliance on the margins calculated in the Provisional Regulation 
was appropriate in light of the specific circum stances of this case. As noted, the change in the 
basis for constructing the normal value that the EU authorities made between the Provisional and 
Definitive Regulations is exactly the one found to be inconsistent with Articles  2.2.1.1 and 2.2 of 
the Anti -Dumping Agreement. More specifically, in the Definitive  Regulation, the EU  authorities 
replaced the actual purchase price of soybeans as reflected in the producers' records, which was 
used in calculating the cost of production at the provisional stage, wit h the surrogate price for 
soybeans.325 This change significantly increased the cost of production determined by the 
EU authorities, hence the normal value and the corresponding margin of dumping, for each of the 
Argentine producers in comparison to the provi sional stage.326 As Argentina showed before the 
Panel, definitive duties were imposed at rates "two to three times higher " than the dumping 
margins in the Provisional Regulation.327 Furthermore, even though the lesser duty rule was 
applied in the Definitive  Regulation, the duty rates applied were still substantially higher than the 
margins of dumping calculated in the Provisional Regulation on the basis of a constructed normal 
value whose consistency with Article 2 has not been questioned.328  
6.111.   In this respect, we  recall the European Union's contention that a complainant "must show 
something more than a simple erroneous calculation of normal value in order to put forward a 
successful claim under Article 9.3 of the Anti -Dumping Agreement".329 As Argentina rightly poin ts 
out, "[t]his is precisely what Argentina did" in this dispute.330 Specifically, in addition to 
demonstrating error in the construction of the normal value, Argentina also showed that the 
amount of the definitive anti -dumping duties "exceeded what the dump ing margins could have 
been had they been established in accordance with Article 2."331 Accordingly, and in light of the 
specific circumstances of this dispute, we find that the Panel did not err in finding that 
"Argentina  has made a prima facie  case that th e European Union acted inconsistently with 
Article  9.3 of the Anti -Dumping Agreement, which the European Union has failed to rebut."332  
6.1.2.4   Conclusion s  
6.112.   In sum, we consider that the Panel correctly interpreted Article 9.3 of the Anti -Dumping 
Agreement in statin g that the "'margin of dumping' referred to in Article 9.3 relates to a margin 
that is established in a manner subject to the disciplines of Article 2 and which is therefore 
consistent with those disciplines ."333 Furthermore, in our view , the Panel did not e rr in considering 
that, in light of the specific circumstances of this dispute, "Argentina has made a prima facie  case 
that the European Union acted inconsistently with Article  9.3 of the Anti -Dumping Agreement, 
which the European Union has failed to rebut ."334 We also agree with the Panel that the same 
considerations that guided its assessment of Argentina's Article 9.3 claim apply mutatis mutandis  
to its assessment of Argentina's claim under Article VI:2 of the GATT 1994.335  
6.113.   For these reasons, we uphold  the Panel's finding, in paragraph s 7.367 and 8.1.c.vii of its 
Report, that the European Union acted inconsistently with Article 9.3 of the Anti -Dumping 
Agreement and Article  VI:2 of the GATT 1994 by imposing anti -dumping duties in excess of the 
margin of dumpi ng that should have been established under Article 2 of the Anti -Dumping 
Agreement  and Article VI:1 of the GATT 1994 , respectively . 
                                                
324 Panel Report, para. 7.365. (emphasis added)  
325 Panel Report, paras. 7.182 and 7.257. See also Definitive Regulation (Panel Exhibit ARG -22), 
Recitals  39-40. 
326 Panel Report, paras. 7.182 and 7.257.  
327 Panel Report, para. 7.365.  
328 Panel Report, para. 7.365.  
329 European Union's appellant's submission, para. 256.  
330 Argentina's appellee's submission, para. 165.  
331 Panel Report, para. 7.365.  
332 Panel Report, para. 7.365.  
333 Panel Report, para. 7.359.  
334 Panel Report, para. 7.365.  
335 Panel Report, para. 7.366.  WT/DS473/A B/R 
 
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  6.1.3   Non-attribution analysis in causation determination: Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement  
6.114.   Argentina appeals th e Panel 's finding that Argentina failed to establish that the 
EU authorities' treatment of "overcapacity" as an "other factor" causing injury to the EU  domestic 
industry was inconsistent with Articles 3.1 and 3.5 of the Anti -Dumping Agreement.336 Specificall y, 
Argentina alleges that the Panel erred in its interpretation of these provisions in considering that it 
was relevant to examine whether the revised data on productio n capacity submitted by 
the EBB had "a significant role" in the EU authorities' non -attribution analysis on overcapacity.337 
Argentina further claims that the Panel erred in its application of Articles 3.1 and 3.5 by: 
(i) concluding that the EU authorities' non -attribution analysis regarding overcapacity was not 
based on or affected by the revi sed data338; (ii) failing to distinguish overcapacity from capacity 
utilization339; and (iii) failing to note the inconsistency of the EU  authorities' conclusion in light of 
the evidence before them.340 Argentina  requests us to reverse the Panel's finding under 
Articles  3.1 and 3.5 of the Anti -Dumping Agreement, and to find that the European Union acted 
inconsistently with these provisions in its non -attribution analysis relating to overcapacity.341 
6.115.   The European Union responds that Argentina's claims regarding the Panel's alleged errors 
should be dismissed.342 The European Union emphasizes the Panel's "clear findings" that the 
revised data did not have a role in the EU authorities' conclusion on overcapacity343, and endorses 
the Panel's observation that overcapacity and  capacity utilization are two logically related 
concepts.344 The European Union requests that we uphold the Panel findings challenged by 
Argentina.345 
6.116.   In addressing Argentina's appeal, we begin by briefly recalling the relevant factual 
background regarding the  EU authorities' determinations of injury and causation, as well as the 
Panel findings relevant to Argentina's appeal. We then address the provisions at issue in this 
dispute. Finally, we examine each of Argentina's  claims regarding the Panel's alleged err ors.  
6.1.3.1   Relevant background and the Panel 's findings  
6.117.   In assessing injury to the domestic industry, the EU authorities evaluated certain 
macroeconomic indicators in the Provisional and Definitive Regulations, including production 
capacity and capacity utiliza tion.346 Following the issuance of the Provisional Regulation, 
the EBB claimed that the total EU production capacity data that it had pre viously submitted to 
the EU authorities were too high because they included "idle capacity". Accordingly, the 
EBB submitt ed revised production capacity data excluding "idle capacity", which the EU authorities 
accepted "after close scrutiny".347 This led to a downward adjustment to the production capacity 
figures, and an upward adjustment to the capacity utilization rates. In t urn, the rev ised findings in 
the Definitive  Regulation stated that production capacity had decreased and capacity utilization 
had increased during the period considered348, which marked a contrast from the findings in the 
Provisional  Regulation that producti on capacity had increased and capacity utilization had 
decreased during the same period.349 Portions of the tables in the Provisional and  
                                                
336 Argentina's o ther appellant's submission, para. 326 (referring to Panel Report, paras. 7.462 -7.472 
and 8.1.c.x) and para. 327.  
337 Argentina's other appellant's submission, para. 334 (quoting Panel Report, para. 7.466).  
338 Argentina's other appellant's submission, para. 3 46 (quoting Panel Report, para. 7.465).  
339 Argentina's other appellant's submission, paras. 327 and 350.  
340 Argentina's other appellant's submission, paras. 327 and 350.  
341 Argentina's other appellant's submission, para. 372.  
342 European Union's appellee's sub mission, paras. 150, 159, and 171.  
343 European Union's appellee's submission, para. 150 (referring to Panel Report, paras. 7.463 
and 7.465) . 
344 European Union's appellee's submission, para. 157.  
345 European Union's appellee's submission, para. 171.  
346 Panel Re port, fn  679 to para. 7.396.  
347 Panel Report, para. 7.377 (quoting Definitive Disclosure (Panel Exhibit ARG -35), para. 105).  
348 The period considered refers to the period for examining trends relevant for the assessment of 
injury, which was from 1  January 20 09 to the end of the investigation period (or the IP), i.e. 30 June 2012. 
(See supra , para. 5.3)  
349 Definitive Regulation (Panel Exhibit ARG -22), Recitals 131 -132. See also Panel Report, para. 7.379.  WT/DS473/AB/R  
 
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  Definitive  Regulations regarding the production capacity, production volume, and capacity 
utilization figures are reprod uced below.350  
Table 2  Macroeconomic indicators from the Provisional Regulation  
 2009  2010  2011  IP 
Production capacity 
(tonnes)  20 359 000  21 304 000  21 517 000  22 227 500  
Production volume 
(tonnes)  8 754 693  9 367 183  8 536 884  9 052 871  
Capacity utili sation  43% 44% 40% 41% 
 
Table 3 Macroeconomic indicators from the Definitive  Regulation351 
 
 2009  2010  2011  IP 
Production capacity 
(tonnes)  18 856 000  18 583 000  16 017 000  16 329 500  
Production volume 
(tonnes)  8 729 493  9 367 183  8 536 884  9 052 871  
Capacity utilisation  46% 50% 53% 55% 
 
6.118.   In addressing causation, the EU authorities undertook a non -attribution analysis regarding 
several "other factors" that were allegedly causing injury to the domestic industry at the same 
time as the dumped imports. Of pa rticular relevance to this appeal, under the heading "Capacity of 
the Union industry", the EU authorities identified, in the Provisional Regulation, an argument that 
had been raised by CARBIO that the injury to the EU industry was "due to overcapacity caus ed by 
over-expansion … without a commensurate increase in demand".352 In responding to this 
argument, the EU authorities observed that, while the domestic industry became less profitable 
during the period considered, capacity utilization remained low and sta ble throughout the period. 
The EU  authorities therefore found that there appeared to be no causal link between low capacity 
utilization and injury to the domestic industry.353 This conclusion was confirmed in the 
Definitive  Regulation.354 
6.119.   Before the Panel, Arg entina challenged the EU authorities' analysis of several indicators of 
injury as being inconsistent with Articles 3.1 and 3.4 of the Anti -Dumping Agreement .355 Argentina 
also challenged the EU  authorities' analysis of causation , contend ing that the EU  autho rities failed 
to separate and distinguish appropriately the injurious effects of overcapacity from those of the 
dumped imports, as required by Articles 3.1 and 3.5.356 In particular, Argentina contended that the 
EU authorities acted inconsistently with these  provisions in their non -attribution analysis by relying 
on the revised figures on production capacity and capacity utilization in the 
Definitive  Regulation.357 In addition, Argentina maintained that, in such analysis, the 
EU authorities confused overcapacit y as an "other factor" causing injury with capacity utilization as 
                                                
350 Panel Report, para. 7.375 (quoting Provisional Regulati on (Panel Exhibit ARG -30), Table 4 in 
Section  7.1) and para.  7.379 (quoting Definitive Regulation (Panel Exhibit ARG -22), Table to Recital 131). See 
also Definitive  Disclosure (Panel Exhibit ARG -35), paras. 105 -106. 
351 The EBB also corrected the production volume figure for 2009, which is reproduced in this table.  
352 Provisional Regulation (Panel Exhibit ARG -30), Recital 137.  
353 Provisional Regulation (Panel Exhibit ARG -30), Recitals 139 -140.  
354 Definitive Regulation (Panel Exhibit ARG -22), Recitals 162 -171.  
355 Panel Report, para. 7.368.  
356 Panel Report, para. 7.441.  
357 Panel Report, para. 7.449.  WT/DS473/A B/R 
 
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  an injury indicator, and erred in focusing on the capacity utilization rates rather than overcapacity 
in absolute terms.358 
6.120.   The Panel began by recalling its finding that the EU authorities' t reatment of the revised 
production capacity data submitted by the EBB was inconsistent with Articles 3.1 and 3.4 of the 
Anti-Dumping Agreement.359 The Panel then considered whether this finding of inconsistency 
should render the EU authorities' non -attributi on analysis with regard to overcapacity inconsistent 
with Articles 3.1 and 3.5 for the same reasons.360 Having reviewed certain recitals in the 
Provisional and Definitive Regulations, the Panel considered that the revised data "did not taint the 
EU authorit [ies'] determination on overcapacity as an 'other factor' causing injury to the domestic 
industry, as this determination was not based on or affected by the revised data".361 In the 
Panel's  view, the revised data "did not have a significant role in the EU  authorities' conclusion in 
the Definitive Regulation on overcapacity as an 'other factor' causing injury".362 Consequently, the 
Panel concluded that the fact that the EU authorities' evaluation of capacity and capacity utilization 
was inconsistent with Articles  3.1 and  3.4 of the Anti -Dumping Agreement did not, in and of itself, 
render the EU authorities' non -attribution analysis of overcapacity inconsistent with Articles 3.1 
and 3.5 thereof.363 
6.121.   The Panel then examined, and rejected, Argentina's argument that the EU authorities 
improperly focused on capacity utilization as opposed to the increase in overcapacity in absolute 
terms. The Panel considered that capacity utilization is logically related to overcapacity, in the 
sense that the rate of capacity utilization reflects the amount of excess capacity of the 
domestic  industry in relative terms. The Panel disagreed with Argentina that focusing on the 
increase in overcapacity in absolute terms, rather than on trends in capacity utilization rates, 
would have altered t he conclusion reached by the EU authorities in this reg ard. Moreover, the 
Panel saw no  basis in Article 3 of the Anti -Dumping Agreement to support the proposition that an 
investigating authority must give priority to the evolution of the domestic industry' s overcapacity 
in absolute terms as opposed to its evolution in relative terms.364  
6.122.   After rejecting several other arguments advanced by Argentina365, the Panel considered 
that the EU authorities' conclusion with respect to overcapacity is one that an unbiased and 
objective investigating authority could have reached in light of the facts before it.366 Consequently, 
the Panel rejected Argentina's allegations that the European Union acted inconsistently with 
Articles  3.1 and 3.5 of the Anti -Dumping Agreement in reje cting overcapacity as an "other factor" 
of injury to the EU domestic industry.367 
                                                
358 Panel Report, para. 7.450. The Panel's findings with respect to other arguments raised by 
Argentina  that challenged the causation analysis made by the EU authorities are not subject to appeal. (Ibid., 
paras.  7.469 -7.471)  
359 Panel Report, para. 7.462. More specifically, the Panel found that the EU  authorities had not 
exercised sufficient care in assessing the accuracy and reliability of the revised data submitted by the EBB in 
the circumstances of the anti -dumping investigation at issue. The Panel considered that, due to their treatment 
of the revised data, the EU authorities had failed to base their evaluation of production capacity and capacity 
utilization on positive e vidence and had failed to conduct an objective examination of the impact of dumped 
imports on the domestic industry relating to these two factors, thereby acting inconsistently with Articles 3.1 
and 3.4 of the Anti -Dumping Agreement. (Ibid., paras.  7.411, 7.413, and 7.415) The Panel's findings under 
Articles 3.1 and 3.4 are not subject to appeal.  
360 Panel Report, para. 7.462.  
361 Panel Report, para. 7.463.  
362 Panel Report, para. 7.466.  
363 Panel Report, para. 7.466.  
364 Panel Report, para. 7.468.  
365 See supra , fn 358. 
366 Panel Report, para. 7.472.  
367 Panel Report, para. 7.472.  WT/DS473/AB/R  
 
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  6.1.3.2   Relevant provisions  
6.123.   Before turning to Argentina's claims, we discuss briefly the relevant provisions of the 
Anti-Dumping Agreement. Articles 3.1 and 3.5 of the Anti -Dumping Agr eement provide:  
Article  3 
Determination of Injury368 
3.1 A determination of injury for purposes of Article VI of GATT 1994 shall be based 
on positive evidence and involve an objective examination of both (a) the volume of 
the dumped imports and the effect of  the dumped imports on prices in the domestic 
market for like products, and (b) the consequent impact of these imports on domestic 
producers of such products.  
… 
3.5 It must be demonstrated that the dumped imports are, through the effects of 
dumping, as set  forth in paragraphs 2 and 4, causing injury within the meaning of this 
Agreement. The demonstration of a causal relationship between the dumped imports 
and the injury to the domestic industry shall be based on an examination of all 
relevant evidence befor e the authorities. The authorities shall also examine any known 
factors other than the dumped imports which at the same time are injuring the 
domestic industry, and the injuries caused by these other factors must not be 
attributed to the dumped imports.  Factors which may be relevant in this respect 
include, inter alia , the volume and prices of imports not sold at dumping prices, 
contraction in demand or changes in the patterns of consumption, trade restrictive 
practices of and competition between the foreig n and domestic producers, 
developments in technology and the export performance and productivity of the 
domestic industry.369 
6.124.   Article 3.1 of the Anti -Dumping Agreement "is an overarching provision that sets forth a 
Member's fundamental, substantive obligatio n" concerning the injury determination and "informs 
the more detailed obligations in the succeeding paragraphs" of Article 3.370 The Appellate Body has 
interpreted the term "positive evidence" as focusing on the facts underpinning and justifying the 
injury d etermination.371 The term relates to the quality of the evidence that an investigating 
authorit y may rely on in making a determination, and requires that such evidence be "affirmative, 
objective, verifiable, and credible".372 Furthermore, the Appellate Body ha s found that an 
"objective examination" requires an authority to conduct  an investigation "in an unbiased manner, 
without favouring the interests of any interested party, or group of interested parties, in the 
investigation".373 
6.125.   Article 3.5 requires that the  determination of a causal relationship between the dumped 
imports and the injury to the domestic industry be based on "an examination of all relevant 
evidence  before the authorities ". Article 3.5 also requires an investigating authority to "examine 
any kn own factors other than the dumped imports which at the same time are injuring the 
domestic industry" and to ensure that "the injuries caused by these other factors [are not] 
                                                
368 Fn omitted.  
369 Emphasis added.  
370 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , para. 5.137 (quoting 
Appellate Body Report , China  – GOES , para. 126). See also Appellate Body Reports, Thailand – H-Beams , 
para. 106; and EC – Bed Linen  (Article 21.5 – India) , para. 110.  
371 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , para. 5.138 (quoting 
Appellate Body Report, US – Hot-Rolled Steel , para. 193).  
372 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , para. 5.138 (quoting 
Appellate Body Report, China – GOES , para. 126). See also Appellate Body Report US – Hot Rolled Steel , 
para. 192. 
373 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , para. 5.138 (quoting 
Appellate Body Report, China – GOES , para. 126). See also Appellate Body Report, US – Hot-Rolled Steel , 
para. 193. WT/DS473/A B/R 
 
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  attributed to the dumped imports".374 The non -attribution language in Article 3.5 ca lls for an 
assessment that involves "separating and distinguishing the injurious effects of the other factors 
from the injurious effects of the dumped imports"375 and requires "a satisfactory explanation of the 
nature and extent of the injurious effects of t he other factors, as distinguished from the injurious 
effects of the dumped imports".376 
6.126.   With the above -mentioned considerations in mind, we turn to consider Argentina's claims 
that the Panel erred in its interpretation and application of these provisions.  
6.1.3.3   Whether the Panel erred in its interpretation of Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement  
6.127.   We begin with the interpretative error that, according to Argentina, is found in th e 
first sentence of paragraph 7.466 of the Panel Report, which states:  
We therefore conclude that the revised data did not have a significant role in the 
EU authorities' conclusion in the Definitive Regulation on overcapacity as an "other 
factor" causing injury.  
6.128.   In Argentina's view, the Panel erred in considering that it was rel evant to examine whether 
the revised data concerning production capacity "[did or] did not have a significant role  in the 
EU authorities' conclusion in the Definitive Regulation on overcapacity as an 'other factor' causing 
injury".377 For Argentina, the obli gation to make an injury determination, including of the other 
known factors causing injury, on the basis of "positive evidence" and involving an "objective 
examination" is an "absolute" one.378 Argentina refers to the following statements by the 
Appellate  Body in EC – Bed Linen (Article 21.5 – India) in support of its argument:  
These obligations are absolute. They provide for no exceptions, and they include no 
qualifications. They must be met by every investigating authority in every injury 
determination.379 
6.129.   In Argentina's view, to the extent that the EU authorities relied, even partly, on evidence 
that was not "positive" and did not involve an "objective examination", the EU authorities' 
non-attribution analysis of overcapacity is inconsistent with Articles 3. 1 and 3.5 of the 
Anti-Dumping Agreement.380 The European Union considers that Argentina's argument should be 
dismissed on the basis of the Panel's "clear findings" in the paragraphs immediately preceding the 
statement challenged by Argentina, which indicate that the EU authorities did not rely on the 
revised data in their non -attribution analysis.381 
6.130.   As a preliminary matter, we are not persuaded that the Appellate Body's statements in 
EC – Bed Linen (Article 21.5 – India)  support Argentina's position.  In our vi ew, the 
Appellate  Body's statement that "[t]hese obligations are absolute" concerns the fundamental 
nature  of the obligations imposed by Articles 3.1 and 3.2, in the sense that "[t]hey must be met 
by every investigating authority in every injury determinat ion."382 These statements of the 
Appellate Body do not speak to the issue of whether the extent to which certain evidence plays a 
role in an injury determination is relevant in assessing the WTO -consistency of that determination.  
                                                
374 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , para. 5.283 (quoting 
Appellate Body Report, China  – GOES , para. 151).  
375 Appellate Body Reports, China – HP-SSST (Japan) / China – HP-SSST (EU) , para. 5.283 (quoting 
Appellate Body Report, China  – GOES , para. 151). See also Appellate  Body Reports, US – Hot Rolled Steel , 
para. 223, and  EC – Tube or Pipe Fittings , para. 188.  
376 Appellate Body Report, US – Hot-Rolled Steel , para. 226.  
377 Argentina's other appellant's submission, para. 334 (quoting Panel Report, para. 7.466). (emphasis 
added by Argentina) See also para. 337; and response to questioning at the oral hearing.  
378 Argentina's other appellant's submission, para. 345.  
379 Argentina's other appellant's submission, para. 336 (quoting Appellate Body Report, EC – Bed Linen 
(Article 21.5 – India) , para. 109).  
380 Argentina's other appellant's submission, para. 345.  
381 European Union's appellee's submission, para. 150.  
382 Appellate Body Report, EC – Bed Linen (Article 21.5 – India) , para. 109.  WT/DS473/AB/R  
 
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  6.131.   In any event, reading the Pa nel's statement in paragraph 7.466 in its context, we do not 
consider that the Panel intended to articulate or apply an interpretation of Articles 3.1 and 3.5.383 
Rather, in making the impugned statement in paragraph 7.466, the Panel merely affirmed the 
view that it had expressed in the preceding paragraphs of its Report regarding the irrelevance of 
the revised data to the specific non -attribution analysis undertaken by the EU authorities in the 
investigation  on biodiesel from Argentina .  
6.132.   More specifically, t he Panel considered that it was "clear" from the EU authorities' findings 
that their conclusions regarding overcapacity in the Provisional and Definitive Regulations "were 
not dependent on, or even affected by, the use of the revised vs. the initial data a nd/or the trends 
associated with these data, as in either case, the data showed a low rate of capacity utilization ".384 
The Panel therefore found that the revised data did not "taint" the EU authorities' determination on 
overcapacity as an "other factor" cau sing injury to the domestic industry, as this determination 
"was not based on or affected by the revised data".385 Finally, in examining Argentina's argument 
concerning a specific statement in Recital 165 of the Definitive Regulation, the Panel considered 
that "this statement does not convince us that the EU authorities' conclusion with respect to the 
issue of overcapacity was based on, or affected by, the revised data."386 After conducting the 
analysis above, the Panel made the statement challenged by Argentin a, namely, that "the revised 
data did not have a significant role  in the EU authorities' conclusion in the Definitive Regulation on 
overcapacity as an 'other factor' causing injury."387 
6.133.   Thus, even though the Panel did not use exactly the same words in the fi rst sentence of 
paragraph 7.466 as it did in the preceding paragraphs  of its Report , the totality of the Panel's 
analysis makes it clear that the Panel found that the EU authorities' non -attribution analysis was 
not based on  or affected by  the revised data . Therefore, contrary to Argentina's argument, we do 
not consider  the Panel to have articulated a standard whereby it is relevant to examine whether 
the revised data played a significant role in the EU authorities' non -attribution analysis.388 We thus 
do not  find an error of interpretation in the Panel's analysis under A rticles 3.1 and 3.5 of the 
Anti-Dumping Agreement. Rather, we consider that Argentina's appeal regarding the Panel's 
analysis of the relevance of the revised data concerns the Panel's alleged errors  in its application of 
Articles  3.1 and 3.5, to which we now turn.  
6.1.3.4   Whether the Panel erred in concluding that the EU authorities did not rely on the 
revised data  
6.134.   Argentina claims that , "even if the Appellate Body were to conclude that the Panel was 
right in examining the role played by the revised data in the determination of the EU authorities, … 
the Panel did not correctly apply Article 3.1 when concluding that 'the issue of overcapacity was 
[not] based on, or affected by, the revised data .'"389 Argen tina refers to two instances, 
Recitals  165 and 170 of the Definitive Regulation, in which the EU authorities referred to the 
revised data in connection with their analysis of whether the injury to the EU industry was caused 
by the alleged overcapacity of t he EU industry, as opposed to dumped imports of biodiesel. In 
Argentina's view, these references demonstrate that the EU authorities relied on the revised 
data.390 The European  Union considers it unnecessary, in light of the Panel's "clear finding" that 
the non-attribution analysis was not "based on, or affected by, the revised data"391, to engage in a 
comparative analysis of the evolution of production capacity, capacity utilization, and overcapacity 
in the Provisional and Definitive Regulations.392  
6.135.   We observe that Recital 165 of the Definitive Regulation states:  
                                                
383 See Argentina's other appellant's submission, pa ras. 334, 337, and 345.  
384 Panel Report, para. 7.463. (emphasis added) The Panel emphasized that the EU authorities had 
found that low capacity utilization was not a major cause of injury on the basis of the original data in the 
Provisional Regulation, and that the Definitive Regulation "merely confirmed these findings, after addressing 
comments of interested parties". (Ibid. (fn omitted) ) 
385 Panel Report, para. 7.463.  
386 Panel Report, para. 7.465.  
387 Panel Report, para. 7.466. (emphasis added)  
388 Panel Report, para. 7.466.  
389 Argentina's other appellant's submission, para. 346 (quoting Panel Report, para. 7.465).  
390 Argentina's other appellant's submission, paras. 347 -349. 
391 Panel Report, para. 7.465.  
392 European Union's appellee's submission, paras. 151 -152. WT/DS473/A B/R 
 
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  In addition, following the inclusion of the revised data on capacity and utilisation, the 
Union industry decreased capacity during the period considered, and increased 
capacity utilisation, from 46% to 55%. This shows that the capacity utilisation of the 
Union industry would be significantly higher in the absence of dumped imports than 
the 53% mentioned above.  
6.136.   Argentina contests the Panel's characterization of the first sentence of Recital 165 as "a 
subsidiary point made by the EU authorities in response to a specific argument [described in 
Recital 163] that even in the absence of any imports from Argentina and Indonesia, capacity 
utilization would have been low at 53% during the [investigation period] ."393 Rather, for Argentina, 
the first sentence constitutes a response t o an interested party's argument,  which pointed out 
that, based on the original data in the Provisional Regulation, "the increase in production capacity 
from 2009 to the end of the [investi gation period]  … has led to a reduction in capacity utilisation 
during the period under consideration ".394 
6.137.   We note that, in addressing Argentina's argument concerning Recital 165, the Panel 
reviewed not only Recitals 163 and 165, but also Recital 164. In thi s recital, the EU authorities 
rejected the interested party's comment in Recital 163 because "no evidence was provided to 
support the view that the low capacity utilization rate was causing injury to such an extent as to 
break the causal link between dumpe d imports and the injury".395 The EU authorities then added 
that fixed costs represented only a small proportion of the total production costs, explaining that 
low capacity utilization was only one factor causing injury, but not a decisive one.396 In making 
these observations, the EU authorities did not make reference to the revised data. Rather, the 
authorities referred generally to the phenomenon of "low capacity utilization" that, in their view, 
existed at both the provisional and definitive stages. The Pane l emphasized that "[i]t is only after 
making these points that the EU authorities posited [in Recital 165] that, in view of the revised 
capacity utilization rates, in the absence of any dumped imports, capacity utilization would have 
been significantly hig her than the 53% figure cited by the interested parties."397  
6.138.   Reading Recitals 163, 164, and 165 together, we concu r with the Panel that the 
first sentence of Recital 165, which refers to the revised data, constitutes "a subsidiary point" in 
response to the interested party's argument  that capacity utilization would have been low even in 
the absence of imports. In our view, therefore, the Panel did not err in stating that the reference 
to the revised data in Recital 165 does not demonstrate that the EU author ities' conclusion 
regarding overcapacity was based on the revised data.398  
6.139.   Argentina further highlights that, in Recital 170 of the Definitive Regulation, the 
EU authorities noted that "[t]he revised macroeconomic indicators also show that companies were 
during the period taking capacity out of possible use, and closer to the end of the  
[investigation  period]  were starting a process of closing plants that are no longer viable."399 We 
note that, during the Panel  proceedings, neither Argentina nor the Panel spec ifically addressed this 
recital in considering whether the EU authorities relied on the revised data in their non -attribution 
analysis.400 Furthermore, apart from quoting the sentence above, Argentina has not provided us 
with additional arguments as to why a  mere reference to the revised data in Recital 170 supports 
the view that the non -attribution analysis was based on the revised data. Such passing reference 
does not change the fact that the conclusion regarding overcapacity in the Provisional Regulation 
remained unchanged in the Definitive Regulation, despite the revised capacity utilization rates.  
                                                
393 Argentina's other appellant's submission, para. 347 (quoting Panel Report, para. 7.465).  
394 Argentina's other appellant's submission, para. 347 (quoting Definitive Regulation (Panel 
Exhibit  ARG-22), Recital 163).  
395 Panel Report, para. 7.465 (referring to Defin itive Regulation (Panel Exhibit ARG -22), Recital  164).  
396 Panel Report, para. 7.465 (referring to Definitive Regulation (Panel Exhibit ARG -22), Recital 164).  
397 Panel Report, para. 7.465 (referring to Definitive Regulation (Panel Exhibit ARG -22), Recital 164 ). 
398 Panel Report, para. 7.465.  
399 Argentina's other appellant's submission, para. 348 (quoting Definitive Regulation (Panel 
Exhibit  ARG-22), Recital 170).  
400 The Panel referred to Recital 170 of the Definitive Regulation in its summary of the factual 
backgr ound to Argentina's claim, in paragraph 7.446 of its Report. Argentina  referred to Recital 170 in 
footnote  224 to paragraph 228 of its second written submission to the Panel, but not as support for its 
argument that the EU authorities relied on the revised  data in the Definitive Regulation.  WT/DS473/AB/R  
 
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  6.140.   In light of the above, we do not consider that Argentina has established that the 
Panel  erred in its application of Articles 3.1 and 3.5 of the Anti -Dumping Agr eement in considering 
that the EU authorities' non -attribution analysis concerning overcapacity in the 
Definitive  Regulation was not "based on" or "affected by" the revised data.401 
6.1.3.5   Whether the Panel erred in failing to distinguish overcapacity from capacity  
utilization and in failing to note the inconsistency of the EU authorities' conclusion in 
light of the evidence before them  
6.141.   As noted above, Argentina makes two additional claims of error regarding the 
Panel's  application of Articles 3.1 and 3.5 of the Ant i-Dumping Agreement, namely, that the 
Panel  erred in  failing to distinguish overcapacity from capacity utilization and in failing to note the 
inconsistency of the EU authorities' conclusion in light of the evidence before them.402  
6.142.   First, Argentina claims  that the Panel erred in considering that the EU authorities did not 
improperly focus on capacity utilization as opposed to the increase in overcapacity in absolute 
terms during the period considered. In Argentina's view, the Panel failed to acknowledge that 
"overcapacity" and "capacity utilization" are two distinct concepts when it stated that the concepts 
are "logically related".403 Argentina submits that, while "overcapacity" refers to a situation where a 
producer has capacity larger than what is required by the demand in a particular market, "capacity 
utilization" refers to the actual production as a percentage of the total capacity.404 For its part, the 
European Union considers that the Panel was correct in stating that capacity utilization is "logically 
related" to overcapacity and that an objective and unbiased investigating authority may examine 
overcapacity on the basis of capacity utilization.405 
6.143.   We recall that, in rejecting Argentina's argument that the EU authorities improperly 
focused on capacity utilizat ion, as opposed to the increase in overcapacity in absolute terms, the 
Panel considered that the concepts of "overcapacity" and "capacity util ization" are "logically 
related  … in the sense that the rate of capacity utilization reflects the amount of excess  capacity of 
the domestic industry in relative terms ."406 This statement by the Panel is consistent with the way 
in which the concepts of "overcapacity" and "capacity utilization" were used in the investigation at 
issue. Specifically, both terms were used in  a complementary manner to refer to the same 
phenomenon, namely, a situation in which production capacity exceeds production volume, 
resulting in excess or unused capacity. While "overcapacity" describes, in absolute terms, the 
production capacity that the  EU domestic industry had not  used, "capacity utilization" describes, in 
relative terms, the production capacity that the EU domestic industry had used. Moreover, both 
the "overcapacity" figures referred to by Argentina and the "capacity utilization" rates  shown in the 
Provisional Regulation were derived from the same data, namely, the original data concerning 
production volume and production capacity. Thus, contrary to Argentina's contention, we do not 
consider that the Panel failed to distinguish between overcapacity and capacity utilization. Rather, 
as the Panel found, "an objective and unbiased investigating authority may well have proceeded to 
examine the issue of overcapacity on the basis of capacity utilization rather than in terms of the 
evolution of  the domestic industry's overcapacity."407  
6.144.   In relation to Argentina's first claim of error, Argentina also  contends that the Panel erred 
in considering that there is no basis in Article 3 to support the proposition that an investigating 
authority would have  to consider or give priority to the evolution of the domestic industry 's 
overcapacity in absolute terms as opposed to its evolution in relative terms. Argentina submits 
that the obligation under Article 3.5 to examine other "known factors " must involve an  "objective 
examination" as req uired by Article 3.1. Argentina  further submits that, to act objectively, the 
                                                
401 Panel Report, para. 7.465.  
402 Argentina's other appellant's submission, paras. 327 and 350.  
403 Argentina's other appellant's submission, para. 356.  
404 Argentina's other appellant's submission, para. 357. To calculate "ov ercapacity" for a given year, 
Argentina subtracts the production volume in tonnes from the production capacity in tonnes for the same year. 
(Ibid., Table 1 to para. 365; second written submission to the Panel, Table 1 to para. 230) By comparison, the 
"capa city utilization" figures as presented in the Provisional and Definitive Regulations are derived by dividing 
the production volume by the production capacity for the same period. (See e.g. Provisional Regulation 
(Panel  Exhibit ARG -30), Table 4)  
405 European Union's appellee's submission, para. 158.  
406 Panel Report, para. 7.468.  
407 Panel Report, para. 7.468.  WT/DS473/A B/R 
 
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  EU authorities should have examined the overcapacity figures raised by CARBIO during the 
investigation and explained why, despite the substantial i ncrease in overcapacity, they could still 
conclude that the injury suffered by the domestic industry was caused by the alleged dumped 
imports.408  
6.145.   As explained  above, "overcapacity" and "capacity utilization" are "logically related" 
concepts that describe th e same phenomenon – excess or unused capacity – in complementary 
terms. Given this relationship, we do not consider that the obligation to conduct an "objective 
examination" based on "positive evidence" necessarily required the EU authorities to examine th e 
evidence regarding these concepts in exactly the same format  as it was submitted by the 
interested parties. We also note that the interested parties themselves (including CARBIO) referred 
not only to overcapacity in absolute terms409, but also to capacity utilization in relative terms in 
their submissions and presentations to the EU authorities.410 In our view, therefore, the Panel did 
not err in finding that the EU authorities were not required to give priority to the evolution of the 
domestic industry 's ove rcapacity in absolute terms as opposed to its evolution in relative terms.411 
Based on our understanding of "overcapacity" and "capacity utilization" as two related and 
complementary concepts, we also disagree with Argentina's argument that the Panel erred i n 
finding that "focusing on the increase in overcapacity in absolute terms, rather than on trends in 
capacity utilization rates, would [not] have altered the conclusion reached by the 
EU authorities".412 
6.146.   Finally, Argentina claims  that the Panel erred "by fai ling to note the inconsistency of the 
EU authorities' conclusion that this factor could not be 'a major cause of injury' on the basis of the 
evidence before [them]".413 For Argentina, the EU authorities' conclusion that capacity utilization 
"remained low thr oughout the … period [considered]"414 is contradicted by the data in the 
Provisional Regulation, which showed a decrease in "utilization capacity" from 43% to 41% and, 
hence, demonstrated a link between the deterioration of capacity utilization and the situa tion of 
the EU producers concerned.415 In our view, the above -mentioned figures appear consistent with 
the EU authorities' assessment that capacity utilization "remained low throughout the … period 
[considered]".416 Thus, we consider that the Panel did not err  in finding no inconsistency with 
Articles 3.1 and 3.5 in this regard.   
6.1.3.6   Conclusion s 
6.147.   We consider that the Panel was not expressing, and therefore did not err in, its 
interpretation of Articles 3.1 and 3.5 of the Anti -Dumping Agreement  when it stated that th e 
revised data did not have a significant role in the EU authoritie s' conclusion in the 
Definitive  Regulation on overcapacity as an "other factor" causing injury. Furthermore, the Panel 
committed no error in its application of these provisions. Specificall y, the Panel did not err in: 
(i) stating that the EU authorities' conclusion in their non -attribution analysis was not based on or 
affected by the revised data; (ii) rejecting Argentina's argument that the EU  authorities improperly 
                                                
408 Argentina's other appellant's submission, para. 361.  
409 It appears that CARBIO did not submit to the EU authorities the specific "overcapacity" figures tha t 
Argentina submitted to the Panel and to us. (Argentina's response to questioning at the oral hearing) 
Nonetheless, the European Union agreed that the specific "overcapacity" figures submitted by Argentina are 
the result of a simple subtraction of the pro duction volume figures from the total production capacity figures. 
(European  Union's response to questioning at the oral hearing)  
410 See Definitive Regulation (Panel Exhibit ARG -22), Recitals 163 and 166; Written Submission by 
CARBIO of 5 November 2012 in AD593 – Anti-dumping investigation concerning imports of biodiesel originating 
in, inter alia , Argentina  (Panel Exhibit ARG -37), paras. 66 -74; CARBIO and its Members, PowerPoint 
presentation on AD593 – Anti-dumping investigation concerning imports of biodie sel originating in, inter alia , 
Argentina, presented at the hearing held on 14 December 2012  (Panel Exhibit ARG -43), slides 17 -18; CARBIO, 
Power Point presentation on AD593 – Biodiesel originating in Argentina, presented at the hearing held on 8 July 
2013 ( Panel Exhibit  ARG-46), slides 18 -21; and Letter dated 1 July 2013 from CARBIO providing comments on 
the Provisional Disclosure (Panel Exhibit ARG -51), pp.  14-18. 
411 Panel Report, para. 7.468.  
412 Argentina's other appellant's submission, paras. 359 and 363 (q uoting Panel Report, para. 7.468).  
413 Argentina's other appellant's submission, para. 368 (quoting Provisional Regulation (Panel 
Exhibit  ARG-30), Recital 139). See also Definitive Regulation (Panel Exhibit ARG -22), Recital 181 . 
414 Argentina's other appellant 's submission, para. 368.  
415 Argentina's other appellant's submission, para. 369. See also Definitive Regulation (Panel 
Exhibit  ARG-22), Recital 161.  
416 Provisional Regulation (Panel Exhibit ARG -30), Recital 139.  WT/DS473/AB/R  
 
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  focused on capacity util ization as opposed to the increase in overcapacity in absolute terms during 
the period considered; or (iii) finding no fault in the EU  authorities' conclusion that , on the basis of 
the evidence before them, overcapacity could not be "a major cause of injur y". More generally, we 
agree with the Panel that the EU  authorities' conclusion with respect to overcapacity is one that an 
unbiased and objective investigating authority could have reached in light of the facts before it.417 
6.148.   For these reasons, we find that Argentina has not established that the Panel erred in 
finding that the EU authorities' treatment of overcapacity in its non -attribution analysis as an 
"other factor" causing injury to the EU domestic industry was not inconsistent with Articles 3.1 
and 3.5 of the Anti -Dumping Agreement. Consequently, we uphold  the Panel's finding, in 
paragraphs  7.472 and 8.1.c.x of its Report, that Argentina had not  establish ed that the 
European  Union's non -attribution analysis was inconsistent with Articles 3.1 and 3.5 of t he 
Anti-Dumping Agreement.  
6.2  Claims concerning the second subparagraph of Article  2(5) of the Basic  Regulation  
6.2.1   Introduction  
6.149.   Argentina appeals the Panel's findings that Argentina had not established that the 
second  subparagraph of Article  2(5) of the Basic  Regulation is inconsistent "as such" with 
Articles  2.2.1.1 and 2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994.418 Furthermore, Argentina appeals the Panel's consequential finding that Argentina 
had not established that the second  subparagraph of Article  2(5) of the Basic  Regulation is 
inconsistent "as such" with Article  XVI:4 of the WTO  Agreement and Article  18.4 of the 
Anti-Dumping  Agreement.419 Argentina requests us to reverse these findings of the Panel. 
Argentina further requests u s to complete the legal analysis and find that the second  subparagraph 
of Article  2(5) of the Basic  Regulation is inconsistent "as such" with Articles  2.2.1.1 and 2.2 of the 
Anti-Dumping  Agreement, Article  VI:1(b)(ii) of the GATT  1994, Article  XVI:4 of the  
WTO Agreement , and Article  18.4 of the Anti -Dumping  Agreement.420 
6.150.   Specifically, with respect to its claim under Article  2.2.1.1 of the Anti -Dumping  Agreement, 
Argentina contends that the Panel erred in ascertaining the meaning of the second subparagraph 
of Article  2(5) of the Basic  Regulation.421 Argentina further claims that, in ascertaining the 
meaning of that provision of the Basic  Regulation, the Panel acted inconsistently with Article  11 of 
the DSU by failing to make an objective, thorough, and holistic e xamination of all the different 
elements put forward by Argentina.422 
6.151.   In respect of its claim under Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994, Argentina alleges , first, that the Panel erred in ascertaining 
the meaning  of the second  subparagraph of Article  2(5) of the Basic Regulation.423 Argentina 
further submits that, in ascertaining the meaning of that provision, the Panel acted inconsistently 
with Article  11 of the DSU by failing to make an objective, thorough, and ho listic examination of all 
the different elements put forward by Argentina.424 Argentina also contends that the Panel erred in 
finding that, the second subparagraph of Article  2(5) of the Basic Regulation is not 
WTO-inconsistent because Argentina had not demo nstrated that the second  subparagraph of 
Article  2(5) cannot be applied in a WTO -consistent manner.425  
6.152.   The European  Union contends that the Panel correctly found that Argentina had not 
established that the second subparagraph of Article  2(5) of the Basic Re gulation is inconsistent "as 
                                                
417 Panel Report, para. 7.472.  
418 Argentina's ot her appellant's submission, paras. 28 and 194 (referring to Panel Report, 
paras.  8.1.b.i -ii, 7.153 -7.154, and 7.169 -7.174).  
419 Argentina's other appellant's submission, para. 291 (referring to Panel Report, paras.  7.175 and 
8.1.b.iii).  
420 Argentina's other a ppellant's submission, paras. 3 -5, 33, 176, and 193.  
421 Panel Report, paras.  7.153 -7.154.  
422 Argentina's other appellant's submission, paras.  32 and 135.  
423 Argentina's other appellant's submission, para.  196 (referring to Panel Report, paras.  7.169  
and 7.172 ). 
424 Argentina's other appellant's submission, para.  269. 
425 Argentina's other appellant's submission (referring to Panel Report, para.  7.174).  WT/DS473/A B/R 
 
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  such" with the  relevant provision s of the covered agreements . Therefore, the European  Union 
requests that we uphold these findings.426 
6.2.2   The assessment of the meaning of municipal law  
6.153.   Before the Panel, Argentina claimed that the se cond subparagraph of Article  2(5) of the 
Basic Regulation is inconsistent "as such" with Articles  2.2.1.1 and 2.2 of the 
Anti-Dumping  Agreement, Article  VI:1(b)(ii) of the GATT  1994, Article  XVI:4 of the 
WTO Agreement , and Article  18.4 of the Anti -Dumping  Agreement. The Panel found that Argentina 
had not established that the second subparagraph of Article  2(5) of the Basic Regulation is 
inconsistent "as such" with th ese provisions of the covered agreements. Argentina challenges 
these findings. Before addres sing Argentina's claims of error, we set out, as the Panel did427, 
certain considerations that are relevant to ascertaining the meaning of a municipal law.  
6.154.   These considerations are particularly relevant in the context of a claim that the municipal 
law at is sue is inconsistent "as such" with WTO obligations. We recall that a claim that a measure 
is inconsistent "as such" challenges a measure of a Member that has general and prospective 
application428, whereas a claim that a measure is inconsistent "as applied" challenges one or more 
specific instances of the application of such a measure.429 
6.155.   Where a Member's municipal law is challenged "as such", a panel must ascertain the 
meaning of that law for the purpose of determining whether that Member has complied with its  
obligations under the covered agreements. Accordingly, "[a]lthough it is not the role of panels or 
the Appellate  Body to interpret a Member's domestic legislation as such, it is permissible, indeed 
essential, to conduct a detailed examination of that legi slation in assessing its consistency with 
WTO law ."430 In this regard, a panel must conduct an independent assessment of the meaning of 
the municipal law at issue, and should not simply defer to the meaning attributed to that law by a 
party to the dispute.431 A panel's assessment of municipal law for the purpose of determining its 
consistency with WTO obligations is subject to appellate review under Article  17.6 of the DSU.432 
Just as it is necessary for the panel to seek a detailed understanding of the municipal  law at issue, 
so too is it necessary for the Appellate  Body to review the panel's examination of that municipal 
law.433 
6.156.   A party asserting that another party's municipal law is inconsistent "as such" with relevant 
WTO obligations bears the burden of introduc ing evidence as to the meaning of such law to 
substantiate that assertion.434 When a municipal law is challenged "as such", the starting point for 
the analysis will be the text of that municipal law, on its face.435 A complainant may seek to 
support its unders tanding of the meaning of the municipal law on the basis of the text of that 
municipal law only. A complainant may also seek to support its understanding of the meaning of 
the municipal law at issue with additional elements such as "evidence of the consist ent application 
of such laws, the pronouncements of domestic courts on the meaning of such laws, the opinions of 
legal experts and the writings of recognized scholars".436 Likewise, in addition to setting out its 
                                                
426 European Union's appellee's submission paras.  17-19, 38, 62, 74, 112, 122, and 171.  
427 Panel Report, paras.  7.119-7.126.  
428 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para.  172. A measure may 
be challenged "as such" even where that measure has never been applied. (See Appellate Body Report, 
US - 1916 Act , paras.  92-93) 
429 Appellate Body Repo rt, US – 1916 Act , para.  60. The terms "as applied" and "as such" do not 
exhaustively define the types of measures that are susceptible to challenge in WTO dispute settlement. 
(Appellate Body Reports, US – Continued Zeroing , paras.  179-181; US – 1916 Act , paras.  60-61; 
US - Corrosion -Resistant Steel Sunset Review , para.  81; Argentina – Import Measures , paras.  5.102 and 
5.109; see also Panel Report, US – Continued Zeroing , para.  7.46)  
430 Appellate Body Report, US – Hot-Rolled Steel , para. 200 (referring to Ap pellate Body Report, 
India - Patents (US) , paras.  66-67). 
431 Panel Report, para.  7.121 (referring to Appellate Body Report, US – Carbon Steel (India) , 
para. 4.445 , (in turn referring to Appellate Body Report, India – Patents (US) , para.  66). 
432 Appellate Bod y Report, US – Section 211 Appropriations Act , para. 105.  
433 Appellate Body Report, India – Patents (US) , para.  68. 
434 The nature and extent of the evidence required to satisfy the burden of proof will vary from case to 
case. (Appellate Body Report, US – Carbon Steel , para.  157) 
435 Appellate Body Report, US – Corrosion Resistant Steel Sunset Review , para.  168. 
436 Appellate Body Report, US – Countervailing and Anti -Dumping Measures (China) , para.  4.100 
(quoting Appellate  Body Report, US – Carbon Steel , para. 157 ). WT/DS473/AB/R  
 
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  understanding of the text of the municipal la w at issue, the respondent may submit evidence 
relating to such additional elements to rebut the complainant's arguments. In conducting its 
independent assessment of the meaning of the municipal law at issue, a panel must undertake a 
holistic assessment of  all the relevant elements before it.437 
6.157.   In the present dispute, before the Panel, Argentina took the position that confining the 
analysis to the text of the second subparagraph of Article  2(5) of the Basic  Regulation would not 
suffice to arrive at a proper understanding of this provision.438 In this regard, Argentina requests 
us to review not only the Panel's examination of the text of the second subparagraph of 
Article  2(5), but also the Panel's  reading of the legislative history that led to the introduction of the 
second  subparagraph of Article  2(5) into the Basic  Regulation, the alleged consistent practice of 
the EU  authorities, and certain judgments of the General Court of the European  Union.439 
6.158.   Below we examine Argentina's contention that the Panel erred in addressing 
Argentina's  claims concerning the second subparagraph of Article  2(5) of the Basic  Regulation. We 
begin with Argentina's claims under Article  2.2.1.1 of the Anti -Dumping  Agreement. Thereafter, we 
turn to Argentina's claims under Article  2.2 of t he Anti -Dumping  Agreement and Article  VI:1(b)(ii) 
of the GATT  1994. Finally, we examine Argentina's claim s under Article  XVI:4 of the 
WTO Agreement and Article  18.4 of the Anti -Dumping  Agreement.  
6.2.3   Article  2.2.1.1 of the Anti -Dumping  Agreement  
6.159.   Argentina argu es that the Panel erred in finding  that the second subparagraph of 
Article  2(5) deals only with "what has to be done after the EU authorities have determined that a 
producer's records do not reasonably reflect the costs of production pursuant to the 
first subparagraph" .440 Argentina contends that the Panel committed legal error in concluding  that 
the second subparagraph of Article  2(5) does not require the European  Union to determine that a 
producer's records do not reasonably reflect the costs associated wit h the production and sale of 
the product under consideration when those records reflect prices that are considered to be 
artificially or abnormally low as a result of a distortion.441 For Argentina, the Panel's conclusions 
are based on an erroneous assessmen t of the text of the measure and of its context, as well as of 
the practice of the EU  authorities, and certain  judgments of the General Court of the 
European  Union.442 Argentina  further argues that the Panel acted inconsistently with Article  11 of 
the DSU by  failing to make an objective and thorough examination of all the different elements put 
forward by Argentina beyond the text of the measure, thereby failing to make a proper holistic 
assessment of all these elements taken together in order to ascertain  the meaning of the 
second  subparagraph of Article  2(5) of the Basic  Regulation.443 
6.160.   The European  Union highlights that it is the first subparagraph of Article  2(5) of the 
Basic Regulation that is concerned with the application of the first sentence of Article  2.2.1.1 of the 
Anti-Dumping  Agreement. The European  Union points out that the first  subparagraph of 
Article  2(5) of the Basic Regulation replicates, in large part, the language of Article  2.2.1.1 of the 
Anti-Dumping  Agreement. By contrast, the second subpar agraph of Article  2(5) of the 
Basic Regulation sets out what is to be done, as a matter of EU law, when costs need not be 
established on the basis of the records of the exporter or producer under investigation, because 
one of the two conditions set out in the first sentence of Article  2.2.1.1 of the 
Anti-Dumping  Agreement is not met.444 For these reasons, the European  Union submits that 
Argentina's attempts to argue that the second  subparagraph of Article  2(5) of the Basic Regulation 
                                                
437 Appellate Body Report, US – Countervailing and Anti -Dumping Measures (China) , para.  4.101.  
438 Panel Report, para.  7.125.  
439 Argentina's other appellant's submission, paras.  133 and 254.  
440 Panel Report, para.  7.153. The Panel found that Argentina had not  established that the 
second  subparagraph of Article  2(5) of the Basic  Regulation is inconsistent "as such" with Article  2.2.1.1 of the 
Anti-Dumping  Agreement and, as a consequence, Article  2.2 of the same Agreement and Article  VI:1(b)(ii) of 
the GATT 1994 . (Panel Report, para.  7.154) On appeal, Argentina limits its claims to the Panel's finding under 
Article  2.2.1.1 of the Anti -Dumping  Agreement, and does not expressly challenge the Panel's consequential 
findings under Article  2.2 of the same Agreement and  Article  VI:1(b)(ii) of the GATT  1994. (Argentina's other 
appellant's submission, para.  28) 
441 Panel Report, para.  7.153.  
442 Argentina's other appellant's submission, paras.  28-30 and 123 -124. 
443 Argentina's other appellant's submission, para.  32. 
444 European Union's appellee's submission, paras.  39-41. WT/DS473/A B/R 
 
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  is inconsistent with the first sentence of Article  2.2.1.1 of the Anti -Dumping Agreement must fail, 
because, conceptually, "there is simply no match between the two provisions ."445 
6.161.   We begin with a summary of the relevant findings of the Panel before addressing each of 
Argentina's cl aims of error.  
6.2.3.1   The Panel 's findings  
6.162.   The Panel understood the essence of Argentina's claim under Article  2.2.1.1 of the 
Anti-Dumping  Agreement to be founded on the following meaning of the second  subparagraph of 
Article  2(5) of the Basic  Regulation, advance d by Argentina. When the EU  authorities take the view 
that the costs reported in an investigated producer's records reflect prices that are "abnormally 
low" or "artificially low" because of what they consider to be a "distortion"446, the 
second  subparagraph of Article  2(5) of the Basic  Regulation requires the EU  authorities to 
determine that the costs of production and sale of the product under investigation are not 
"reasonably reflected" in the producer's records and, consequently, to reject or adjust those costs 
in establishing the investigated producer's costs of production and sale.447 The Panel noted that, 
according to Argentina, this understanding of the provision necessarily means that the 
second  subparagraph of Article  2(5) of the Basic  Regulation is inc onsistent "as such" with the 
first sentence of Article  2.2.1.1 of the Anti -Dumping Agreement.448 
6.163.   The Panel examined the text of the second subparagraph of Article  2(5) of the 
Basic Regulation, together with the other elements relied on by Argentina, in order  to determine 
whether they support Argentina's understanding of th is provision. The other elements consiste d of 
the legislative history that led to the introduction of the second  subparagraph of Article  2(5) into 
the Basic  Regulation in 2002 , the alleged c onsistent practice of the EU  authorities , and judgments 
of the General Court of the European  Union.  
6.164.   With respect to the text, the Panel found that  the second subparagraph of Article  2(5) only 
lays down what the authorities can do – and allows them to selec t any one of the listed options for 
determining the costs of production – after they have made a determination under the 
first subparagraph that the records do not reasonably reflect the costs.449 With respect to the 
legislative history, the Panel considered  that neither Recital  4 of Council Regulation  
(EC) No. 1972/2002450 nor the second subparagraph of Article  2(3) of the Basic Regulation 
support s the notion that the determination that records do not reasonably reflect the costs of 
production if prices are ar tificially low due to a market distortion is made pursuant to the 
second  subparagraph of Article  2(5) in certain situations.451 Further, the Panel found that the 
decisions of the EU  authorities , submitted by Argentina as evidence of the alleged consistent 
practice, did not undermine the Panel's preliminary conclusion, reached on the basis of the text of 
the impugned provision and of its legislative history, that the relevant determination is made 
pursuant to the first subparagraph of Article 2(5).452 Finally, t he Panel found that nothing in the 
judgments of the General  Court of the European  Union cited by Argentina support s 
Argentina's  reading of the relationship between the first two subparagraphs of Article  2(5), that is, 
that the determination of whether the producer's records reasonably reflect the costs of production 
                                                
445 European  Union's appellee's submission, para.  42. 
446 Panel Report, para.  7.113. The Panel noted Argentina's explanation that it had used the terms 
"abnormally" and "artificially" to indicate that the prices are  "lower" as a result of an alleged "distortion" in the 
form of price regulation, an export tax, or other government intervention. Argentina pointed out that these 
terms, and the terms "distorted or affected by a distortion" and "do not reflect market value s or prices", which 
it used in describing the measure at issue, are not included in the text of the second subparagraph of 
Article  2(5) of the Basic  Regulation. However, these terms were used in the other evidence Argentina had 
submitted to the Panel in su pport of its understanding of the scope and meaning of the second subparagraph of 
Article  2(5) of the Basic  Regulation. (Ibid., and fn 188 thereto)  
447 Panel Report, para.  7.112.a.  
448 Panel Report, para.  7.112.a.  
449 Panel Report, para.  7.134.  
450 Council Regulat ion (EC) No.  1972/2002 of 5 November 2002 amending Regulation (EC) No.  384/96 
on the protection against dumped imports from countries not members of the European Community, Official 
Journal of the European Communities , L Series, No.  305 (7 November 2002), pp. 1-3 (Panel Exhibit ARG -5). 
451 Panel Report, para.  7.143.  
452 Panel Report, para.  7.148.  WT/DS473/AB/R  
 
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  is made pursuant to the first subparagraph in certain situat ions and pursuant to the 
second  subparagraph in other situations.453 
6.165.   The Panel concluded that the second subparagraph of Article  2(5) of  the Basic  Regulation 
does not require the EU authorities to determine that a producer's records do not reasonably 
reflect the costs associated with the production and sale of the product under consideration when 
these records reflect prices that are consi dered to be artificially or abnormally low as a result of a 
distortion. The Panel understood that the second subparagraph of Article  2(5) applies to an 
entirely different issue, that is, the issue of what has to be done after the EU  authorities have 
determ ined, under the first subparagraph of Article  2(5), that a producer's records do not 
reasonably reflect the costs of production. Hence, the Panel concluded that Argentina had not 
established that the second subparagraph of Article  2(5) of the Basic  Regulat ion is inconsistent 
"as such" with Article  2.2.1.1 of the Anti -Dumping  Agreement, because Argentina had not 
established its case regarding the meaning of the challenged measure on which its claim was 
based.454 
6.2.3.2   Whether the Panel erred in ascertaining the mean ing of the 
second  subparagraph of Article  2(5) of the Basic Regulation  
6.166.   We understand the question raised by Argentina on appeal to be whether the Panel erred 
in finding that the second subparagraph of Article  2(5) of the Basic Regulation comes into play 
only after a determination has been made under the first subparagraph of Article  2(5) that the 
records do not reasonably reflect the costs associated with the production and sale of the product 
under consideration.455 Argentina contests the Panel's understandi ng, emphasizing that the 
second  subparagraph of Article  2(5) requires the European  Union to determine that a producer's 
records do not reasonably reflect the costs associated with the production and sale of the product 
under consideration in circumstances where such records reflect prices considered to be artificially 
or abnormally low as a result of a distortion.  
6.167.   We recall our interpretation of Article  2.2.1.1 of the Anti -Dumping  Agreement at 
paragraphs  6.18-6.26. As discussed, the first sentence of Article  2.2.1.1 identifies the records of 
the investigated exporter or producer as the preferred source for cost of production data, and 
directs the investigating authorit y to base cost calculation on such records when the two  conditions 
set out in th is provision are met. The second of those conditions is that the "records … reasonably 
reflect the costs associated with the production and sale of the product under considerati on". To 
us, the second condition in the first sentence of Article  2.2.1.1 relates to whether the records of 
the exporter or producer suitably and sufficiently correspond to or reproduce the costs that have a 
genuine  relationship with the production and sal e of the specific product under consideration.  
6.168.   According to Argentina, its reading of the second subparagraph of Article  2(5) of the 
Basic Regulation necessarily means that the measure at issue  is inconsistent with the 
first sentence of Article  2.2.1.1 of  the Anti -Dumping  Agreement, because Article  2.2.1.1 does not 
allow an investigating  authorit y to reject or adjust costs simply because such costs are considered 
to be abnormally or artificially low due to a distortion. For Argentina, when prices of some i nputs 
or raw materials are "abnormally or artificially low " in comparison to prices in other markets due to 
an alleged market distortion, they still qualify as the costs actually incurred by the particular 
exporter  or producer. Th us, the records of the exp orter or producer containing such costs would, 
for the purpose of Article  2.2.1.1 of the Anti -Dumping  Agreement, still be considered as reasonably 
reflecting the costs associated with the production and sale of the product under consideration . 
Argentina ar gues, therefore, that by providing that the EU  authorities shall reject or adjust the 
cost data of the exporter as included in its records when those costs reflect prices which are 
"abnormally or artificially low " due to an alleged market distortion , the s econd subparagraph of 
Article  2(5) of the Basic  Regulation is inconsistent with Article  2.2.1.1 of the 
Anti-Dumping  Agreement.456 
                                                
453 Panel Report, para.  7.152.  
454 Panel Report, paras.  7.153 -7.154.  
455 Panel Report, paras.  7.132 and 7.153.  
456 Argentina's other appellant's submission, paras. 123 -124 and 189-191; first  written submission to 
the Panel, para. 132.  WT/DS473/A B/R 
 
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  6.169.   Like the Panel, we begin our review with the text of the legal instrument containing the 
measure at issue, being mindful of the overall structure and logic of the Basic  Regulation457, before 
we review the other elements submitted by Argentina in support of its understanding of the 
meaning of the measure at issue.  
6.170.   The measure at issue, namely , the second  subparagraph of Article  2(5), is one of the 
provisions of Article  2 of the Basic  Regulation.458 Article  2, section A, of the Basic Regulation 
governs the determination of the normal value in anti -dumping investigations. Article  2 of the 
Basic Regulation provides, in relevant part:  
Article 2 
Determination of dumping  
A. NORMAL VALUE  
… 
3. When there are no or insufficient sales of the like product in the ordinary course of 
trade, or where because of the particular market situation such sales do not permit a 
proper comparison, the normal valu e of the like product shall be calculated on the 
basis of the cost of production in the country of origin plus a reasonable amount for 
selling, general and administrative costs and for profits, or on the basis of the export 
prices, in the ordinary course o f trade, to an appropriate third country, provided that 
those prices are representative.  
A particular market situation for the product concerned within the meaning of the 
first subparagraph may be deemed to exist, inter  alia, when prices are artificially l ow, 
when there is significant barter trade, or when there are non -commercial processing 
arrangements.  
… 
5. Costs shall normally be calculated on the basis of records kept by the party under 
investigation, provided that such records are in accordance with t he generally 
accepted accounting principles of the country concerned and that it is shown that the 
records reasonably reflect the costs associated with the production and sale of the 
product under consideration.  
If costs associated with the production and sale of the product under investigation are 
not reasonably reflected in the records of the party concerned, they shall be adjusted 
or established on the basis of the costs of other producers or exporters in the same 
country or, where such information is no t available or cannot be used, on any other 
reasonable basis, including information from other representative markets .459 
… 
6. The amounts for selling, for general and administrative costs and for profits shall be 
based on actual data pertaining to productio n and sales, in the ordinary course of 
trade, of the like product, by the exporter or producer under investigation. …  
6.171.   The first subparagraph of Article  2(3) identifies two alternative methods for determining 
the normal value. Articles  2(5) and 2(6)  focus o n the application of the first alternative method 
identified in the first subparagraph of Article  2(3), that is, the construction of the normal value on 
the basis of the cost of production in the country of origin plus a reasonable amount for selling, 
general and administrative costs and for profits.  
                                                
457 Appellate  Body Reports, China – Auto Parts , para.  238. 
458 Basic Regulation (Panel  Exhibit ARG -1). A general description of Article 2 of the Basic  Regulation is 
contained in section  5.2 of this Report.  
459 Underlining added.  WT/DS473/AB/R  
 
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  6.172.   As the Panel observed, the first subparagraph of Article  2(5) reproduces, in large part, the 
text of the first sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement.460 The 
first subparagraph of Article  2(5) identifies the records of the "party under investigation" as the 
source of the data that is to be preferred in the calculation of costs. The text of the 
first subparagraph of Article  2(5) indicates that this provision sets the conditions that, when 
satisfi ed, require the EU  authorities to rely on the records of the "party under investigation" in the 
construction of the costs associated with the production and sale of the product under 
consideration. These two  conditions are: that the records are consistent with the GAAP of the 
exporting Member ; and that they reasonably reflect the costs associated with the production and 
sale of the product under consideration.461 
6.173.   The second subparagraph of Article  2(5) does not directly correspond to any specific 
provision of  the Anti -Dumping Agreement. It begins by noting : "If costs associated with the 
production and sale of the product under investigation are not reasonably reflected  in the records 
of the party concerned".462 It seems to us that the first clause of the second subparagraph of 
Article  2(5), which begins with the word "if", and repeats the reference to costs being reasonably 
reflected in the records, refers to the circumstances in which the second condition set out in the 
first subparagraph is not met. In such cir cumstances, the second subparagraph of Article  2(5) 
directs the EU  authorities to adjust or establish the costs "on the basis of the costs of other 
producers or exporters in the same country or, where such information is not available or cannot 
be used, on  any other reasonable basis, including information from other representative markets" . 
Thus, we share  the Panel's view that the wording and structure of the first two  subparagraphs of 
Article  2(5) suggest that the second  subparagraph of Article  2(5) comes into play  only following  a 
determination made in applying the first  subparagraph that a producer's records do not reasonably 
reflect the costs associated with the production and sale of the product under investigation.463 
6.174.   We note that, before the Panel, Arge ntina argued that the clause "shall be adjusted or 
established on the basis of the costs of other producers or exporters in the same country or, where 
such information is not available or cannot be used, on any other reasonable basis, including 
information  from other representative markets" in the second subparagraph of Article  2(5) 
constitutes or informs the reasons why information from the domestic market cannot be used to 
determine the costs of production.464 In rejecting this argument by Argentina, the Pa nel stated 
that "the text of the first and the second subparagraphs do not provide any criteria for the 
determination of whether the costs are reasonably reflected in a producer's records."465 On appeal, 
Argentina contends that  the Panel contradicted itself in finding both that the first subparagraph of 
Article  2(5) does not provide "any criteria for the determination of whether the costs are 
reasonably reflected in a producer's records" and that the issue as to when the EU  authorities are 
to determine that t he producer's records do not reasonably reflect the costs is "an issue that is 
governed by the first subparagraph of Article  2(5) of the Basic Regulation."466 
6.175.   In our view, in stating that "the text of the first and the second subparagraphs do not 
provide any  criteria for the determination of whether the costs are reasonably reflected in a 
producer's records"467, the Panel was rejecting Argentina's argument that the 
second  subparagraph of Article  2(5) constitutes or informs the reasons why information from the 
domestic market cannot be used to determine the costs of production. The second  subparagraph 
refers to "where such information is not available or cannot be used", but  it does not specify the 
reasons for  which , or circumstances in which, the EU  authorities may find themselves in such a 
situation. Moreover, as discussed at paragraph  6.172  above, we understand that the obligation in 
the first subparagraph of Article  2(5) to calculate the costs on the basis of the re cords kept by the 
party under investigation is triggered only if , inter alia, the records reasonably reflect the costs 
associated with the production and sale of the product under consideration. Thus, contrary to 
Argentina's argument, it is in applying the  first subparagraph of Article  2(5), rather than the 
                                                
460 Panel Report, para.  7.131.  
461 Panel Report, para.  7.131.  
462 Emphasis added.  
463 Panel Report, para.  7.132.  
464 Panel Report, para.  7.133 (referring to Argentina's second written submission to the Panel, 
paras. 19-22 and 63).  
465 Panel Report, para.  7.133.  
466 Argentina's other appellant's submission, para.  43 (referring to Panel Report, paras.  7.131 -7.133).  
467 Panel Report, para.  7.133.  WT/DS473/A B/R 
 
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  second,  that the EU  authorities determine whether the records reasonably reflect the costs 
associated with the production and sale of the product under consideration.  
6.176.   We therefore  understand the options identified in the second  subparagraph to be those 
that would apply after the EU  authorities make the deter mination, pursuant to the 
first subparagraph of Article  2(5), that the records of the party under investigation do not 
reasonably reflect the costs as sociated with the production and sale of the product under 
consideration. Nor do we consider that the Panel erred in finding that the text of the first and 
second subparagraphs of Article  2(5) does not provide any criteria for the determination of 
whether the costs are reasonably reflected in a producer's records.468 
6.177.   Argentina also asserts that Article  2(3) of the Basic  Regulation, and , in particular, the 
second  subparagraph thereof, supports Argentina's view that it is the second subparagraph of 
Article  2(5) that governs the determination by the EU  authorities that the records of the "party 
under investigation" do not reasonably reflect the costs associated with the production and sale of 
the product under consideration. Argentina considers it especially rele vant that the 
second  subparagraphs  of Article s 2(3) and 2(5) , respectively, were introduced into the 
Basic Regulation at the same time, through the same amendment.469 
6.178.   The Panel considered it to be "a matter of considerable significance to the meaning and 
content of both of the subparagraphs of Article 2(5) that neither subparagraph contains any of the 
terms or concepts used by Argentina to describe the measure at issue, i.e.  'artificially low', 
'abnormally low', 'distortion', 'reflects market values'; 'regula ted market', 'artificially distorted', 
etc.".470 Argentina contests this statement by the Panel, arguing that  all these terms and concepts 
used by Argentina to describe the measure at issue can be found in the other elements referred to 
by Argentina  includin g, for example , Article  2(3) of the Basic  Regulation .471 
6.179.   We recall that, pursuant to Article  2(3), the EU  authorities may decide that domestic sales 
do not permit a proper comparison for the purposes of a determination of dumping. In such a 
case, the normal value would have to be arrived at through different means, one of which  — 
calculation on the basis of the cost of production — is addressed by Article  2(5) that governs the 
calculation of costs. Thus, we understand Articles  2(3) and 2(5) to concern differe nt 
determinations by the EU  authorities. It is true, as Arge ntina contends, that the 
second  subparagraph of Article  2(3) contains the words "artificially low", which Argentina seeks to 
rely on in explaining its understanding of the second subparagraph of A rticle 2(5).472 Yet, on its 
face, the second subparagraph of Article  2(3) provides no guidance as to which subparagraph of 
Article  2(5) governs the determination by EU  authorities that the records of the "party under 
investigation" do not reasonably reflect the costs associated with the production and sale of the 
product under consideration.473  
6.180.   Based on an examination of the text of the second subparagraph of Article  2(5), taking 
into account the overall structure and logic of Article  2 of the Basic  Regulation , we do not consider 
that the Panel erred in expressing the preliminary view that the second subparagraph of 
Article  2(5) comes into play only after a determinatio n has been made under the 
                                                
468 Panel Report, para.  7.134.  
469 Argentina submits that the second subparagra ph of Article  2(3) of the Basic Regulation, and the 
reasons for its introduction into the Basic  Regulation, are part of the legislative history that should have 
informed the Panel's understanding of the meaning of the second  subparagraph of Article  2(5). ( Argentina's 
other appellant's submission, paras.  62-63 and 72 -73) We note that the Panel addressed Article  2(3) as part of 
the legislative history that led to the introduction of the second subparagraph of Article  2(5). (Panel Report, 
paras.  142-143) In ou r view, while the reasons for the introduction of the second subparagraph of Article  2(3) 
may be pertinent as evidence of the legislative history relevant to this dispute, Article  2(3) itself is part of the 
context, structure, and overall logic of Article  2 of the Basic  Regulation. Therefore, we review it as such.  
470 Panel Report, para.  7.134.  
471 Argentina's other appellant's submission, para.  50. 
472 In Argentina's view, these words support the understandi ng that the scope of the 
second  subparagraph of Article  2(5) is not to set out alternative sources for records that are found not to 
reasonably reflect costs in general. For Argentina, the second subparagraph of Article  2(5) addresses the 
situations in which costs are "distorted". (Argentina's other appellant' s submission, para.  49) 
473 We take note that Argentina also relies on Article  2(3) of the Basic Regulation, read together with 
Recital 4 of Council Regulation (EC) No.  1972/2002, to support its understanding of the legislative history. We 
address this furth er at infra, paras.  6.182 -6.185 . WT/DS473/AB/R  
 
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  first subparagraph that the records do not reasonably reflect the c osts associated with the 
production and sale of the product under consideration.474 
6.181.   In support of its claim of error, Argentina relies on three additional elements that, in its 
view, make clear that the second  subparagraph of Article  2(5) does not have the m eaning 
attributed to it by the Panel. These elements are the legislative history that led to the introduction 
of the measure at issue into the Basic  Regulation, the alleged consistent practice of the 
EU authorities, and judgments of the General  Court of th e European  Union.  
6.182.   Regarding the legislative history, as Argentina points out, the provisions that appear in the 
Basic Regulation as the first subparagraphs of Article  2(3) and 2(5), respectively, existed in 
Council Regulation (EC) No. 3283/94475 and Council  Regulation (EC)  No. 384/96476, both of which 
preceded the Basic Regulation. However, the provisions that appear in the Basic  Regulation as the 
second subparagraphs of Article s 2(3) and 2(5) , respectively , were introduced only in 2002, 
through Council Regulat ion (EC)  No. 1972/2002.  
6.183.   Argentina argues that the Panel erred in finding that "neither Recital  4 [of Council 
Regulation (EC) No. 1972/2002] nor the second subparagraph of Article  2(3) support the notion 
that the determination that records do not reasonably  reflect the costs of production if prices are 
artificially low due to a market distortion is made pursuant to the second subparagraph of 
Article  2(5) in certain situations, while in other situations, the determination is made pursuant to 
the first subpara graph of Article  2(5)".477 For Argentina, Recital  4 clarifies that , if data have to be 
obtained from sources that are unaffected by distortions, this necessarily implies that , when the 
costs in the records are affected by a distortion, the authorities automa tically have to determine 
that such records do not reasonably reflect the costs associated with the production and sale of the 
product under consideration.478 
6.184.   Recital  4 of Council Regulation (EC) No. 1972/2002 states:  
It is considered appropriate to give som e guidance as to what has to be done if, 
pursuant to Article  2(5) of Regulation (EC) No  384/96, the records do not reasonably 
reflect the costs associated with the production and sale of the product under 
consideration, in particular in situations where be cause of a particular market situation 
sales of the like product do not permit a proper comparison. In such circumstances, 
the relevant data should be obtained from sources which are unaffected by such 
distortions. Such sources can be the costs of other pr oducers or exporters in the same 
country or, where such information is not available or cannot be used, any other 
reasonable basis, including information from other representative markets. The 
relevant data can be used either for adjusting certain items of  the records of the party 
under consideration or, where this is not possible, for establishing the costs of the 
party under consideration.  
6.185.   Recital  4 provides guidance as to "what has to be done if, pursuant to Article  2(5) of 
Regulation (EC) No  384/96, the records do not reasonably reflect the costs associated with the 
production and sale of the product under consideration".479 In Council  Regulation (EC)  No. 384/96 
(a preceding version of the Basic  Regulation), what now appears as the first subparagraph of 
Article 2(5) was the only provision of Article  2(5). Thus, we do not see the text of Recital  4, in 
particular its first  sentence, as supporting Argentina's argument. Rather, like the Panel, we read 
Recital  4 of Council  Regulation (EC) No. 1972/2002 as sugges ting that the determination that the 
records do not reasonably reflect the costs associated with the production and sale of the product 
                                                
474 Panel Report, para.  7.132.  
475 Council Regulation (EC) No. 3283/94 of 22  December  1994 on protection against dumped imports 
from coun tries not members of the European Community, Official Journal of the European  Communities , 
L Series, No.  349 (31  December  1994), p.  1 (Panel Exhibit ARG -3). 
476 Council Regulation (EC) No. 384/96 of 22  December  1995 on protection against dumped imports 
from countries not members of the European Community, Official Journal of the European  Communities , 
L Series, No.  56 (6 March  1996), p.  1 (Panel Exhibit ARG -4). 
477 Panel Report, para.  7.143.  
478 Argentina's other appellant’s submission, paras.  67-73. 
479 Emphasis ad ded. WT/DS473/A B/R 
 
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  under consideration has always been one made pursuant to the provision that now appears in the 
Basic Regulation as the f irst subparagraph of Article  2(5).480 
6.186.   Argentina also challenges the Panel's assessment of three academic articles relating to the 
legislative history of the second subparagraph of Article  2(5).481 According to Argentina, the 
Panel  made contradictory statements  in reviewing these articles. Specifically, the Panel recognized 
that these articles suggest that the "2002 amendments" "enable" the EU  authorities to conclude 
that the records do not "reasonably reflect" costs where prices are artificially low. At the sam e 
time, the Panel considered that these articles do not suggest that it is the second subparagraph of 
Article  2(5) that governs the determination of whether costs are reasonably reflected in a 
producer's records.482 
6.187.   The articles referred to by Argentina appe ar to focus on the correlation between the timing 
of the introduction of the second subparagraphs of Articles  2(3) and 2(5), on the one hand, and 
the granting of full and unconditional market economy status to Russia, on the other hand. 
However, as the Pan el rightly observed, none of these articles "suggest that it is the 
second  subparagraph of Article  2(5) that governs the determination [of] whether costs are 
reasonably reflected in a producer's records."483 
6.188.   Argentina further challenges the Panel's evaluatio n of the alleged consistent practice of the 
EU authorities, arguing that the Panel erred in finding that: 
the decisions cited by Argentina do not establish, o r even suggest, that the 
second  subparagraph of Article  2(5) is the provision pursuant to which th ese 
determinations of whether the costs were reasonably reflected in the records were 
made. The decisions in general refer to Article  2(5) without distinguishing between its 
two subparagraphs; contrary to Argentina's assertions, the wording used by the 
EU authorities in the regulations does not suggest that their determinations that its 
records did not 'reasonably reflect' a producer's costs were made pursuant to 
Article  2(5), second subparagraph.484 
6.189.   Specifically, Argentina contends that, in ascertaining the meaning of the 
second  subparagraph of Article  2(5), the Panel erred in the conclusions it drew from its review of 
the following decisions of the EU  authorities in a series of anti -dumping proceedings  following  the 
introduction of the second subparagraph of  Article  2(5) of the Basic  Regulation485: Potassium 
Chloride from Belarus, Russia or Ukraine486; Seamless Pipes and Tubes of Iron or Steel from 
Croatia, Romania, Russia and Ukraine487; Solutions of Urea and Ammonium Nitrate from , inter alia, 
                                                
480 Panel Report, para.  7.141. We also take note of Argentina's argument that the Panel ignored other 
phrases in Recital  4, read in conjunction with Article  2(3) of the Basic Regulation. These other phrases include: 
"in particular in situations where be cause of a particular market situation sales of the like product do not 
permit a proper comparison"; and "the relevant data should be obtained from sources which are unaffected by 
such distortions." (Argentina's other appellant’s submission, paras.  67 and 69) However,  we consider 
Argentina's reliance on the other phrases of Recital  4 to be unavailing, because they relate to what should be 
done after it has been found that the records do not reasonably reflect the relevant costs.  
481 Argentina's other appellan t's submission, para.  75 (referring to Tietje et al., "Cost of Production 
Adjustments in Anti -Dumping Proceedings"  (2011) 45(5)  Journal of World Trade  , pp. 1071-1102 (Panel 
Exhibit  EU-8); E.  Borovikov and B. Evtimov, "EC's Treatment of Non -Market Economie s in Anti -Dumping Law: 
Its History: An Evolving Disregard of International Trade Rules; Its State of Play: Inconsistent with the 
GATT/WTO?", Revue des Affaires Européennes  (2001 -2002) (Kluwer, 20 02), pp.  875-896 (Panel 
Exhibit  ARG-6); and O lesia. Engelbutz eder, EU Anti-Dumping Measures Against Russian Exporters – In View of 
Russian Accession to the WTO  and the EU  Enlargement 2004  (Peter Lang AG, 2004), (excerpt) pp.  159-160 
(Panel Exhibit ARG -7)). 
482 Argentina's other appellant’s submission, para.  76 (referr ing to Panel Report, para.  7.144).  
483 Panel Report, para.  7.144.  
484 Panel Report, para.  7.148. (fn omitted) In these proceedings, Argentina does not challenge the 
alleged consistent practice of the EU authorities as a measure at issue. Rather, Argentina reli es on this alleged 
consistent practice as an element supporting its understanding of the second subparagraph of Article  2(5) of 
the Basic Regulation.  
485 Panel Report, paras.  7.146 -7.147.  
486 Council Regulation (EC) No.  1891/2005 (Panel Exhibit ARG -8); Council  Regulation (EC) 
No. 1050/2006 (Panel Exhibit ARG -9). 
487 Council Regulation (EC) No.  954/2006 (Panel Exhibit ARG -10); Council Regulation (EC) No.  812/2008 
(Panel Exhibit  ARG-11); Council Implementing Regulation (EU) No.  1269/2012 (Panel Exhibit ARG -12). WT/DS473/AB/R  
 
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  Russia and Algeria488; Ammonium Nitrate from Russia489; Ammonium Nitrate from Ukraine490; 
Urea from Russia491; Urea from, inter alia, Croatia and Ukraine492; and Certain Welded Tubes and 
Pipes of Iron or Non -Alloy Steel from , inter alia , Russia.493 
6.190.   All of these decisions concern, inter alia, determinations that were made by the 
EU authorities pursuant to Article  2(5) of the Basic  Regulation. We observe that , in these 
decisions, each time a reference was made to Article  2(5), such reference was made in connection 
with a determination by th e EU authorities to adjust the "costs". Accordingly, we understand these 
references to concern, in particular, the second  subparagraph of Article  2(5), which directs the 
EU authorities to adjust the "costs", or establish the "costs": (i) on the basis of th e costs of other 
producers or exporters in the same country , or, where such information is not available or cannot 
be used ; (ii) on any other reasonable basis, including information from other representative 
markets.494 
6.191.   However, none of the references to Art icle 2(5) in these decisions expressly identifies the 
second subparagraph of Article  2(5) as the provision that governs the determination that the 
records of the party under investigation do not reasonably reflect the costs of the production and 
sale of th e product under consideration,  when those records reflect prices that are considered to 
be artificially or abnormally low as a result of a market distortion.  
6.192.   Before the Panel, Argentina also referred to the Definitive  Regulation issued following the 
anti-dumping investigation concerning imports of biodiesel from Argentina, the subject of 
Argentina's "as applied" claims in the present dispute.495 In the Definitive  Regulation, the 
EU authorities referred to certain jurisprudence of the General  Court of the Euro pean Union, 
noting:  
The General  Court also concluded that it is apparent from the first subparagraph of 
Article  2(5) of the basic Regulation that the records of the party concerned do not 
serve as a basis for calculating normal value if the costs associate d with the 
production of the product under investigation are not reasonably reflected in those 
records. In that case, the [second subparagraph ] provides that the costs are to be 
adjusted or established on the basis of sources of information other than thos e 
records. That information may be taken from the costs incurred by other producers or 
exporters [in the same country] or, when that information is not available or cannot 
                                                
488 Council Regulation (EC) No.  1911/2006 (Panel Exhibit ARG -13); Council Regulation (EC) 
No. 238/2008 (Panel Exhibit  ARG-14); Council Implementing Regulation (EU) No.  1251/2009 (Panel Exhibit 
ARG-15). 
489 Council Regulation (EC) No.  236/2008 (Panel Exhibit ARG -16); Council Regulation (EC) No.  661/2008 
(Panel Exhibit  ARG-17). 
490 Council Regulation (EC) No.  237/2008 (Panel Exhibit ARG -18). 
491 Council Regulation (EC) No.  907/2007 (Panel Exhibit ARG -19). 
492 Council Regulation (EC) No.  240/2008 (Panel Exhibit ARG -20). 
493 Council Regulation (EC) No.  1256/2008 (Panel Exhibit ARG -21). 
494 For example, in Solutions of Urea and Ammonium Nitrate from,  inter alia, Russia and Algeria, the 
EU authorities considered that the gas prices paid in Algeria during the review investigation p eriod could not 
reasonably reflect the costs associated with the production and distribution of gas. The EU authorities 
determined that , "as provided for in Article  2(5) of the basic  Regulation, the gas costs borne by one 
cooperating exporting producer, Fe rtial, were adjusted on the basis of information from other representative 
markets." (Council Regulation (EC), No. 1911/2006 (Panel Exhibit ARG -13), Recital  28) During a subsequent 
review, the EU  authorities established that the prices paid by the Russian exporting producers were abnormally 
low. Since gas costs were not reasonably reflected in their records, the EU  authorities had to adjust them 
accordingly. The decision states : "[i]n the absence of any undistorted gas prices relating to the Russian 
domesti c market, and in accordance with Article  2(5) of the basic  Regulation, gas prices had to be established 
on 'any other reasonable basis, including information from other representative markets'." (Council Regulation 
(EC), No. 238/2008, (Panel Exhibit  ARG-14), Recital  21) In Urea from Russia , the EU  authorities established 
that the prices paid by the Russian producers were abnormally low. Since gas costs were not reasonably 
reflected in the four companies' records, the EU  authorities decided that "they had to  be adjusted pursuant to 
Article  2(5) of the basic Regulation." (Council Regulation (EC)  No. 907/2007 (Panel Exhibit ARG -19), 
Recital  33) Similar findings were made in Council Regulation  (EC) No.  237/2008 (Panel Exhibit ARG -18), 
Recital  19; Council Regulat ion (EC) No.  240/2008 (Panel Exhibit  ARG-20), Recital  26; and Council Regulation 
(EC) No. 1256/2008 (Panel Exhibit ARG -21), Recital  111. 
495 Definitive Regulation (Panel Exhibit ARG -22).  WT/DS473/A B/R 
 
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  be used, any other reasonable source of information, including information from othe r 
representative markets.496 
6.193.   These statements in the Definitive  Regulation indicate that the EU  authorities considered 
that Article  2(5) involves a two -step structure, and that the EU  authorities understood the 
General  Court to have expressed the same view.497 First, pursuant to the first subparagraph of 
Article  2(5), the EU  authorities determine whether the records of the party under investigation 
reasonably reflect the costs of the production and sale of the product under consideration. If they 
do not, then , pursuant to the second subparagraph of Article  2(5), the costs are to be adjusted or 
established on the basis of sources of information other than those records.  
6.194.   For these reasons, we agree with the Panel that the decisions cited by Argentina do not 
sugges t, much less suffice to demonstrate, that it is the second subparagraph that governs the 
determination by the EU  authorities that the records of the party under investigation do not 
reasonably reflect the costs of the production and sale of the product und er consideration.498 
6.195.   In addition, we take note of Argentina's assertion that the Panel erred in concluding that 
nothing in the four judgments of the General  Court of the European  Union, cited by Argentina, 
supports Argentina's view that the determination of whether the producer's records reasonably 
reflect the costs of production is made pursuant to the first subparagraph in certain situations and 
pursuant to the second subparagraph in other situations.499 Argentina referred the Panel to 
four judgments of the G eneral Court of the European  Union relating to Case T -235/08 ( Acron  I)500, 
Case T -118/10 ( Acron II )501, Case T -459/08502, and Case T -84/07.503 
6.196.   We see some significance in the statement of the General  Court, which appears in all 
four judgments, that it is "apparent  from the first subparagraph of Article  2(5) of the 
basic regulation that the records of the party concerned do not serve as a basis for calculating 
normal value if the costs associated with the production of the product under investigation are not 
reasona bly reflected in those records."504 This statement  suggests that it is in applying the 
first subparagraph of Article  2(5), rather than the second, that the EU  authorities determine 
whether the records of the party under investigation reasonably reflect the c osts associated with 
the production and sale of the product under consideration. Our view is reinforced by the fact that , 
in all four judgments, the sentence that immediately follows the quoted statement identifies  the 
role of the second  subparagraph of Ar ticle 2(5) as governing the adjustment or establishment of 
                                                
496 Definitive Regulation (Panel Exhibit ARG -22), Recital  32. In this re gard, we recall the Panel's 
clarification, in fn  110 to paragraph  7.73 of its Report, that "the General  Court of the European  Union has 
referred to the [second subparagraph] as the 'second sentence of the first subparagraph' of Article  2(5) of the 
Basic Re gulation."  
497 See also European  Union's appellee's submission, paras.  12 and 54.  
498 Panel Report, para.  7.148. Like the Panel, we do not consider it necessary to decide on whether the 
decisions cited by Argentina can properly be characterized as reflecting, or constitutive of, a consistent practice 
by the EU  authorities.  
499 Argentina's other appellant's submission, paras.  93-114 (referring to Panel Report, 
paras.  7.150 -7.152).  
500 Judgment of the General Court of the European  Union (Eighth Chamber) of 7  February  2013, 
Case T-235/08 , Acron  OAO and Dorogobuzh OAO v Council of the European  Union  (General Court of the 
European Union, Case T -235/08 ( Acron  I)) (Panel Exhibit ARG -23). 
501 Judgment of the General Court of the European Union (Eighth Chamber) of 7 February 2 013, 
Case T-118/10 , Acron OAO v Council of the European  Union  (General Court of the European  Union, 
Case T-118/10 ( Acron II) ) (Panel Exhibit ARG -52). 
502 Judgment of the General Court of the European Union (Eighth Chamber) of 7 February 2013, 
Case T-459/08 , EuroChem Mineral and Chemical Company OAO (EuroChem MCC) v Council of the 
European  Union  (General Court of the European Union, Case T -459/08) (Panel Exhibit ARG -53). 
503 Judgment of the General Court of the European Union (Eighth Chamber) of 7 February 2013,  
Case T-84/07 , EuroChem Mineral and Chemical Company OAO (EuroChem M CC) v Council of the 
European  Union  (General Court of the European Union, Case T -84/07 ) (Panel Exhibit ARG -54). 
504 Judgments of the General  Court of the European  Union, Case T -235/08 ( Acron  I) (Panel 
Exhibit  ARG-23), para.  39; Case T -118/10 ( Acron II ) (Panel Exhibit ARG -52), para.  46; Case T -459/08 (Panel 
Exhibit  ARG-53), para.  60; Case T -84/07 (Panel Exhibit ARG -54), para.  53. WT/DS473/AB/R  
 
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  the costs established on the basis of sources of information other than those records that have 
been found, pursuant to the first  subparagraph, to be unfit for use.505 
6.197.   For these reasons, we see no er ror in the Panel's statements that :  
nothing in the judgments cited by Argentina supports Argentina's reading of the 
relationship between the first  two subparagraphs of Article  2(5), i.e. that the 
determination of whether the producer's records reasonably reflect the costs of 
production is made pursuant to the first subparagraph in certain situations and 
pursuant to the second subparagraph in other situations. Rather, the four  judgments 
of the General  Court cited by Argentina point in the direction of this determination 
being made pursuant to the first subparagraph of Article  2(5).506 
6.198.   In sum, having reviewed the Panel's evaluation of all the elements submitted by Argentina, 
we find that Argentina has not established that the Panel erred in its assessment of th e 
second  subparagraph of Article  2(5) of the Basic  Regulation. Like the Panel, we do not see support 
in the text of the Basic  Regulation, or in the other elements relied on by Argentina, for the view 
that it is in applying the second subparagraph of Articl e 2(5) that the EU  authorities are to 
determine that the records of the party under investigation do not reasonably reflect the costs 
associated with the production and sale of the product under consideration when those records 
reflect prices that are cons idered to be artificially or abnormally low as a result of a distortion.  
6.2.3.3   Whether the Panel acted inconsistently with Article  11 of the DSU  
6.199.   Argentina argues that the Panel failed to make an objective assessment of the matter 
before it, thereby acting incons istently with Article  11 of the DSU. According to Argentina, 
although the Panel recognized the need to follow a holistic approach in examining the various 
elements submitted by Argentina and the European  Union for purposes of discerning the meaning 
and con tent of Article  2(5) of the Basic Regulation, it failed to do so. Specifically, Argentina asserts 
that the Panel failed to make a thorough examination of all the different elements put forward by 
Argentina beyond the text of the measure and failed to make a proper holistic assessment of all 
these elements taken together in order to ascertain  the meaning of the second  subparagraph of 
Article  2(5).507 
6.200.   Article  11 of the DSU states in relevant part that "a panel should make an objective 
assessment of the matter b efore it, including an objective assessment of the facts of the case and 
the applicability of and conformity with the relevant covered agreements" . For a claim under 
Article  11 of the DSU to prevail, an appellant must identify specific errors regarding the  objectivity 
of the panel's assessment508, and "it is incumbent on a participant raising a claim under Article  11 
on appeal to explain why the alleged error meets  the standard of review under that provision".509 
An appellant should not simply recast arguments that it made before the panel in the guise of a 
claim under Article  11.510 Moreover, a claim that a panel has failed to make an objective 
assessment of the matter before it, as required by Article  11 of the DSU, is "a very serious 
allegation".511 With respect to a panel's assessment of the facts, the Appellate  Body has stressed 
that "not every error allegedly committed by a panel amounts to a violation of Article  11 of the 
                                                
505 Judgments of the General  Court of the European  Union, Case T -235/08 ( Acron I ) (Panel Exhibit 
ARG-23), para.  39; Case T -118/10 ( Acron II ) (Panel Exhibit ARG -52), para.  46; Case T -459/08 (Panel 
Exhibit  ARG-53), para.  60; Case T -84/07 (Panel Exhibit ARG -54), para.  53. 
506 Panel Report, para.  7.152.  
507 Argentina's other app ellant's submission, paras.  32 and 142 -175. 
508 Appellate  Body Report, EC – Fasteners (China) , para. 442.  
509 Appellate  Body Reports, China – Rare Earths , para. 5.178 (quoting Appellate  Body Report, 
EC - Fasteners (China) , para. 442 (emphasis original)).  
510 Appellate  Body Report, EC – Fasteners (China) , para.  442. 
511 Appellate Body Reports, China – Rare Earths , para. 5.227 (quoting Appellate Body Report, 
EC - Poultry , para.  133).   WT/DS473/A B/R 
 
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  DSU"512, but only those that are so material that, "taken together or singly"513, they underm ine 
the objectivity of the panel's assessment of the matter before it.514 
6.201.   With particular regard to a panel's duties in ascertaining the meaning of municipal law, the 
Appellate  Body has found that, "[a]s part of their duties under Article  11 of the DSU, pane ls have 
the obligation to examine the meaning and scope of the municipal law at issue in order to make an 
objective assessment of the matter before it" .515 In doing so, "a panel should undertake a 
holistic  assessment of all relevant elements, starting with t he text of the law and including, but not 
limited to, relevant practices of administering agencies" .516 When parties refer to elements in 
addition to the text of the municipal law, a panel must take account of all such elements, in order 
to engage in an obje ctive assessment of the matter. As the Appellate Body clarified in US – Carbon 
Steel (India) : 
[I]t is incumbent on a panel to engage in a thorough analysis of the measure on its 
face and to address evidence submitted by a party that the alleged inconsisten cy with 
the covered agreements arises from a particular manner in which a measure is 
applied. While a review of such evidence may ultimately reveal that it is not 
particularly relevant, that it lacks probative value, or that it is not of a nature or 
signif icance to establish a prima  facie case, this can only be determined after its 
probative value has been reviewed and assessed.517 
6.202.   Thus, in ascertaining the meaning of a municipal law, a panel is required to undertake a 
"holistic assessment" of all the relevan t elements. At the same time, we emphasize that a review 
of whether a panel undertook a holistic assessment, and by so doing met its obligation under 
Article  11 of the DSU, should be guided by the specific circumstances of each case, the nature of 
the meas ure and the obligation at issue, and the evidence submitted by the parties. In other 
words, there is no single methodology that every panel must employ before it can be found to 
have undertaken a proper "holistic assessment".  
6.203.   Turning to the present dispute , we understand the crux of Argentina's claim under 
Article  11 of the DSU to be that the Panel failed to make an objective assessment of the matter 
because the Panel failed to undertake a "holistic assessment"  of all the relevant elements in order 
to ascer tain the meaning of the second subparagraph of Article  2(5).518 Additionally, 
Argentina  contends that the Panel's examination of the legislative history of the provision at issue, 
the academic articles, the alleged consistent practice of the EU  authorities, and judgments of the 
General  Court, was cursory and failed to address properly the details of each of these elements.519 
6.204.   We disagree with Argentina's assertion that the Panel's examination of the relevant 
elements was cursory. The Panel examined each of the elements referred to by the parties.520 The 
mere fact that the Panel disagreed with Argentina's understanding of the various elements and 
agreed, in some respects, with the European  Union's view does not equate to a breach of the 
Panel's duties under Article  11 of the DSU. It seems to us that Argentina has, in large part, recast 
the arguments that it made before the Panel in the guise of a claim under Article  11, which does 
not suffice as a basis for us to find that the Panel acted inconsistently with Article  11 of the 
DSU.521 
6.205.   As regards Argentina's assertion that the Panel  failed to undertake a proper 
holistic  assessment of all the relevant elements taken together  in order to ascertain the meaning 
of the second subparagraph of Article  2(5), we recall that the A ppellate  Body addressed a similar 
                                                
512 Appellate  Body Report, EC – Fasteners (China) , para.  442. 
513 Appellate  Body Report , EC and certain member States – Large Civil Aircraft , para.  1318. See also 
Appellate  Body Report, EC – Fasteners (China) , para.  499. 
514 Appellate  Body Reports, China – Rare Earths , para.  5.179.  
515 Appellate Body Reports, US – Countervailing and Anti -Dumping  Measures (China) , para.  4.98; 
US - Carbon Steel (India) , para.  4.445.  
516 Appellate Body Reports, US – Countervailing and Anti -Dumping Measures (China) , para.  4.101; 
US - Shrimp II (Viet  Nam) , para.  4.32. 
517 Appellate Body Report, US – Carbon Steel (India) , para. 4.454.  
518 Argentina's other appellant's submission, paras.  32, 148 -155, and 161 -175. 
519 Argentina's other appellant's submission, paras.  144-146. 
520 Panel Report, paras.  7.136 -7.152.  
521 Appellate  Body Report, EC – Fasteners (China) , para. 442.  WT/DS473/AB/R  
 
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  claim by Viet  Nam in US – Shrimp II (Viet  Nam) . In that case, the panel began its examination 
with the text of the measure at issue. The panel set out its preliminary finding on the basis of the 
text of the measure, before  proceeding to its examination of the other elements submitted by the 
parties. In rejecting Viet  Nam's arguments that the panel failed to undertake a 
"holistic  assessment", and therefore was in breach of its duty under Article  11 of the DSU, the 
Appellate  Body noted, with respect to the panel's preliminary conclusion on the basis of the text of 
the measure at issue , that: 
[t]hese statements, read in isolation, might unfortunately give the impression that the 
Panel was drawing a conclusion regarding the mean ing and effect of Section  129(c)(1) 
on the basis of the text of that provision, taken alone. Yet, as noted above, these 
statements form part of a paragraph that clearly indicates at the outset that, at this 
step of its analysis, the Panel was examining the  text of Section  129(c)(1). In 
subsequent paragraphs, the Panel proceeded to examine the relevance and import of 
argumentation and elements – beyond the text of Section  129(c)(1) – submitted by 
the parties regarding the meaning and effect of Section  129(c) (1).522 
6.206.   In that dispute, having reviewed the panel's reasoning in its entirety, the Appellate  Body 
concluded that the panel properly relied on the various elements that it examined to inform its 
understanding of the meaning and effect of the measure at issue . Therefore, the Appellate Body 
found that the panel had complied with its duty under Article  11 of the DSU.523 
6.207.   Similarly, in the present dispute, the Panel made clear that the initial conclusion that it 
reached on the basis of its examination of the text of  the second subparagraph of Article  2(5) of 
the Basic Regulation was only the first step in a multi -pronged analysis. At the outset of this 
section of its Report, the Panel preceded its assessment of the second subparagraph of Article  2(5) 
by explaining th at it would proceed as follows:  
[M]indful of the need to conduct a "holistic assessment" of the evidence put forward 
by the parties, we proceed to determine the scope, meaning and content of the 
measure at issue, as they pertain to each of Argentina's two  claims.  
We first consider the text of Article  2(5), second subparagraph, and the other 
evidence submitted by Argentina in order to determine whether they support 
Argentina's allegations concerning the scope, meaning, and content of this 
provision.524 
6.208.   Having examined the text of the second subparagraph of Article  2(5), the Panel explicitly 
characterized the results of that examination as a preliminary conclusion on the basis of the text, 
indicating that it would proceed to consider "the other evidence submitte d by Argentina".525 
Thereafter, the Panel examined, and made intermediate findings526, with respect to the legislative 
history that led to the introduction of the second subparagraph of Article  2(5), the 
alleged  consistent practice of the EU  authorities, and t he four judgments of the General Court of 
the European  Union, before coming to a conclusion based on its "holistic assessment" of all the 
evidence submitted by Argentina.527 
6.209.   Based on our review of the Panel's findings, we consider that the Panel conducted a proper 
examination and undertook a holistic assessment of the various elements before it. We therefore 
reject Argentina's claim that the Panel acted inconsistently with Article  11 of the DSU, in 
ascertaining the meaning of the second  subparagraph of Articl e 2(5) of the Basic Regulation . 
6.210.   Given our finding in paragraph  6.198  above, and our rejection of Argentina's claim under 
Article  11 of the DSU, we find that the Panel did not err in concluding that Argentina did  not 
establish its case regarding the meaning of the challenged measure, or in finding , for this reason, 
                                                
522 Appellat e Body Report, US – Shrimp II (Viet  Nam) , para.  4.36. 
523 Appellate Body Report, US – Shrimp II (Viet  Nam) , paras.  4.50-451. 
524 Panel Report, paras.  7.126 -7.127.  
525 Panel Report, para.  7.135.  
526 Panel Report, paras.  7.135, 7.143 -7.144, 7.148, and 7.152.  
527 Panel  Report, paras.  7.153 -7.154.  WT/DS473/A B/R 
 
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  that Argentina had not establish ed that the second  subparagra ph of Article  2(5) of the 
Basic Regulation is inconsistent "as  such" with Article  2.2.1.1 of the Anti -Dumping  Agreement.528 
6.2.3.4   Conclusions  
6.211.   Regarding  Argentina's claim of error with respect to the Panel's findings under 
Article  2.2.1.1 of the Anti -Dumping  Agreement, having reviewed the Panel's evaluation of all the 
elements submitted by Argentina, we  do not consider that Argentina  has established that the 
Panel  erred in its assessment of the second  subparagraph of Article  2(5) of the Basic  Regulation. 
Like the Panel, we do not see support in the text of the Basic  Regulation, or in the other elements 
relied on by Argentina, for the view that it is in applying the second subparagraph of Article  2(5) 
that the EU  authorities are to determine that the records of the party under investigation do not 
reasonably reflect the costs associated with the production  and sale of the product under 
consideration when those records reflect prices that are considered to be artificially or abnormally 
low as a result of a distortion. In this regard, w e further consider that the Panel conducted a 
proper examination and under took a holistic assessment of the various elements before it. We 
therefore reject Argentina's  claim that the Panel acted inconsistently with Article  11 of the DSU in 
ascertaining the meaning of the second  subparagraph of Article  2(5) of the Basic Regulatio n. 
6.212.   Accordingly, we find that the Panel did not err, and did not fail to comply with its duties 
under Article  11 of the DSU, in concluding that Argentina had not establish ed its case regarding 
the meaning of the challenged measure, or in finding , for this r eason, that Argentina had not 
establish ed that the second  subparagraph of Article  2(5) of the Basic Regulation is inconsistent 
"as such" with Article  2.2.1.1 of the Anti -Dumping  Agreement.529 
6.213.   For these reasons, we uphold  the Panel's finding, in paragraphs  7.154 and 8.1.b.i of its 
Report, that Argentina ha d not established that the second subparagraph of Article  2(5) of the 
Basic Regulation is inconsistent "as such" with Article  2.2.1.1 of the Anti -Dumping  Agreement.  
6.2.4   Article  2.2 of the Anti -Dumping  Agreement a nd Article  VI:1(b)(ii) of the 
GATT  1994  
6.214.   Argentina requests us to reverse the Panel's finding that Argentina had not established 
that the second  subparagraph of Article  2(5) of the Basic Regulation is inconsistent "as  such" with 
Article  2.2 of the Anti -Dump ing Agreement and Article  VI:1(b)(ii) of the GATT  1994.530 
Argentina  advances three grounds in support of its appeal.531 
6.215.   First, Argentina argues that the Panel erred in ascerta ining the meaning of the 
second  subparagraph of Article  2(5) of the Basic Regulation , by finding that, even when 
"information from other representative markets" is used, the second  subparagraph of Article  2(5) 
does not require the EU  authorities to establish the costs of production so as to reflect costs 
prevailing in other countries.532 Second, Argentina contends that, in ascerta ining the meaning of 
the second  subparagraph of Article  2(5) of the Basic Regulation , the Panel acted inconsistently 
with Article  11 of the DSU by failing to conduct an objective, thorough, and holistic examination of 
all of the different elements put forward by Argentina.533 Third, Argentina alleges that the Panel 
erred in finding that Argentina had to demonstrate that the second subparagraph of Article  2(5) 
cannot be applied in a WTO -consistent manner.534 In Argentina' s view, the approach by the Panel 
wrongly suggests that, in order to prevail with a claim that a measure is inconsistent "as such", 
the complaining party must establish that the measure at issue leads to WTO -inconsistent results 
in all instances in which t he measure is applied. For Argentina, this finding also erroneously 
                                                
528 Panel Report, para.  7.154.  
529 Panel Report, para.  7.154.  
530 Panel Report, paras.  7.169 -7.174 and 8.1.b.ii.  
531 Argentina also appeals the Panel's interpretation of Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii)  of the GATT  1994, which is contained in paragraph  7.171 of the Panel Report. This aspect of 
Argentina's appeal is addressed in section  6.1.1.2  of this Report.  
532 Panel Report, para.  7.172 (referring to Argentina 's opening statement at the second Panel meeting, 
para. 24).  
533 Argentina's other appellant's submission, paras.  267-275. 
534 Panel Report, paras.  7.174 and 8.b.ii.  WT/DS473/AB/R  
 
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  suggests that, in order to prevail with a claim that a measure is inconsistent "as such", it is 
necessary that the measure being challenged is mandatory.535 
6.216.   The European  Union requests us to reject Argentina's claims of error and uphold the 
Panel's finding that the second subparagraph of Article  2(5) of the Basic Regulation is not 
inconsistent "as such" with Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994. A s regards Argentina's first ground of appeal, the European  Union highlights that the 
second  subparagraph of Article  2(5) grants broad discretion to the EU  authorities to resort to 
various options in constructing costs when they have determined, in applying  the 
first subparagraph of Article  2(5), that the records kept by the party under investigation do not 
reasonably reflect the costs associated with production and sale.536 Second, the European Union 
avers that the Panel did not fail to make an objective asse ssment of the matter as required by 
Article 11 of the DSU.537 In response to Argentina's third ground of appeal, the European  Union 
contends that, in order for a claim that a measure is inconsistent "as such" to prevail, it must be 
shown that the measure wil l necessarily be applied in a manner that is inconsistent with that 
Member's WTO obligations. For the European  Union, this means that the measure at issue can only 
be found to be inconsistent "as  such" if it "unavoidably" or "compulsorily" requires the 
EU authorities to act contrary to the European  Union's WTO  obligations.538 
6.217.   We begin with a summary of the relevant findings of the Panel before addressing each of 
Argentina's claims of error in turn.  
6.2.4.1   The Panel 's findings  
6.218.   Before the Panel, Argentina raised two a lternative lines of argument in support of its claim 
under Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994. 
First, Argentina contended that the second subparagraph of Article  2(5) of the Basic  Regulation 
mandates  WTO-inconsistent conduct. This line of ar gument was based on 
Argentina's  understanding of the second subparagraph of Article  2(5) as requiring  the 
EU authorities to adjust or establish a producer's costs on the basis of information from countries 
other than the co untry of origin, if the EU authorities have determined that the records reflect 
prices that are artificially or abnormally low as a result of a distortion and if information from other 
producers/exporters from the same country is not available or cannot be  used.539 
Argentina  submitted that the references to "any other reasonable basis" and to "information from 
other representative markets" in the second subparagraph of Article  2(5) mandate  the use of costs 
from outside the country of origin.540 The European  Union disagreed with Argentina, arguing that 
the second subparagraph of Article  2(5) grants wide discretion to the EU authorities to resort to 
various options where they have determined under the first subparagraph of Article 2(5) that the 
costs are not reaso nably reflected in the records.541 For the Panel, the disagreement between the 
parties centred on the "discretion" afforded to the EU  authorities to resort to information from 
"other representative markets" in establishing or adjusting the costs when they ha ve concluded 
that a producer's records do not reasonably reflect the costs of production of the product under 
consideration.542 
6.219.   The Panel considered the text of the second subparagraph of Article  2(5) of the 
Basic Regulation, together with the other elements  submitted by Argentina, in ascertaining the 
meaning of th is provision. These elements consist of other  relevant provisions of the 
Basic Regulation, the legislative history that led to the introduction of the second subparagraph of 
Article  2(5) into the Ba sic Regulation in 2002, the alleged consistent practice of the EU  authorities, 
and certain judgments of the General Court of the European  Union.  
                                                
535 Argentina's other appellant's submission, para.  277. 
536 European  Union's appellee's submissio n, paras.  74-75. 
537 European  Union's appellee's submission, para.  112. 
538 European  Union's appellee's submission, para.  120 (quoting Appellate Body Report, US – Oil Country 
Tubular Goods Sunset  Reviews , para.  172).  
539 Panel Report, para.  7.155. We recall that , in paragraphs 6.211 -6.213  of this Report, we upheld the 
Panel's  finding that Argentina had not established that the second subparagraph of Article  2(5) of the 
Basic Regulation requires the EU authorities to determine that the records of the party under investigation do 
not reasonably reflect the costs associated with the production and sale of the product under consideration.  
540 Panel Report, para.  7.155.  
541 Panel Repo rt, paras.  7.117 and 7.155.  
542 Panel Report, paras.  7.117 and 7.155.  WT/DS473/A B/R 
 
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  6.220.   The Panel found that the text of the second subparagraph of Article  2(5) does not support 
Argentina's argument that this measure requires the EU  authorities, when they take the view that 
the costs of other domestic producers or exporters are not available or cannot be used, to 
construct the normal value on the basis of costs that do not reflect the costs of product ion in the 
country of origin.543 Instead, the Panel found that the second subparagraph of Article  2(5) lays out 
a series of options for the EU  authorities to establish the costs of production once it has been 
determined that the producer's records do not rea sonably reflect the costs associated with the 
production and sale of the product being investigated. According to the Panel, on its face, the 
phrase "on any other reasonable basis, including information from other representative markets" 
in the second subp aragraph of Article  2(5) is formulated in permissive terms, and does not require 
that the costs reported in the producer's records be replaced by costs in another country.544 
6.221.   With respect to the legislative history, the Panel considered that neither Recital  4 of 
Council Regulation  (EC) No.  1972/2002 nor the second subparagraph of Article  2(3) of the 
Basic Regulation  suggests that the options available under the second subparagraph of Article  2(5) 
are constrained in such a way that the EU authorities must syst ematically resort to information or 
prices not in the country of origin.545 Further, the Panel stated that, while the decisions of the 
EU authorities submitted by Argentina as evidence of a consistent practice reveal that the 
EU authorities may resort to pri ces in countries other than the country of origin, any consistent 
practice emanating from these examples does not demonstrate that the second  subparagraph  of 
Article 2(5)  requires  them to do so.546 Finally, the Panel found that the judgments of the 
General  Court of the European  Union cited by Argentina show that, in a situation in which the 
EU authorities determine that a producer's records do not reasonably reflect the costs of 
production because they are affected by a distortion, the EU  authorities are entitled to establish 
the producer's costs on the basis of sources that are unaffected by that distortion, and may have 
recourse to sources of information outside the country of origin. The Panel considered this 
understanding to be consistent with its reading of the text of the second  subparagraph of 
Article  2(5).547 
6.222.   Based on its consideration of the arguments of the parties, and of all the relevant elements 
submitted by Argentina, the Panel concluded that, even where the EU authorities do resort to 
information f rom other countries to construct the normal value, it does not necessarily follow that 
they act contrary to Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994.548 In the Panel's view, the language of the second subparagraph of  Article  2(5) 
pertains to the sources of information  (as opposed to the costs themselves) that may be used to 
establish an investigated producer's/exporter's costs in constructing the normal value. As a result, 
the Panel found that, even when information f rom "other representative markets" is used, the 
second subparagraph of Article  2(5) does not " require  the EU authorities to establish the costs of 
production so as to reflect costs prevailing in other countries ."549  
6.223.   In its second line of argument, Argentina  maintained that, even if the Panel were to find 
that the second subparagraph of Article  2(5) is discretionary, in the sense that it does not require  
the EU  authorities to use costs not prevailing in the country of origin, the second subparagraph of 
Article 2(5) would still be inconsistent "as such" with Article  2.2 of the Anti -Dumping  Agreement 
and Article  VI:1(b)(ii) of the GATT  1994. In Argentina's view, even if the second subparagraph of 
Article  2(5) were discretionary, in the sense that it provides for  the possibility to use a basis other 
than the cost of production in the country of origin, this renders that measure inconsistent with 
Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT 1994.550 In 
                                                
543 Panel Report, para.  7.160.  
544 Panel Report, para.  7.169.  
545 Panel Report, para.  7.163.  
546 Panel Report, para.  7.166.  
547 Panel Report, para.  7.168.  
548 Panel Report, para.  7.171. Argentina's ap peal of this paragraph of the Panel  Report is addressed in 
section  6.1.1.2  of this Report.  
549 Panel Report, para.  7.172. (emphasis original; fn omitted)  
550 Panel Report, para.  7.118 (referring to Argentina's openi ng statement at the first Panel meeting, 
para. 74; response to Panel question No.  24, para.  69; and second written submission to the Panel, 
paras.  147-149 and 162).  WT/DS473/AB/R  
 
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  response, the European  Union sub mitted that Argentina needed to establish that the measure 
mandates WTO -inconsistent action for its claim to succeed.551 
6.224.   The Panel found that Argentina had established that the second subparagraph of 
Article  2(5) permits the EU authorities to resort to costs  outside the country of origin in some 
circumstances . Thus, the Panel found that Argentina had shown that this measure is capable of 
being applied in a manner that is inconsistent with the European  Union's obligations under 
Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994. However, the 
Panel stated that Argentina had n ot demonstrated that the second  subparagraph of Article  2(5) 
cannot be applied in a WTO -consistent manner. The Panel found, as a consequence, that Argentina 
had not established that the second subparagraph of Article  2(5) of the Basic  Regulation is 
inconsistent "as such" with Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994.552 
6.2.4.2   The assessment of a complaint that a measure is inco nsistent "as such" with 
WTO  obligations  
6.225.   In respect of its claim under Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994, Argentina asserts that the Panel erred in ascertaining the 
meaning of the second subparagraph of Artic le 2(5) of the Basic Regulation. Argentina also 
contends that the Panel acted inconsistently with Article  11 of the DSU in ascertaining the meaning 
of the second subparagraph of Article  2(5). In addition, Argentina argues that the Panel employed 
an erroneo us legal standard that a complainant must meet in order to prevail in a claim that a 
measure is inconsistent "as such".  
6.226.   Argentina's appeal raises questions concerning the legal standard for establishing whether 
a measure is inconsistent "as such" with WTO obligations.553 As we stated in paragraph  6.154  
above, a claim that a measure is inconsistent "as such" challenges a measure that has general and 
prospective application554, whereas a claim that a measure is inconsi stent "as applied" challenges 
one or more specific instances of the application of such a measure.555 Indeed, a measure need 
not have been applied to be the subject of an "as such" challenge.556 Given that complainants 
bringing "as such" challenges seek to pre vent Members ex ante from engaging in certain conduct, 
the "implications of such challenges are … more far -reaching than 'as applied' claims."557 
6.227.   Under the GATT  1947, panels distinguished between mandatory and discretionary 
legislation, finding that only leg islation that mandated a violation of GATT  obligations could be 
found to be inconsistent "as such" with those obligations.558 The distinction between mandatory 
and discretionary legislation turned on whether there was relevant discretion vested in the 
execut ive branch of government.559 The Appellate  Body has since clarified that, as with any 
analytical tool, the importance of the "mandatory/discretionary" distinction may vary from case to 
case, and has, for this reason, cautioned against applying the distinctio n "in a 
mechanistic  fashion".560 
6.228.   Moreover, there is no basis, either in the practice of the GATT and the WTO generally, or in 
the provisions of the Anti -Dumping  Agreement, for finding that only certain types of measure s can 
                                                
551 Panel Report, para.  7.118 (referring to European  Union's first written submission to the Panel, 
paras.  184-187; and second written submission to the Panel, paras.  38 and 82).  
552 Panel Report, para.  7.174 (referring to Appellate Body Report, US – Carbon Steel (India) , 
para. 4.483).  
553 Argentina's appeal also raises questions concerning the consid erations that are relevant to 
ascertaining the meaning of a municipal law. In respect of this, we recall our discussion in paragraphs  6.153 -
6.156  above.  
554 Appellate Body Reports, US – Oil Country Tu bular Goods Sunset Reviews , para.  172; US – 1916 Act , 
paras.  92-94. 
555 Appellate Body Report s, US – 1916 Act , paras.  60-61; US – Continued Zeroing , paras.  179-181; 
US - Corrosion -Resistant Steel Sunset Review , para.  81; Argentina – Import Measures , para.  5.103. See also 
Panel Report, US – Continued Zeroing , para.  7.46. 
556 Appellate Body Reports, US – Corrosion -Resistant Steel Sunset Review , para.  82; US – 1916 Act , 
paras.  92-94. See also Panel Report, US – Section 301 Trade Act , paras.  7.80-7.81. 
557 Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews , para.  172. 
558 Appellate Body Report, US – 1916 Act , para.  88 (referring to various GATT  Panel Reports).  
559 Appellate Body Report, US – 1916 Act , para.  100. 
560 Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para.  93. WT/DS473/A B/R 
 
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  be challenged "as such". As the Ap pellate  Body explained in US – Corrosion -Resistant Steel Sunset 
Review , allowing measures to be the subject of dispute settlement proceedings, whether or not 
they are of a mandatory character, is consistent with the comprehensive nature of the right of 
Members, enshrined in Article  3.2 of the DSU, to resort to dispute settlement to preserve their 
rights and obligations under the covered agreements.561 The Appellate  Body, therefore, saw 
"no reason for concluding that, in principle, non -mandatory measures canno t be challenged 
'as such'" .562 
6.229.   Thus, the discretionary nature of the measure is no barrier to a challenge "as such". 
Furthermore, measures involving discretionary aspects may be found to violate certain 
WTO obligations "as such".563 Appellate Body findings in past disputes recognize this possibility. 
For example, in US – Corrosion -Resistant Steel Sunset Review , the Appellate  Body reversed the 
panel's finding that the measure at issue was "not a mandatory legal instrument obligating a 
certain course of conduct a nd thus can  not, in an d of itself, give rise to a WTO  violation."564 
Similarly, in US – Carbon Steel , the Appellate Body found that the complainant did not satisfy its 
burden of proving either that the measure at issue mandated the investigating authority to  act 
inconsistently with the relevant provision of WTO law, or that such law "restrict[ed] in a material 
way" the authority's discretion to make a determination consistent with WTO law.565 
6.230.   As the Panel noted, consistent with the generally applicable principl es regarding the 
burden of proof in WTO disputes, it is for the complainant to establish the WTO -inconsistency of 
the challenged municipal law.566 The complainant bears the burden of introducing evidence as to 
the meaning of that municipal law to substantiat e its claim of WTO -inconsistency.567 Such evidence 
will typically be produced in the form of the text of the relevant legislation or legal instrument, and 
may be supported by evidence of other elements such as the consistent application of such law, 
the pron ouncements of domestic courts on the meaning of such law, the opinions of legal experts , 
and the writings of recognized scholars. Precisely what is required to establish that a measure is 
inconsistent "as such" will vary, depending on the particular circum stances of each case, including 
the nature of the measure and the WTO obligations at issue.568  
6.231.   With these considerations in mind, we turn to Argentina's claims on appeal. We recall that, 
before the Panel, Argentina's challenge under Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994 consisted of two alternative lines of argument: (i) that the 
second subparagraph of Article  2(5) requires  WTO-inconsistent action; and (ii) that, even if the 
second subparagraph of Article  2(5) doe s not require  WTO-inconsistent action, it is nevertheless 
WTO-inconsistent because it provides for the possibility that such action may be taken. 
Argentina's  appeal concerns the Panel's findings with respect to both lines of argument.  
6.232.   We begin with Argenti na's contention that the Panel erred in ascertaining the meaning of 
the second subparagraph of Article  2(5) of the Basic Regulation by finding that the provision does 
not require  the EU  authorities to establish the costs of production so as to reflect cost s prevailing 
in other countries. Next, we address Argentina's related claim that the Panel acted inconsistently 
with Article  11 of the DSU in ascertaining the meaning of the second subparagraph of Article  2(5) 
of the Basic  Regulation. Thereafter, we examin e Argentina's assertion that the Panel employed an 
erroneous legal standard for an "as such" challenge in stating that Argentina had not 
demonstrated that the second subparagraph of Article  2(5) cannot be applied in a WTO -consistent 
manner.  
                                                
561 Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para.  89. 
562 Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para.  88. 
563 Appellate Body Report, US – 1916 Act , fn 59 to para.  99 (referring to Panel Report, US – Section  301 
Trade Act , paras.  7.53-7.54).  
564 Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para.  100. (fn omitted)  
565 Appellate Body Report, US – Carbon Steel , para.  162. 
566 Panel Report, para.  7.120.  
567 Appellate Body Report, US – Carbon Steel , para.  157 (referring to Appellate Body Report, US – Wool 
Shirts and Blouses , p. 14, DSR 1991:I, p. 335).  
568 Appellate Body Report, US – Carbon Steel , para.  157; Panel Reports, EC – IT Products , para.  7.112.  WT/DS473/AB/R  
 
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  6.2.4.3   Whether the Pan el erred in ascerta ining the meaning of the 
second  subparagraph of Article  2(5) of the Basic Regulation  
6.233.   Argentina appeals the Panel's finding that , even when "information from other 
representative markets" is used, the second subparagraph of Article  2(5) d oes not " require  the 
EU authorities to establish the costs of production so as to reflect costs prevailing in other 
countries" .569 We understand the question raised by Argentina on  appeal to be whether the 
Panel  erred in finding that the phrase "on any other  reasonable basis, including information from 
other representative markets" in the second  subparagraph of Article  2(5) is formulated in 
permissive terms, and does not require that the costs reported in the producer's records be 
replaced by costs in another  country.570 Argentina contends that the second subparagraph of 
Article  2(5) is formulated in mandatory  terms because, in circumstances  where the records of an 
investigated producer do not reasonably reflect costs associated with the production and sale of 
the product, and the costs of other domestic producers or exporters cannot be used, the 
EU authorities must use information from other representative markets that do es not reflect the 
costs of production in the country of origin.  
6.234.   We recall our interpretatio n of Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994 in paragraph s 6.69-6.73 above. In particular, we recall that 
the phrase "cost of production […] in the country of origin" in these provisions make s clear that 
the determination to be made is of a cost of production in the country of origin . These provisions 
do not limit the sources of information or evidence that may be used in esta blishing the costs of 
production in the country of origin. However, whatever the information that it uses, an 
investigating authority has to ensure that such information is used to arrive at the "cost of 
production" "in the country of origin". Compliance w ith this obligation may require the 
investigating authority to adapt the information that it collects.571 
6.235.   In support of its claim before the Panel, Argentina relied on the text of the 
Basic Regulation, the legislative history that led to the introduction of the second subparagraph of 
Article  2(5), the alleged consistent practice by the EU  authorities, and judgments of the 
General  Court of the European  Union. We begin our review with the Panel's examination of the text 
of the legal instrument containing the me asure at issue, being mindful of the overall structure and 
logic of the Basic  Regulation. Thereafter, we review the Panel's examination of the other elements 
submitted by Argentina. Finally, we draw our conclusion regarding the meaning of the 
second subpar agraph of Article  2(5) from the assessment of all the relevant elements taken 
together.  
6.236.   As we have seen, the second subparagraph of Article  2(5) of the Basic  Regulation states:  
If costs associated with the production and sale of the product under investiga tion are 
not reasonably reflected in the records of the party concerned, they shall be adjusted 
or established on the basis of the costs of other producers or exporters in the same 
country or, where such information is not available or cannot be used, on a ny other 
reasonable basis, including information from other representative markets.  
6.237.   For the reasons discussed in section 6.2.3.2  above, we agree with the Panel's finding that 
the second subparagraph of Article  2(5) comes into play only after a determination has been made 
under the first subparagraph that the records do not reasonably reflect the costs associated with 
the production and sale of the product under consideration.572 The second subparagraph of 
Article  2(5) indicates that, in such circumstances, the costs associated with the production and 
sale of the product under investigation "shall" be adjusted or established on the basis of the 
alternative means provided for in the second clause of that subparagraph.  To us, the text of the 
second subparagraph of Article  2(5), and in particular the word "shall", indicates that, once a 
determination is made, in applying the first subparagraph, that the costs associated with the 
production and sale of the product under i nvestigation are not reasonably reflected in the records 
of the party concerned, then the EU  authorities must "adjust" or "establish" the costs on the basis 
                                                
569 Panel Report, para.  7.172. (emphasis original)  
570 Panel Report, para.  7.169.  
571 See supra, paras. 6.69-6.73. 
572 Panel Report, para.  7.132.  WT/DS473/A B/R 
 
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  of the alternative means provided for under the second subparagraph.573 The second subparagraph 
provides several options574 for the EU  authorities to use as a basis for adjusting or establishing the 
costs.575 
6.238.   Moreover, our reading of the text of the second subparagraph of Article  2(5) suggests that 
there is a progression, or an order of preference, for the al ternative bases contained therein. When 
this provision applies, the EU  authorities are directed to adjust or establish these costs on the 
basis of the costs of other producers or exporters in the same country. Only in situations where 
such information is n ot available or cannot be used can the EU  authorities proceed to adjust or 
establish the costs "on any other reasonable basis, including information from other representative 
markets" . 
6.239.   As regards the specific alternative bases that the second  subparagraph of Article  2(5) 
provides for adjusting or establishing the relevant "costs", Argentina argues that the Panel erred 
when it found that the language of the second subparagraph of Article  2(5) refers to the sources of 
information  as opposed to the costs thems elves.576 The European  Union agrees with the Panel's 
finding.577 
6.240.   We observe that, unlike Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) 
of the GATT  1994, which refer only to "costs", the second  subparagraph of Article  2(5) of the 
Basic Regul ation uses both the words "costs" and "information". As discussed in paragraph  6.69 
above, the word "cost s" refers to the price paid or to be paid to produce something.578 The 
definition of the word "information" is broader579, and could encompass knowledge communicated 
concerning costs. 
6.241.   Our reading of the text of the second subparagraph of Article  2(5) suggests that the 
meaning of the word "information", which appears twice in the Basic  Regulation, is dependent on 
the context in which it is used. For instance, the second  subparagraph of Article  2(5) directs the 
EU authorities to adjust or establish the "costs associated with the production and sale of the 
product under investigation" on the basis of the " costs of oth er producers or exporters in the same 
country ", except "where such information  is not available or cannot be used".580 Given the 
immediate context of the word "information" in that phrase, it could be read as referring to the 
"costs of other producers of exp orters in the same country". However, when the information 
concerning the costs of other producers or exporters in the same country is not availabl e or cannot 
be used, the second  subparagraph of Article  2(5) directs the EU  authorities to adjust or establis h 
the relevant costs "on any other reasonable basis, including information  from other representative 
markets" .581 Argentina and the European  Union disagree as to whether the phrase "information 
from other representative markets" must be read as a reference t o information regarding costs 
from outside the country of origin.582 To us, the text of the second subparagraph of Article  2(5), on 
                                                
573 We observe that both participants also appear to accept this vi ew. Argentina contends that the use of 
the word "shall" in this provision implies that the second subparagraph of Article  2(5) "is formulated in 
mandatory terms". (Argentina's other appellant's submission, para.  239) Likewise, in response to questioning 
at the oral hearing, the European  Union acknowledged that the second subparagraph of Article  2(5) imposes an 
obligation on the investigating authority as to what it must do following a determination, pursuant to the 
first subparagraph, that the records do no t reasonably reflect the costs associated with the production and sale 
of the product under consideration.  
574 The second subparagraph of Article 2(5) identifies these alternative bases as: the costs of other 
producers or exporters in the same country; or, where such information is not available or cannot be used, on 
any other reasonable basis, including information from other representative markets.  
575 The Panel made a similar observation, stating that "the text of Article  2(5), second subparagraph, 
provides  a number of alternative bases on which the EU  authorities may establish or adjust the costs where 
they have determined pursuant to the first subparagraph of Article  2(5) that the costs reported in a producer's 
records do not 'reasonably reflect' the costs  of production of the investigated product." ( Panel Report, 
para. 7.157; see also European  Union's appellee's submission, para.  76) 
576 Argentina's other appellant's submission, paras.  255-261. 
577 European Union's appellee's submission, para.  89. 
578 Shorter Ox ford English Dictionary , 6th edn (Oxford University Press, 2007), Vol.  1, p. 528. 
579 The definition of "information" includes: "[k]nowledge communicated concerning some particular 
fact, subject, or event". ( Shorter Oxford English Dictionary , 6th edn (Oxford  University Press, 2007), Vol.  1, 
p. 1379)  
580 Emphasis added.  
581 Emphasis added.  
582 At the oral hearing, Argentina argued that, because the EU  authorities can adjust or establish costs 
"on any other reasonable basis, including information from other represent ative markets" only if the costs of WT/DS473/AB/R  
 
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  its face, makes clear that "any other reasonable basis , including information from other 
representative markets" , refers to in formation relating to something other than the "costs of other 
producers or exporters in the same country". However, it is not apparent to us that the words 
"information from other representative markets" are necessarily to be understood in a narrow 
sense,  as Argentina  suggests, as only referring to the costs of production  of the product under 
consideration from outside the country of origin.583 
6.242.   Moreover, we recall that the second subparagraph of Article  2(5) directs the EU  authorities 
to "adjust" or "establi sh" the relevant costs: (i) on the basis of the costs of other producers or 
exporters in the same country; or, where such information is not available or cannot be used; 
(ii) on any other reasonable basis, including information from other representative ma rkets. The 
words "adjust" and "establish" have very broad definitions.584 This suggests that they cover a wide 
range of possible actions by the EU  authorities, and do not exclude that the authorities could adapt 
out-of-country information to ensure that it r eflects the cost of production in the country of origin. 
For example, the EU  authorities may consider that the costs associated with the production and 
sale of the product under consideration are reasonably reflected in the records of the producer or 
expor ter under investigation, save for a minor discrepancy relating to one of the manufacturing 
inputs. In such a case, the alternative bases proposed in the second subparagraph of Article  2(5), 
including "information from other representative markets", could b e used as a reference point for 
correcting the discrepancy. However, this information would not replace  the costs reflected in the 
records of the producer or exporter under investigation. Likewise, the EU  authorities may 
encounter a situation in which the information concerning the costs of the other producers or 
exporters in the same country is not available or cannot be used, in which case the EU  authorities 
would have to construct the cost of production relying on "any other reasonable basis", including 
information from other representative markets. In such a scenario, nothing in the language of the 
second subparagraph of Article  2(5) precludes the possibility that the EU  authorities may use the 
"information from other representative markets" in order to arrive at the cost of production 
without adapting it to reflect the costs of production in the country of origin. At the same time, 
nothing in the language of the second subparagraph of Article  2(5) precludes the possibility that 
the EU  authorities may ada pt information from outside the country of origin to reflect the costs of 
production in the country of origin.585 
6.243.   For these reasons, we are of the view that the second subparagraph of Article  2(5) may be 
read to encompass the possibility that the EU  authorit ies may use "information from other 
representative markets", as the basis for arriving at the costs of production, without adapting it to 
reflect the costs of production in the country of origin. Nevertheless, the existence of that 
possibility  does not mea n, as Argentina contends, that the second subparagraph of Article  2(5) 
requires  the EU  authorities to construct the normal value on the basis of the costs prevailing in 
countries other than the country of origin.  
6.244.   Based on the foregoing, we agree with the P anel's preliminary view, following the first step 
in its analysis that, on its face, the text of the second subparagraph of Article  2(5) "does not 
require  that the costs reported in the producer's records be replaced by costs in another 
country."586 At the s ame time, nothing in the text of the second subparagraph of Article  2(5) 
                                                                                                                                                  
other producers or exporters in the same country are not available or cannot be used, then the "information 
from other representative markets" must necessarily refer to information regarding costs from  outside the 
countr y of origin. For its part, the European  Union maintained that the reference to "information from other 
representative markets" cannot be automatically equated with information from outside the country of origin. 
According to the European  Union, "other repr esentative markets" may include other relevant product markets 
in the country of origin, a geographical market, or even a temporal market. (European  Union's appellee's 
submission, para.  86)  
583 Panel Report, para.  7.159.  
584 The definition of the word "adjust " includes: "[a]rrange suitably in relation to something else or to 
some standard or purpose" and "[a]rrange, compose, harmonize differences, discrepancies, accounts". 
(Shorter Oxford English Dictionary , 6th edn (Oxford University Press, 2007), Vol.  1, p. 28) The definition of the 
word "establish" includes: "place beyond dispute, ascertain, demonstrate, prove". ( Shorter Oxford English 
Dictionary , 6th edn (Oxford University Press, 2007), Vol.  1, p. 865) 
585 We note that, in response to questioning at the oral hearing, both Argentina and the European  Union 
acknowledged that the second subparagraph of Article  2(5) could be understood broadly enough to capture any 
one of the scenarios described above. However, as the European  Union commented, the treatment of any such 
"information from other representative markets" would necessarily be dependent on the circumstances of each 
anti-dumping investigation.  
586 Panel Report, para.  7.169 . (italics original; underlining added)  WT/DS473/A B/R 
 
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  precludes the possibility that the EU  authorities may use "information from other representative 
markets" as the basis for arriving at the costs of production without adapting it to r eflect the costs 
of production in the country of origin.587 
6.245.   As part of our "holistic assessment", we now turn to consider the various other elements 
relied on by Argentina to support its understanding of the meaning of the second subparagraph of 
Article  2(5) of the Basic Regulation .588 On appeal, Argentina challenges the Panel's assessment of 
these elements.  
6.246.   With respect to the legislative history that led to the introduction of the 
second  subparagraph of Article  2(5) into the Basic  Regulation, before the Panel , Argentina referred 
to Recitals  3 and 4 of Council Regulation (EC) No. 1972/2002, read in conjunction with the 
second  subparagraph of Article  2(3) of the Basic Regulation . In this regard, the Panel found:  
[O]ur reading of the second subparagraph of Articl e 2(3) in conjunction with Recital  4 
of Council Regulation  1972/2002 suggests that when the authorities determine that a 
particular market situation exists on the basis of the existence, inter alia, of 
"artificially low" prices due to a distortion, they sh ould establish or adjust the costs of 
a producer on a basis that is not affected by that distortion. However, neither the 
second subparagraph of Article  2(3) nor Recital  4 of Council Regulation  1972/2002 
suggests that the options available to the EU author ities are constrained in such a way 
that they must systematically resort to information or prices not in the country of 
origin.589 
6.247.   Argentina contests this reasoning by the Panel and instead contends that Recitals  3 and 4 
of Council Regulation (EC) No. 1972/2 002 support Argentina's view that the "information from 
other representative markets" referred to in the second  subparagraph of Article  2(5) of the 
Basic Regulation constitutes the information that will have to be used to adjust or replace the costs 
includ ed in the records of the producer or exporter concerned precisely because those costs are 
affected by a country -wide distortion.590  
6.248.   As described at paragraph  6.182  above, Council Regulation (EC) No. 1972/2002 is the 
legal instrument that introduced the two provisions that now appear in the Basic  Regulation as the 
second subparagraphs of Articles  2(3) and 2(5) respectively.591 Recitals  3 and 4 of 
Council  Regulation (EC) No. 1972/2002 state, in relevant part:  
(3) … I t is prudent to provide for a clarification as to what circumstances could be 
considered as constituting a particular market situation in which sales of the like 
product do not permit a proper comparison. Such circumstances can, for example, 
occur because of the existence of barter -trade and other non -commercial processing 
arrangements or other market impediments. As a result market signals may not 
properly reflect supply and demand which in turn may have an impact on the relevant 
costs and prices and may a lso result in domestic prices being out of line with 
world -market prices or prices in other representative markets. …  
(4) It is considered appropriate to give some guidance as to what has to be done if, 
pursuant to Article  2(5) of Regulation (EC) No  384/96 , the records do not reasonably 
reflect the costs associated with the production and sale of the product under 
consideration, in particular in situations where because of a particular market situation 
                                                
587 Argentina's contention that the existence of t his possibility is sufficient to demonstrate that the 
second subparagraph of Article  2(5) of the Basic Regulation is inconsistent "as such" with Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 is addressed in section  6.2.4.5  of this 
Report.  
588 These elements consist of the legislative history that led to the introduction of Article  2(5) into the 
Basic Regulation, the alleged consistent practice of the EU  authorities , and certain judgments of the  
General  Court of the European  Union.  
589 Panel Report, para.  7.163. (fn omitted)  
590 Argentina's other appellant's submission, paras.  244 and 262; see also response to Panel question 
No. 99. 
591 In response to questioning at the oral hearing, the European  Union  clarified that Recitals  3 and 4 of 
Council  Regulation  (EC) No.  1972/2002 do not contain obligations in themselves, but explain the reasons for 
the legislation.  WT/DS473/AB/R  
 
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  sales of the like product do not permit a proper compar ison. In such circumstances, 
the relevant data should be obtained from sources which are unaffected by such 
distortions. Such sources can be the costs of other producers or exporters in the same 
country or, where such information is not available or cannot  be used, any other 
reasonable basis, including information from other representative markets. The 
relevant data can be used either for adjusting certain items of the records of the party 
under consideration or, where this is not possible, for establishing  the costs of the 
party under consideration.592 
6.249.   At the oral hearing, Argentina highlighted that Recital  3, like the second subparagraph of 
Article  2(5) of the Basic  Regulation, uses the words "other representative markets". In particular, 
Argentina points to  the phrase "domestic prices being out of line with world -market prices or prices 
in other representative markets ".593 Argentina argues that, given the juxtaposition of "domestic 
prices", on the one hand, with "world market prices" and "other representative markets", on the 
other hand, when the Basic  Regulation refers to "other representative markets", this necessarily 
means markets other than the domestic market of the exporting country. Moreover, 
Argentina  contends that Recital  4 clarifies that there is no discretion left to the authorities . For 
Argentina , whenever the records do not reasonably reflect the costs because they are affected by 
a distortion, the EU authorities must obtain data from sources that are not affected by such 
distortions. Argentina add s that , in circumstances where the distortion affects the costs of all 
domestic exporters/producers, the EU authorities must use information from other representative 
markets, and this data "will necessarily not reflect the costs prevailing in the country of origin ".594 
6.250.   Recital  3 of Council Regulation (EC) No. 1972/2002 explains the rationale for the 
introduction of the second subparagraph of Article  2(3)595 of the Basic  Regulation. This 
Recital  clarifies the circumstances that could be considered as constituti ng a particular market 
situation in which sales of the like product do not permit a proper comparison. Recital  4 of 
Council  Regulation (EC) No. 1972/2002 contains the rationale for the introduction of the 
second  subparagraph of Article  2(5) of the Basic  Regulation, the measure at issue in this dispute. 
As discussed above, Article  2(5) elaborates on the application of the first alternative method 
identified in the first  subparagraph of Article  2(3)596, namely, construction of the normal value on 
the basis of t he costs of production in the country of origin. While Recitals  3 and 4 concern 
different determinations by the EU  authorities, it is significant that both use the words "other 
representative markets". In our view, this confirms our initial understanding, expressed in 
paragraph  6.241  above, that the phrase "information from other representative markets" in the 
second subparagraph of Article  2(5) refers to something other than the "costs of other producers 
or expo rters in the same country".  
6.251.   However, contrary to Argentina's assertion, we do not read Recitals  3 and 4 of 
Council  Regulation (EC) No. 1972/2002 to suggest that, pursuant to the second subparagraph of 
Article  2(5) of the Basic Regulation , "[w]here the dist ortion affects the costs of all domestic 
exporters/producers, the EU  authorities must use information" that will necessarily not reflect the 
costs of production in the country of origin.597 Recital  4 clarifies that, where the EU  authorities find 
that a parti cular market results in "distortions", the EU  authorities should obtain data from sources 
that are unaffected by such distortions. Recital  4 indicates that such sources can be "the costs of 
other producers or exporters in the same country or, where such in formation is not available or 
cannot be used, any other reasonable basis, including information from other representative 
markets." In the event that the scenario posited by Argentina occurs, that is, a distortion affects 
the costs of all the producers or exporters in the same country, then the EU  authorities are to use 
"any other reasonable basis, including information from other representative markets" . Thus, even 
                                                
592 Panel Exhibit ARG -5. 
593 Emphasis added.  
594 Argentina's other appellant's submission, para.  244. See also para. 262.  
595 The second subparagraph of Article  2(3) states that: "[a] particular market situation for the product 
concerned within the meaning of the first subparagraph may be deemed to exist, inter  alia, when prices are 
artificially low, when t here is significant barter trade, or when there are non -commercial processing 
arrangements."  
596 The two alternative methods identified in the first subparagraph of Article  2(3) are: (i) "on the basis 
of the cost of production in the country of origin plus a  reasonable amount for selling, general and 
administrative costs and for profits"; and (ii) "on the basis of the export prices, in the ordinary course of trade, 
to an appropriate third country, provided that those prices are representative".  
597 Argentina's other appellant's submission, para.  244. WT/DS473/A B/R 
 
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  if, according to Argentina, the term "other representative markets" necessarily refers to ma rkets 
outside the country of origin, the word "including" makes clear that the information from other 
representative markets is but one illustration of what may constitute "any other reasonable basis".  
6.252.   Recital  4 adds that the "relevant data can be used eit her for adjusting certain items of the 
records of the party under consideration or, where this is not possible, for establishing the costs of 
the party under consideration." As discussed at paragraph  6.242  above , the words "adjust" and 
"establish" in the second subparagraph of Article  2(5) have very broad definitions. They could 
cover a wide range of possible actions by the EU  authorities, and do not exclude adaptation of 
out-of-country information to reflect the  costs of production in the country of origin.  
6.253.   For these reasons, we agree with the Panel that the legislative history relied on by 
Argentina does not suggest that the options available to the EU  authorities are constrained in such 
a way that the EU  author ities are required to resort to information or prices not in the country of 
origin.598 
6.254.   Argentina also challenges the Panel's evaluation of the alleged consistent practice of the 
EU authorities.599 As the Panel noted, in the majority of the examples cited by Ar gentina, the 
EU authorities adjusted the actual costs incurred by the producer on the basis of prices prevailing 
in other countries or on the basis of the price for export of the input concerned. In the 
investigation  on biodiesel from Argentina , the EU  authorities replaced the actual input costs with a 
surrogate price for soybeans that, in their view, reflected what the domestic prices for the inputs 
would have been in the absence of the distortions created by the export tax system maintained by 
Argentina.600 The Panel took the view that , while the examples of application cited by Argentina 
reveal that the EU  authorities may resort to prices prevailing in countries other than the country of 
origin, these examples do not demonstrate that the second subparagraph  of Article  2(5) requires  
them to do so.601 
6.255.   We note that, in the investigations in : Seamless Pipes and Tubes of Iron or Steel from 
Croatia, Romania, Russia and Ukraine ; Ammonium Nitrate from Russia;  and Urea from Russia , 
having found that the gas  costs were not reasonably reflected in the exporting producers' records 
as provided for in Article  2(5) of the Basic  Regulation, the EU  authorities considered it appropriate 
to base the adjustment, in all three decisions, on information from "other representative 
markets".602 In the investigation on biodiesel that is the subject of Argentina's "as applied" claims 
in the present dispute, the EU  authorities noted the confirmation of the General Court of the 
European  Union that :  
… the records of the party concerned do not  serve as a basis for calculating normal 
value if the costs associated with the production of the product under investigation are 
not reasonably reflected in those records. In that case, the [second subparagraph ] 
provides that the costs are to be adjusted or established on the basis of sources of 
information other than those records.603 
6.256.   Accordingly, we concur with the Panel that "[t]he decisions of the EU authorities cited by 
Argentina contain explicit statements by the EU authorities to the effect that Artic le 2(5) allows 
recourse to data from other representative markets including third countries."604 However, as the 
Panel observed, while the examples cited by Argentina reveal that the EU  authorities may resort to 
                                                
598 Panel Report, para.  7.163.  
599 The Panel's assessment concerned the same decisions of the EU  authorities that we discussed in 
paragraphs  6.189 -6.194  above.  
600 Panel Report, para.  7.165. 
601 Panel Report, paras.  7.164 -7.166.  
602 For all three investigations, the adjusted price was based on the average price of Russian gas when 
sold for export at the German/Czech border (Waidhaus), adj usted for local distribution costs.  
(Council  Implementing Regulation (EU) No.  1269/2012 (Panel Exhibit ARG -12), Recital 21; Council Regulation 
(EC) No.  238/2008 (Panel Exhibit ARG -14), Recital 22; Council Regulation (EC) No. 907/2007 (Panel 
Exhibit  ARG-19), Recitals 33 and 34)  
603 Definitive Regulation (Panel Exhibit ARG -22), Recital  32. 
604 Panel Report, para.  7.165. (fn omitted)  WT/DS473/AB/R  
 
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  prices prevailing in countries other than the country of origin, they do not demonstrate that the 
second subparagraph of Article  2(5) of the Basic  Regulation requires  them to do so.605 
6.257.   Still in this regard, we note that the European  Union refers to evidence submitted to the 
Panel concerning other decisi ons of the EU  authorities.606 Notably, in response to questioning at 
the oral hearing, the European  Union pointed to the EU  authorities' decision on Silicon from Russia. 
According to the European  Union, this decision provides a clear example of a situation w hen the 
phrase "information from other representative markets" in the second  subparagraph of Article  2(5) 
was understood to refer to information from a different geographical market, but one within the 
country of origin. However, we observe that, in that d ecision, the EU  authorities explained that the 
investigation was initiated before the date of entry into force of the amendment to the 
Basic Regulation by Council  Regulation  (EC) No.  1972/2002.607 Therefore, the new regime 
following from that amendment, whic h includes the second subparagraph of Article  2(5) of the 
Basic Regulation, did not apply to that investigation. We share Argentina's view that the examples 
cited by the European  Union shed no light on the meaning of the words "on any other reasonable 
basis including information from other representative markets" in the second  subparagraph of 
Article  2(5) of the Basic Regulation.  
6.258.   Argentina also considers that the Panel erred in its understanding of the four judgments of 
the General  Court of the European  Union. In particular, Argentina contends that the Panel wrongly 
considered these judgments to show that , when the EU  authorities determine that a producer's 
records do not reasonably reflect the costs of production because they are affected by a distortion, 
"the EU authorities are entitled  to establish the producer's costs on the basis of sources that are 
unaffected by that distortion, and may have recourse to sources of information outside the country 
of origin."608 In Argentina's view, these judgments , instead , clearly indicate the mandatory nature 
of the second subparagraph of Article  2(5). Argentina asserts that the judgments demonstrate 
that, when the EU  authorities conclude that the exporter's records do not reasonably reflect the 
costs due to a distortion,  the authorities have to  adjust the distorted item by having recourse to 
information from other representative markets, and have no discretion to do otherwise.609 
6.259.   In each of the judgments relied on by Argentina, the General  Court concluded that the 
EU author ities were "fully entitled to conclude that one of the items in the applicants' records could 
not be regarded as reasonable and that, consequently, that item had to  be adjusted by having 
recourse to other sources from markets which the institutions regarde d as more representative 
and, consequently, the price of gas had to be adjusted."610 We read these statements by the Court 
as suggesting that, once the EU  authorities determine that the records of the producer or exporter 
under investigation do not reasonabl y reflect the costs of production and sale of the product under 
consideration, the  authorities  must resort to the alternative  bases identified in the 
second  subparagraph of Article  2(5) of the Basic Regulation .  
6.260.   We also take note that, in each of the cases , the General  Court found that "the 
[second  subparagraph ] provides that the costs are to be adjusted or established on the basis of 
                                                
605 Panel Report, para.  7.166.  
606 European Union's appellee's submission, paras. 104 -106 (referring to Commission Decision of 
13 Februa ry 2013 terminating the anti -dumping proceeding concerning imports of white phosphorus, also 
called elemental or yellow phosphorus, originating in the Republic of Kazakhstan, Official Journal of the 
European Union , L Series, No. 43 (14 February 2013), pp. 38-58 (Panel Exhibit EU -3); Commission Regulation 
(EC) No.  988/2004 of 17 May 2004 imposing provisional anti -dumping duties on imports of okoumé plywood 
originating in the People's Republic of China, Official Journal of the European Union , L Series, No. 18 1 (18 May 
2004), pp.  5-23 (Panel Exhibit  EU-4); and Council Regulation (EC) No.  240/2008 (Panel Exhibit  ARG-20)). For 
example, in one decision, the EU  authorities relied on the accounts of the parent company in the country of 
origin (which included the dat a of the activities of the exporting producer under investigation) to correct an 
aspect of the records of the exporting producer. ( (Panel Exhibit  EU-3), Recitals  36-37) 
607 Commission Regulation (EC) No.  1235/2003 of 10 July 2003 imposing a provisional anti -dumping 
duty on imports of silicon originating in Russia, Official Journal of the European Union , L Series, No. 173 
(11 July 2003), pp.  14-34 (Panel Exhibit  EU-24), Recital  15. 
608 Argentina's other appellant's submission, para.  250 (quoting Panel Report, pa ra. 7.168 (emphasis 
original)).  
609 Argentina's other appellant's submission, paras.  250-253. 
610 Judgments of the General  Court of the European  Union, Case T -235/08 ( Acron I ) (Panel 
Exhibit  ARG-23), para.  46; Case T -118/10 ( Acron II ) (Panel Exhibit ARG -52), p ara. 53; Case T -459/08 (Panel 
Exhibit  ARG-53), para.  67; and Case T -84/07 (Panel Exhibit ARG -54), para.  60. (emphasis added)  WT/DS473/A B/R 
 
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  sources of information other than those records."611 In each of the se cases, the EU  authorities 
relied on information concerni ng costs from outside the country of origin. However, in each of 
these cases, the General  Court stressed the order of preference set out in the 
second  subparagraph of Article  2(5), noting that, where adjustments are to be made, the 
"information may be take n from the costs incurred by other producers or exporters [in the same 
country] or, when that information is not available or cannot be used, any other reasonable source 
of information, including information from other representative markets" .612 Accordingly , we are 
not persuaded by Argentina's contention that "[t]he fact that the General  Court did not discuss or 
even refer to allegedly other possible options" means that , "[w]henever there is a distortion 
affecting the domestic market, the authorities have to  adjust the item affected by the distortion by 
having recourse to information from other representative markets" .613 Rather, these judgments 
are consistent with the view that the EU  authorities can turn to any other reasonable basis, 
including information fr om other representative market s, only in the event that the costs of other 
producers or exporters in the same country were not available or could not be used.  
6.261.   In our view, while the judgments reveal that the EU  authorities may resort to information 
from so urces outside the country of origin, they do not demonstrate that the second subparagraph 
of Article  2(5) of the Basic  Regulation requires  the EU  authorities to use that information without 
adapting it to reflect the costs of production in the country of o rigin. Hence, we do not consider the 
Panel to have erred in finding that these judgments show that , when the EU  authorities determine 
that a producer's records do not reasonably reflect the costs of production because they are 
affected by a distortion, "the EU authorities are entitled  to establish the producer's costs on the 
basis of sources that are unaffected by that distortion, and may have recourse to sources of 
information outside the country of origin."614 
6.262.   In sum, having reviewed the Panel's evaluation of all the relevant elements, we find that 
Argentina has not established that the second subparagraph of Article  2(5) of the Basic  Regulation 
means that, where the costs of other domestic producers or exporters in the same country cannot 
be used, the EU  authorities are required  to use information from other representative markets that 
does not reflect the costs of production in the country of origin.  
6.2.4.4   Whether the Panel acted inconsistently with Article  11 of the DSU  
6.263.   Argentina claims that, in ascertaining the  meaning of the second subparagraph of 
Article  2(5) of the Basic  Regulation, the Panel failed to make an objective assessment of the 
matter before it, thereby acting inconsistently with Article  11 of t he DSU. Specifically, 
Argentina  argues that the Panel f ailed to conduct an objective examination of the elements 
submitted by Argentina. Argentina contends that the Panel's analysis of the elements beyond the 
text of the Basic  Regulation was limited to some cursory observations and failed to provide any 
reason ing for the Panel's conclusions. Argentina also argues that the Panel failed to make a true 
"holistic assessment" of these different elements because, having reached a preliminary conclusion 
on the basis of the text of the challenged provision, the Panel e xamined the remaining elements 
separately and in isolation from each other , and failed to base its final conclusion on a 
holistic  assessment of all relevant elements taken together.615 The European  Union submits that 
the Panel's analysis of the various eleme nts cannot be construed as a failure to fulfil its obligations 
under Article  11 of the DSU. The European  Union considers that the Panel carefully analysed all the 
arguments advanced by Argentina and justified its conclusions with respect to each of them.616 
6.264.   We reiterate our discussion, at paragraphs  6.200 -6.202  above, regarding a panel's duties, 
under Article  11 of the DSU, in the context of ascertaining the meaning of m unicipal law. We 
consider that, like the arguments it advanced in support of its othe r claim under Article  11 of 
                                                
611 Judgments of the General  Court of the European  Union, Case T -235/08 ( Acron I ) (Panel Exhibit 
ARG-23), para.  39; Case T -118/10 ( Acron II ) (Panel Exhibit ARG -52), para.  46; Case T -459/08 (Panel 
Exhibit  ARG-53), para.  60; Case T -84/07 (Panel Exhibit ARG -54), para.  53. 
612 Judgments of the General  Court of the European  Union, Case T -235/08 ( Acron I ) (Panel 
Exhibit  ARG-23), para.  39; Case T-118/10 ( Acron II ) (Panel Exhibit ARG -52), para.  46; Case T -459/08 (Panel 
Exhibit  ARG-53), para.  60; Case T -84/07 (Panel Exhibit ARG -54), para.  53. See also European  Union's 
appellee's submission, paras.  108-111. 
613 Argentina's other appellant's submission , para.  253. (emphasis added)  
614 Panel Report, para.  7.168. (emphasis original)  
615 Argentina's other appellant's submission, paras.  267-275. 
616 European  Union's appellee's submission, paras.  112-117. WT/DS473/AB/R  
 
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  the DSU617, Argentina's arguments that the Panel acted inconsistently with Article  11 of the DSU in 
reaching its findings regarding the consisten cy of the second subparagraph of Article  2(5) of the 
Basic Regulation with Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994 amount to no more than a recasting of the arguments that Argentina made before the 
Panel. This doe s not suffice as a basi s for us to find that the Panel  acted inconsistently with 
Article  11 of the DSU.618 
6.265.   Argentina also asserts that the Panel failed to undertake a proper holistic assessment of all 
the relevant elements taken together  in order to asce rtain the meaning of the 
second  subparagraph of Article  2(5) of the Basic Regulation . Relying on the Appellate  Body's 
reasoning in US – Shrimp II (Viet  Nam)619, it is our view, for the same reasons as those discussed 
in paragraphs  6.199 -6.209  above, that the Panel conducted a proper examination and undertook a 
holistic assessment of the various elements before it. We therefore reject Argentina's claim that 
the Panel acted in consistently with Article  11 of the DSU in ascertaining the meaning of the 
second  subparagraph of Article  2(5) of the Basic  Regulation.  
6.266.   Based on our finding in paragraph  6.262  above and our rejection of Argentin a's claim 
under Article  11 of the DSU, we consider that the Panel did not err in finding that , "even when 
information from 'other representative markets' is used, Article  2(5), second  subparagraph, does 
not … require  the EU authorities to establish the cos ts of production so as to reflect costs 
prevailing in other countries."620 
6.267.   As described in paragraphs  6.231 -6.232  above, before the Panel, Argentina's challenge 
under A rticle 2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 
consisted of two alternative lines of argument: (i) that the second subparagraph of Article 2(5) 
requires WTO -inconsistent action; and (ii) that, even if the second subparagr aph of Article 2(5) 
does not require WTO -inconsistent action, it is nevertheless WTO -inconsistent because it provides 
for the possibility that such action may be taken. Having addressed Argentina's appeal concerning 
its first line of argument above, we now  turn to Argentina's appeal concerning the Panel's finding  
on Argentina's second line of argument. Specifically, we examine Argentina's  assertion that the 
Panel employed an erroneous legal standard for an "as such" challenge in stating that Argentina 
had n ot demonstrated that the second subparagraph of Article  2(5) of the Basic  Regulation cannot 
be applied in a WTO -consistent manner.  
6.2.4.5   Whether the Panel erred by employing an erroneous legal standard to find that 
Argentina had not established that the second s ubparagraph of Article  2(5) of the 
Basic  Regulation is inconsistent "as such" with Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994  
6.268.   Before the Panel, Argentina put forward an alternative to its argument that the 
second  subparagraph of Article  2(5) of the Basic Regulation  is mandatory. For Argentina, even if it 
does not mandate recourse to out -of-country costs, the fact that the second subparagraph of 
Article  2(5) permits the authorities to construct the cost of production u sing a basis other than the 
costs of production in the country of origin renders that measure inconsistent "as such" with 
Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994.621 The Panel, 
however, rejected this alternative arg ument, finding instead that , "while Argentina has established 
that Article  2(5), second subparagraph, is capable of being applied in a manner that is inconsistent 
with the European  Union's obligations under Article  2.2 of the Anti -Dumping  Agreement and … 
Article VI:1(b)(ii) of the GATT  1994, … Argentina has not demonstrated that this provision cannot 
be applied in a WTO -consistent manner."622 
                                                
617 At para. 6.209  above, we rej ected Argentina's claim that the Panel acted inconsistently with 
Article  11 of the DSU in reaching its findings regarding the consistency of the second subparagraph of 
Article  2(5) of the Basic Regulation with Article  2.2.1.1 of the Anti -Dumping  Agreement.  
618 Appellate  Body Report, EC – Fasteners (China) , para.  442. 
619 Appellate Body Report, US – Shrimp II (Viet  Nam) , paras.  4.36 and 4.50.  
620 Panel Report, para.  7.172. (emphasis original)  
621 Panel Report, para.  7.118 (referring to Argentina's opening statement at the first Panel meeting, 
para. 74; response to Panel question No.  24, para.  69; and second written submission to the Panel, 
paras.  147-149 and 162).  
622 Panel Report, para.  7.174 (referring to Appellate  Body Report, US – Carbon Steel (India) , 
para. 4.483) . WT/DS473/A B/R 
 
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  6.269.   On appeal, Argentina submits that this Panel finding is erroneous because it suggests that , 
in order to prevail with a  claim that a measure is inconsistent "as such", a complaining party must 
establish that the measure at issue leads to WTO -inconsistent results in all instances in which the 
measure is applied.  
6.270.   We understand Argentina and the European  Union to have advanc ed several possible tests 
as to what must be established in order for a measure to be found to be inconsistent "as  such" 
with WTO obligations. Argentina contends that a complainant challenging a measure "as such" has 
to demonstrate that a certain aspect of  that measure would lead to an outcome that is necessarily 
inconsistent with WTO rules.623 In addition, Argentina suggests that, to the  extent that a 
WTO provision at issue prohibits certain conduct, the fact that the challenged measure permits  
such conduct renders it inconsistent "as such" with that WTO provision.624 The European  Union, for 
its part, asserts that for a measure to be found inconsistent "as such", the measure must 
"unavoidably" or "compulsorily" require the domestic  authorities to act contrary t o WTO obligations 
in all cases.625 We also take note of the views of two of the third participants in this regard. 
China  submits that, in order to show that a legislative measure is in consistent "as such" with a 
WTO obligation, a complainant need not show th at the measure leads to a WTO -inconsistent 
outcome in every instance. Instead, in China's view, the claim will prevail as long as a measure 
necessarily operates, at least in certain circumstances, to preclude conduct required under the 
covered agreements.626 For its part, the United  States opines that, where a Member may apply a 
measure in a WTO -consistent manner, there is no basis to find that the Member has, through that 
measure, breached its WTO obligations because of the potential for a future WTO -inconsi stent 
application.627 
6.271.   As we have discussed in paragraphs  6.228 -6.229  above, the discretionary nature of a 
measure is no barrier to an "as such" challenge, and measures involving some discretionary 
aspects "may violate certain WTO obligations".628 Consistent with the generally applicable 
principles regarding the burden of proof in WTO disputes, it is for the complainant to establish the 
WTO-inconsistency of the challenged m easure.629 Precisely what is required to establish that a 
measure is inconsistent "as such" will vary, depending on the particular circumstances of each 
case, including the nature of the measure and the WTO obligations at issue.630 
6.272.   In the present dispute, the Panel began its analysis of Argentina's claims concerning the 
Basic Regulation by recalling "the relevant principles established under WTO  jurisprudence " on, 
inter alia, the examination of a complaint that a Member's municipal law is inconsistent 
"as such" .631 The Panel noted the Appellate  Body's clarificatio n that challenges to a 
Member's  legislation "as such" are "'serious challenges', particularly as Members are presumed to 
have enacted their laws in good faith."632 The Panel added that, consistent with the generally 
applicable principles regarding the burden of proof in WTO disputes, it is for the complainant to 
establish the WTO -inconsistency of provisions of domestic law.633 In that section of its analysis, 
the Panel made no additional statements in connecti on with the examination of a complaint that a 
measure is inconsistent "as such".  
                                                
623 Argentina's other appellant's submission, paras.  279-280 (quoting Appellate Body Report, US – Oil 
Country Tubular Goods Sunset  Reviews , para.  172). Argentina maintains that it has demonstrated that, in 
cases in which the records of the producer or expo rter under investigation do not reasonably reflect the costs 
associated with the production and sale of the product under consideration because of a "distortion" affecting 
the domestic market, the EU authorities necessarily use "information from other repr esentative markets", 
which are not the costs of production in the country of origin. (Ibid., para.  281) 
624 Argentina's other appellant's submission, paras.  284-285 (referring to Panel Report, para.  7.171).  
625 European  Union's appellee's submission, paras.  120 and 122.  
626 China's third participant's submission, paras.  97-98 (quoting Appellate Body Reports, US – Shrimp II 
(Viet Nam) , para.  4.24; Argentina – Textiles and Apparel , para.  62; and US – FSC (Article  21.5 – EC), 
para. 221).  
627 United  States' third parti cipant's submission, para.  47. 
628 Appellate Body Report, US – 1916 Act , fn 59 to para.  99 (referring to Panel Report, US – Section  301 
Trade Act , paras.  7.53-7.54).  
629 Panel Report, para.  7.120.  
630 Appellate Body Report, US – Carbon Steel , para.  157; Panel Re ports, EC – IT Products , para.  7.112.  
631 Panel Report, paras.  7.119 -7.126.  
632 Panel Report, para.  7.120 and fn  192 thereto (quoting and referring to Appellate  Body Report, 
US - Oil Country Tubular Goods Sunset Reviews , paras.  172-173).  
633 Panel Report, para.  7.120.  WT/DS473/AB/R  
 
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  6.273.   Our review of the Panel's analysis of Argentina's claim under Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 suggests to us that the 
Panel  proceeded as follows. The Panel first ascertained the meaning of the second subparagraph of 
Article  2(5) of the Basic Regulation634 before examining the nature of the WTO obligations in 
Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the  GATT  1994.635 The Panel 
then compared the two to assess whether the second subparagraph of Article  2(5) is inconsistent 
"as such" with those WTO obligations.636 In our view, the Panel did not err in adopting this 
approach.  
6.274.   In addressing Argentina's alternativ e line of argument, the Panel stated that, "while 
Argentina has established that Article  2(5), second subparagraph, is capable of being applied in a 
manner that is inconsistent with the European  Union's obligations under Article  2.2 of the 
Anti-Dumping  Agreement and … Article  VI:1(b)(ii) of the GATT  1994, … Argentina  has not 
demonstrated that this provision cannot be applied in a WTO -consistent manner."637 In a footnote 
to this statement, the Panel indicated that it found guidance in certain statements in the  
Appellate  Body report in US – Carbon Steel (India)  contain ing language that is quite similar to that 
used by the Panel  in its Report .638 
6.275.   In US – Carbon Steel (India) , the Appellate  Body reversed the panel's findings under 
Article  12.7 of the Agreement on Su bsidies and Countervailing Measures ( SCM Agreement ) 
because it found that the panel had failed to comply with its duty under Article  11 of the DSU.639 
India requested the Appellate  Body to complete the legal analysis and address its claim that 
the US measure s at issue in that case were inconsistent "as  such" with Article  12.7 of the 
SCM Agreement.640 
6.276.   With respect to the nature of the obligation at issue in that dispute, the Appellate  Body 
found that, pursuant to Article  12.7 of the SCM  Agreement, an investigati ng authority must use 
"facts available" that reasonably replace the information that an interested party failed to provide, 
with a view to arriving at an accurate determination.641 The Appellate  Body rejected India's 
argument that Article  12.7 prohibits the use of an inference that is "adverse to the interests" of a 
non-cooperating party. Instead, the Appellate  Body clarified that using an inference that is 
"adverse to the interests" of a non -cooperating party is not, in itself, inconsistent with Article  12.7. 
Rather, whether the "facts available" used are reasonable replacements of the missing 
information, and whether an adverse inference is drawn in accordance with Article  12.7, is to be 
determined in light of the particular circumstances of a given case.642 
6.277.   As regards the measure at issue in that dispute, India argued that the measure was 
inconsistent "as such" with Article  12.7 of the SCM  Agreement because, despite the "innocuous" 
language of the text of the measure643, other evidence644, including the United Sta tes Department 
of Commerce ( USDOC ) practice , allegedly demonstrated "a consistent and systematic application 
of the measure, which contribute[d] to proving the existence, as part of the measure, of a system 
created to punish non -cooperation by drawing adve rse inferences in every case of 
                                                
634 Panel Report, paras.  7.157 -7.170.  
635 Panel Report, para.  7.171.  
636 Panel Report, para.  7.172.  
637 Panel Report, para.  7.174.  
638 Panel Report, fn  241 to para.  7.174.  
639 Appellate Body Report, US – Carbon Steel (India) , para.  4.456.  
640 Article  12.7 of the SCM Agreement provides that: "[i]n cases in which any interested Member or 
interested party refuses access to, or otherwise does not provide, necessary information within a reasonable 
period or significantly impedes the investigation", preliminary and fina l determinations may be made on the 
basis of the facts available.  
641 Appellate Body Report, US – Carbon Steel (India) , para.  4.416 (quoting Appellate  Body Report, 
Mexico – Anti-Dumping Measures on Rice , paras.  293-294).  
642 Appellate Body Report, US – Carbon Steel (India) , paras.  4.467 -4.469.  
643 Appellate Body Report, US – Carbon Steel (India) , para. 4.471.  
644 In addition to the text of the measure at issue, India submitted evidence of judicial decisions, the 
Statement of Administrative Action, and USDOC practic e. (Appellate Body Report, US – Carbon Steel (India) , 
para. 4.452)  WT/DS473/A B/R 
 
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  non-cooperation."645 The Appellate  Body made intermediate findings with respect to each of the 
elements before it646, and concluded that those elements:  
[did] not establish conclusively that the measure requires an investigating  authority to 
consistently apply inferences in a manner that would not comport with Article  12.7 in 
all cases of non -cooperation. Where inferences are drawn, this evidence of the use of 
"adverse inferences" does not establish conclusively that the measure at issue cannot 
be applied in a manner that comports with Article  12.7.647 
6.278.   In light of the obligation under Article  12.7 of the SCM  Agreement, the Appellate  Body 
examined all the relevant elements and found that India had failed to establish that the measure  
bore the meaning that India attributed to it.648 As noted above, Article  12.7 directs an 
investigating authority to use "facts available" that reasonably replace the information that an 
interested party failed to provide, with a view to arriving at an accur ate determination. For this 
reason, evidence that an adverse inference was drawn in a particular instance, or in several 
instances, could not, in itself, have sufficed to establish that the information selected did not 
reasonably replace the information in  a manner consistent with Article  12.7. Thus, the finding of 
the Appellate  Body related to the nature of the WTO obligation at issue, and the burden of proof 
with regard to In dia's assertion as to the meaning of the municipal law at issue.  
6.279.   For these reason s, we consider that the Panel in the present dispute took the 
Appellate  Body's statements in US – Carbon Steel (India)  out of context. To the extent that the 
Panel was expressing a legal standard for an "as such" challenge when it stated  that 
"Argentina  has not demonstrated that this provision cannot be applied in a WTO -consistent 
manner"649, the Panel misread the Appellate  Body's statements in US – Carbon Steel (India) . 
6.280.   We recall that the WTO obligation at issue in the present dispute is found in Article  2.2 of 
the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994. As stated at 
paragraph  6.234  above, Article  2.2 and Article  VI:1(b)(ii) do not limit the sources of information or 
evidence that may be us ed in establishing the costs of production in the country of origin. 
However, whatever the information that it uses, an investigating authority has to ensure that such 
information is used to arrive at the "cost of production" "in the country of origin". Co mpliance with 
this obligation may require the investigating authority to adapt the information that it collects.  
6.281.   We further recall our finding, at paragraph  6.266  above, that the Panel did not err in 
finding tha t, "even when information from 'other representative markets' is used, Article  2(5), 
second subparagraph, does not  … require  the EU authorities to establish the costs of production so 
as to reflect costs prevailing in other countries."650 We also recall our view that nothing in the 
second  subparagraph of Article  2(5) precludes the possibility that , when the EU  authorities rely on 
                                                
645 Appellate Body Report, US – Carbon Steel (India) , para.  4.479.  
646 The Appellate  Body's intermediate findings, with respect to each of the elements before it, were as 
follows. With respect to the text of the measure at issue, the Appellate Body did not consider that the measure, 
on its face, required the investigating authority to act inconsistently with Article  12.7. The Appellate  Body also 
found that the judicial  decisions did not support India's proposition that the measure at issue was mandatory in 
requiring the use of the worst possible information in all cases of non -cooperation. Likewise, the Appellate Body 
was of the view that the Statement of Administrative Action and the legislative  history of the measure did not 
support India's proposition that the measure was mandatorily applied in all cases of non -cooperation without 
examining all evidence or engaging in a comparative assessment of such evidence so as to use the most 
appropriate o r fitting information. Finally, on the basis of its review of the "practice" in the application of the 
measure, the Appellate  Body was not convinced by India's assertion that the measure required the USDOC to 
draw the worst possible inference in all cases of non -cooperation, or to assume that those "facts available" with 
adverse consequences were the only facts that it could use. (Appellate Body Report, US – Carbon Steel (India) , 
paras.  4.470, 4.477 -4.478, and 4.481)  
647 Appellate Body Report, US – Carbon Ste el (India) , para.  4.483.  
648 For example, India submitted documents to the Panel arguing that they illustrated that the measure 
had been applied in many instances routinely and mechanically to always draw the worst possible inference. In 
rebuttal, the Unite d States placed a number of cases on the Panel record where the "worst possible inference" 
was not applied in instances of non -cooperation. For the Appellate Body, the evidence concerning the 
application of the measure suggested that, even if the "practice " in respect of its application were relevant to 
ascertaining its meaning in that case, it did not conclusively support the proposition advanced by India. 
(Appellate  Body Report, US – Carbon Steel (India) , paras.  4.479 -4.481)  
649 Panel Report, para.  7.174.  
650 Panel Report, para.  7.172. (emphasis original)  WT/DS473/AB/R  
 
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  "information from other representative markets", they could adapt that information to reflect the 
costs of production in the countr y of origin, in a manner consistent with Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994. We therefore find that 
Argentina has not satisfied its burden of proving that the second subparagraph of Article  2(5) of 
the Basic  Regulation restricts, in a material way, the discretion of the EU  authorities to construct 
the costs of production in a manner consistent with Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994.651 
6.282.   Like the Panel, we consider that "Argentina has established that Article  2(5), 
second  subparagraph, is capable of being applied in a manner that is inconsistent with the 
European  Union's obligations under Article  2.2 of the Anti -Dumping  Agreement and  … 
Article  VI:1(b)(ii) of the GATT  1994."652 However, the mere fact tha t the application of the 
second  subparagraph of Article  2(5) could, in some circumstances, lead to WTO -inconsistency is 
not sufficient to discharge Argentina's burden to make a prima  facie case that the 
second  subparagrap h of Article  2(5) of the Basic Regulation is inconsistent "as such" with 
Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994. Accordingly, 
we find that the Panel did not err in finding that Argentina had not established that the 
second  subparagraph of Article 2(5)  of the Basic Regulation  is inconsistent "as such" with 
Article  2.2 of the Anti -Dumping Agreement and Article  VI:1(b)(ii) of the GATT  1994.653 
6.2.4.6   Conclusions  
6.283.   Regarding Argentina's claims of error with respect to the Panel' s findings under Article  2.2 
of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994, having reviewed the 
Panel's evaluation of all the relevant elements, we find as follows. As regards Argentina's first line 
of argument, we find that Argent ina has not established that the Panel erred in rejecting the 
assertion that the second subparagraph of Article  2(5) of the Basic  Regulation means that, where 
the costs of other domestic producers or exporters in the same country cannot be used, the 
EU authorities are required  to use information from other representative markets that does not 
reflect the costs of production in the country of origin. In this regard, we further consider that the 
Panel conducted a proper examination and undertook a holistic as sessment of the various 
elements before it. We therefore reject Argentina's claim that the Panel acted inconsistently with 
Article  11 of the DSU in ascertaining the meaning of the second  subparagraph of Article  2(5) of the 
Basic Regulation . 
6.284.   For these reaso ns, we find that the Panel did not err, and did not fail to comply with its 
duties under Article  11 of the DSU, in stating that , "even when information from 'other 
representative markets' is used, Article  2(5), second subparagraph, does not … require  the 
EU authorities to establish the costs of production so as to reflect costs prevailing in other 
countries."654  
6.285.   With respect to Argentina's second line of argument, precisely what is required to establish 
that a measure is inconsistent "as such" will vary, dep ending on the particular circumstances of 
each case, including the nature of the measure and the WTO obligations at issue. As regards the 
nature of the WTO obligations at issue, Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994 do not limit the sources of information or evidence that may 
be used in establishing the costs of production in the country of origin. However, whatever the 
information that it uses, an investigating authority has to ensure that such information is us ed to 
arrive at the "cost of production" "in the country of origin". Compliance with this obligation may 
require the investigating authority to adapt the information that it collects. As regards the measure 
at issue, we understand that nothing in the secon d subparagraph of Article  2(5) of the 
Basic Regulation precludes the possibility that , when the EU  authorities rely on "information from 
other representative markets", they could adapt that information to reflect the costs of production 
in the country of o rigin, in a manner consistent with Article  2.2 of the Anti -Dumping  Agreement 
and Article  VI:1(b)(ii) of the GATT  1994. We therefore find that Argentina has not satisfied its 
burden of proving that the second subparagraph of Article  2(5) of the Basic  Regula tion restricts, in 
a material way, the discretion of the EU  authorities to construct the costs of production in a 
                                                
651 See Appellate Body Report, US – Carbon Steel , para.  162. 
652 Panel Report, para.  7.174.  
653 Panel Report, para.  7.174.  
654 Panel Report, para.  7.172. (emphasis original)  WT/DS473/A B/R 
 
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  manner consistent with Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994.  
6.286.   Like the Panel, we consider that "A rgentina has established that Article  2(5), 
second  subparagraph, is capable of being applied in a manner that is inconsistent with the 
European  Union's obligations under Article  2.2 of the Anti -Dumping  Agreement and  … 
Article  VI:1(b)(ii) of the GATT  1994."655 To the extent that the Panel may have been expressing a 
legal standard for an "as such" challenge when it stated that "Argentina has not demonstrated that 
this provision cannot be applied in a WTO -consistent manner"656, we consider that this would be a 
misreading of a statement by the Appellate  Body in US – Carbon Steel (India) . In any event, the 
mere fact that the application of the second subparagraph of Article  2(5) could, in some 
circumstances, lead to WTO -inconsistency is not sufficient to discharge Ar gentina's burden to make 
a prima  facie case that the second subparagraph of Article  2(5) of the Basic Regulation is 
inconsistent "as such" with Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994.  
6.287.   Consequently, we uphold  the Panel's finding, in paragraphs  7.174 and 8.1.b.ii of its 
Report, that Argentina had not establish ed that the second subparagra ph of Article  2(5) of the 
Basic Regulation is inconsistent "as such" with Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b)(ii) of the GATT  1994.  
6.2.5   Article  XVI:4 of the WTO  Agreement and Article  18.4 of the 
Anti-Dumping  Agreement  
6.288.   Argentina submits that, because it has demonstrated that the Panel erred in finding that 
the second subparagraph of Article  2(5) of the Basic Regu lation is not inconsistent "as such" with 
Articles  2.2.1.1 and 2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994, 
it necessarily follows that the European  Union has not ensured the conformity of its laws, 
regulations, and administr ative procedures with the provisions of the Anti -Dumping Agreement 
and the GATT  1994 and, as a consequence, has violated Article  XVI:4 of the WTO  Agreement and 
Article  18.4 of the Anti -Dumping  Agreement.657  
6.289.   As discussed above, we have upheld the Panel's fin dings that Argentina ha d not 
established that the second subparagraph of Article  2(5) of the Basic  Regulation is inconsistent 
"as such" with Articles  2.2.1.1 and 2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of 
the GATT  1994. The Panel's findin g under Article  XVI:4 of the WTO  Agreement and Article  18.4 of 
the Anti -Dumping  Agreement was consequential. On appeal, Argentina advances no arguments in 
support of its claims under Article  XVI:4 of the WTO  Agreement and Article  18.4 of the 
Anti-Dumping  Agreement that are separate from its arguments in support of its claims under 
Articles  2.2.1.1 and 2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994.  
6.290.   Consequently, we uphold  the Panel's finding, in paragraphs  7.175 and 8.1.b.iii of its 
Report, that Argentina ha d not established that the second subparagraph of Article  2(5) of the 
Basic Regulation is inconsistent with Article  XVI:4 of the WTO Agreement and Article  18.4 of the 
Anti-Dumping  Agreement.  
7  FINDINGS AND CONCLUS IONS  
7.1  Claims conc erning the EU anti -dumping measure on imports of biodiesel from 
Argentina  
7.1.  For the reasons  set out in this Report, the Appellate  Body makes the following findings and 
conclusions.  
                                                
655 Panel Report, para.  7.174.  
656 Panel Repor t, para.  7.174.  
657 Argentina's other appellant's submission, paras.  291-293. WT/DS473/AB/R  
 
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  7.1.1   Determination of dumping  
7.1.1.1   Article  2.2.1.1 of the Anti -Dumping  Agreement  
7.2.  We con sider that the second condition in the first sentence of Article  2.2.1.1 of the 
Anti-Dumping  Agreement – that the records kept by the exporter or producer under investigation 
reasonably reflect the costs associated with the production and sale of the produ ct under 
consideration – relates to whether the records kept by the exporter or producer under 
investigation suitably and sufficiently correspond to or reproduce those costs incurred by the 
investigated exporter or producer that have a genuine relationship  with the production and sale of 
the specific product under consideration. The Panel's interpretation, which is more nuanced than 
the European Union's arguments on appeal suggest, does not conflict with our understanding of 
this provision. In our view, the  Panel did not err in rejecting the European Union's argument that 
the second condition in the first sentence of Article  2.2.1.1 includes a general standard of 
"reasonableness". With respect to the application of Article 2.2.1.1 to the anti -dumping measure  
on biodiesel, we agree with the Panel that the EU authorities' determination that domestic prices of 
soybeans in Argentina were lower than international prices due to the Argentine  export tax system 
was not, in itself, a sufficient basis for concluding th at the producers' records did not reasonably 
reflect the costs of soybeans associated with the production and sale of biodiesel, or for 
disregarding the relevant costs in those records when constructing the normal value of biodiesel. 
We therefore find that the Panel did not err in its interpretatio n and application of the 
second  condition in the first sentence of Article  2.2.1.1 of the Anti -Dumping  Agreement.  
a. Consequently, we uphold  the Panel's finding, in paragraphs  7.249 and 8.1.c.i  of the 
Panel  Report, that the European Union acted inconsistently w ith Article 2.2.1.1 of the 
Anti-Dumping Agreement by failing to calculate the cost of production of the product 
under investigation on the basis of the records kept by the producers. Having upheld th is 
Panel' s finding, the condition for Argentina's request for completion of the legal analysis 
is not fulfilled. Thus, we do not examine this request.  
7.1.1.2   Article  2.2 of the Anti -Dumping  Agreement and Article VI:1(b)(ii) of the 
GATT  1994  
7.3.  We consider that the phrases "cos t of production in the country of origin" in Article  2.2 of the 
Anti-Dumping  Agreement and "cost of production … in the country of origin" in Article  VI:1(b)(ii) of 
the GATT  1994 do not limit the sources of information or evidence that may be used in 
estab lishing the cost of production in the country of origin to sources inside the country of origin. 
When relying on any out -of-country information to determine the "cost of production in the 
country of origin" under Article  2.2, an investigating authority has  to ensure that such information 
is used to arrive at the "cost of production in the country of origin", and this may require the 
investigating authority to adapt that information. In this case, like the Panel, we consider that the 
surrogate price for soyb eans used by the EU  authorities to calculate the cost of production of 
biodiesel in Argentina did not represent the cost of soybeans in Argentina for producers or 
exporters of biodiesel. We therefore find that the Panel did not err in its interpretation of  
Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994, and that the 
European  Union has not established that the Panel erred  in its application of these provisions to 
the biodiesel measure at issue.  
a. Consequently, we uphold  the Panel's finding, in paragraphs  7.260 and 8.1.c.ii  of the 
Panel  Report, that the European Union acted inconsistently with Article  2.2 of t he 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994 by not using the cost 
of production in Argentina wh en constructing the normal value of biodiesel. Having 
upheld this finding , the condition for Argentina's request for completion of the legal 
analysis is not fulfilled. Thus, we do not examine this request.  
7.1.1.3   Article 2.4 of the Anti -Dumping Agreement  
7.4.  We have upheld the Panel's findings that the EU authorities acted inconsistently with 
Articles  2.2.1.1 and 2.2 of the Anti -Dumping Agreement in constructing the normal value for the WT/DS473/A B/R 
 
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  reasons set out above.658 Given these findings, and notwithstanding our reservations  about certain 
aspects of the Panel's analysis under Article 2.4 of the Anti -Dumping Agreement, we do not 
consider it fruitful, in the particular circumstances of this dispute, to examine further whether the 
EU authorities also failed to conduct a "fair co mparison" in comparing the constructed normal value 
to the export price.  
a. We therefore find it unnecessary to rule on Argentina's claim on appeal regarding the 
Panel's finding under Article 2.4 of the Anti -Dumping Agreement.  
7.1.2   Imposition of anti -dumping duti es: Article 9.3 of the Anti -Dumping Agreement and 
Article VI:2 of the GATT 1994  
7.5.  We consider that the Panel correctly interpreted Article 9.3 of the Anti -Dumping Agreement in 
stating that the "'margin of dumping' referred to in Article 9.3 relates to a marg in that is 
established in a manner subject to the disciplines of Article 2 and which is therefore consistent 
with those disciplines".659 Furthermore, in our view , the Panel did not err in considering that, in 
light of the specific circumstances of this dispu te, "Argentina has made a prima facie  case that the 
European Union acted inconsistently with Article  9.3 of the Anti -Dumping Agreement, which the 
European Union has failed to rebut."660 We also agree with the Panel that the same considerations 
that guided it s assessment of Argentina's Article 9.3 claim apply mutatis mutandis  to its 
assessment of Argentina's claim under Article VI:2 of the GATT 1994.661  
a. For these reasons, we uphold  the Panel's finding, in paragraphs  7.367 and 8.1.c.vii of 
the Panel  Report, that the European Union acted inconsistently with Article 9.3 of the 
Anti-Dumping Agreement and Article  VI:2 of the GATT 1994 by imposing anti -dumping 
duties in excess of the margin of dumping that should have been established under 
Article 2 of the Anti -Dumpi ng Agreement  and Article VI:1 of the GATT 1994, 
respectively . 
7.1.3   Non-attribution analysis in causation determination: Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement  
7.6.  We consider that the Panel was not expressing, and therefore did not err in, its interpret ation 
of Articles 3.1 and 3.5 of the Anti -Dumping Agreement when it stated that the revised data did not 
have a significant role in the EU authorities' conclusion in the Definitive Regulation on overcapacity 
as an "other factor" causing injury. Furthermore , the Panel committed no error in its application of 
these provisions. Specifically, the Panel did not err in: (i) stating that the EU  authorities' 
conclusion in their non -attribution analysis was not based on or aff ected by the revised data; 
(ii) rejectin g Argentina's argument that the EU  authorities improperly focused on capacity 
utilization as opposed to the increase in overcapacity in absolute terms during the period 
considered; or (iii)  finding no fault in the EU  authorities' conclusion that , on the ba sis of the 
evidence before them , overcapacity could not be "a major cause of injury". More generally, we 
agree with the Panel that the EU authorities' conclusion with respect to overcapacity is one that an 
unbiased and objective investigating authority cou ld have reached in light of the facts before it.662 
For these reasons, we find that Argentina has not established that the Panel erred in finding that 
the EU  authorities' treatment of overcapacity in its non -attribution analysis as an "other factor" 
causing injury to the EU domestic industry was not inconsistent with Articles 3.1 and 3.5 of the 
Anti-Dumping Agreement.  
a. Consequently, we uphold  the Panel's finding, in paragraphs 7.472 and 8.1.c.x of the 
Panel  Report, that Argentina had not established  that the E uropean  Union's 
non-attribution analysis was inconsistent with Articles 3.1 and 3.5 of the Anti -Dumping 
Agreement.  
                                                
658 See supra , paras. 6.56-6.57 and 6.82-6.83. 
659 Panel Report, par a. 7.359.  
660 Panel Report, para. 7.365.  
661 Panel Report, para. 7.366.  
662 Panel Report, para. 7.472.  WT/DS473/AB/R  
 
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  7.2  Claims concerning the second subparagraph of Article  2(5) of the Basic  Regulation  
7.2.1   Article  2.2.1.1 of the Anti -Dumping  Agreement  
7.7.  Having revie wed the Panel's evaluation of all the elements submitted by Argentina, we do not 
consider that Argentina has established that the Panel erred in its assessment of the 
second  subparagraph of Article  2(5) of the Basic  Regulation. Like the Panel, we do not se e support 
in the text of the Basic  Regulation, or in the other elements relied on by Argentina, for the view 
that it is in applying the second subparagraph of Article  2(5) that the EU  authorities are to 
determine that the records of the party under investi gation do not reasonably reflect the costs 
associated with the production and sale of the product under consideration when those records 
reflect prices that are considered to be artificially or abnormally low as a result of a distortion. In 
this regard, we  further consider that the Panel conducted a proper examination and undertook a 
holistic assessment of the various elements before it. We therefore reject Argentina's claim that 
the Panel acted inconsistently with Article  11 of the DSU in ascertaining the meaning of the 
second  subparagraph of Article  2(5) of the Basic Regulation . Accordingly, we find that the Panel 
did not err, and did not fail to comply with its duties under Article  11 of the DSU, in concluding 
that Argentina had not establish ed its case r egarding the meaning of the challenged measure, or in 
finding , for this reason, that Argentina had not establish ed that the second  subparagraph of 
Article  2(5) of the Basic Regulation is inconsistent "as  such" with Article  2.2.1.1 of the 
Anti-Dumping  Agree ment.663 
a. For these reasons, we uphold  the Panel's finding, in paragraphs  7.154 and 8.1.b.i of the 
Panel  Report, that Argentina ha d not established that the second subparagraph of 
Article  2(5) of the Basic  Regulation is inconsistent "as such" with Article  2.2.1.1 of the 
Anti-Dumping  Agreement.  
7.2.2   Article  2.2 of the Anti -Dumping  Agreement and Article VI:1(b)(ii) of the 
GATT  1994  
7.8.  Having reviewed the Panel's evaluation of all the relevant elements, we find as follows. As 
regards Argentina's first line of argument, w e find that Argentina has not established that the 
Panel erred in rejecting the assertion that the second subparagraph of Article  2(5) of the 
Basic Regulation means that, where the costs of other domestic producers or exporters in the 
same country cannot b e used, the EU  authorities are required  to use information from other 
representative markets that does not reflect the costs of production in the country of origin. In this 
regard, we further consider that the Panel conducted a proper examination and under took a 
holistic assessment of the various elements before it. We therefore reject Argentina's claim that 
the Panel acted inconsistently with Article  11 of the DSU in ascertaining the meaning of the 
second  subparagraph of Article  2(5) of the Basic Regulatio n. 
7.9.  For these reasons, we find that the Panel did not err, and did not fail to comply with its duties 
under Article  11 of the DSU, in stating that , "even when information from 'other representative 
markets' is used, Article  2(5), second subparagraph, does n ot … require  the EU authorities to 
establish the costs of production so as to reflect costs prevailing in other countries."664 
7.10.   With respect to Argentina's second line of argument, precisely what is required to establish 
that a measure is inconsistent "as suc h" will vary, depending on the particular circumstances of 
each case, including the nature of the measure and the WTO obligations at issue. As regards the 
nature of the WTO obligations at issue, Article  2.2 of the Anti -Dumping  Agreement and 
Article  VI:1(b) (ii) of the GATT  1994 do not limit the sources of information or evidence that may 
be used in establishing the costs of production in the country of origin. However, whatever the 
information that it uses, an investigating authority has to ensure that such information is used to 
arrive at the "cost of production" "in the country of origin". Compliance with this obligation may 
require the investigating authority to adapt the information that it collects. As regards the measure 
at issue, we understand that not hing in the second subparagraph of Article  2(5) of the 
Basic Regulation precludes the possibility that , when the EU  authorities rely on "information from 
other representative markets", they could adapt that information to reflect the costs of production 
in the country of origin, in a manner consistent with Article  2.2 of the Anti -Dumping  Agreement 
                                                
663 Panel Report, para.  7.154.  
664 Panel Report, para.  7.172. (emphasis original)  WT/DS473/A B/R 
 
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  and Article  VI:1(b)(ii) of the GATT  1994. We therefore find that Argentina has not satisfied its 
burden of proving that the second subparagraph of Article  2(5) of  the Basic  Regulation restricts, in 
a material way, the discretion of the EU  authorities to construct the costs of production in a 
manner consistent with Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994.  
7.11.   Like the Panel, we  consider that "Argentina has established that Article  2(5), 
second  subparagraph, is capable of being applied in a manner that is inconsistent with the 
European  Union's obligations under Article  2.2 of the Anti -Dumping  Agreement and  … 
Article  VI:1(b)(ii) o f the GATT  1994."665 To the extent that the Panel may have been expressing a 
legal standard for an "as such" challenge when it stated that "Argentina has not demonstrated that 
this provision cannot be applied in a WTO -consistent manner"666, we consider that th is would be a 
misreading of a statement by the Appellate  Body in US – Carbon Steel (India) . In any event, the 
mere fact that the application of the second subparagraph of Article  2(5) could, in some 
circumstances, lead to WTO -inconsistency is not sufficien t to discharge Argentina's burden to make 
a prima  facie case that the second subparagraph of Article  2(5) of the Basic Regulation is 
inconsistent "as such" with Article  2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the 
GATT  1994.  
a. Consequentl y, we uphold  the Panel's finding, in paragraphs  7.174 and 8.1.b.ii of the 
Panel  Report, that Argentina had not establish ed that the second subparagraph of 
Article  2(5) of the Basic Regulation is inconsistent "as such" with Article  2.2 of the 
Anti-Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994.  
7.2.3   Article  XVI:4 of the WTO  Agreement and Article  18.4 of the 
Anti-Dumping  Agreement  
7.12.   We have upheld the Panel's findings that Argentina ha d not established that the 
second  subparagraph of Article  2(5) of the Basic Regulation is inconsistent "as such" with 
Articles  2.2.1.1 and 2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994. 
The Panel's finding under Article  XVI:4 of the WTO  Agreement and Article  18.4 of the 
Anti-Dumping  Agreement was  consequential. On appeal, Argentina advances no arguments in 
support of its claims under Article  XVI:4 of the WTO  Agreement and Article  18.4 of the 
Anti-Dumping  Agreement that are separate from its arguments in support of its claims under 
Articles  2.2.1.1  and 2.2 of the Anti -Dumping  Agreement and Article  VI:1(b)(ii) of the GATT  1994.  
a. Consequently, we uphold  the Panel's finding, in paragraphs  7.175 and 8.1.b.iii of the 
Panel  Report, that Argentina ha d not established that the second subparagraph of 
Article  2(5) of the Basic  Regulation is inconsistent with Article  XVI:4 of the 
WTO Agreement and Article  18.4 of the Anti -Dumping  Agreement.  
7.3  Recommendation  
7.13.   The Appellate  Body recommends  that the DSB request the European  Union to bring its 
measure found in this Rep ort, and in the Panel  Report as modified by this Report, to be 
inconsistent with the Anti -Dumping  Agreement and the GATT  1994 into conformity with those 
Agreements.  
 
                                                
665 Panel Report, para.  7.174.  
666 Panel Report, para.  7.174.  WT /DS47 3/ AB/R 
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Signed in the original in Geneva this 6th day of September 2016 by: 
Ujal Singh BHATIA 
Presiding Member 
Yuejiao ZHANG' 
Member